CHAPTER FOUR:

Healthcare Regulations in Malaysia

4.1

Regulatory Overview of Healthcare in Malaysia

There are generally two key aspects of private healthcare regulation: regulating
private healthcare facilities and regulating the medical profession. The particular
concern is issues of equitability and accessibility and the quality of healthcare
services.
In healthcare, there is imperfect information since consumers have only limited
understanding of what will or will not restore health, while the provider has much
better information on what the patient requires and usually has influence over what is
supplied and consumed. The challenge for the regulator is to deal with this
information asymmetry and protect the patient-consumers. Another issue is the
implicit understanding between the professions and the state that the professions will
ensure safe and competent services in exchange for the exclusive rights to provide
these services. The concern here is that the professions may use their powers to
further their own interests, rather than that of the general public basing on the
principal-agent theory. The challenge for the state is to identify regulatory
mechanisms and structures that are effective in protecting public interest [1].

4.2

Historical development of the Existing Framework

The principal-agent theory also known as the agency theory is important in regulating
healthcare professionals. In healthcare services, the patients have scan knowledge
or information on the treatments provided by the healthcare providers. They are at
the mercy of the healthcare professionals placing their trusts on their advice and
treatment. There is always the concern that the providers will place their personal
interest above that of the patients to their detriment. With his concern the healthcare
professionals are regulated through occupational licensing.
Occupational Licensing of Healthcare Professionals
Healthcare professionals have been regulated since before the countrys
independence. The earliest of the healthcare professions acts was the Nurses Act
1950 (Act 14) which was amended in 1985. The Registration of Pharmacists Act
1951 (Act 371) was the next to be enacted to be followed by the rest as shown in
Table 4.1. There are other healthcare professionals who are not yet subjective to
occupational licensing. These are the Allied Health Professionals (AHP). The Ministry
of Health have identified 23 types of AHP and are working on the regulations to
regulate them.

37

With occupational licensing of the healthcare professionals, the regulators assume

the role of principal who ensures that the safety and rights of the patient are
protected. The requirements ensure that only competent professionals with adequate
and recognized qualifications get into the system. The regulatory control legitimizes
the professionals by ensuring that incompetent, unqualified and fraudulent individuals
do not get into the system. In a sense this provides these licensed professionals
exclusive rights to practise.
Table 4.1: Regulation of Healthcare Professionals
No.
1

Acts & Regulations

Medical Act 1971 (Act 50)

Professions
Medical practitioner
(Doctors) & specialists
Dentists

Nurses

Midwives

Nurses Act 1950 (Act 14) &

Nurses Registration Regulations
1985
Midwifery Act 1966 (Act 436)

Pharmacists

Medical Assistants

Opticians &
Optometrists

Allied Health
Professionals
(32 categories)

Dental Act 1971 (Act 51)

Registration of Pharmacists Act

1951 (Act 371) &
Registration of Pharmacists
Regulations 2004
Medical Assistants (Registration)
Act 1977 (Act 180)
Optical Act 1991 (Act 469)

Bill has been drafted.

Regulators
Malaysian Medical
Council
Malaysian Dental
Council
Malaysia Nursing
Board

Licensing
Registration & Annual
Practicing Certificate
Registration & Annual
Practicing Certificate
Registration & Annual
Practicing Certificate

Malaysia Midwife
Board
Malaysia Pharmacy
Board

Registration & Annual

Practicing Certificate
Certification of
Registration & Annual
Retention of
Registration
Annual Certificate of
Registration
Registration and
Annual Practicing
Certificate
Registration required
by 2011.

Medical Assistants
(Registration) Board
Malaysian Optical
Council

Source: Author

These healthcare professionals are required to be registered formally with the

regulators and apply for a practicing license to practice. The license needs to be
renewed yearly with further provisions that the professionals achieve certain level of
continuous professional development (CPD). This ensures that the professionals
keep up with current development in knowledge and practice in their respective
fields.
Private Hospital Licensing
The regulation for private hospitals was first established in 1971 with the enactment
of the Private Hospitals Act 1971 (Act 43). The requirements then were not as
stringent as the Act of the day as the explicit objective then was on the protection of
the rights and safety of patients. There were then few private hospitals in the country
and those in existence then were generally not-for-profit type of private hospitals
established by religious organizations as such as Assunta Hospital, the Penang
Adventist Hospital, Hospital and Mount Miriam Hospital to name a few. The others
are the Chinese community-based charity hospitals such as the Tung Shin Hospital
in Kuala Lumpur and the Lam Wah Ee Hospital in Penang.

38

However, after the 1980s, with the privatizing policy and the healthcare policy realignment, the government encourages the setting up of private healthcare facilities
and services to complement the public healthcare services. With the new policy
focus, the establishment of private for-profit hospitals grew quickly. The number of
private healthcare facilities then grew from 50 in 1980 to over 200 by year 2000.
Unfortunately the then Private Hospitals Act 1971 lacks to teeth to adequately
regulate these private healthcare facilities and services from various policy concerns.
Before 2006, the main Acts under which private hospitals were regulated are the
Local Government Act 1976 (Act 171), the Private Hospitals Act 1971 (Act 43) and
the Atomic Energy Licensing Act 1984 (Act 304). For the Federal Territory of Kuala
Lumpur, Putrajaya and Labuan, there is the Federal Territory (Planning) Act 1982
(Act 267). The Local Government Act 1976 provides local governments with
regulating powers and functions largely relating to the efficient use of land and on the
liveability of the environment. The governance is based on the Uniform Building Bylaws 1984. However these laws and regulations are about standard local government
planning and building procedures and are not specific to healthcare facilities.
The Private Hospitals Act 1971 then provided the governance of private healthcare
facilities including the private hospitals. The regulatory control was through licensing
and inspection of the healthcare facilities: private hospitals, nursing homes and
maternity homes. An issued or renewed license was valid for a year. Together with
this Private hospitals Act, the Atomic Energy Licensing Act 1984 provided regulatory
control and licensing of radiation equipment and use of radioactive materials and for
the establishment of standards, liability for nuclear damage and related matters.
However, this Act did not provide adequate provisions to regulate all private
healthcare facilities and services, such as medical and dental clinics, day surgeries,
clinical laboratories, haemodialysis centres, ambulance services, and hospice. These
limitations and omissions are addressed in the new Act, the Private Healthcare
Facilities and Services Act 1988 (Act 586) [1].
The two main institutions involved in regulating private hospitals are the Ministry of
Health (MOH) and the local authorities. Regulatory control is achieved through
licensing. In establishing a private hospital, there is the need to construct the building
and approval planning is necessary from the local authority. The process often
referred to as dealing with construction permits involves the application for
development order, a type of building license, followed by approvals for building
plans and finally the issuance of certificate of completion and compliance. Act 568,
however, also empowered MOH in planning approval for the pertinent requirements
of a private hospital. This is explicitly stated in Section 9 of the Act.
Once the planning approval is obtained, the licensee has to complete the building
and then apply for the operating license from MOH within three years as is explicitly
state in Section 14 of the Act. To qualify for the operating licensing the hospital has to
39

meet all the regulatory requirements prescribed in the Private Healthcare Facilities
and Services (Private Hospitals and Other Private Healthcare Facilities) Regulations
2006 [P.U. (A) 138/2006]. Within these regulations, there is also the license for
installation and usage of radiation equipment issued by the Radiation Safety Unit of
the MOH.

4.3

Current Legislative Arrangements

In general, policymakers concerns with private healthcare are accessibility, equity

and quality care. Achieving these objectives can be complex and it is difficult to
formulate performance measures for them as they are multi-faceted and multidimensional. Depending on the context, there can be different dimensions to them.
Malaysias approach has been to formulate prescriptive regulations as in the PHFS
Regulations 138.
Accessibility
From the World Health Organizations (WHO) definition, accessibility to health
services can take four dimensions which encompass availability, accessibility,
affordability and acceptability. The Government aspiration on this is to achieve
universal accessibility on healthcare for the population.
In general, the government has been quite successful in achieving universal
accessibility to all Malaysians through public healthcare facilities and services. Public
hospitals are generally available in all states, cities and towns across the country to
ensure that primary, secondary and even tertiary care is accessible. Unfortunately,
high demand for this welfare-oriented service has created overloading in the public
hospitals resulting in long waiting times and the perception of poor services.
For the services of private hospital where out-of-pocket payment is the norm in
Malaysia, accessibility is confined to the higher income group. Although medical fees
are somewhat regulated for medical consultation and medical procedure, the total
treatment charges for private healthcare services is relatively hefty and unaffordable
to more ordinary Malaysians (see Figure 4.1).
While the WHO Health for All Strategy seeks to achieve access by all to a minimum
standard of health services according to need, not according to the ability to pay, this
is difficult to implement in the for-profit private hospital sector unless government
directly subsidises costs for patients. For-profit private hospitals have the obligations
to provide quality care and at the same time to ensure a reasonable return-oninvestment to the shareholders.

40

Figure 4.1: Income Distributions in Malaysia

Source: World Bank Report [http://www.tradingeconomics.com/malaysia/gini-index-wb-data.html ]

Quality care
Quality can be viewed from different perspectives. It can be defined in the light of the
providers technical standards and patients expectations and even from the
clinicians perspectives, which equate quality in patient care to the improved clinical
outcome. Improved outcomes mean lower mortality and better neurological function.
To the patients, however, quality is more than optimum outcome, as increasingly, the
nature of experience is as important. Quality is subjective and multidimensional, and
includes patient safety, effectiveness of treatment, patient-centred service, timeliness
and efficiency [2].
Asymmetric information and the principal-agent theory
Besides the concerns for accessibility and quality care, there is also the dilemma of
information asymmetry. This is particularly serious in healthcare in spite of the
profusion of information on the Internet.
With the commercialisation of healthcare and the increasingly competitive
environment in healthcare business, patients as consumers of healthcare services do
not have adequate knowledge nor expertise to make informed judgements about the
quality of care. They have to place their trust on the well-informed professional
provider [3]. They depend and delegate decision making to the attending professional
healthcare provider. To protect the consumers the principal-agent theory is applicable
here, with the regulator acting as the principal to ensure the safety and protect the
rights of the patient.

41

The Private Healthcare Facilities and Services Act 1998 (Act 586)
The Private Healthcare Facilities and Services Act 1998 (Act 586) Gazette on 27 th
August 1998, but only came into operation on 1st May 2006 with the issuance of the
Private Healthcare Facilities and Services (Private Hospitals and Other Private
Healthcare Facilities) Regulations 2006 [P.U. (A) 138/2006] (referred here as PHFS
Regulations 138). This regulation provides for the licensing of private hospitals and
other private healthcare facilities to ensure that the minimum acceptable standards
are complied with the provisions of the legislation together with the mandated
accountability of private healthcare providers towards patient safety, the upholding of
patient rights, and the assurance of quality care. The stringent provisions under Act
586 stipulated the mandatory approval and licensing of all private hospitals and other
private healthcare facilities and services for the protection of patients and the
accessibility of healthcare consumers in the country [2]. The analysis on the focus of
the Act 586 is given in Appendix 4.1.
The Private Healthcare Facilities and Services (Private Hospitals and Other
Private Healthcare Facilities) Regulations 2006 [P.U. (A) 138/2006]
The PHFS Regulations 138 is a highly prescriptive regulatory instrument with the aim
of addressing the concerns discussed above. It comprises 434 separate regulations
and 13th schedules. It is organized into 29 parts covering both private hospitals and
other healthcare facilities and services as defined in the Act 586. The summary of the
relevant parts of the regulations for private hospitals is listed in Box 4.1 below. More
details of these regulations are in presented in Appendix 4.2.
As many management system practices and clinical protocols have been prescribed
in the regulations, any non-compliance on any of these prescribed requirements
constitutes an offence. For example, Part III of the Regulations 2006 encompassing
Regulation 11 to Regulation 20 mandates the planning of the organisation and
management of the private hospitals and other private healthcare facilities or
services. Under Regulation 11 stipulates that all private healthcare facilities and
services shall have a plan of organisation outlining the staff and practitioners in the
facility and the chain of command. Further as provided under Regulation 13 the
Person-In-Charge (PIC) is responsible on the employment of qualified healthcare
professionals including foreigners registered under the law and recognised by the
Director General of Health. Besides, the licensee or PIC of a licensed private
healthcare facility or service shall not indulge in any form corrupt practice of feesplitting and shall ensure that all healthcare professionals do not practise fee spitting
too. Any person who contravenes these sub-regulations commits an offence and
shall be liable on conviction to a fine not exceeding ten thousand ringgit or to
imprisonment for a term not exceeding three months or both.

42

Box 4.1: Relevant PHFS Regulations for Private Hospitals

Parts of Requirements of PHFS Regulations 138 for Private Hospitals:
II : Application for approval to establish or maintain or license to operate or provide private
healthcare facilities or services and other applications
III : Organization and management of private healthcare facilities and services
IV : Policy
V : Registers, rosters and returns
VI : Grievance mechanism
VII : Patient medical record
VIII : Consent
IX : Infection control
X : General provisions for standards of private healthcare facilities or services
XI : Standards for Obstetrical or Gynaecological care
XII : Standards for newborn nursery facilities
XIII : Standards for paediatric patient care
XIV : Standards relating to Anesthesia
XV : Standards for surgical facilities and services
XVI : Special requirements for critical care on intensive care unit
XVII : Special requirements for emergency care services
XVIII : Special requirements for pharmaceutical services
XIX : Special requirements for central sterilizing and medical-surgical supply facilities and
: services
XX : Standards for dietary services
XXI : Special requirements for blood bank services, blood transfusion services or blood donation
: programme
XXII : Special requirements for haemodialysis facilities and services (Applicable in some
: hospitals)
XXIII : Standards for rehabilitation facilities and services (Not applicable)
XXIV : Standards for specialist outpatient facilities and services
XXV : Standards for ambulatory care (Not applicable)
XXVI : Special requirements for radiological or diagnostic imaging services and radiotherapy and
: radioisotope services
XXVII : Standards for private nursing homes (Not applicable)
XXVIII : Special requirements for hospice and palliative care services (Not applicable)
XXIX : Miscellaneous (other facilities, ancillary services, fee schedule and penalty)
Source: PHFS Regulations 2006 [P.U. (A) 138/2006]

The burden of accountability on business is speciality defined in the responsibility of

the licensee and particularly in the PIC. The penalty for offences includes hefty fines
and/or imprisonment, which makes the PHFS Regulations 138 to be perceived
draconian control.
Policy Objectives of the Government as in the National Healthcare Plan
The Malaysian Government and in particular the Ministry of Health (MOH) recognise
the rising expectations and demands for quality healthcare and better accessibility to
services. The Ministry believes that it has some control over the supply of health
services but not on the demand for healthcare services. The issues to the Ministry
continue to be inequity of access to health services, inappropriate interventions and
treatments as demanded by patients or induced by providers, varying quality and
standards of care and costs that cannot always be effectively controlled. The issues
are summarized in Box 4.2.

43

Box 4.2: Summary of Issues

Healthcare delivery

Public-Private Dichotomy and other Structural Factors

Accessibility to Services

Responsiveness
Quality and Standards of Care

Variation in Quality\Pursuit of Affordable World Class Quality and Standards of Care

Inappropriate Utilization
Rising cost of care

Inefficiency

Increasing demand for health services in institutions

Wasted resources
Cost drivers

Wealth

Epidemiological transition

Facing emerging/re-emerging infectious diseases

Demographic transition

Technology
Financing the system

Financial crisis
Health awareness and lifestyle

Knowledge behaviour gap

Communitys reluctance to take ownership of health issues

Insufficient number of health promotion workforce

Lack of supportive environment

Empowerment of individuals and communities

Constraints in implementing healthy public policy

Weakness of legislation and enforcement

Policies of other Ministries not in line with MOH

Lack of public awareness

Weaknesses in programme implementation

Constrains in empowering women and specific risk groups

Lack of supportive environment

Lack of resources

Organizational issues
Information and communication technology

Inadequate integrated planning of health information system

Lack of health informatics expertise (subject matter and technical experts)

Inadequate infrastructure

Lack of standards
Research
Human Capital Development
Mismatch of Supply and Demand

Source: Country Health Plan, MOH

The Ministry continues to be concerned about the quality of care, service standards
and high fee charges in the private health sector. It desires further integration of
primary, secondary and tertiary services through strong public and private
partnerships and strengthening the enforcement of the Private Health Care Facilities
and Services Act 1998 (Act 586). The variation of quality of care is believed to be
due to inadequate regulations and/or enforcements over health professionals and
hospitals.
Bearing in mind these issues or challenges, MOH has instituted six strategic
directions in the 10th Malaysia Plan:1. Competitive Private Sector as Engine of Growth
44

2.
3.
4.
5.
6.

Productivity and Innovation through K-economy

Creative and Innovative Human Capital with 21st Century Skills
Inclusiveness in Bridging Development Gap
Quality of Life of an Advanced Nation, and
Government as an Effective Facilitator.

Through these strategic directions, the Ministry aims to achieve quality healthcare
and active healthy lifestyle in the country. The desired outcome is the provision of
and increased accessibility to quality health care and public recreational and sports
facilities to support active healthy lifestyle. The summary of MOH Key Result Areas
and Strategy is in Box 4.3 [4].
Box 4.3: MOH Strategies and KRAs
Key Result Areas

Strategies
1.

1.

2.
3.

Health sector transformation towards

a more efficient and effective health
system in ensuring universal access
to healthcare
Health awareness and healthy
lifestyle
Empowerment of individual and
community to be responsible for their
health

2.
3.
4.

Establish a comprehensive healthcare system and

recreational infrastructure
Encourage health awareness & healthy lifestyle activities
Empower the community to plan or implement individual
wellness programme (responsible for own health)
Transform the health sector to increase the efficiency and
effectiveness of the delivery system to ensure universal
access

Source: Country Health Plan, MOH

The understanding of these policy objectives as laid out in the Country Health Plan
will hopefully give us some understanding and appreciation of the motivation of MOH
in its regulatory role of the private hospital sector though budgetary instruments are
also important to achieve some of these results. The reader should refer to the
Country Health Plan: 10th Malaysia Plan 2011-2015 for further details on MOH policy
objectives.

4.4

Regulators and Other Relevant Bodies

The regulatory regimes for health in Malaysia are very extensive and complex and
range across three levels of government and involve many different ministries,
agencies, and departments. The principal regulator is the Ministry of Health (MOH).
The comprehensive list of the licensing, permits, approvals and registrations is given
in appendix 4.3 (in Bahasa Malaysia). However, the primary focus of this report is on
regulatory aspects of Private Hospital operation by the MOH.
Operating a private hospital is a complex business and the current regulatory regime
makes it even more complicated. To establish a hospital business from planning to
building to commissioning and licensing will take no less than four years. The
investor has to deal with numerous Acts and Regulations and interacts with many
regulators at the federal, state and local government levels.
45

Table 4.2: Business Life Cycle Regulations

Business Life Cycle
a) Start up
Starting a business

b) Operation/
Expansion
Dealing with
construction
permits
Fair trade

Utilities

Acts and Regulations

Regulatory bodies

Companies Act 1965

Registration of Business Act 1956

Companies Commission Malaysia (SSM)

Ministry of Domestic Trade, Co-operatives, and
Consumerism

Town and Country Planning Act

1976
Uniform Building By-laws 1984

Local and municipal councils, Ministry of Housing

and Local Government
Note: Kuala Lumpur, Putrajaya and Labuan come
under a different Act and Ministry.
Malaysia Competition Commission (MyCC),
Ministry of Domestic Trade, Co-operatives, and
Consumerism
Fire and Rescue Department (BOMBA), Ministry
of Housing and Local Government
National Water Services Commission (SPAN),
Ministry of Energy, Green Technology and Water
Energy Commission (Suruhanjaya Tenaga ST
& Tenaga Nasional Bhd. TNB)
Inland Revenue Board (LHDN), Ministry of Finance
Royal Malaysian Customs Department, Ministry of
Finance
Local and municipal councils, Ministry of Housing
and Local Government
Royal Malaysian Customs Department, Ministry of
Finance
Central Bank Malaysia (BNM)

Competition Act 2010

Price Control and Anti Profiteering
Act 2011
Fire Services Act 1988
Water Services Industry Act 2006
Electricity Supply Act 1990

Paying taxes

Income Tax Act 1967

Service Tax Act 1975,
Sales Tax Act 1972
Assessment Tax (Local councils)

Trading across
borders

Customs Act 1967, Excise Act

1976,
Customs Duties order 1996
Exchange Control Act 1953
Employment (Amendment) Act
2011
Industrial Relation Act 1967
Minimum Wages Order 2012
Minimum Retirement Age Bill 2012
Employees Provident Fund Act
1991
Employees Social Security Act
1969
Pembangunan Sumber Manusia
Berhad Act 2001
Occupational Safety and Health
Act 1994
National Land Code 1965
Strata Titles Act 1985

Employing workers

Ownership of
property

Getting
credit/raising fund

Protecting
investors

Enforcing contracts

Windingup/Receivership

EPU Guideline on the Acquisition

of Properties (foreign investment)
Anti-Money Laundering Act 2001
Capital Market & Services Act
SC Guidelines on Private Debt
Securities
SC Guidelines on Sales Practice of
Unlisted Capital Market Products
Malaysian Code on Corporate
Governance 2012
Bursa Malaysia Listing & Trading
Requirements
Contracts Act 1950
Stamp Act 1949
Specific Relief Act 1963
Bankruptcy Act 1967

Ministry of Human Resource

Employees Provident Fund (EPF)

Social Security Organisation, (SOCSO), Ministry of
Human Resource
Human Resource Development Fund (HRDF)
Ministry of Human Resource
National Institute of Occupational Safety & Health
(NIOSH) , Ministry of Human Resource
Ministry of Housing and Local Government
Department of Director General of Lands and
Mines (JKPTG), Ministry of Natural Resource &
Environment
Economic Planning Unit (EPU), Prime Ministers
Department
Bank Negara Malaysia
Securities Commission (SC)

Bursa Malaysia (Bursa)

Attorney Generals Chambers (AGC)

Malaysia Department of Insolvency (MDI)

Source: MITI-PwC Report 2013 [1]

Note: Authors addition in bold italic

46

For example, Table 4.2 illustrates the general regulatory requirements that any
business incorporations in Malaysia will have to comply with.
For a private hospital, there are other regulatory requirements that have to be met.
These are covered by the various health and medical Acts and Regulations that
have been introduced over the years. Health regulations in Malaysia is extensive and
expansive, covering the total health business value chain, including food, beauty
products and services, and other health related activities.
The health regulatory regime is relatively matured and well developed and is well
aligned with World Health Organization standards and requirements. The health
regulatory regime continues to be improved with the introduction of new regulations
and the continual reviews of existing regulations in line with new challenges in
healthcare, economic development, development in medical and pharmaceutical
technology and societal and demographic changes. For example, the Ministry of
Health has on first July 2013 implemented the Medical Device Act 2012 (Act 737)
and the accompanying Regulations 2012.
Apart from health regulations, the Ministry continues to develop and formulate new
policy and operational guidelines for industry to self regulate their activities. The
Ministry web-site has a listing of 36 Acts and Regulations on the healthcare sector
under its purview and 15 policy papers for health professional reference. It has also
published some 50 guidelines and electronic books for reference by both public and
private hospitals.
Prior to 1998, there is no specific regulation to govern the planning, establishment
and operation of the private hospital business. The regulations on private hospitals
were the same as that of public hospitals. In 1998, the Private Health Care Facilities
and Services Act 1998 (Act 586) was enacted and was implemented on 1st May
2006 with the gazette of the Private Health Care Facilities and Services (Private
Hospitals and Other Private Healthcare Services) Regulations 2006 [P.U. (A)
138/2006] and the Private Health Care Facilities and Services (Private Medical
Clinics or Dental Clinics) Regulations 2006 (P.U. (A)) 137/2006]. The MOH is the
principal regulator for private hospitals and other private healthcare facilities in the
country. There are also other regulators involved in the private hospital business as
illustrated in Table 4.3.

47

Table 4.3: Facilities and Services Regulations and Regulators for Private Hospitals
Primary Activity
Establishment
Healthcare
professionals
Specialists
Medical supplies
Facilities
Medical tourists

Operations
Services
Healthcare
professionals
Specialists
Diagnostics
Treatment
Rehabilitation
Reporting
(statistics &
incident reporting)

Sales & Marketing

Promotion
Brand development
Market development
Services
Immigration
Transportation
Accommodation
Financial

Acts and Regulations

Private Healthcare Facilities and Services Act
1998
Private Healthcare Facilities and Services
(Private Hospitals and Other Private
Healthcare Facilities) Regulations 138/2006
Medical Act 1971

Dental Act 1971

Nurses Act 1950 & Nurses Registration
Regulations 1985
Midwifery Act 1966 (Act 436)
Medical Assistants (Registration) Act 1977
(Act 180)
Registration of Pharmacists Act 1951 &
Registration of Pharmacists Regulation
2004
Private Healthcare Facilities and Services Act
1998
Private Healthcare Facilities and Services
(Medical Clinics or Dental Clinics) Regulations
2006
Medical Act 1971
Medical Regulations 1974
Dental Act 1971
Nurses Act 1950
Registration of Pharmacists Act 1951 &
Registration of Pharmacists Regulation 2004
Optical Act 1991 (Act 469) &
Optical Regulations 1994
Medical Device Act 2012
Medical Device Regulations 2012
Atomic Energy Licensing Act 1984 (Act
304)
Environmental Quality Act 1974 (Act 1270
Factory and Machinery Act 1967
Fire Services Act 1988
Control of Drugs and Cosmetics
Regulations 1984 (for manufacturing
license)
Statistics Act 1965 (Act 415)
Medicines (Advertisement and Sale) Act 1956
Medicines Advertisements Board
Regulations 1976
Malaysia Health Tourism Council
Requirements
Immigration Act 1959/63
Insurance Act 1996
Exchange Control Act 1953
Tourism Industry Act 1992
Land Public Transport Act 2010

Regulatory body
Ministry of Health (various
departments)

Malaysian Medical Council (MMC)

National Specialists Registration
(NSR)
Malaysian Dental Council (MDC)
Malaysia Nursing Board (MNB)
Malaysia Midwives Board (MMB)
Malaysia Medical Assistants
(Registration) Board (MMAB)
Malaysian Pharmacy Board (MPB)

Ministry of Health

Malaysian Medical Council (MMC)

Malaysian Dental Council (MDC)
Malaysia Nursing Board (MNB)
Malaysian Pharmacy Board (MPB)
Malaysian Optical Council (MOC)
Medical Device Board (MDB)
Engineering Department of MOH
Department of Environment (DOE)
Department of Occupational Health
and Safety (DOSH)
BOMBA
Malaysian Pharmacy Board

Department of Statistics (DOS)

Medicine Advertisements Board
(MAB)
Malaysia Health Tourism Council
(MHTC)
Immigration Department Malaysia
Bank Negara Malaysia (BNM)
Ministry of Tourism (MOT)
Land Public Transport Commission &
Road Transport Department (JPJ)

Source: MITI-PwC Report 2013 [6]

Note: Authors addition in bold italic

The functional responsibilities for regulating the private healthcare providers are
shared between different agencies, whether they are councils, boards, registrars or
specialized departments and divisions, under the umbrella of MOH. These various
agencies within MOH have their established roles defined by the various Acts and
48

Regulations a show in Table 4.4. [See also Table 4.1 on healthcare professionals
registration and licensing].
Apart from these regulatory agencies, the private healthcare providers are also being
represented by non-regulatory bodies which play important roles in the development
and growth of the healthcare industry. Many of them have close working
relationships with MOH and provide feedbacks and inputs to the Ministry on their
regulatory roles. These non-governmental organizations (NGOs) represent the voice
of its members and liaise with the Government. They also look into the continuous
develop of their members.
Table 4.4: MOH Agencies and Their Legislative Provisions
Agencies

Legislative provisions

Medical Practice
Division Private
Medical Practice
Control Section
(CKAPS)

Private Healthcare Facilities and Services Act 1998 [Act 586]

Section 3: Approval and Licensing of facilities other than clinics;

Section 4: Registration of clinics;

Part XIV: Managed Care Organisation; and

Part XVI: Enforcement (Section 87 100).

Regulations under Act 586:
1. Private Healthcare Facilities and Services (Private Hospitals and Other Private
Healthcare Facilities) Regulations 2006;
2. Private Healthcare Facilities and Services (Private Medical Clinics and Private Dental
Clinics) Regulations 2006;
3. Private Healthcare Facilities and Services (Official Identification Card) Order 2006; and
4. Private Healthcare Facilities and Services (Compoundable Offences) Regulations 2011.

Section 12 -14 of the Medical Act 1971;

Section 20 of the Medical Act 1971;

Section 29 31A of the Medical Act 1971 and Regulation 26-33 of the Medical
Regulation 1974;

Second Schedule Medical Act 1971; and

Malaysia Qualification Agency Act 2007 [Act 679].

Dental Act 1971 (Act 51)

Malaysian
Medical Council
(MMC)

Malaysia Dental
Council
Malaysia Nursing
Board
Malaysia Midwife
Board
Medical Assistant
Board

Malaysian Optical
Council (MOC)
Pharmacy
Enforcement
Division (PED)

Nurses Act 1950 (Act 14) &

Nurses Registration Regulations 1985

Midwifery Act 1966 (Act 436)
Medical Assistant (Registration) 1977 Act [Act 180]

Section 3(1);

Section 6(1), 7(1); and

Section 9(1).
Optical Act 1991 (Act 469)
Optical Regulations 1994
1. Poisons Act 1952

Section 31: Power of investigation, examination and entry into premise.

Section 34: Sanction to prosecute and conduct prosecution.

2. Sale of Drugs Act 1952

Section 4(1)(a): Power to enter and inspect any place where he has reason to
believe that there is any drug intended for sale.

Section 4(1)(b): Power to mark, seal, otherwise secure, weigh, count or measure
any drug, the sale, preparation or manufacture of which is or appears to be
contrary to this Act

Section 4(1)(c): Power to inspect any drug wherever found which is or appears to
be unwholesome or deleterious to health.

Section 4(2)(a): Power to seize any drug wherever found which is or appears to be
unwholesome or deleterious to health.

Section 4(2)(b) : Power to destroy any drug wherever found which is decayed or
putrefied.

49

Pharmacy Board
Malaysia
National
Pharmaceutical
Control Bureau

Medicine
Advertisement
Board
Food Safety and
Quality Division
Disease Control
Division

Section 5: Power to demand, select and take samples.

Section 9: Power to call for information.
Power to prosecute and conduct prosecution given by DPP under Section 376 of
Criminal Procedure Code.
3. Registration of Pharmacists Act 1951

Section 21(2): power to enter premises to inspect, remove and detain

4. Medicines (Advertisement and Sale) Act 1956

Section 6B: Power of investigation.

Section 6C: Power of Examination of witnesses.

Section 6D: Power to enter premises.

Section 6F: Sanction to prosecute and conduct prosecutions.

Registration of Pharmacist Act 1951; and
Registration of Pharmacist Regulations 2004.
Control of Drugs and Cosmetics Regulations 1984
Where the Authority (known as the Drug Control Authority, DCA) established under these
Regulations, is tasked with ensuring the quality, safety and efficacy of medicinal products
through the registration, including quality control, inspection and licensing and postregistration activities. The NPCB acts as a secretariat to the Authority.
The Medicines (Advertisement and Sale) Act 1956 [Act 290]; and
Medicines Advertisements Board Regulations 1976
Food Regulation 1985
Food Hygiene Regulation 2009
Food Analyst Act 2011
Prevention and Control of Infectious Diseases Act 1988 (Act 342);
Prevention and Control of Infectious Diseases (Importation and Exportation of Human
Remains, Human Tissues and Pathogenic Organisms and Substances) Regulations
2006; and
International Health Regulations 2005.

Source: Author

These key non-regulatory bodies provide additional oversights on the behaviour and
performance of the healthcare providers. The MSQH for example, provides voluntary
quality accreditation for hospitals which assures quality patient care and protection of
the rights of patients. In addition, it follows closely the requirements of the PHFS
Regulations 2006. The accreditation process complements the licensing role of the
MOH.
The MHTC is under the umbrella of MOH and overseas the promotion of health
tourism in the country. The main agenda of MTHC is to promote the Malaysian
healthcare industry internationally and to develop healthcare into a global export. In
this facilitating role it also ensures that health visitors into the country are protected
and receive quality care.
The MMA is another NGO that provides oversight of medical professionals. It has
close liaison with the MMC in particular and other MOH regulators in general. Its
oversight role is complementary to the licensing role of MMC. Together with this is
the NSR which caters for voluntary registration of medical specialists. The MOH
recognizes the Specialist Certification by NSR which is a requirement for licensing
the specialist medical clinics. The certification legitimises the specialty area of the
medical practitioner. These bodies also ensure the continuing professional
development of its members as part of the regulatory requirements. The other

50

professional bodies with similar roles as MMA, although not as authoritative, are
listed in Table 4.5 below.
Table 4.5: Key Non-Governmental Bodies in Healthcare Regulation
Bodies

Purpose/objective/function

Malaysian Health Tourism

Council www.mhtc.org.my

Mission:

[Note: MHTC was

established under MOH
with Cabinet approval in
2009]

Malaysian Medical
Association
http://www.mma.org.my/
[A National Association for
Medical Doctors]

National Specialist
Register
http://www.nsr.org.my/

The Academy of Medicine

Malaysia
http://www.acadmed.org.
my/
Association of Private
Hospitals Malaysia
http://www.hospitalsmalaysia.org/

Malaysian
Pharmaceutical Society
http://www.mps.org.my/

To promote global awareness of Malaysian healthcare facilities and

services.
To promote and facilitate the development of the Malaysian healthcare
industry so as to penetrate the global market.
Objective:
To facilitate public-private sector collaboration so that issues affecting this industry
can be effectively addressed to ensure that health visitors have a seamless
experience with Malaysian healthcare services.
Objective:

To promote and maintain the honour and interest of the profession of

medicine

To serve as a vehicle of the integrated voice of the whole profession

To participate in the conduct of medical education, as may be as

appropriate
Purpose:
To ensure that doctors designated as specialists are appropriately trained and fully
competent to practise the expected higher level of care in the chosen specialty. With
the National Specialist Register in place, doctors will be able to identify fellow
specialists in the relevant specialties to whom they can refer either for a second
opinion or for further management. Importantly, the National Specialist Register
protects the public and will help them to identify the relevant specialist doctors to
whom they may wish to be referred or may wish to consult.
AMM is a professional organisation to assure the maintenance of a high standard of
professional and ethical practice. AMM was formed in 1966 and was registered on
22nd December, 1966 under the Societies Act (1966). The Academy of Medicine of
Malaysia embraces all specialities in medicine.
The APHM plays an important role in its objective of helping to raise standards of
medical care within the country.
Some of the activities geared towards this objective include: Ensuring patient safety and quality as a member of the National Patient
Safety Council, the Malaysian Society for Quality in Health and the
Malaysian Productivity Council.
Working dialogues with public sector agencies including Ministry of Health
Malaysia
Participation in National working groups such as MPC, MITI and
MATRADE.
Training programs for all Healthcare providers which include the yearly
Conference and Exhibition and regular smaller group workshops on clinical
and administrative / managerial topics.
Promotion of Health Tourism Activities regionally and internationally with
the Malaysia Healthcare Travel Council (MHTC)
Among the aims of the Society are:

To promote and maintain the honour and interest of the profession of

pharmacy

To encourage and further the development of Pharmacy and

Pharmaceutical Education and to foster intra-professional relationship
among members.

To improve the Science of Pharmacy for the general welfare of the public
by fostering the publication of scientific and professional information
relating to the practice of pharmacy and aid in the development and
stimulation of discovery, invention and research.

To uphold and enhance the standard and ethics of the profession.

To affiliate an co-operate with any organization as may be deemed

desirable in furthering the aims of the Society.

To represent the views of the members in matters affecting the common

interest of the profession.

51

Malaysian Society of
Anaesthesiologists
http://www.msa.net.my/

Malaysian Nurses
Association
http://www.mna.org.my/

Malaysian Association of
Medical Assistants
http://www.pppmalaysia.c
om/

Malaysian Dental
Association
http://www.mda.org.my/
Affiliations:
a) Malaysian Endodontic
Society
b) Malaysian Private
Dental Practitioners
Association
c) Malaysian Association
of Aesthetic Dentistry
d) Malaysian Oral
Implant Association

To assist in improving the health services in the country.

To enhance the professionalism of pharmacists, the Society endorsed the
Code of Conduct For Pharmacists And Bodies Corporate as established by
the Pharmacy Board.
The Malaysian Society of Anaesthesiologists was founded in 1964. It was initially
Registered as Malayan Anaesthetic Society but changed its name to Malaysian
Society of Anaesthesiologists in the 1970s.
Objectives:
To promote the art and science of Anaesthesiology.
To co-ordinate the activities of Anaesthesiologists.
To represent Anaesthesiologists and protect their interests.
To encourage and promote co-operation and friendship between
Anaesthesiologists and to do such lawful things as may be indicated or
conducive to the attainment of such objects.
To achieve liaison with similar bodies and other specialties in other
regions.
MNA Objectives
To achieve our mission, the Association aims to:
develop and promote high standards of nursing practice and research.

uphold the image of nursing.

abide by the professional ethics.

be the centre of National and International Nursing networking.

implement and collaborate with other organizations for health promotion.

Objectives Of The Association

To cater for the professional interests of medical assistants and to all those
having connection with and the practice of medical and health sciences
towards helping to sustain standard and work ethics.

To facilitate the exchange of information and ideas by literary, technical

and social activities on matters affecting the role of medical assistants in
relation to primary health and medical care, emergency medicine, medical/
surgical specialisation and super specialisation and medical management,
administration and supervision.

To foster and preserve the unity and aim or purpose of the profession.

To support a high standard of professional ethics and conduct.

To enlighten and direct public opinion on professional aspects in relation to

medical and health problems.

To promote the advancement of medical assistants as a profession and to

maintain the standard of training, service, education and interests of the
profession at all levels.

To voice its opinion and to acquaint the government and other bodies with
the policy and attitude of the medical assistants profession.

To promote and participate in social, medical and charitable activities in

building an united Malaysian nation.
Objectives:

To promote the art and science of dentistry

To maintain the honour and interest of the dental profession.

To foster and preserve unity, aim and purpose of the dental profession as
a whole.

To hold periodical meetings of members of the association for the

discussion of scientific subjects professional matters and social purposes.

To encourage study and research in the field of dentistry.

To support and promote a high standard of ethics and professional

conduct.

To enlighten and direct public opinion on dentistry and problems of dental

health.

To publish papers, journals and other materials in furtherance of the above

objects

Source: Websites of associations and bodies.

52

Private Hospital Life-cycle Value Chain - Regulatory Regimes

Having identified the various Acts and Regulations the linkage to the business lifecycle value chain for the private hospital and the resulting regulatory regimes can be
established. This provides an overview of the complex nature of regulatory regimes
from the stage of starting the business, its continuing operation and growth to its
eventual winding-up. The details of the regulatory regime are in Appendix 4.3. Using
the business life-cycle value chain established in Chapter two (see Figure 2.4), the
resultant linkage can be formulated as in Table 4.6. There are four stages to the
business life-cycle: a) Establishment (start-up), b) Operation and maintenance
(license renewal), c) Expansion (growth & improvement), and finally d) Winding-up.
Table 4.6 provides an overview of the regulatory regimes for the business life-cycle
for private hospital.
Table 4.6: Private Hospital Life-cycle Value Chain - Regulatory Regimes
Acts & Regulations

Companies Act 1965

Registration of Business Act 1956
National Land Code 1965
Strata Titles Act 1985
EPU Guideline on the Acquisition of
Properties (foreign investment)
Town and Country Planning Act
1976
Federal Territory Planning Act 1982
Uniform Building By-laws 1984
Fire Services Act 1988
Water Services Industry Act 2006
Electricity Supply Act 1990
PHFS Act 1998
PHFS Regulations 138/2006

Contracts Act 1950

Stamp Act 1949
Specific Relief Act 1963

Business life-cycle
Establishment
Starting a business
Acquiring property (land
matters)
Establishment of private
hospital
Construction of building
Land conversion
Utilities requirements

Establishing contracts

Operation & Maintenance

PHFS Act 1998
Operation & maintenance
of hospital & healthcare
PHFS Regulations 138/2006
facilities
Medical Device Act 2012
Medical Device Regulations 2012
Atomic Energy Licensing Act 1984
Environmental Quality Act 1974
Factory and Machinery Act 1967
Fire Services Act 1988
Control of Drugs and Cosmetics
Regulations 1984
Poisons Act 1952
Sale of Drugs Act 1952
Medicines (Advertisement and Sale)
Act 1956
Medical Act 1971
Healthcare professionals
o Medical doctors
Medical Regulations 1974
o Medical specialists
Dental Act 1971
o Dentist & dental
Nurses Act 1950
specialists
Registration of Pharmacists Act
o Nurses
1951

Regulatory regime (Appendix 4.3)

Business registration (SSM)
Land acquisition and registration
(State)
Strata title (State)
Dealing with construction permits
Development Order (LA)
Planning Approval (LA)
Land conversion & registration (State)
Approval to Establish (MOH)
Fire safety (BOMBA)
Water & sewerage (SPAN)
Approval for electricity (ST/TNB)
Certificate of completion & compliance
(LA)
Registration of contracts
Stamp duties

Operation licensing (MOH - CKAP)

Licensing of medical devices (MDB)
Licensing of radioactive medical
equipment (MOH)
Licensing of hazardous waste (DOE)
Passenger lifts safety certificate
(DOSH)
Autoclaves & other pressure vessels
(DOSH)
Fire safety certificate (BOMBA)
Drugs and pharmaceuticals
manufacturing license (MPB)
Approvals for advertisement and
adverting materials (MAB)
Registrations for all healthcare
professionals (various boards/councils)
Annual Practising Certificate for all
healthcare professionals, including
Allied Health Professionals (various
boards/councils)

53

 Registration of Pharmacists
Regulation 2004
Optical Act 1991 (Act 469) &
Optical Regulations 1994

Midwives
Medical Assistants
Opticians & Optometrists
Pharmacists
Other Allied Health
Professionals
Employment (Amendment) Act 2011 Other employment
requirements
Industrial Relation Act 1967
Minimum Wages Order 2012
Minimum Retirement Age Bill 2012
Employees Provident Fund Act
1991
Income Tax Act 1967
Employees Social Security Act
1969
Pembangunan Sumber Manusia
Berhad Act 2001
Occupational Safety and Health Act
1994
Immigration Act 1959/63
Local Government Act 1976
Other business licensing
Land Public Transport Act 2010

Similar to operation and

maintenance

Similar regulations are applicable

as for establishing a new hospital

o
o
o
o
o

Specialist Certification (NSR)

Registration of workforce (MOHR)

Registration of Unions (Industrial
Relations Department MOHR)
Registration of employees with
SOCSO
Registration of employees with PSMB
Registration of employees with LHDN
Work Permits (Immigration)
Various types of permits on workforce
(see Appendix 4.3)

Premise License (LA)

Advertising License (LA)
Vehicle Parking License (LA)
Food Premise License (LA)
Vehicle Type Approval (JPJ)

Continuing operation
Private Hospital License is Except for those one-off registrations,
renewable every 2 years.
all other renewable licenses and
certifications are the same of
Other types of licensing are
Operation and Maintenance.
usually on an annual basis

PHFS Act 1998

PHFS Regulations 138/2006

Companies Act 1965

Income Tax Act 1967

Bankruptcy Act 1967
Employment (Amendment) Act 2011
Industrial Relation Act 1967

Expansion/Growth
(include improvement)
Renovation on building
Up-grading of facilities
Extension of building
Acquiring adjacent land for
extension
Winding up business
Closing down
Sales or ownership transfer
Bankruptcy

Similar planning as in dealing with

construction permits (LA)
Establishment approval (MOH)
Re-licensing on completion by MOH to
include the new facility.

Surrender of operating license (MOH)

Notification on retrenchment (MOHR)
Receivership processing (MDI)
Registration of company (SSM)

Source: Author

54