KUALA LUMPUR, Dec 13 — Private hospitals in Malaysia face a series of regulatory and legal challenges that may affect their operations and financial stability, according to the Association of Private Hospitals Malaysia (APHM).
The APHM Factbook 2024 titled “Evolving Landscape of the Private Healthcare System: Contributions, Challenges, and Recommendations” – which was released last November 13 – highlighted what private hospitals described as a “bureaucratic maze” of regulations.
Under the Private Healthcare Facilities and Services Act 1998 (Act 586), hospitals must navigate approvals from at least 10 regulatory bodies, including the Ministry of Health (MOH), the Department of Environment, the Department of Occupational Safety and Health, the Fire and Rescue Department, and the state government.
The group cautioned that these overlapping regulations can result in delays and additional costs, potentially diverting resources away from patient care.
APHM cited specific challenges for single-specialty hospitals, which are subject to many of the same regulatory requirements as multi-disciplinary hospitals. These include mandates to provide emergency services and meet resource demands, such as hiring additional staff and acquiring specialised equipment, even if these resources are not aligned with the hospital’s primary services.
“Ultimately, the cost of establishing such a department contributes to an increase in operational costs of single-specialty hospitals. Generally, it is counterproductive for such hospitals to be subjected to the same regulations as multi-disciplinary hospitals, as it poses significant operational challenges and costs in the long-term,” APHM stated.
Private hospitals are also grappling with lengthy approval processes for specialised medical facilities, such as catheterisation laboratories (cath labs).
APHM said that building and licensing such facilities can take up to four years, with hospitals incurring substantial costs in the meantime, including maintenance fees of around RM500,000 annually.
While the government has made strides to reduce approval times through digitalisation, APHM believes more is needed to streamline the process and improve efficiency.
The association also highlighted the government’s consideration of a medicine price control policy, which is being explored in response to rising health care costs. This policy aims to regulate drug prices using an external reference pricing mechanism, which would put a cap on wholesale prices and subsequently set retail ceiling prices for prescription medicines in private hospitals.
APHM cited a report by the Malaysia Productivity Corporation (MPC) that suggests that price caps could result in a RM206 billion loss to the private health care sector over the next 15 years, equivalent to 3 to 4 per cent of Malaysia’s annual gross domestic product (GDP).
While the policy aims to curb health care costs, APHM cautioned that it could potentially limit access to innovative treatments and affect the willingness of foreign pharmaceutical companies to launch new drugs in Malaysia.
“Foreign pharmaceutical firms might give less priority to Malaysia for the launch and distribution of innovative treatments. This could potentially implicate Malaysia’s access to the latest innovative standard of care medicine, posing an impediment to advancing the nation’s health care agenda. Other economic impacts could stem in reduction of foreign direct investment and cross-industry collaboration,” APHM said.
In addition to regulatory and pricing concerns, APHM pointed to the legal implications of a recent landmark court ruling. In February 2024, the Federal Court found Columbia Asia liable for medical negligence, rejecting the private hospital operator’s defence of its doctors acting as “independent contractors”.
According to APHM, this ruling could set a precedent for future cases in which private hospitals may be held accountable for the actions of their doctors.
The potential for increased legal liabilities could lead to higher medical indemnity insurance premiums and encourage defensive medicine, where doctors may take extra precautions that could affect patient care.
“The ruling may also generate potential distrust in health care professionals’ and hospitals’ medical judgement, and it has set a precedent for patients to instigate medical malpractice lawsuits in the future.”
