The Implications of Legislative Controls on Private Hospitals in Malaysia

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Kwee-Heng Lee
Raja Noriza Raja Ariffin
Nik Rosnah Wan Abdullah


The emergence of proprietary private hospitals in the 1980s has led to some unprecedented socio-economic implications. The exorbitant cost, variation in care and rise in adverse events posed societal concerns. This urgency prompted the enforcement of the Private Healthcare Facilities and Services Act 1998 (Act 586) in regulating all private hospitals nationwide in 2006. Employing the case study approach, this paper attempts to discuss some salient themes on the impact of Act 586 on fifteen purposively selected private hospitals in the Klang Valley in terms of achieving the national objectives of accessibility, equity and quality care. This study reveals several interrelated themes among others on the issue of policy, power, governance, compliance, and quality of care. The findings indicate the high investment of the state in private hospitals. Although a private hospital is stipulated to be a physician-led institution, in reality the majority of these hospitals are owned by government-linked corporations. Many private hospitals face major challenges in terms of compliance with the new regulations for patient’s safety and quality of care. There has been a mixed of compliance to the regulations to achieve the health priorities. However, full compliance to the regulations remains an insurmountable challenge as the private providers are influential. Faced with the political constraint, asymmetric information and the inadequate human resources, the regulatory authority seems hampered in its enforcement capacity.


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