Impact Of The Private Healthcare Facilities And Services Act 1998 (Act 586) & Regulations 2006 On The Medical Practice In Corporate Private Hospitals In Malaysia

by Prof. Dr. Nik Rosnah Wan Abdullah and Dr. Kwee-Heng Lee

OIDA International Journal of Sustainable Development, (2011) Vol. 2, No. 9, Pages 89-106


This is a preliminary study which examines the impact of the “Private Healthcare Facilities and Services Act 1998 (Act 586) & Regulations 2006(PHFA)” on the medical practice in the corporate private hospitals (for profit) in Malaysia since its implementation with effect from 1st May, 2006. This historical Act 586 regulates all private healthcare facilities and services for the first time in the country after 35 years replacing the Private Hospitals Act 1971. The rapid development of corporate private hospitals from the mid-1980s, which was in line with the “Malaysia Incorporated” concept had led to an unprecedented growth of corporate private hospitals, the repercussions of which, had wide social economic implications in the health care sector which resulted in inequitable medical and health resources, and in some resulted in poorer quality of care.

It is not uncommon to hear negative media reports of unethical practice in the management of some of these private healthcare facilities: questionable hospitals’ charges and padded bills; emergency services denied due to economic reasons, unreported assessable deaths, are some of the major concerns to policy makers. Further, it has been reported that professional medical indemnity and incident reports as a result of adverse events, medical errors and negligence in private hospitals are on the rise. Recognising the urgent need to address these issues of accessibility, equity, and quality care under a new regulatory framework, the Malaysian Government stated explicitly the intention of the government that it would gradually reduce its role in the provision of health services and increase its regulatory and enforcement functions in the Seventh Malaysia Plan(1996-2000), the government’s five-year development plans, and gazetted a comprehensive legislation, Private Healthcare Facilities and Services Act 1998 (Act 586) which was implemented in May, 2006.

This study takes a close look at the regulation at work on ten study hospitals in the Klang Valley. The research methodology is designed by utilizing case studies and employs exploratory qualitative approach using key informant perception interviews and personal communications to obtain the relevant data. The research design encompasses two levels of studies, one at the corporate private hospitals sector as the regulatees and the other level at the Ministry of Health, Malaysia as the regulatory principal authority. Using the agency theoretical framework, the study examines whether the regulatory intervention have the desired effect on the behavior of both the regulator and regulatees, and whether regulatory intervention achieve the Government’s stated objectives of accessibility, equity and quality care.

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