Hybrid Organizations in Health Systems: The Corporatization of Malaysia’s National Heart Institute

ABSTRACT Health system reforms across high- and middle-income countries often involve changes to public hospital governance. Corporatization is one such reform, in which public sector hospitals are granted greater functional independence while remaining publicly owned. In theory, this can improve public hospital efficiency, while retaining a public service ethos. However, the extent to which efficiency gains are realized and public purpose is maintained depends on policy choices about governance and payment systems. We present a case study of Malaysia’s National Heart Institute (IJN), which was created in 1992 by corporatization of one department in a large public hospital. The aim of the paper is to examine whether IJN has achieved the goals for which it was created, and if so, whether it provides a potential model for further reforms in Malaysia and other similar health systems. Using a combination of document analysis and key informant interviews, we examine key governance, health financing and payment, and equity issues. For governance, we highlight the choice to have IJN owned by and answerable to a Ministry of Finance (MOF) holding company and MOF-appointed board, rather than the Ministry of Health (MOH). On financing and payment, we analyze the implications of IJN’s combined role as fee-for-service provider to MOH as well as provider of care to private patients. For equity, we analyze the targeting of IJN care across publicly-referred and private patients. These issues demonstrate unresolved tensions between IJN’s objectives and public service goals. As an institutional innovation that has endured for 28 years and grown dramatically in size and revenue, IJN’s trajectory offers critical insights on the relevance of the hybrid public-private models for hospitals in Malaysia as well as in other middle-income countries. While IJN appears to have achieved its goal of establishing itself as a commercially viable, publicly owned center of clinical excellence in Malaysia, the value for money and equity of the services it provides to the Ministry of Health remain unclear. IJN is accountable to a small Ministry of Finance holding company, which means that detailed information required to evaluate these critical questions is not published. The case of IJN highlights that corporatization cannot achieve its stated goals of efficiency, innovation, and equity in isolation; rather it must be supported by broader reforms, including of health financing, payment, governance, and transparency, in order to ensure that autonomous hospitals improve quality and provide efficient care in an equitable way.


Introduction
Malaysia's health system has long been praised for its effective publicly financed and provided services, and has achieved important milestones of health access and equity.However, despite Malaysia's wellregarded public-sector health provision, privatesector health spending has grown rapidly over the past 30 years, creating a mixed public-private system in which approximately 40% of total health spending is private, largely financed through out-ofpocket (OOP) payments from the growing middle class. 1 As the health system has evolved, Malaysia's government has sought to experiment with hybrid organizational forms in order to better integrate the de facto mixed public and private health care system that has emerged.Since the 1990s, health financing reforms aimed at creating a social health insurance system have figured prominently on the government's policy agenda in Malaysia.Yet, while comprehensive financing reform failed to materialize and several attempts to implement a national health insurance program were blocked by opponents, 2 Malaysian policy makers introduced a series of measures to reduce the government's role in direct provision of health services and enhance private sector participation, with the goals of improving the system's technical efficiency.
Since the early 1990s, various forms of private sector involvement have been developed, ranging from private financing models to outsourcing and sub-contracting of tasks previously performed by public-sector institutions.For example, in 1994, national drug distribution via Government Medical Stores (GMS) was contracted out to a private firm.Hospital support services in public hospitals, such as cleaning and medical equipment maintenance, were outsourced to private vendors in 2002.Public university teaching hospitals were corporatized and beginning in 2010s, public tertiary hospitals began accepting 'full paying patients,' who receive expedited services and can choose their doctor.
This paper focuses on one example of reforms which aimed to introduce private sector practices in the Malaysian health system: the organizational transformation of its leading cardiac care facility in 1992 through corporatization.This change to hospital governance was in line with broader international trends: In Western and Central Europe, for example, rising health costs and accompanying strain on public financing over the 1980s prompted similar shifts in public hospital governance models.Public hospitals across England, Estonia, Spain, Portugal, Sweden, and the Netherlands moved from traditional command and control models to varying levels of hospital autonomy. 3While institutional models across countries vary in terms of ownership, autonomy, and accountability to external parties (including patients), many countries saw a shift toward some form of hospital autonomy within the public sector.Similar trends also emerged in low-and middle-income countries (LMICs), with notable reforms occurring in Tunisia, Argentina, Indonesia, and Ecuador, among other countries. 4owever, in a recent review, de Geyndt (2017)  argues that such "policies granting autonomy to public hospitals have had limited success." 4We examine one such case, in Malaysia, which has previously been identified as a relatively successful example of hospital corporatization.
Malaysia is Southeast Asia's third-largest economy, with a GDP per capita (PPP constant 2017 international $) of 28,351 USD in 2019. 5Malaysia's National Heart Institute or Institut Jantung Negara (IJN) is the country's leading referral and tertiary care facility for specialized cardiac and thoracic care.As an institutional innovation in a publicsector dominated health system, IJN's design and evolution offer important lessons on the workability and transportability of the corporatization model to hospitals in Malaysia as well as other middleincome countries.However, there is still limited understanding of the experience and implications of hospital corporatization globally. 3Against this background, this paper provides a critical examination of the experience of corporatization of IJN, highlighting the challenges relating to the governance structure, the financing and payment model, and the allocation of specialized medical care across social groups.
We begin with a description of corporatization which is followed by an explanation of the methodology and data sources for this paper.Section 2 outlines the key drivers and objectives for corporatization.Sections 3 and 4 focus on IJN's key institutional parameters and its performance in relation to its stated goals.The final section concludes the paper to highlight the central message of the relevance of the corporatization model for hospitals in Malaysia and other middle-income countries.

Corporatization, Concepts and a Conceptual Framework for Analysis
Corporatization represents a 'hybrid' organizational form by which public hospitals acquire greater autonomy while preserving their place within the public sphere. 3In this paper, we define corporatization as the conversion of public organizations into parastatal corporations by separating them from civil service structures and exposing them to market forces. 6As distinct from privatization, corporatization does not involve complete severance from government through the sale of the organization and its assets to private actors.Corporatized non-privatized hospitals remain state-owned, although not subject to day-to-day government administration or administrative rules.While retaining, at least in theory, a public sector ethos in which some definition of public interest is prioritized over pure pursuit of profit, corporatized facilities can adopt private sector management principles intended to allow innovative and responsive decision-making, management, and staffing, which may result in improved operational efficiency and effectiveness. 3Organizational innovations in hybrid organizations may include independent boards, performance targets, service contracts for staff (rather than civil service contracts), and incentive systems. 3Hybrid agencies typically have the freedom to manage their budgets and day-today operations while remaining accountable to the public (via an appointed board) for their performance.They can then provide care to both public and private payers and patients.
Duran and Saltman 6 view shifts in public-sector hospital governance as occurring across a continuum running from 'command and control' models to complete independence.They argue that most hospitals in Western and Central Europe lie somewhere along this spectrum with varying levels of autonomy.Similarly, Atun 3 views hospital corporatization as occupying a middle space on a privatization spectrum which ranges from limited reforms in which public entities embrace private sector management principles but remain firmly in the public sector, to outright privatization at the far end of the spectrum.Harding and Preker 7 see corporatization as a stronger option among the array of possible measures to increase hospital autonomy, going beyond more limited forms of organizational autonomy, in which hospital managers may gain control of personnel and can allocate resources more flexibly, but remain fully public-sector organizations with budgets allocated by the central government.Corporatization, by contrast, involves full organizational and budgetary autonomy, established in law, including at least in theory, a hard budget constraint and local institutional control over residual resources, which creates greater incentives for technical efficiency in resource utilization.In doing so it involves the creation of a hybrid organizational form, melding features of both public and private sectors.
Political economy factors heighten the relevance of corporatization.In many cases, public agencies take on a hybrid form, such as corporatization, when policy makers view line ministries as inflexible and poorly managed, but also because policy makers believe privatization would give too much power to profit-motivated firms or because they fear political opposition.Bureaucratic politics within government can also be an obstacle to reform.Even when reforms are designed to give hospitals significant autonomy, De Geyndt 4 shows that in practice, line ministries remain reluctant to genuinely devolve powers over human resources, revenue and expenditures, and other medical and operational functions.Atun 3 presents a matrix that represents shifts in governance across four quadrants: high versus low government stewardship and high versus low operational autonomy of public entities, with each quadrant depicting a distinct hybrid model.Overall, these hybrid organizational forms result in greater autonomy for public entities, while shifting the government's role from direct intervention to stewardship, purchasing, regulation, and supportive supervision.
In summary, from the government's perspective greater hospital autonomy (including in the stronger form of corporatization) represents a trade-off between health system advantages such as greater technical efficiency and operational effectiveness, weighed against potential disadvantages, such as less direct control of operations and revenues, and therefore potentially more ability for hospital management to pursue objectives which deviate from those of the government.We examine how those trade-offs were managed in the case of IJN.

Methodology, Data Sources and Analysis
This study was a sub-component of a larger qualitative study focused on the political economy and institutions of Malaysia's health system. 1 These studies formed one part of a multi-disciplinary health system strengthening project involving analysis of the Malaysian health system's organization, healthcare financing, service delivery, health information systems, and human resource functions.Across the full qualitative research component, we interviewed 50 key stakeholders from various divisions of the health and finance ministries, private hospital chains, public and teaching hospitals, academia and civil society actors.This research was originally designed as an exploratory case study, based on a combination of semi-structured interviews and documentary review.Interviews with a purposively selected sample of six key stakeholders closely associated with IJN's conception, design, and management (Table 1) were triangulated with analysis of IJN annual reports, financial statements obtained from the Companies Commission of Malaysia (2005-2018), 8 parliamentary statements (1992-2016), news reports in English and Malay, and the secondary literature.Additional information on patient numbers, personnel and IJN's governance structures and processes (board of directors, staff evaluation and incentive structures) was subsequently obtained from IJN's Human Capital and Organization Development Manager (in 2017) and again from the IJN CEO and updated in July 2020.
Teams of two researchers, including at least one local researcher, conducted the interviews.Topic guides were generated in consultation with the local team in Malaysia.Interviews were administered in English, audio-recorded and transcribed by the local research team.Relevant transcripts were thematically analyzed and themes generated through iteration and consultation among the research team.AV, MM and KM carried out preliminary coding using a combination of deductive and inductive techniques focused around IJN's history, organizational structure, and processes.Higher order themes related to IJN's governance, financing and staffing arrangements were developed through subsequent re-readings of the texts and these were further refined following several rounds of discussions with the research team.In order to develop a fuller and more up-to-date account of IJN's functioning, the interviews were complemented with descriptive analysis of IJN's patient case load patterns as derived from annual reports and financing based on the financial data series from 2005 to 2018. 8thical clearance was obtained from the Harvard School of Public Health Institutional Review Board and Malaysia's Medical Research and Ethics Committee (MREC) and all interviewees provided informed consent before participating in interviews.

Drivers and Objectives of Corporatization
IJN was corporatized in September 1992, carved out of the cardiac care unit of the Ministry of Health's Kuala Lumpur General Hospital to become a separate and independent institution.Impetus for this policy change came from the highest political levels: Respondents highlighted then-Prime Minister Mahathir Mohamad's central role in championing an in-country specialist facility, motivated by his personal experience of deficient cardiac care in Malaysia.Similarly, Tun Hussein et al. 9 also highlight the government's desire to be able to provide specialized cardiac care in Malaysia, to reduce dependence on foreign cardiac centers.In addition to serving as a center of clinical excellence, provision of specialized care for government employees, as well as those with low incomes, was also a key element a of IJN's stated mission.As Prime Minister Mahathir Mohamed stated at the IJN's launch in 1992: One of the objectives of corporatizing IJN is to ensure the government's social responsibility to bear treatment costs for its employees and also for those with low incomes, and it will continue to be responsible. 10N's corporatization was not just driven by the then-Prime Minister's interest in improved cardiac care; it also coincided with general trends in Malaysian economic policy at the time which called for the government to 'downsize its role,' making privatization 'an important cornerstone of (the) national development and national efficiency strategy.' 11Public hospitals were not the only public-sector entities identified by the seventh Malaysia plan (1996-2000) for privatization or corporatization. 12A former ministry official echoed the general sentiment within government as it affected the Ministry of Health: … we feel that with organizational transformation, the Ministry of Health's role will have to change.We wanted to separate delivery from governance, policy, standard setting, training … delivery should be part of the autonomous organization.Still public, but autonomous (Interview 9, 16 June 2015).Corporatization also stemmed from pragmatic considerations, notably the need to retain diminishing numbers of public-sector specialist doctors in public-oriented service, who were otherwise leaving for "the private side … where the money is …" (Interview 25, 23 July 2015).For highly trained specialists, IJN's position outside of the civil service pay scale provided a more lucrative and independent platform, and also offered hospital managers the opportunity to operate outside civil service rules.
Although a previous study of IJN identifies similar drivers behind corporatization-to reduce 'dependence on foreign heart centres' and 'improve the retention of highly trained and specialized personnel within the public health care sector' 9 , official IJN documents articulate its current purpose without any references to any specific public-service obligation, stating simply that it was established: as a heart specialist institution committed to delivering advanced standards in cardiovascular and thoracic medicine for adult and paediatric heart patients. 13

Governance
As a corporate entity, IJN (a legal entity named Institut Jantung Negara Sdn.Bhd) is not subject to government budget processes, and civil service rules for personnel, but the theory of corporatization states that in absence of these controls, public regulation and oversight can be maintained through ownership and governance.We describe the ownership structure of IJN based on documents obtained from the Companies Commission of Malaysia.IJN's governance structure hence is a hybrid arrangement involving the Malaysian government (as owners), an appointed hospital board, and an internal management committee.IJN is governed directly by a board of directors appointed in theory by its shareholders, i.e. the Ministry of Finance Incorporated, subject to Ministry of Health advice.According to filings at the Companies Commission of Malaysia, the current five-member hospital board includes a representative from MOF and two representatives from MOH (the Secretary-General and Director-General), and two doctors; one who practices at IJN itself, and the other at a private hospital partly owned by a government-linked company (GLC).IJN Holdings Sdn Bhd's current fivemember board of directors includes representatives from MOF and the Employees Provident Fund, and two doctors; one who practices at IJN itself and the other at a private hospital partly owned by government-related entities.
Subject to MOF approval, the IJN board appoints the hospital chief executive officer (CEO).IJN has more financial autonomy than public hospitals, as the CEO or board approvals sanction most operational expenditures.By contrast, for public hospitals, most spending needs to be authorized centrally by the health and/or finance ministry.For IJN, Ministry of Finance approvals are only needed for high-value expansion plans or investments.A medical director was eventually created to manage clinical services on behalf of the CEO, who focuses on administration, finances, and management.
However, in our interviews, senior officials, particularly those formerly in the Ministry of Health and on the IJN board, have argued for greater accountability of IJN's board, which they felt lacked appropriate checks and balances, with limited accountability to the government and public.One former senior official contended that as a relatively small entity, IJN was not a high priority for the Finance Ministry, limiting the amount of substantive oversight.Yet giving the Ministry of Finance-owned parastatals ownership of IJN reduced the role of the Ministry of Health, which might otherwise be expected to conduct more active oversight.Several respondents also felt that the Ministry of Health's curtailed role had caused a shift in organizational culture, hindering IJN's ability to prioritize public-oriented health objectives.
The CEO occupies a critical position in IJN's governance structure; the CEO is answerable to the board and is the key player in direction of financing and staffing policies.Interviews emphasized the importance of selecting qualified candidates with relevant expertise, particularly doctors or public health experts rather than business or financial professionals, for senior management roles to ensure "patient focused management."At time of writing, the CEO of IJN is a Senior Consultant Cardiologist.Yet one interviewee argued that this mismatch had directly pushed IJN away from health-oriented management in the past: … We got an ex-banker to run the hospital but the management without medical background can't work with those with medical background … Nonmedical person is looking at profit, as far as he is concerned, his bonus is paid on that basis.But medical person is focusing on serving the public, patients … making big thick profits is secondary (Interview 28, 31 July 2015).
Yet while interviewees consistently argued that the IJN's governance structure, and in particular, MOF rather than MOH ownership, triggered its commercial focus, others were unclear on how changing ownership would fundamentally alter the IJN's business model: … IJN was under the purview of Ministry of Finance which viewed it as if it's profit making … … Ministry of Health must have a strong say in the direction of IJN because IJN was built with taxpayers' money.So it cannot divorce itself from the government and become profit-making.
This sentiment was recently reechoed by Dr Yahya Awang, one of the pioneers of IJN 14 : If you ask me how I would do it differently, I'd say IJN should be a Health Ministry Incorporated product that is based on service, rather than profit.
Tun-Hussein et al. 9 note that at the founding of IJN, social goals were "partially made explicit" but that significant cross subsidy from private patients to poorer patients was required to fulfill that mission.Given that this mandate was only partially specified, it requires continuous management decisions by IJN leadership about the level of cross subsidy between private and poorer (publicly referred), in order to fulfill this social mandate.Interviewees believed that the ownership structure reduced the likelihood that these management decisions were being made with sufficient focus on population health objectives.This highlights the importance of governance arrangements, such as ownership structure and board appointment power, to continuity over time of the social mission of corporatized institutions.

Staffing
IJN's health workers are salaried staff and include specialist cardiologists, surgeons, anesthesiologists, paramedics, and clinical support staff.Nonfinancial rewards for staff, including clinical fellowships and greater case variety and complexity, also draw senior specialists. 15In contrast to the criticism of the ownership model, interviewees were more positive about these changes.Several suggested that a shift to a "clinician-led" corporate structure also brought about positive shifts in clinical practices and led to more responsive services.Comparing the experience of working in the public sector versus IJN, a senior board member highlighted the flattening of professional hierarchies as a result of corporatization: Previously we used to manage patients based on, we call it 'eminence based'-the opinion of the seniors that are important, the consultants … When we moved, we adopt(ed) the patient focus.The patient is the most important in terms of service (Interview 35, 8 July 2015).
At the time of corporatization in 1992, the 315 staff members in the cardiology and cardiothoracic divisions at Kuala Lumpur General Hospital which became IJN were given three options: (i) early retirement from the civil service to join IJN; (ii) secondment to IJN for a two-year period while retaining civil service benefits; or (iii) retention of employment within Hospital Kuala Lumpur. 9he most practical option for most trained specialists was to move to the IJN, since the entire cardiology department was rehoused.
Of 315 employees, 298 doctors and ancillary staff opted to leave the civil service and join IJN.Salaries of new staff were between 70%-80% higher than earlier MOH salaries, although unlike the civil service, IJN offered no access to the civil servants' pension scheme.Augmented salaries and decision-making authority combined with professional stimulus in the form of interesting and complex cases helped with retention of top-tier specialists at the IJN.Much like their e1833639-6 government sector counterparts 16 senior IJN consultants are now permitted to see private and international patients over weekends and two weekdays at IJN Private.IJN's management committee, subject to Ministry of Finance approval, sets staff salaries and bonuses which are periodically reviewed.IJN staff also receive annual salary increments and graduated bonuses based on individual performance, and depending on annual profits.Respondents reported that this had kept overall attrition levels at 20%, although up to 50% of "younger" doctors left for private practice.They surmised this was to do with deferred career progression to consultant level and less competitive salaries for "middle-rung" doctors and nurses.As a senior IJN board member and former director observed: … the middle rung … may not see their move up the career ladder as fast may leave for private … They want to … send their children to private schools or overseas.Certainly for the middle rung, the salary that they get from here will be not sufficient … but there is not much we can do (Interview 35, 8 July 2015).
IJN Holdings discharges its clinical training function both through fellowships at IJN and an affiliate IJN College.This is in keeping with its mission at inception, of developing cardiovascular and thoracic capabilities among health professionals.However, some respondents noted a conflict of interest in IJN fulfilling its training obligations by offering alternative employment for government doctors: … When government sent these doctors to be trained in IJN, IJN pinched them and say, 'Why don't you come into IJN?You (will) get better salary' (Interview 25, 23 July 2015).

Finance
The main source of revenue for IJN is fees from three main patient categories, each with different fee structures, funding channels, and waiting times: (i) civil servants and civil service retirees, (ii) public-sector referrals, and (iii) private patients (self-referring Malaysian patients and international patients).A couple of respondents explained how the IJN invoiced the ministry on a fee for service basis for treatment rendered to government employees and pensioners, indicating a "mark up" on the cost of equipment or consumables used to account for departmental salaries.Yet, there are inherent structural limitations to IJN's revenues as noted by a sitting IJN board member and former director: … our earning is principally from patient care.For government-funded patients, it is fixed.For in patients and private paying patients, we can increase the markup a little.But it's also determined by the ministry of finance.But if our patients are principally government funded, how much more can we earn?(Interview 35, 8 July 2015) Since establishment, IJN has demonstrated a basic degree of financial sustainability: Revenues exceeded costs for almost every year with a notable exception of 2009 where a loss of RM 24.4 million was posted (Figure 1).In its first decade, 10% dividends were paid on the initial investment to the Ministry of Finance 9 from 2005 to 2018, a total of RM 135 million in dividends were issued to shareholders 8 .However, these revenues include substantial revenues from the public purse to pay for public patients referred to IJN: The Ministry of Finance look at it as how much profit you make.But maybe they don't realize that the profit they (IJN) make, 85% were from government (funded patients).So, it's government pumping in money to IJN (Interview 23, 23 July 2015).
Hence, an excess of revenues over cost does not mean that IJN has attained full financial selfsufficiency in the sense of independence from public resources, as noted in IJN's own 2014 Annual Report. 17The report states that IJN's "objective is to be financially self-sustaining" and highlights, as measures of sustainability, "the number of private patients increasing year on year" and the "ratio between government patients … and private patients was 65:35 compared to 70:30 in [2013]."The empirical and normative basis for this measure and arbitrary target is not articulated but as of data available in its 2016 Annual Report (the most recent published at the time of writing), the target had not been reached and the proportion of government-funded new inpatients increased to a high of 84%. 18JN has since invested RM 5 million (~1 million USD) in 2017 to set up IJN Private, a separate section serving private patients, including self-funded patients, insurance policy holders, corporate clients, and foreigners.As IJN consultants are permitted to practice under the IJN Private umbrella for a limited number of sessions, this is possibly a strategy to retain senior consultants by allowing them to earn supplementary income, similar to 'full paying patients' scheme at MOH hospitals.Published data on IJN Private finances and case load, which would permit analysis on its ability to cross-subsidize other IJN services and on its impact on equity, are not available.

Discussion
IJN's formation and quasi-autonomous status resemble reform trends across public hospitals in regional comparators as well as Central and Western Europe, yet offers distinctive policy lessons.These are considered with reference to IJN's stated goals of public service and financial self-sustainability and its intended aims of staff retention and efficient provision of high-quality specialized services (Table 2).
Driven by the government of Malaysia's perceived need for greater access to specialized health care delivery and desire for organizational forms compatible with efficient use of resources, IJN's structure was engineered to enable highly trained specialists to continue serving the public, and to give their managers flexibility to organize this work efficiently.IJN's hybrid form and linkages with government via ownership, purchasing, and regulation, allow it to remain publicly owned and regulated, and with publicly appointed leadership, but with autonomy  from government budget processes and civil service rules.Flattened management hierarchies also evidently facilitated decision-making and were perceived by respondents to have resulted in a patientcentered and responsive service.Operational matters relating to salaries and hiring came to be largely internally managed-with the result that higher salaries and greater decision space offered powerful incentives for medical staff, especially doctors and surgeons, although retaining mid-tier and nursing staff remains a persistent challenge.

Financial Sustainability
As a hospital established using public investments in the form of infusions of staff and capital, the most positive case for IJN's private endeavors would be if revenues from private patients effectively cross-subsidized care for governmentfunded patients as alluded to although not directly stated in IJN's Annual Reports.However, there are no published financial statements or analyses which confirm that IJN generates excess revenues from private patients and uses this to subsidize government-funded patients.Compensation for clinicians may be a mechanism in which crosssubsidization occurs as clinicians seeing private patients are allowed to receive much higher fees as part of the compact to retain their services to government-funded patients.Analysis on the degree of implied cross-subsidization is not available but notably, MOH hospitals also have an equivalent 'full-paying patients' initiative which allows for similar arrangements.
Market conditions are such that IJN is operating in a competitive environment with other private cardiovascular and thoracic centers.Even if private patients, including wealthy health tourists, are charged higher fees (Interview 35), the fees must comply with the fee schedule of the Private Health care Facilities and Services Act 1998 19 under which IJN is registered.
Reducing dependence on revenue from government-funded patients may hence be an illogical measure of financial sustainability for IJN, irreconcilable with its mandate to treat public patients and the lack of a reformed health financing system.The 2014 annual report acknowledges this dilemma of trying to "balance the social and commercial" purposes of the hospital -as a "social enterprise" providing affordable health services to all Malaysians and corporate "needs to be self-sustaining."A more critical measure of financial sustainability for IJN is its ability to deliver cardiovascular and thoracic care more efficiently (at a lower cost) to alternatives, such as other MOH hospitals and private hospitals in the same vicinity, controlled for the quality of those services, including waiting times.

Competition and Cost Efficiency
IJN's experience also demonstrates the potential stewardship role for the state in managing new organizational forms to realize efficiency gains from competition. 20In the past, IJN has been described as a 'price bulwark' against uncontrolled pricing by private sector cardiovascular and thoracic services by providing a pricing benchmark and credible competition with private hospitals.A widely cited report from 2008, one of few available comparisons of IJN pricing, compared typical prices for heart procedures at IJN and another premier private hospital which had unsuccessfully sought a stake in IJN Holdings Sdn Bhd. 21The price comparisons indicated that the upper range of medical charges for a 'single bypass' and angioplasty were RM 50,000 (12,020 USD) and RM 45,000 (10,818 USD) at the private hospital compared with RM 30,000 (7,212 USD) and RM 35,000 (8,414 USD) at IJN.However, cost efficiency against MOH hospitals may not be favorable as IJN bills based on fee-for-service which exerts little incentive to improve efficiency, as noted by respondents.Comparative systematic analyses of the costeffectiveness and clinical outcomes of IJN compared with MOH hospitals and private hospitals to determine the technical efficiency of IJN as a cardiovascular and thoracic provider have not been performed or published.Such a study would be an opportunity to increase public accountability.If private hospitals or MOH hospitals are able to provide equivalent services more efficiently, IJN's justification as MOH's exclusive outsourced supplier of cardiovascular and thoracic care services, and indeed the rationale for outsourcing such services away from MOH hospitals, would be much weakened.However, with more than 400 beds, IJN has large fixed costs and will be dependent on a large volume of cases which are mainly financed by the government-without this privilege, IJN's continued viability would be uncertain.

Equity of Provision
A further concern is the profile of patients receiving government-funded care at IJN, and the extent to which this corresponds to objective need for care, versus civil service employment status or other forms of privilege.In October 2016, the composition of IJN patients was estimated to be 40% civil servants and civil service pensioners b , 30% low income (social worker approved) patients c , and 30% private patients. 22Thus, despite comprising less than 15% of Malaysia's labor force, IJN's services are preferentially accessed by current and retired central government officers. 9This arrangement risks institutionalizing an inequitable multi-tier system, offering faster treatment and greater choice depending on patient type.Equity considerations aside, analysts contend that this fundamental tension in balancing IJN's public service and financial obligations arises not due to corporatization per se but a wider systemic gap and the lack of a comprehensive risk pooling mechanism. 9

Conclusion
Health system reforms which aim to promote competition and cost efficiency within publicsector institutions have led to the corporatization of public hospitals across various countries, with mixed results.Corporatization is often designed to achieve cost-savings and promote greater efficiency and effectiveness in public facility operations.Somewhat unusually, in Malaysia hospital corporatization was a one-off event, yet there has been limited analysis of the effects of this corporatization over the long term.
Health planners seek greater efficiency from such reforms not to minimize costs as an intrinsic goal but from a 'social efficiency' perspective-to enable production of more health services for a given resource allocation.With corporatization, efficiency gains must be translated into greater access to quality treatment at affordable costs for all citizens.However, in IJN's case, while more efficient and higher quality service provision was sought through organizational changes, there were no commensurate changes to health purchasing systems.Moreover, due to IJN's governance structure, it has provided limited public documentation of its financial and cost structure.As a result, it remains impossible to demonstrate whether these improvements enabled expansion of care to all citizens.Finally, as IJN services largely benefited civil servants, there are open questions about whether IJN's services are accessible by all Malaysian citizens in need of these services, and whether access to these services is allocated in a fully transparent manner.Several interviewees argued that reforms to the fee-for-service system for exclusive purchasing by MOH of IJN's services, and to IJN's governance structure, are warranted.At minimum, provision of detailed public data about IJN's costs, patient population, and clinical outcomes should be routinely available so that MOH stakeholders and public health researchers in Malaysia can conduct rigorous evaluation of the health and economic impacts.
IJN's experience demonstrates that new institutional forms can be created and sustained within an otherwise relatively change-resistant health system. 2 Yet, this analysis also demonstrates persistent tensions between public and private missions within such a corporatized entity.Hence, governance arrangements within such entities must be carefully constructed and monitored over time to ensure an acceptable balance is maintained.
The success of any future institutional innovation in Malaysia's health sector and elsewhere will therefore be shaped by the extent to which issues of cross subsidy, equity in health care provisioning and sustainable funding are systematically addressed.Equally, the degree to which internal organizational and governance arrangements allow for technical autonomy while also being insulated from capture by providers or influential political constituencies will be important.

Notes
a. Circa 2003 the threshold for MOF approval was 15 million Ringgit (3,627,075 USD).b.MOH-funded treatment for civil servants is paid on a 'concessional' fee-for-service basis 9 (at least relative to the fees IJN charges to private patients) although the actual negotiated rates between MOH and IJN are not published.c.Circa 2003, the fee structure for publicly-referred patients, was that patients in third class wards were charged at cost, second class wards paid cost plus 5%, and first-class wards paid cost plus 10%, although the fee structure has been renegotiated since then. 9Lowincome publicly-referred patients as assessed by a special unit within the Ministry of Health ('Unit Taksiran Khas') determines the extent of government subsidy and out-of-pocket charges.IJN Foundation and regional grants can also provide financial support to low-income patients.

Panel 1 .
Sampling frame.IJN has a total of 461 beds in eight general wards, an Intensive Care Unit (ICU) for post-surgical cases, a Coronary Care Unit (CCU), a Pediatric Intensive Care Unit (PICU), five operating theaters, a 24-hour Emergency and Accident Department, four invasive cardiovascular laboratories, pharmacy services, a day-care ward, and 24-hour ambulance services.IJN patients have a choice of room ranging from executive and superior suites to deluxe 2-bed or 4-bed rooms.Since inception in 1992, IJN has treated over two million patients, providing both clinical and surgical care.The total number of surgeries performed has steadily risen, with over 4000 conducted in 2016.There was an increase of 4.3% in the total number of surgeries performed at IJN from 2013 to 2014.In terms of health outcomes, IJN consistently reports high performance on a range of indicators for clinical competence in cardiac care-an over 95% survival rate for heart surgery patients, low incidence rate for antibiotic infections and declining hospital stays post-surgery for various procedures.IJN also reports high patient satisfaction ratings with a median figure of 93.5% between 2013-2016.While there are few publicly available assessments or longitudinal analysis of the IJN's financial performance other research and our interviewees attest to more streamlined management and reasonable treatment costs particularly for advanced procedures as result of corporatization.

Table 1 .
Sampling frame These documents show that following corporate restructuring, IJN is 100% owned by IJN Holdings Sdn.Bhd. which in turn is owned almost entirely by Minister of Finance (Incorporated) except for one share (of 417 million shares) owned by the Federal Lands Commissioner.IJN Holdings Sdn.Bhd. also owns other active (IJN College Sdn.Bhd., an affiliated training unit) and inactive entities (IJN Capital Sdn.Bhd., IJN International Sdn.Bhd.) a .

Table 2 .
Key stated objectives for IJN corporatization (as derived from interview data and documentary sources).