Every now and then, I ask myself a simple question.
If private hospitals were to provide rooms for free, would medical inflation fall?
If medicines were charged at retail pharmacy prices, ignoring for a moment that hospital overheads would put most retail operations to shame, would medical inflation fall?
If we absorbed more costs into room rates, bundled more services, stopped itemising certain consumables, and charged “reasonably”, would the public finally say, “Yes, that is fair”? Or would the answer be, “Thank you, but please discount the rest as well”?
This is not a rhetorical exercise in irritation, although I confess there are days when it comes close. It is a serious question about how Malaysia understands the cost of care.
A hospital bill is not a supermarket receipt. Behind every line item sits a chain of people, systems and risks: nurses, pharmacists, radiographers, infection control teams, biomedical engineers, clinical waste management, sterilisation, utilities, maintenance, emergency readiness, regulatory compliance, litigation risk, technology upgrades, drugs that must be available before they are
needed, and staff who must be present even when no one notices them.
Yet in the current debate, it has become tempting to reduce medical inflation to one convenient villain: private hospital prices.
It is neat. It is emotionally satisfying. It is also wrong, or at least far too incomplete to be useful.
The Price Is Visible. The System Is Not
The Public Accounts Committee (PAC) report has raised serious concerns about private hospital charges, non-professional fees, mark-ups, unbundling and differences between cash-paying and insured patients. These issues deserve to be examined seriously. Any industry that touches patients’ lives must be prepared for scrutiny.
Private hospitals should not be above questioning. We must justify our charges, explain our cost structures, improve transparency, and remove practices that cannot be defended.
But scrutiny is not the same as simplification.
When the public sees a hospital bill, it sees the price. It does not see what sits behind the price.
It does not see what is being cross-subsidised, which services are undercharged, which costs are bundled, which capabilities must remain available 24 hours a day, and which clinical investments have to be made long before the first patient uses them.
If hospitals are told that medicines cannot carry a margin, consumables cannot be itemised, room rates must remain low, ICU charges must remain modest, nursing charges must not rise, operating theatre usage must be constrained, and doctors’ fees must remain tied to schedules that have not kept pace with reality, then we should at least be honest about the question being asked.
We are not asking for transparency. We are asking private hospitals to provide increasingly complex care while pretending that complexity does not cost money.
Medical Inflation Is Not Hospital Price Inflation
One of the most important clarifications in this debate is also one of the least discussed.
The 14 per cent to 16 per cent medical inflation figures often quoted in Malaysia are not simply a measure of private hospital price increases.
They reflect broader medical cost trends. Claims rise because of many factors: the number of people seeking care, the severity of illness, the complexity of treatment, new technology, newer drugs, ageing, chronic disease, benefit design, patient behaviour, provider behaviour and the commercial promises made by insurers.
If more Malaysians are developing diabetes, hypertension, cancer, kidney disease, and heart disease, claims will rise. If patients present later and sicker, claims will rise.
If insurance products promise cashless access with little friction at the point of care, utilisation will rise. If policyholders who have paid premiums for years finally seek care when they are unwell, claims will rise.
And if premiums go up even for people who have not made claims, that is not a hospital pricing issue alone. That is an insurance pooling, pricing, product design, and claims management issue.
The uncomfortable truth is this: a health care bill is not created only in the hospital. It is created over years, through population health, product design, underwriting assumptions, lifestyle risk, delayed prevention, utilisation behaviour and clinical need.
By the time the patient reaches the ward, the bill has already begun.
Perhaps We Could Start By Reading The Reports
One wishes the national conversation had begun with the reports, rather than the headlines. This may sound unfashionable, but reports do have their uses. Some of them even contain evidence.
The World Bank and other health system analyses have pointed repeatedly to Malaysia’s wider pressures: ageing, non-communicable diseases, fragmented care, underinvestment in prevention, rising expectations, and the need to shift from paying for treatment to paying for value.
These are not obscure issues. They are not hidden in footnotes written in invisible ink. They are the large, structural drivers of health care cost.
Yet somehow, after years of warnings that Malaysians are getting older, sicker and more expensive to treat, the public conclusion now appears to be that private hospitals have simply been charging too much.
That is a wonderfully convenient diagnosis. Convenient, but incomplete. It is also worth asking how this impression was formed. Based on recent reporting, some of the strongest claims came from insurance industry leaders themselves, including allegations about overutilisation, medical equipment, hospital pricing practices and the supposed commercial behaviour of private hospitals.
Their statements deserve to be heard. But they also deserve to be interrogated.
Insurers and payors are not neutral observers of patient behaviour. They are active designers of it.
For years, insurance products have been built around the promise of cashless access, wide coverage, convenience, and reassurance. These products shape expectations. They influence when patients seek care, what patients believe they are entitled to, and how patients behave at the point of treatment.
This is not an accusation. It is product design.
If you engineer a product that tells patients, “You are covered, seek care when needed, do not worry about payment at the point of care,” then it should surprise no one when patients behave as though they are covered, seek care when needed, and do not worry about payment at the point of care.
To then treat rising utilisation as though it is mainly the moral failure of hospitals is rather elegant, in the way only selective memory can be elegant.
Hospitals do not design insurance benefits. Hospitals do not price premiums. Hospitals do not determine pooling assumptions. Hospitals do not decide how much friction, co-payment or gatekeeping a policy should contain. Hospitals do not sell the promise of cashless care and then rediscover prudence only when claims are submitted.
So yes, let us examine hospital charges.
But let us also examine the products that shaped demand, the promises that shaped behaviour, the pricing that underestimated risk, and the national health profile that made higher claims almost inevitable.
A serious country cannot read only the invoice and ignore the epidemiology. And a serious reform conversation cannot begin with the conclusion already chosen.
What Exactly Do We Want Hospitals To Charge For?
Let us take nursing care.
No one argues publicly that nurses are unimportant. In every speech, they are called the backbone of health care. In every crisis, they are praised. During every pandemic, they become heroes.
But when a bill is discussed, nursing often disappears into the background, as if skilled bedside care is an atmospheric condition rather than a professional service.
Should nursing care be charged properly? If yes, the bill will show it. If no, then the cost must be recovered somewhere else.
The same applies to intensive care. ICU care is not simply a bed in a room with more machines. It is a high-acuity environment requiring specialised nurses, intensivists, respiratory support, monitoring, infection control, pharmacy support, and the ability to respond when a patient deteriorates at 3am.
Should ICU usage reflect its true cost? If yes, the bill will rise. If no, someone must subsidise it.
The operating theatre is another example. A modern OT requires anaesthesia support, theatre nurses, sterilisation, equipment maintenance, implants, disposables, recovery care and readiness for complications. It is not merely a room rented by the hour, although that would certainly make the costing easier.
If the answer is that hospitals should lower room rates, reduce medicine margins, avoid itemisation, maintain low nursing charges, keep ICU and OT charges modest, absorb rising labour costs, pay for technology, comply with regulation, invest in safety, and still be accused of profiteering, then perhaps the debate has moved from affordability into fantasy.
A three-star hotel may charge for a room and provide housekeeping. A hospital room must support clinical care, infection control, nursing response, emergency escalation, biomedical equipment, medication administration, dietary control, waste disposal, documentation, security and 24-hour operational readiness.
If we expect hospital room rates to be lower than a modest hotel room, but also expect everything clinical, safe, and invisible to be bundled into it, we are not debating prices. We are debating arithmetic. And arithmetic, unlike public outrage, does not bend easily.
The Country Is Getting Sicker
There is another truth we must stop avoiding. Malaysia is not merely facing medical inflation. Malaysia is facing disease inflation.
We are an ageing society. We have high rates of diabetes, hypertension, obesity and high cholesterol. Many patients do not know they are ill until complications appear.
Prevention remains underfunded, primary care remains fragmented, and too much of our system still pays for rescue rather than health.
When a patient with poorly controlled diabetes develops kidney failure, the eventual cost is not created by the dialysis centre alone. When uncontrolled hypertension becomes a stroke, the cost is not created by the hospital bed alone. When obesity contributes to heart disease, joint disease, sleep apnoea and cancer risk, the cost does not begin at admission.
We keep asking why the bill is high at the end of the journey. We are less willing to ask why the journey was allowed to get there.
A country cannot neglect prevention for decades and then be shocked that treatment is expensive.
Private Health Care Is Not Cheap Because Good Health Care Is Not Cheap
None of this means private hospitals should be free from reform.
We should improve billing clarity. We should explain charges better. We should reduce unjustified variation. We should work with regulators, insurers and clinicians on value-based care. We should examine where outcomes can be maintained while costs are reduced. We should be prepared to move from volume to value.
And this is not theoretical. We have been working on value-driven outcomes, clinical pathways, procurement discipline, generics where clinically appropriate, digitalisation and better cost visibility. We accept that the private sector must be part of the solution.
But being part of the solution is not the same as accepting a distorted diagnosis.
The danger of blaming private hospital prices as the main reason for medical inflation is that it gives the country the comfort of a simple answer. Simple answers are politically useful. They are rarely clinically useful.
Medical inflation is a system problem. It sits at the intersection of national health, insurance design, clinical behaviour, patient behaviour, technology, regulation, labour costs, litigation risk and public expectations.
If we misdiagnose it, we will mistreat it. And in health care, mistreatment has consequences.
Invisibility Is Not Innocence
The tragedy of the current debate is that it risks mistaking the most visible part of the system for the most responsible part of the system.
The hospital bill is visible. The insurance product is less visible. The actuarial assumptions are less visible.
The neglected diabetes, hypertension and obesity are less visible. The years of underinvestment in prevention are less visible.
The commercial promise of cashless care is less visible. But invisibility is not innocence.
If we are serious about medical inflation, then everyone who helped design the system must sit at the table, not merely those whose invoices are easiest to photocopy.
Fairness Requires Honesty
The public deserves affordable care. Policyholders deserve protection from sudden premium shocks. Patients deserve bills they can understand. Regulators deserve better data. Insurers deserve responsible utilisation. Hospitals deserve a fair hearing. Clinicians deserve fees and professional autonomy that reflect modern practice and ethical responsibility.
These are not competing truths. They are all true at the same time.
That is why the next phase of reform must avoid turning this into a blame game.
By all means, examine hospital charges. But examine insurer practices too. By all means, ask whether hospitals are charging fairly. But ask whether insurance products have been priced and designed sustainably. By all means, demand transparency from providers. But demand transparency from payors as well. By all means, regulate where regulation is needed. But do not regulate one part of the system while leaving the deeper incentives untouched.
If Malaysia wants lower health care costs, we must decide what we mean by “lower”.
Do we mean lower hospital prices, lower claims, lower premiums, lower utilisation, lower disease burden, or lower standards? Because these are not the same thing.
The easiest thing is to attack the bill. The harder thing is to understand what produced it. So, will the real reason for rising medical costs please stand up?
It will not be one person. It will not be one hospital. It will not be one insurer. It will not be one line item.
It will be the system we built, the risks we ignored, the incentives we tolerated, the diseases we failed to prevent, and the promises we made without fully pricing their consequences.
If we are serious about affordability, we must stop pretending that the hospital bill is where the story begins. It is often where the story finally becomes visible.
Dr Kamal Amzan is the chief executive officer of IHH Healthcare Malaysia.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
