private hospitals

Transcription

private hospitals

RECOMMENDATION REPORT
PRIVATE HOSPITALS
August 2014
i
PUBLISHED BY:
MALAYSIA PRODUCTIVITY CORPORATION
Lorong Produktiviti, Off Jalan Sultan
46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia.
Tel : 603 – 7955 7266 / 7955 7050 / 7955 7085
Faks : 603 – 7957 8068 / 7955 1824 / 7954 0795
Emel : [email protected]
Website : http://www.mpc.gov.my
Perbadanan Produktiviti Malaysia 2014
All right reserved
No part of this publication may be reproduced, stored in retrieval system or transmitted, in
any form or any means, electronics, mechanical, photocopying, recording, or otherwise,
without prior permission of Malaysia Productivity Corporation.
Disclaimer
This report has been prepared by Malaysia Productivity Corporation from sources believed
to be reliable but no responsibility is accepted by Malaysia Productivity Corporation, its
employees, consultants, contractors and/or agents in relation to the authenticity, origin,
validity, accuracy or completeness of, or for any errors in or omission form, the information,
statements, forecasts, misstatement of facts, opinion and comments contained here in.
ISBN NO 978–983–2786–25–2
PRODUCTIVITY AND REGULATION
Productivity is the only driver of income growth that is unlimited, as opposed to resource exploitation or
increase in population and labour force participation, each of which faces natural limits. The potential for
productivity growth to generate higher income for Malaysians makes it a natural and important
consideration for decision makers. As such the continuing need to stimulate productivity rightly remains
at the forefront of government policies.
Regulation is the lifeblood of a modern, well-functioning economy. Almost all regulations have the
potential to impact on productivity, either through the incentives which they provide to businesses to
change operating and investment decisions, or more directly through their impacts on compliance costs. It
is inconceivable to think of a modern economy functioning without regulation. However, poor regulation
can cause frustration and unintended consequences, or simply add red tape that adds nothing useful to
the economy, society or the environment.
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FOREWORD
Through regulation the government can leverage its policy interests on businesses.
Regulation can contribute to a range of social, environmental and economic goals.
However, in practice, many regulations are not implemented efficiently or costeffectively, and some regulations do not even adequately achieve the ends for which
they are designed. Poor regulatory regimes invariably result in unnecessary
regulatory burdens which will stifle business growth.
In the 10th Malaysia Plan, the Malaysia Productivity Corporation (MPC) is mandated
to review those regulations affecting the conduct of business in Malaysia with the
view to modernize business regulations. This is crucial in order for the country to
move towards its aspiration of becoming a high-income nation. Towards this, MPC
has embarked on review of existing business regulations with the focus on the 12
National Key Economic Areas (NKEA) which have been identified as having high
growth potential.
In this study, the research team led by Mr. Goh Swee Seang has been asked to
examine the regulatory regimes of the healthcare services sector with the aim of
recommending options to remove unnecessary regulatory burdens. For this particular
study, the focus is on the private hospital sector as this is deemed a high value
added, high knowledge-based and growing sector.
The study emulated the approach used by the Australian Government Productivity
Commission (AGPC) and the team was guided by a regulatory expert previously from
the AGPC, Ms. Sue Holmes. The team selected a sample of private hospitals across
the country and carried out interviews with the senior management personnel to
identify the issues of concern relating to the various regulations imposed upon the
operation of private hospitals. From these issues and using principles of good
regulatory practices, the team then formulated feasible options for further
deliberation. These issues and options will be subjected to public consultation with
relevant stakeholders in order to develop concrete recommendations to reduce
unnecessary regulatory burdens on private hospitals.
In the course of the study, MPC benefited greatly from discussions with some private
hospitals, government officials and business organizations. Valuable input and
feedback were received from the AGPC expert, members of the Healthcare
Consultative Panel of MPC and other interested parties. MPC is grateful to all those
who assisted it.
The study was conducted in MPC Head Office by the Regulatory Review Directorate
led by Mr. Zahid Ismail and overseen by me.
Dato’ Mohd Razali Hussain
Director General, MPC
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CONTENTS
FOREWORD ........................................................................................................................................................................ iii
ABBREVIATIONS ............................................................................................................................................................ viii
GLOSSARY ............................................................................................................................................................................. x
OVERVIEW ........................................................................................................................................................................ xiii
RECOMMENDATIONS .................................................................................................................................................. xix
CHAPTER ONE: ABOUT THE REVIEW ...................................................................................................................... 1
1.0
About the Review ......................................................................................................................................... 1
1.1
What MPC has been asked to do.................................................................................................... 1
1.2
The 10th Malaysia Plan: Modernising Business Regulation ............................................... 2
1.3
The approach and rationale of this review .................................................................................. 3
1.4
Conduct of the study .............................................................................................................................. 4
1.4
Structure of the report ........................................................................................................................... 1
CHAPTER TWO: HEALTHCARE INDUSTRY VALUE CHAIN ............................................................................. 3
2.0
Sector Analysis on Healthcare Industry ............................................................................................ 3
2.1
Healthcare Industry in Malaysia ............................................................................................................ 4
2.2
Healthcare Industry Value Chain.......................................................................................................... 5
2.3
Macroeconomic Performance .............................................................................................................. 10
2.4
Growth of Private Hospital Sector ...................................................................................................... 14
CHAPTER THREE: BEST PRACTICE REGULATIONS AND REGULATORY BURDENS .......................... 21
3.0
Cost of Regulation ..................................................................................................................................... 21
3.1
What are Unnecessary Regulatory Burdens? ............................................................................. 23
3.2
Regulation of the Private Hospitals ................................................................................................... 24
3.3
Sources of Unnecessary Regulatory Burden ............................................................................... 27
3.4
Best Practice Regulation ........................................................................................................................ 28
3.5 Regulatory approaches: Prescriptive-based, Performance-based, Principle-based and
Process-based Approaches to Regulatory Design ....................................................................... 31
CHAPTER FOUR: HEALTHCARE REGULATIONS IN MALAYSIA .................................................................. 33
4.0
Regulatory Overview of Healthcare in Malaysia ......................................................................... 33
4.1
Historical development of the Existing Framework ................................................................... 33
4.2
Current Legislative Arrangements ..................................................................................................... 36
4.3
Regulators and Other Relevant Bodies........................................................................................... 41
CHAPTER FIVE: THE BURDENS OF LICENCE RENEWAL ............................................................................... 50
5.0
Regulatory Burdens in the Private Hospital Sector ................................................................... 50
5.1
Licence Renewal ........................................................................................................................................ 51
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5.2
Issue No. 1: Application Documentation......................................................................................... 52
5.2.1
Option No. 1: No change and continue with the existing practice ................................. 52
5.2.2
Option No 2: Using information technology ........................................................................... 53
5.2.3
Option No 3: Moving from “evidence-based” to “information-based” by removing
duplication of requirements by different regulators within the MOH......................... 53
5.2.4
Recommended Option to Resolve Issue No. 1 ........................................................................ 54
5.3
Issue No. 2: Complying with Licensing Requirements ............................................................ 54
5.3.1
Option No. 1: No change .................................................................................................................. 56
5.3.2
Option No. 2: Review the PHFS Regulations 138/2006 and Adopt Best
International Practices .................................................................................................................... 56
5.3.3
Option No. 3: Transparency through Continuing Education on Licensing
Requirements ...................................................................................................................................... 57
5.3.4
Recommendation to Resolve Issue No. 2 ................................................................................. 57
5.4
Issue No. 3: Dealing with licensing officers (on-site inspections, audits, or surveys)
58
5.4.1
Option No. 1: Transparency through Separating Auditing from Licence approval 58
5.4.2
Option No. 2: Transparent Standard Operating Procedure .............................................. 59
5.4.3
Option No. 3: Establishing a Help-desk ..................................................................................... 59
5.4.4
Option No. 4: Providing Appeal Provisions ............................................................................. 59
5.4.5
Recommended Options to Resolve Issue No. 3...................................................................... 59
5.5
Issue No. 4: Fragmented Processes ................................................................................................ 60
5.5.1
Option No. 1: No direct action....................................................................................................... 60
5.5.2
Option No. 2: Redefining the regulatory oversights functions ........................................ 60
5.5.3
5.6
Issue No. 5: Annual Practising Certificates for Healthcare Professionals ..................... 61
5.6.1
Option No. 1: No change to existing practice .......................................................................... 61
5.6.2
Option No. 2: Online Registrations ............................................................................................. 62
5.6.3
Option No. 3: Revamping the APC concept and practice ................................................... 62
5.6.4
Recommended Option on APC ...................................................................................................... 62
5.7
Concluding Remarks ................................................................................................................................ 62
CHAPTER SIX: THE BURDENS IN PLANNING APPROVALS, WORKFORCE REGULATION, MEDICAL
ADVERTISING AND REGULATED MEDICAL FEES............................................................................................. 64
6.0
Regulatory Burdens in Private Hospital Sector 2 ....................................................................... 64
6.1
Issue No. 1: Planning Approval for renovation, upgrade, extension, etc. ...................... 64
6.1.1
Option No. 1: No change and continue with the existing practice ................................. 64
6.1.2
Option No 2: Eliminate Planning Approval for minor renovation ................................. 64
6.1.3
Option No 3: Adopt Risk-based Approach for Planning Approval................................. 65
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6.1.4
6.2
Issue No. 2: Workforce Quality ............................................................................................................ 65
6.2.1
Option No. 1: Maintain existing practice .................................................................................. 67
6.2.2
Option No. 2: Monitoring Education Quality by the MOH ................................................. 68
6.2.3
Option No. 3: A Formula for Supply-Demand Balance ....................................................... 68
6.2.4
Recommended Option No. 3 to Resolve Issue on Workforce .......................................... 68
6.3
Issue No. 3: Approval for Advertisement and Advertising Materials ................................ 68
6.3.1
Option No. 1: Maintain existing practice .................................................................................. 69
6.3.2
Option No. 2: Electronic means of submission and application ..................................... 69
6.3.3
Option No. 3: Change the approval application to notification using ICT................... 69
6.3.4
Recommended Option No. 3 .......................................................................................................... 69
6.4
Issue No. 4: Regulated Medical Fees .............................................................................................. 69
6.4.1
Option No. 1: No change but review the Thirteen Schedule periodically ................... 71
6.4.2
Option No. 2: Remove the regulation on medical fee together with government
sponsored patients ............................................................................................................................ 71
6.4.3
Option no. 3: Revamp the PHFS Regulations 138/2006 to reduce fixed overhead
costs of private hospitals ................................................................................................................ 71
6.4.4
Recommended options: long-term solutions from Option No. 2 and 3 ....................... 71
6.5
Other Issues .................................................................................................................................................. 72
6.5.1
Export of Healthcare Services (Health Tourism) .................................................................. 72
6.5.2
Personal Data Protection ................................................................................................................ 72
6.5.3
MSQH Accreditation .......................................................................................................................... 72
6.5.4
Information and Reporting ............................................................................................................ 72
6.6
CHAPTER SEVEN: FEEDBACK FROM REGULATORS AND OTHER STAKEHOLDERS.......................... 75
7.0
Presentation to the Healthcare Consultative Panel (HCP) of MPC .................................. 75
7.1
Feedback from the HCP Members .................................................................................................... 76
7.2
Feedback from the Licensing Authority of the Ministry of Health (CKAP) ..................... 77
7.3
REFERENCES .................................................................................................................................................................... 82
APPENDIXES ..................................................................................................................................................................... 84
Appendix 2.1: Healthcare Services and Related Sectors MSIC2008 ............................................ 84
Appendix 4.1: Analysis of Act 586.................................................................................................................... 86
Appendix 4.2: PHFS Regulations 138/2006: Requirements for Private Hospitals .................. 89
Appendix 4.3: Regulatory Regimes for Healthcare and Health-related industries .................. 91
Appendix 5.1: Summary of Survey Output................................................................................................... 94
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Appendix 5.2: Validation Response on Survey Output.......................................................................... 98
Appendix 7.1: Reports of Meeting with the MOH .................................................................................. 101
Appendix A: Study Methodology (Presentation by Sue Holmes) .................................................. 103
Appendix B: Study Questionnaires and Conceptual Framework .................................................. 111
Appendix C: APHM Members List ................................................................................................................. 114
Appendix D: Summary of Interviews Output ............................................................................................ 125
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ABBREVIATIONS
AGC
AHIA
AHP
AMM
APC
AGPC
APHM
BNM
BOMBA / JBPM
CKAPS
CPD
DCA
DG
DOE
DOS
DOSH
EPF
EPU
ETP
GDP
GRP
HCP
HRDF
IT
JCI
JPJ
LG
LHDN
MAB
MATRADE
MDB
MDC
MDI
MEGB
MHTC
MISC2008
MITI
MMA
MMAB
MMB
Attorney General’s Chambers
Australasian Health Infrastructure Alliance
Allied Health Professionals
Academy of Medicine Malaysia
Annual Practising Certificate
Australian Government Productivity Commission
Association of Private Hospitals Malaysia
Bank Negara Malaysia (Malaysia Central Bank)
Fire and Rescue Department Malaysia
Cawangan Kawalan Amalan Perubatan Swasta (Private Healthcare
Practice Control Branch)
Continuous Professional Development
Drug Control Authority
Director General
Department of Environment
Department of Statistics
Department of Occupational Health and Safety
Employees Provident Fund
Economic Planning Unit, Malaysia
Economic Transformation Plan
Gross Domestic Product
Good Regulatory Practises
Healthcare Consultative Panel of MPC
Human Resource Development Fund
Information Technology
Joint Commission International
Road Transport Department
Local Government
Lembaga Hasil Dalam Negeri (Inland Revenue Board)
Medicine Advertisements Board
Malaysia External Trade Development Corporation
Medical Device Board
Malaysian Dental Council
Malaysia Department of Insolvency
Masterskill Education Group Berhad
Malaysia Health Tourism Council
Malaysian Standard Industrial Classification 2008
Ministry of International Trade and Industry
Malaysian Medical Association
Malaysia Medical Assistants (Registration) Board
Malaysia Midwives Board
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MMC
MNA
MNB
MOC
MOH
MOHR
MOT
MPB
MPC
MSIC
MSQH
MYCC
NDPC
N.E.C
NGO
NIOSH
NKEA
NSR
OECD
PEMUDAH
PHFS
PIC
PTPTN
RIS
RR
RURB
SC
SL1M
SME
SOCSO
SOP
SPAD
SSM
ST
TNB
UKAPS
UNU
WHO
Malaysian Medical Council
Malaysia Nurses Association
Malaysia Nursing Board
Malaysian Optical Council
Ministry of Health
Ministry of Human Resources
Ministry of Tourism
Malaysian Pharmacy Board
Malaysia Productivity Cooperation
Malaysia Standard Industrial Classification
Malaysian Society for Quality in Health
Malaysia Competition Commission
National Development Planning Committee
Not elsewhere classified
Non-Governmental Organization
National Institute of Occupational Safety & Health
New Key Economic Area
National Specialists Registration
Organisation for Economic Co-operation and Development
Special Taskforce to Facilitate Business
Private Healthcare Facilities and Services
Person-In-Charge
National Higher Education Fund Board
Regulatory Impact Statement
Regulatory Review
Reducing Unnecessary Regulatory Burden
Securities Commission
1Malaysia Training Scheme
Small and Medium Enterprises
Social Security Organisation
Standard Operating Procedure
Land Public Transport Commission
Suruhanjaya Syarikat Malaysia (Companies Commission Malaysia)
Suruhanjaya Tenaga (Energy Commission)
Tenaga Nasional Berhad
Unit Kawalan Amalan Perubatan Swasta
United Nations University
World Health Organization
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GLOSSARY
Annual Practising
Certificate (APC)
Grandfathering
Healthcare
professionals
Licensee
Occupational
licensing
Person-In-Charge
Primary care
Private Hospitals
Regulation
Any fully registered person who desires to practise as a medical
practitioner after the thirty first day of December of any year
shall, not later than the first day of December of that year, make
an application in the prescribed form and shall pay the
prescribed fee for a certificate to practise as a medical
practitioner during the ensuing year (Act 50).
Grandfathering is allowing an existing operation or conduct to
continue legally when a new operation or conduct would be
illegal.
The "healthcare professional" includes a medical practitioner,
dental practitioner, pharmacist, clinical psychologist, nurse,
midwife, medical assistant, physiotherapist, occupational
therapist and other allied healthcare professional and any other
person involved in the giving of medical, health, dental,
pharmaceutical or any other healthcare services under the
jurisdiction of the Ministry of Health.
A "licensee" means a person to whom a licence to operate or
provide a private healthcare facility or service other than a
private medical clinic or private dental clinic granted under
paragraph 19(a) of Act 586
Occupational licensing is a process whereby entry into an
occupation requires the permission of the government, and the
state requires some demonstration of a minimum degree of
competency.
The "person in charge" means a person possessing such
qualification, training and experience as may be prescribed and
who shall be responsible for the management and control of the
private healthcare facility or service to which a licence or
registration relates (Act 586).
Primary care is the term for the health care services which play
a role in the local community. It refers to the work of healthcare
professionals who act as a first point of consultation for all
patients within the health care system.
Under Act 586 “private hospitals” means any premises, other
than Government hospital institution, used or intended to be
used for the reception, treatment and care of persons who
require medical treatment or suffer from any disease or who
require dental treatment that requires hospitalization.
Any laws or other government ‘rules’ which influence the way
people behave. It is not limited to primary or delegated
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Regulatory Impact
Statement (RIS)
Secondary care
Tertiary care
legislation; it also includes ‘quasi-regulation’ (such as codes of
conduct, advisory instruments or notes etc.) where there is a
reasonable expectation by governments of compliance.
The RIS is a document prepared by the department, agency,
statutory authority or board responsible for a regulatory
proposal following consultation with affected parties, formalising
and evidencing some of the steps that must be taken in good
policy formulation. It requires an assessment of the costs and
benefits of each option, followed by a recommendation
supporting the most effective and efficient option. It must be
incorporated into the assessment process used by all areas of
government responsible for reviewing and reforming
regulations.
Secondary care is the health care services provided by
medical specialists and other health professionals who
generally do not have first contact with patients, for example,
cardiologists, urologists and dermatologists.
Tertiary care is specialized consultative health care, usually for
inpatients and on referral from a primary or secondary health
professional, in a facility that has personnel and facilities for
advanced medical investigation and treatment, such as a tertiary
referral hospital.
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Key Points
 MPC which has been mandated to facilitate the implementation of the
National Policy on the Development and Implementation of Regulations
has taken the initiative to carry out this regulatory review with the aim of
reducing unnecessary regulatory burdens on the healthcare sector. The
focus of this first initiative is on the review of regulations on private
hospitals.
 The private hospital sector has grown over the last thirty years and today
we have today around 220 licensed private hospitals in the country. In
the past, regulatory control of private hospitals was limited until the
Private Healthcare Facilities and Services Act 1998 (ACT 560) was
enforced in 2006. With this Act licensing requirements are stringent with
resulting increased in unnecessary regulatory burdens.
 The objective of MPC is to uncover and report the areas which are of
most concern with private hospitals and provide recommended options
for further reviews and discussions with interested parties.
 The first concern is the need to reduce the burdens in the application
for renewal of hospital operating licence, which has to be renewed
every two years.
 The second is on the highly prescriptive nature of the Private
Healthcare Facilities and Services Regulations 138/2006 which has
posted heavy burden on the licensing process.
 The third concern is on the difficulty with dealing with the licensing
officers to follow-up on the licensing as the process can take up to or
more than six months.
 Fourthly, the licensing requirements integrate the other regulatory
regimes from other regulators. The present practice of the principal
regulators creates heavy burdens on licence renewal.
 The fifth concern is on the renewal of the Annual Practicing
Certificate, on which the licensing requirements require evidential
proof. This compound the heavy burden of the hospital licence
renewal. These five concerns contribute to a lot of unnecessary
regulatory burdens in the licensing of private hospitals.
 The sixth concern is on planning approval for the physical
improvement and/or expansion of facilities, which is onerous
creating unnecessary regulatory burdens on private hospitals.
 The seventh concern is on the quality of new medical professionals
coming into employment are of concern to the sector. The imbalance
in the market supply-demand for medical professionals is
contributing to the concern.
 The eighth concern is on the approval for advertising and advertising
materials. The application is expensive and burdensome.
 Lastly, there is the issue on regulated medical charges. This does not
post any regulatory burden but the business is concern with the
restrictiveness to innovation and competition.
 The report explained these concerns raised by the private hospitals
and proposed options for further deliberation with interested parties.
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OVERVIEW
The healthcare sector is large comprising many types of businesses. From a value
chain perspective, there are three distinct value chains: two product value chains –
pharmaceuticals and medical devices - and a service value chain.
Regulation of pharmaceuticals comes under the purview of the Pharmaceutical
Services Division of the Ministry of Health (MOH). There are various Acts and
Regulations governing the value chain, from the manufacturing of drugs, import and
export, distribution, storage, retail, advertisement, usage, consumption, recall and
disposal.
While pharmaceuticals have been regulated since independence, the regulation of
the medical device value chain is very recent. The Medical Device Act came into
existence only in 2012 and the Medical Device Regulations 2012 have only been
enforced since July 2013. The regulatory purview comes under the Medical Device
Board of the MOH.
The healthcare services value chain is complex having many different kinds of
facilities and services and specializations. It ranges from the simple ubiquitous
stand-alone medical clinic, to dental clinic, to specialist, to the most complex of
private hospitals providing secondary and tertiary acute care services. Apart from
private hospitals, there are also other healthcare facilities and services such as the
medical laboratories, hemodialysis centres, nursing homes, ambulatory care centre
and blood banks.
The government has always been the primary provider of primary, secondary and
tertiary healthcare to the public and continues today. However, the cost of providing
public this healthcare has increased over the years. In the eighties the government
started to encourage the establishment of private healthcare services, in particular,
private hospitals to take up part of the burden. Private healthcare services are mainly
for those who can afford out-of-pocket payment and so is able to cater for the ever
growing group of higher income population.
Although private healthcare started to grow in the eighties, there was no specific
governing regulation for private healthcare facilities and services until the Private
Healthcare Facilities and Services Act 1998 (Act 586). Even so, the Act 586 was
then only enforced in 2006 with the gazette of the Private Healthcare Facilities and
Services Regulations 137/2006 and 138/2006. Many of the existing private hospitals
could not totally meet all the new requirements of the regulations. However, they
were given “grandfathering rights” to continue operation and to work towards
meeting the regulatory requirements. All new establishments since then must meet
all the stated regulatory requirements.
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Generally, Malaysians enjoy universal access to healthcare services, where
everyone has access to public healthcare services. Many of the public hospitals are
equipped with some of the latest medical technology and provide many specialist
treatments. However, they are generally overloaded and waiting time for some
services can be unacceptably long.
There are now 220 licensed private hospitals in the country, some of them having
the latest medical technology by international standards. They also provide many
types of specialist treatments also with international standards. While the medical
fees are generally high and only the higher income group can afford the out-ofpocket medical charges, the private system nevertheless reduces the burden of the
public healthcare system. For example, the MOH Health Facts 2013 shows that
admissions to private hospitals represented nearly 30 per cent of total admissions for
the year 2012.
At the macro level, the population-to-healthcare resources ratio is still on the low side
when compared to the high-income economies. The key indicator of the number of
hospital beds per 1000 population current stood at 1.8 which is well below many
countries until today. The government has been targeting 2.0 in its effort to increase
healthcare services capacity in the country.
Achieving the target 2.0 beds per 1000 people is not going to happen any time soon,
at least not from private sector investment. A separate study has shown that the lead
time for establishing a new functional private hospital is more than four years. A
significant portion of the lead time involves dealing with government regulations.
Planning approvals for hospital construction may take more than two years and
licensing the hospital requires no less than six months.
The good healthcare system in the country is partly due to the established regulatory
system that has evolved from the previous British system. In a sense, we are
blessed with this heritage and at the same time cursed with the difficulty of changing
it. A system that has worked over time is difficult to change even if it is unnecessarily
burdensome and limiting progress. The slow growth of the number of private
hospitals in the country over the last seven years could be a testimony to this.
Until recently, the regulatory regime in the country has not kept up with global good
regulatory practices. However, with the launching of the National Policy on the
Development and Implementation of Regulations in July 2013, regulators will have to
follow a set of principles and processes for good regulatory practice. In the
meantime, MPC has been given the mandate in the 10th Malaysia Plan to review all
existing business-related regulations with the aim of reducing unnecessary
regulatory burdens to business. This study on reducing unnecessary regulatory
burdens in private hospitals is one of the on-going reviews.
Some regulatory burdens are necessary for the government to achieve national
policy objectives. There are three broad areas that comprise the “regulatory burden”
xiv
on business - time, effort and costs expended in complying with government
regulatory and taxation requirements. The main dissatisfaction has been the
increased amount of the paperwork involved and costs associated with the taxes,
levies and fees. Then there are the negative impacts on firms’ productivity arising as
significant amount of resources has to be allocated to compliance activities instead
of business activities. There are also a variety of other non-economic costs involved
such as stress and frustration in dealing with the regulatory systems.
Although regulation imposes some burdens on business, concern arises when the
burdens necessarily reflect inefficiency in the regulatory regime and point to the
existence of “unnecessary regulatory burdens”. Unnecessary burdens arise from:
 excessive coverage of the regulations, including ‘regulatory creep’ — that is,
regulations that encompass more activity than was intended or required to
achieve their objectives
 subject-specific regulations that cover much the same ground as other
generic regulation
 unduly prescriptive regulation that limits the ways in which businesses may
meet the underlying objectives of regulation
 excessive time delays in obtaining responses and decisions from regulators
 rules or enforcement approaches that inadvertently provide incentives to
operate in less efficient ways
 unwieldy licence application and approval processes
 unnecessarily invasive regulatory behaviour, such as overly frequent
inspections or requests for information.
Unnecessary regulatory burdens stifle productivity, undermine business
competitiveness and increase consumer prices, leading the chronic economic
inefficiencies. As a result, more developed nations are moving to regulations that
have been formulated through a Best Practice Regulation process to achieve policy
objectives and reduce the unnecessary regulatory burdens on business.
A regulator plays an important role in regulatory regimes by encouraging compliance
through education and advice, as well as enforcing laws and regulations through
disciplinary means. When regulators are transparent and accountable in their
enforcement role and have incorporated good guiding principles into their operating
systems they will both assist the achievement of policy goals and impose minimum
necessary burden on business. This is pertinent in regulating the healthcare industry,
and in particular, the private hospital sector.
Since all the regulations on healthcare services have not been crafted using
established principles of good regulatory process and since existing regulators do
not follow established good regulatory practice principles, there are many
unnecessary regulatory burdens in existing regulatory regimes. It is through a
xv
thorough regulatory review of existing practices that these burdens could be
uncovered and eventually removed for the progress of business.
To uncover the unnecessary regulatory burdens in the operation of private hospitals
a number of private hospitals in various states were interviewed in this study. The
study emulated the approach used by the Australian Government Productivity
Commission and a former regulatory specialist from the AGPC was engaged to
provide advice to the team. From the issues uncovered, various options for their
resolution were formulated using the principles of good regulatory practice and
principles for process improvement. This draft report is being released in order to
validate these issues and options with interested parties in order to firm up the
proposed recommendations for the government to reduce unnecessary burdens.
Licence Renewal
The main issue on licence renewal for private hospitals is in dealing with the principal
regulator. Under the current regulation, private hospitals have to apply for renewal of
their operating licence every two years. They experience the pain of achieving
licence renewal for at least six months as the regulation requires that they have to
submit the renewal application not less than six months before the licence expires.
There are five areas that contribute the most to unnecessary regulatory burdens in
licence renewal. Firstly, there is a huge burden in the preparation of application
documents demanded by the regulator. Each of three to four thousand sheets of A4
size paper needs to be endorsed as a “true copy” by a senior manager, and in two
sets. Some of the documents are redundant - for example, the certified “true copy” of
the Annual Practicing Certificates as evidence is already with various regulating
bodies such as the Malaysian Medical Council, the Malaysian Nursing Board, the
Malaysian Dental Council, and the Malaysian Pharmacy Board. The overheads in
time, costs, administrative and managerial resources and the coordination efforts in
preparing the submission documents are a huge burden to hospital management.
Secondly, the current regulation, the Private Healthcare Facilities and Services
Regulations 138/2006 is very prescriptive in its requirements. It prescribes
(examples given in italics) the spatial details in precise dimensions (…door to toilet
adjoining patient room shall have 0.9 metre minimum clear opening…), the layout of
facilities and clinical processes and their work flow (… where two or more beds are
intended to be placed in a room or ward, the beds shall be arranged to allow spacing
of beds at 1.5 metres clear space between beds and shall be at least 0.9 metre from
any wall), the human resources requirements for every service (…the ratio of the
nursing staff and personal care aide to patient is not less than one to two), the
requirements of air conditioning, ventilation ( for newborn nursery…have a minimum
ventilation rate of twelve air change per hour which is provided by mechanical supply
and exhaust air systems…), noise control and lightings, the supplies requirements,
even the type of hand washing dispenser, the number and ratio of nurses to beds or
patients (…nurses’ station shall not serve more than thirty-six beds to ensure that the
xvi
healthcare delivered to all patients is not adversely affected or compromised.), and
many other detailed prescriptions for operating a hospital. All these unduly
prescriptive regulations limit the ways in which the private hospital may meet the
underlying objectives of the regulation. The hospital management and medical
professionals have little incentive left to develop innovative means to improve
efficiency and clinical effectiveness – all their efforts are on meeting these
prescriptions.
Thirdly, dealing with the licensing officers and hospital surveyors or auditors also
proves to be a challenge for the licensee. Getting consistent input from different
licensing officers is challenging as a result of the unduly prescriptive regulation and
also the unwieldy licence application and approval processes. The difficulty of getting
to the right person in the Ministry frequently results in excessive time delays in
obtaining responses and decisions from the regulator. The amount of information
required in the submission and the frequent requests for more information only
exacerbate the burden.
Fourthly, there are many units involved in the licensing process. From the
perspective of the licensees there is serious fragmentation in the process as they
have to deal with different officers. Each has its own information requirements and
this results in a communication nightmare for the licensee.
Lastly but not least, is the requirement for medical professionals to apply for Annual
Practicing Certificates (APC). Although the maintenance of the APC is an individual
responsibility, the need for the hospital to manage the APC of their personnel
contributes to the licensing burden. There are over a hundred thousand medical
professionals (medical doctors, dentists, nurses, pharmacists, medical assistants,
and other allied health professionals) who have to get their APC done yearly. This is
a tremendous waste of human effort and a lot of government resources which could
be used for more productive activity.
Planning Approval
Apart from the big regulatory burden in licence renewal, there are other burdensome
issues for private hospitals. From the experience of the licensee, the planning
approval for changes to facilities is as complicated as for building a new hospital and
doing a major expansion to an existing building. The regulator does not practice a
risk-based approach and treats all planning approvals alike. Even minor
improvements require planning approval stifling the capacity of many hospitals to
carry out continuous improvements in their facilities.
Occupational Licensing
Occupational licensing of medical professionals has the objective of maintaining
standards of competency and professionalism. Physicians licensing comes under
Medical Act 1971, Nurses under the Nurses Act 1950, Midwifes under the Midwifery
Act 1966, Medical Assistants under the Medical Assistants (Registration) Act 1977,
xvii
Dentists under the Dental Act 1971 and Pharmacists under the Registration of
Pharmacists Act 1951. Only the Allied Health Professionals (e.g., Occupational
Therapists, Audiologists, Medical Laboratory Technologists) are not subjected to any
regulation.
Quality of Medical Professionals
There has been increasing concern on the quality of medical professionals, in
particular, doctors and nurses. There is concern that the proliferation of private
medical education is affecting the quality of medical graduates. Private hospitals are
concerned about some recently educated nurses whom they claim to be below
expectations. Another concern is the training of medical doctors. It seems that the
output of medical graduates is higher than the current availability of houseman
positions in public hospitals.
Regulation of Advertising
Another regulatory burden is the control on business advertising. Although there is a
need to control unsubstantiated claims and offerings, businesses report they cannot
be innovative and grow their customer base when they cannot promote their
products and services, especially where they are competing with suppliers from
other countries who are not so constrained. The tension between the traditional
notion on how healthcare services are to be provided and the new idea to grow the
private healthcare industry is at odds. The regulator and business has to sit down
and re-evaluate this traditional notion to move forward.
Regulation of Medical Charges
Medical charges for private healthcare are high because the costs for establishing
and maintaining healthcare facilities and services are high. Regulatory burdens add
to the overheads of private healthcare services. Medical consultation and treatment
procedural fees charged by the specialist physician represent only a fraction of the
total medical treatment costs to the patient. While regulating medical charges will
lower the total medical costs to the patient this acts as a disincentive to innovation in
medical treatment.
While this study is still at the exploratory stage, the findings provide opportunity to
develop options for further deliberation and debate so that interested parties can
comment on or suggest recommendations for the government to move forward.
Some of the key options are presented in the next section.
xviii
RECOMMENDATIONS
From the analysis of unnecessary regulatory burdens on private hospitals various
options are formulated for further deliberation by interested parties. These options
formulated based on some of the principles of good regulatory practice and on the
principles of process improvement.
1.
Reduce the burden on applications for licence renewal.
Submission of information is necessary for approvals however the need to submit
evidences would create unnecessary burdens for the licensee, particularly when the
authority already has the evidences. Further, since the licensing authority, in this
case, the Medical Practice Division: Private Medical Practice Control Section
(CKAPS) of the MOH, surveys the facilities and services, the evidences could be
checked at the site.
2.
Review and re-design the PHFS Regulations 138/2006
Since the regulation has been enforced in 2006, a review would be warranted. The
highly prescriptive nature of the regulation is stifling to the business. Many countries
have moved away from unduly prescriptive regulation that limits the ways in which
businesses may meet the underlying objectives of the regulation. The trend is to craft
more performance-based regulation supported by system-based accreditation for
management practices. Together with the review, there should be continuous
education for business on how to comply with the numerous requirements of the
regulation. The Medical Practice Division: Private Medical Practice Control Section
(CKAPS) of the MOH will be the key authority to look into this regulation.
3.
Reduce difficulty in dealing with licensors
The short-term solution is to set up a Help-desk facility by the Medical Practice
Division: Private Medical Practice Control Section (CKAPS) of the MOH for dealing
with private healthcare providers. This will alleviate uncertainty experienced by the
licensees. For the longer term, the recommended options are (a) establish a
transparent Standard Operating Procedure for the licensing process where the
licensee could track the progress of her application and would feel assured of getting
her licence approved, and (b) establish an appeal mechanism in the current
regulatory regime for private hospitals whereby licensees could dispute any
unreasonable demands by the licensing officers. A formal and independent tribunal
can be established to arbitrate on any disputes.
4.
Dealing with fragmented processes
The other regulatory oversights functions should be assumed to be effectively carried
out and the licensing processes should only involve random and sampling
inspections on these oversights functions during the licensing surveys of the
hospitals. For example, there should be sampling inspection of APCs, fire and safety
xix
certificates, and other necessary fitness certificates during the on-site survey to
ensure that the licensing requirements are adequately maintained. Any observed
non-compliance should then be corrected followed by appropriate corrective action
by the hospital management. The Medical Practice Division: Private Medical Practice
Control Section (CKAPS) of the MOH could be the main facilitator of this issue.
5.
Doing away with the application for renewing APC
The renewal of APC can be made automatic with only notification by the medical
professionals, in which case, there is no need for issuance of the annual certificate –
only the original certificate on the first-time application. The regulator can maintain an
on-line register of APCs for the public reference. What the regulators need are the
annual fee and the updates of information e.g. CPD updates. This will remove the
extensive burden on private hospitals licence renewal with regard to APCs because
all the required information would be available in the on-line register. The various
professional boards and councils, such as the Malaysian Medical Council, Malaysian
Dental Board, the Malaysian Nursing Board, and others should review this.
6.
Planning Approval for Renovation, Upgrade, Extension, etc.
A risk-based approach would be a suitable option for approval for improvement of
hospital facilities. There should not be a “one-size-fits-all” process in a competitive
environment. What is more important is that there should be reliable lead time for
planning approvals that would facilitate the hospital in its management planning.
Large variation in lead time leads to uncertainty and results in unnecessary burdens
to the hospital management. The Medical Practice Division: Private Medical Practice
Control Section (CKAPS) of the MOH should review this process.
7.
Quality of Medical Professionals
Although the quality of education may be a crucial issue here, the root cause for this
problem is likely the imbalance between supply and demand on healthcare human
resources. When the supply growth is higher than the demand growth, then the
unemployment and underemployment situation arises with costly consequences in
terms of waste of trained and knowledge resources. It is recommended that the MOH
and MOE work together to formulate an appropriate policy to achieve this demandsupply balance in healthcare human resources in the country.
8.
Approval for Advertisement and Advertising Materials
Since the guidelines for advertisement has been established and accessible in the
Pharmaceutical Services Division web-site, and also that the MAB is educating the
healthcare business through seminars (example: Seminar on Vetting Medicine
Advertisement, on 29 October and 3rd December 2013) MAB could consider
changing the regulatory regime from approval to notification (with enforcement).
Notification could be made on-line. In this manner, private hospitals will not need to
wait for approval and the regulator could sanction them should they fail to comply
with the guidelines.
xx
9.
Regulated Medical Fees
Increasing the prices of necessary services has always been a sensitive public
issue. Thus any attempt to remove regulated medical fees will incur public outcry.
However, it is known that the medical consultation and/or treatment fees are only a
fraction of the total hospital costs to a patient. Many countries however, have
removed the regulatory control of medical fees. This could be considered a possible
option. However, other options would be to curtail escalating medical costs, and
regulators could play an important role here by reducing regulatory burdens to
hospitals. Regulators could work together with the APHM and the medical
association to control hospital charges through more self-regulation. However,
controlling the medical charge does not impose unnecessary burden but just a policy
instrument of social interest.
These are nine proposed options for further deliberation and debate by interested
parties in the quest to reduce unnecessary regulatory burdens in private healthcare
services. The options are at the preliminary stage of analysis and require more
detailed consultations to firm up the recommendations for the government and
regulators to act upon.
xxi
CHAPTER ONE: ABOUT THE REVIEW
1.0 About the Review
Regulation has grown as an unprecedented pace in Malaysia over recent decades.
There are regulations that were formulated way back even before independence
which are still being enforced. Until recently no systematic effort has been made to
review the relevance and effectiveness of existing regulations, even though new
regulations are being formulated. This has been a response to the needs and
demands of an increasing affluent and risk-adverse society and an increasingly
complex global economy. Good and well implemented regulations deliver economic,
social and environmental benefits but they also impose substantial costs. Some
costs are the unavoidable secondary impact of pursuing legitimate policy objectives
although a significant proportion is not. In many cases, the costs have exceeded the
benefits. Moreover, regulations have not always been effective in addressing the
objectives for which they were designed, including some regulations designed to
reduce risk.
The growing recognition of these costs and other deficiencies of regulation have led
the government to decide that major reforms have to be made. An early focus of
such efforts was the removal of many regulations that are obsolete and not relevant
anymore. Further waves of reform will follow, and this review is one of such that is
focused on the regulation of key economic initiatives and regulatory compliance
burdens generally.
1.1
What MPC has been asked to do
The 10th Malaysian Plan has mandated MPC to carry out regulatory review in view of
making it easy to do business in Malaysia. This review process will draw on the
expertise and perspectives of public sector and private sector leaders, who will help
identify key issues and the appropriate solutions. Figure 1.1 below illustrates the
regulatory review framework of MPC.
Mandated in the 10th Malaysia Plan specifically, MPC will [2]:
 Review existing regulations with a view to removing unnecessary rules and
compliance costs. Regulations affecting NKEAs will be prioritised;
 Undertake a cost-benefit analysis of new policies and regulations to assess
the impact on the economy;
 Provide detailed productivity statistics, at sector level, and benchmark against
other relevant countries;
 Undertake relevant productivity research (e.g. the impact of regulations on
growth of small-medium enterprises (SME));
1


Make recommendations to the Cabinet on policy and regulatory changes that
will enhance productivity; and
Oversee the implementation of recommendations.
Figure1.1: MPC Regulatory Review Framework
Modernising
Business
Regulation
Ensure New Quality
Regulation
Improve Existing
Quality Regulation
Vertical
Approach (MBL)
Horizontal
Approach (SSRR
& MSRR)
Methodology:
 Baseline study
 Analysis and propose solution
 Monitoring implementation
Thematic
(WBDB)
Adequacy
Criteria
Gatekeeper
Transparency &
Accountability
Main activities:
 Develop Gate-keeper function
 Develop function of Quality Regulation Audit
 Develop Adequacy Criteria
Source: Malaysia Productivity Corporation: www.mpc.gov.my
The government has formalized and institutionalized mandate given to MPC with the
introduction of a national regulatory policy through the policy document National
Policy on the Development and Implementation of Regulations. This document was
formally launched by the Chief Secretary of the Government of Malaysia in July
2015.
The objective of the national policy is to ensure that Malaysia’s regulatory regime
effectively supports the country’s aspirations to be a high-income and progressive
nation whose economy is competitive, subscribes to sustainable development and
inclusive growth. The policy is to ensure a regulatory process that is effective,
efficient and accountable as well as to achieve greater coherence among policy
objectives of government [3].
1.2
The 10th Malaysia Plan: Modernising Business Regulation
The Government recognizes that the regulatory environment has a substantial effect
on the behaviour and performance of companies. Innovation and private sector
participation in the economy require a regulatory environment that provides the
necessary protections and guidelines, while promoting competition. Too often,
Malaysian firms face a tangle of regulations that have accumulated over the years
2
and now constrain growth. At the same time, regulations that would promote
competition and innovation are absent or insufficiently powerful.
Malaysia has consistently improved its regulatory performance over the last few
years as can been seen from its ranking in the World Bank Report on Doing
Business, see Table 1.1 below. To maintain a top-10 overall competitive ranking the
country has to continuously improve its regulatory performance. In the 2014 report,
Malaysia has made impressive progress with its overall ranking from number 12 th to
sixth position. This has been the result of the efforts in reforming the regulations in
areas such as dealing with construction permits, starting a business, getting
electricity and resolving insolvency. Although the overall ranking in doing business
has improved there is much to do to ensure sustained position in the top-ten ranking
[2].
Table1.1: Malaysia’s Competitiveness Performance in Doing Business Report
Indicator
Overall
Starting a business
Dealing with construction permits
Getting Electricity
Registering property
Getting credit
Investor protection
Paying taxes
Trading across borders
Enforcing contract
Resolving insolvency
Malaysia’s ranking with other countries
2014
2013
1012
2011
6
12
18
23
16
54
50
111
43
96
113
111
21
28
59
60
35
33
59
59
1
1
1
1
4
4
4
4
36
15
41
39
5
11
29
28
30
33
31
60
42
49
97
57
Source: World Bank Doing Business Reports.
To achieve this goal, the Government will begin with a comprehensive review of
business regulations, starting with regulations that impact on the NKEAs.
Regulations that contribute to improved national outcomes will be retained, while
redundant and outdated regulations will be eliminated. These reviews are being led
by the Malaysia Productivity Corporation (MPC), which has been restructured to
ensure it has strong capabilities and resources. MPC will be comprised of relevant
expertise from business and academia. Its work will complement the efforts of
PEMUDAH.
1.3
The approach and rationale of this review
The government has identified 12 National Key Economic Areas (NKEAs) to focus
the economic growth towards a high-income nation. The NKEA will be the driver of
economic activity that has the potential to directly and materially contribute a
quantifiable amount of economic growth to the economy.
3
The NKEAs were chosen on the basis of their contribution to high income,
sustainability and inclusiveness. An initial set of 12 potential NKEAs have been
identified comprising 11 sectors and one geographic area - Kuala Lumpur. Kuala
Lumpur was chosen because it accounts for almost one-third of Malaysia’s total
GDP and urban agglomeration can be a major driver of economic growth. One of the
NKEAs is the private healthcare which is the focus of this study.
In particular, the private hospital sector has been chosen as it is high added value
and fast growing business that also has huge export potential. The private hospital
business is a large investment business, hugely complex in nature, technologically
evolving, needed high level knowledge workforce and a highly regulated business.
The hospital business directly impacts upon the safety, health and wellbeing of the
customer-patients of which the general public has particular interest.
A significant portion of this study will be based on literature reviews of laws and
regulations in the country, past studies made by more mature regulatory review
agencies such as the Australia Government Productivity Commission, policy papers
and reports, statistical reports and research literatures within the country and official
web-sites of relevant professional bodies, non-governmental organisations,
regulatory agencies and business organizations. The other portion of the study will
come through direct interviews and consultations with private hospitals, professional
bodies, associations and regulatory agencies involved in the sector.
The first part of the study will be to establish the key areas which the private
hospitals viewed as the more burdensome. This will record the views and
experiences of the regulatory burdens from which improvement options could be
formulated. A public consultation paper will then be produced for the second part of
the review – the public consultation. During this part of the study consultations will be
carried out with both the provide hospitals, their associations, health professionals
and their professional bodies and the key regulatory agencies. The consultation
process will provide the necessary feedbacks for the final report.
1.4
Conduct of the study
The investigations have involved collection, review and analysis of data and
information from two sources: secondary data from literature reviews and primary
data from interviews with key stakeholders.
Secondary data which were reviewed and used as inputs for this study are from
many sources and are classified as follows:
a) Research papers published by international agencies and other countries
such as the World Bank, the Australian Government Productivity Commission.
b) Local research papers and reports commissioned by the government such as
Economic Planning Unit (EPU) commissioned reports and Ministry of
4
International Trade and Industry (MITI) commissioned reports. Reference to
these papers will be cited in this report.
c) Laws of Malaysia, the various Acts and Regulations relevant to Private
Hospital operations, healthcare professionals and health tourism.
d) Statistical data relating to the health care sector will be from international
sources and local sources, primarily the World Bank, Ministry of Health
Malaysia publications, Department of Statistics Malaysia publications.
e) Information from local government agencies, quasi government bodies,
professional bodies, private businesses and the relevant associations on
policy matters, news, reports and statistics for analysis and inputs to this
study. Much of this was accessed from their web-sites and the sources will be
listed in the final report.
Primary data collection will be through the public consultation process involving
interviews of key stakeholders comprising the business players, representatives of
professional bodies and the regulators. The business players in this study will be
primarily the private hospitals which are licensed by the Ministry of Health (MOH)
and who are members of Association of Private Hospitals Malaysia (APHM) and
members of the Malaysia Health Tourism Council (MHTC).
The study is being carried out in two stages: the exploratory stage to prepare the
draft paper and the option stage to verify the feasible options formulated to achieve
the aim of the study. An interview brief was prepared for dissemination to the
selected respondents (private hospitals) and with the assistance of the AGPC expert,
a list of relevant questions was developed for the one-on-one interviews with the
respondents. The respondents were selected from the members of APHM. The
listing of these key stakeholders interviewed will be included in the final report.
From these inputs, detailed analysis will be made at three levels:
a) at the individual level where the principal researcher will carry out his/her
analysis on the inputs and draft a discussion paper for further deliberations,
b) at the team level (various researchers) where the inputs and discussion paper
will be deliberated and analysis to achieve further insights,
c) with the expert from AGPC, Ms. Sue Holmes who will provide expertise inputs
and insights.
After the analysis, the final report will be written by the principal researcher and will
then be subjected to review by the by research team before submission to MPC.
Figure 1.2 below summarizes the study process for this research.
5
Figure1.2: Summary of Study Process.
Conceptualize the industry Value
Chain
List all Acts and map them onto the
Value Chain
Scoping & Target Selection
LITERATURE
REVIEW INPUTS
(e.g. Reports;
Articles &
Statistics)
Develop a list of questions
Conduct interviews
CONSULTATION
& EXPERT’S
ADVICE (From
AGPC)
Analyse Information gathered
Draft report (with proposed options)
Workshops and other feedback
Final Report
Source: Author
1.4
Structure of the report
This report on the Review of Unnecessary Regulatory Burdens (RURB) has been
organized into six chapters, starting with this introductory Chapter One. Here, the
rationale of the review is highlighted and the approach to the study imitates the
Australian Government Productivity Commission (AGPC) methodology. An
Australian expert previously with the AGPC was engaged by MPC to provide the
advisory input to the study team throughout the study duration.
In Chapter Two, the overview of the healthcare sector is analyzed via the valuechain concept. The value chain for the healthcare industry is mapped out and this is
used as the guide to identify the businesses in the industry. Reference is made to
the Malaysia Standard Industrial Classification 2008 Version 1 on this. This led to the
decision to focus on the private healthcare services sector, in particular the private
hospitals. The chapter also show the macro-economic performance of the healthcare
services sector over the period 2006 to 2012.
1
Chapter Three deals with the rationale of regulating the healthcare services sector,
and in particular the private hospital sector. This chapter looks at regulatory burdens
and the potential sources of unnecessary regulatory burdens. There are four
regulatory approaches; prescriptive-based, performance-based, principle-based and
system-based, which would affect the final outcome of regulations. From these arise
the various regulatory costs that impact on the different key stakeholders.
Chapter Four gives the overview on the development of the regulatory regimes for
healthcare services in the country with the focus on those pertinent to the private
hospitals. The chapter traces the historical development of the regulatory regime for
private hospitals leading to the current governing regulations, the PHFS Regulations
138/2006. In the development of this governing regulation, the chapter gives some
background on the overarching intent of the government in regulating the healthcare
services. The chapter concludes with the big picture on the regulatory regimes for
the private hospital across its value chain.
Chapters Five and Six present the analysis and findings of the study. Options are
proposed for the regulatory issues of concern. Although the study identified nine
issues, five have been selected as being the pertinent regulatory issues of most
concern. Chapter Five covers the issue relating to operating license renewal for
private hospitals. Here five interrelated issues that pose heavy regulatory burdens
are analyses and the potential options to ameliorate them are proposed. Chapter Six
analyses the other four regulatory issues and also proposed options to ameliorate
them. This chapter also explains on the other issues raised in the study but are not
treated as key concern.
All the key findings of the six chapters are summarized in the overview and the
recommendations at the beginning of this report. The chapters are organized in the
manner that the relevant references and appendices are incorporated at the end of
the chapter for easy reference of the reader. In other words, each chapter stands on
its own.
2
CHAPTER TWO: HEALTHCARE INDUSTRY VALUE CHAIN
2.0
Sector Analysis on Healthcare Industry
Since independence until the early 1980s, primary healthcare was provided by the
public sector with a few Christian Mission Hospitals and Chinese charity hospitals.
With exception of the ubiquitous medical clinics, usually in the urban areas, health
care is almost totally provided through the national budget by the federal
government.
With increasing income after 1980, particularly in the urban areas, the demand for
private health care services increased. With international influences and government
policy intervention, the health care sector grew in complexity with the growth of the
private sector health care providers.
During the mid-term review of the Sixth Malaysia Plan, there began a shift in the role
of the Health Ministry “towards more policy making and regulatory aspects as well as
setting standards to ensure quality, affordability and appropriateness of care.” Then
in the 7th Malaysia Plan (1996-2000) the government “will gradually reduce its role in
the provision of health services and increase its regulatory and enforcement
functions.”
The 7th Plan clearly outlined the changing role of the government in health care, to
reduce its provider role and increase its regulatory role. However, the objective of
regulating the private health sector was not being realized due to insufficient legal
framework. It was only with the passing of the Private Health Care Facilities and
Services Act 1998 (Act 586) that provided this legal framework. However this Act
586 was only implemented in May 2006, after the Private Health Care Facilities and
Services (Private Hospitals and Other Private Healthcare Facilities) Regulations
2006 (P.U. (A) 138/2006) was gazetted [1a].
The government’s welfare policy of equitable and accessible health care for every
Malaysian conflicts with some aspects of its promotion private investment in
healthcare. An obvious example is that Section 9 of the Act 586 empowers the
regulating authority to dictate the location for private healthcare facilities and
services, in particular private hospitals. While the regulator tends to focus on
improving equity of access to healthcare across the nation, businesses want to
locate their hospitals where the greatest demand is. Often, this is where there is high
population density and/or high-income earners reside. Hence the conflict, regulators
often want to site new hospitals in remote areas while investors often want to site
them in urban areas [2].
3
2.1
Healthcare Industry in Malaysia
The healthcare industry is complex one because there are multiple aspects to
human health. To arrive at an adequate analysis it would be pragmatic to view the
health sector in different perspectives, notably from the perspectives of products, the
services and facilities, the human resources and the supporting services. As the
industry has a direct impact on the human wellbeing, the industry tends to be highly
regulated. Central to this regulatory environment is the people - the regulators,
health professionals, patients and investors.
From the products perspectives, there are three different aspects to healthcare
products: pharmaceuticals, medical devices and food, each of these has its own
regulatory requirements. Each of these three aspects has different product
dimensions for regulatory control. The product perspective has three different
aspects, pharmaceutical, medical device and food, each of these has its own
regulatory requirements. Pharmaceuticals have been classified into drugs, cosmetics
and traditional medicines. Medical devices are categorized into four classes, A to D
depending on the impact on users. Food involves different production stages from
the field to the plate: farming, manufacturing and processing of agricultural produce
and food services (both selling of final food products and restaurants, etc).
With regard to services .there are different types of services and service providers
and operating with different types of facilities. The Health Ministry has classified
services according to the different types facilities from which they operate: hospitals,
homes, laboratories to clinics. Each of these has different regulatory requirements
and controls, the most complex being the hospitals which provide multiple services
and possess different types of facilities. Facilities which are closely tied to the
services provided have their own control dimensions such as safety, operation and
maintenance and final disposal.
The provision of health care services crucially depends on specially qualified human
resources. This, in turn, means that maintaining a good healthcare system in the
country is crucially dependent on how well the training, assessment and
accreditation of professional human resources are regulated. The current regulatory
regimes for the key health professionals are provided for by the established Acts and
Regulations, for example medical practitioners (medical doctors) come under the
Medical Act 1971, nurses under the Nurses Act 1950, midwives under the Midwifery
Act 1966 (Act 436), medical assistants under the Medical Assistants (Registration)
Act 1977 (Act 180), dentists under Dental Act 1971 (Act 51) and pharmacists under
the Registration of Pharmacists Act 1951. New bills are being drafted to regulate
other categories of healthcare professionals such as allied health professionals (32
categories) and medical specialists (current registered with the National Specialist
Register).
4
Supporting services include the financiers (insurance, employers, social security
services), the logistics providers (for medical tourism) and the intermediaries which
provide the links between the consumers/patients and the medical service providers
(hospitals, clinics). An overview for the healthcare regulatory environment is as
illustrated in Figure 2.1 below.
Figure 2.1: Healthcare Regulatory Environment
Supporting Services
Finance/Insurance
Intermediaries
Others
Human Resource
Doctors
Nurses
Dentists Etc.
Pharmaceutical
Drugs
Cosmetics
TMC
Medical Device
4 classes (A,B,C,D)
Public
Consumer
Patient
Food
Manufacturing
Agriculture Services
Facilities
Surgical
Cardiovascular
Diagnostic
imaging Etc.
Services
Hospitals
Homes
Laboratories Etc.
Source: Author
2.2
Healthcare Industry Value Chain
The value chains for products, service facilities, human resources and supporting
services are illustrated in Figures 2.2.
The theoretical bases for analysis for the product perspective will be the Value Chain
Analysis, for the service facilities and that of human resources perspectives will be
the Life Cycle Value Chain Analysis and that of the supporting services will be the
Network Relationships Value Chain Analysis. These analytical approaches will
enable a systematic and conceptual mapping of the businesses, regulators, the
regulatory requirements and relevant regulatory issues.
The conceptual value chain does not reflect the total health system of the country. It
only considers the healthcare system, the businesses that are involved in providing
5
the treatment and care to the human patients. For example, the food and other
businesses are not included here.
The food sector is itself highly complex and normally treated as a separate sector for
analysis from that of the health care sector and will be so treated in this study. The
food value chain can have serious impact on the health sector from various aspects.
From the diseases aspect we have seen the serious negative consequences on
human health from Foot and Mouth disease, bird influenza (H1N1), swine fever,
SARS, mad cow disease and the like. Food poisoning and contamination is another
serious impact from the food chain that frequently causes mass poisoning from the
like of Salmonella and E-coli. Another serious aspect is the use of banned
substances and chemicals in food processing that may result in long-term
consequences such cancers and birth defects.
Figure 2.2: Healthcare Industry Value Chains
Health Care Products Value Chain [3&4]
Service Facilities Life-Cycle Value Chain
Human Resources Life-Cycle Value Chain
6
Supporting Services Relationships Value Chain
Source: Author
It would be pragmatic to combine the separate value chains in order to view the
healthcare system holistically. The total healthcare system value chain would then
look like the illustration in Figure 2.3. The human resource dimension is not treated
separately as it is incorporated within this total health care value chain.
The types of businesses related to the total healthcare chain can be determined
using the Malaysian Standard Industrial Classification 2008 (MISC2008) [5]. The list
is given in Appendix 2.1.
Figure 2.3: Concept of the Total Healthcare Value Chain
Source: Author
7
Table 2.1: MISC 2008 Classification of Hospitals and Related Activities [5]
Class
861
8610
Item
86101
86102
862
8620
86201
86202
86203
8690
86901
86902
86903
86904
86905
86906
86909
Description
Hospital activities
Hospital and maternity home activities
Hospital activities
Maternity home services (outside hospital)
Medical and Dental practice activities
Medical and dental practice activities
General medical services
Specialized medical services
Dental Services
Other human health activities
Dialysis Centres
Medical laboratories
Physiotherapy and occupational therapy service
Acupuncture services
Herbalist and homeopathy services
Ambulance services
Other human health services n.e.c.
MSIC 2000
85110p
85110p
85121p
85121p
85122
85110p
85121p
85192
85199p
85193
85194
85121p
Source: Extract from MISC 2008
The intended focus of MPC has been on services liberalisation, and in this particular
case, on healthcare services sub-sector, the study will target the healthcare services
(patient-focus) portion of the total healthcare system value chain. Even then, health
care services involved many types of different businesses, from simple single
operator general medical clinics, to specialist medical clinics, medical laboratories
and testing services, nursing homes, until the most complex multi-discipline private
hospitals. All these healthcare businesses are highly regulated under various Acts.
For the healthcare service business, the healthcare regulatory regime tends to take
business cycle perspectives; from business establishment to operation and
maintenance to growth and expansion to closure or sale of the business, as
illustrated in Figure 2.4 below.
To establish a private hospital, for example, the interested party has to get the
planning approval from the Ministry of Health first. The application of the private
hospital license has to be made within three years of this approval. The operating
license for private hospital is valid for a maximum of two years and the application for
renewal has to be made at least six months before the expiry of the existing license.
For expansion (alteration, improvement, addition, renovation, etc.) the hospital has to
go through the planning approval, and submit the existing license for endorsement
within 14 days upon completion of the expansion. For the closure or disposal of the
hospital, the operator has to notify the regulator not less than 30 days of this
intention and then surrender the license.
8
Figure 2.4: Healthcare Services Regulatory Regime
The study will focus specifically on private hospitals with the aim of reducing
unnecessary regulatory burdens on them. The private hospital business is chosen
because in order to narrow the study to a manageable scale. It is also the most
complex business entity and the most regulated of healthcare services — this is
because it involves a variety of disciplines and functions in it operations. The
MSIC2008 codes for hospitals and the related activities (up to 5-digit level) are
summarized in Table 2.1 above.
Table 2.2: Analytical Framework
PERSPECTIVE
Products:
 Pharmaceutical
 Medical Device
Services &
Facilities
Human Resources
Supporting services
ANALYTIC
Value Chain
Analysis
Life-Cycle
Value Chain
Analysis
Life Cycle
Value Chain
Analysis
Relationships
Network
Value Chain
Analysis
REGULATORY DIMENSION
DATA













 Business players
& associations
 Regulators
 Acts &
Regulations
 Standards &
Guidelines
 Research & other
Reports
 Interviews &
Statistics
 Issues &
complaints
Pre-Market
Place-on Market
Post Market
Formation/Establishment
Operation & Maintenance
Expansion/Change ownership
Pre Employment
During Employment
Post/Change Employment
Intermediaries/Tour agencies
Financing/Payers/Logistics
Patients (Local/Foreign)
Service Providers (Hospitals/Clinics)
Source: Author
With the identification of the businesses of interest, the analytical framework can be
formulated to guide the regulatory review process. This is illustrated in Table 2.2
above.
9
2.3
Macroeconomic Performance
Traditionally Healthcare in the country is provided mainly by the government and this
“welfare-oriented” policy has not changed, although in the Seventh Malaysia Plan the
government made the move to promote private healthcare services in the country.
The policy logic is that average income has improved and there are those who are
prepared to pay out-of-pocket for better “quality” services by private healthcare
providers. The escalating cost of healthcare on the government has also been a key
factor to shift this burden to the private sectors.
Generally, Malaysia has a growing and relatively competitive healthcare economy.
However, key statistics showed that the country has much to do to reach the
comparable healthcare status of a high income economy. The comparative
indicators to compare Malaysia with the average performance of the world in general
and the high income Organisation for Economic Co-operation and Development
(OECD) countries in particular will give some indications of the country’s standing.
However, the global picture on healthcare expenditure tells a different story.
Malaysia’s health expenditure as a per cent of GDP (3.6 per cent of GDP for 2011) is
relative low by the world average and lower still when compared to the high-income
countries (see Figure 2.5). On the per capital basis, our indicator is even lower,
about a third of the world average and only 6.3 per cent of that of high-income OECD
countries. This begs the question on whether the government is spending enough for
healthcare. We can also interpret that the potential for future growth as our per
capital income rises is very bright.
Figure 2.5: Health Expenditure as Per cent of GDP
Health Expenditure As per cent GDP
14
Per cent of GDP
12
High income:
OECD
10
8
World
6
4
Malaysia
2
0
2006
2007
2008
2009
2010
2011
Source: World Bank: http://data.worldbank.org/indicator
Figure 2.6 tells us that the percentage of government expenditure to the total hovers
around 55 per cent but experienced an unusual drop to 45.7 per cent in 2011.
10
Probably, this is due to higher private sector investments in private hospitals. In any
case, public expenditure on health is still lags behind that of the world in general and
that of the high-income economies.
Figure 2.6: Health Expenditure USD per Capital
Health Expenditure Per Capital
6000.0
USD5492.3
Current USD
5000.0
High
income:
OECD
4000.0
World
3000.0
2000.0
Malaysia
USD949.7
1000.0
USD346.0
0.0
2006
2007
2008
2009
2010
2011
The hospital beds indicator (per 1,000 people) in Malaysia was last reported at 1.80
in 2010, according to a World Bank report published in 2012. Hospital beds include
inpatient beds available in public, private, general, and specialized hospitals and
rehabilitation centres. In most cases beds for both acute and chronic care are
included (Figure 2.7).
Figure 2.7: Hospital beds per 1000 population in Malaysia
Source: World Bank Report 2012.
11
Although the government started to promote private healthcare sectors in the 7th
Malaysia Plan, the number of hospital beds per 1000 people indicator started to drop
from the peak value of 2.56 in 1985. The indicator stabilised somewhat at about 1.8
since year 2000.
Figure 2.8: Growth of Medical Professionals
90000
80000
70000
60000
Doctors
50000
Dentists
40000
Pharmacists
30000
Nurses
20000
10000
0
2006
2007
2008
2009
2010
2011
2012
2006
2007
2008
2009
2010
2011
2012
Growth rate
(%)
Doctors
21937
23738
25102
30536
32979
36607
38718
12.75
Dentists
2940
3165
3640
3567
3810
4253
4558
9.17
Pharmacists
4292
4571
6397
6784
7759
8632
9652
20.81
47642
48916
54208
59375
69110
74788
84968
13.06
Nurses
Source: MOH Health Fact 2006-2013*
What can be concluded from these statistics is that the growth of healthcare services
has not commensurate with economic growth of the country. On one hand this
means that healthcare services growth is not meeting the demand of a growing
higher-income population and perhaps also an aging population. On the other hand,
there is large potential for growth in healthcare services and in particular, the private
hospital sector.
Another aspect on the importance of the healthcare services industry is the
contribution to employment of knowledge workers. These knowledge workers
generally represent the higher income group, particularly the specialists or those with
specialist skills.
12
The growth of the number of medical professionals has been impressive over the
last seven years. Figure 2.8 shows that the high six-year average growth rates for
pharmacists at 20.8 per cent, nurses at 13.1 per cent, Doctors at 12.8 per cent and
dentists at 9.2 per cent.
On the medical professionals to population ratios, the rate of change has been
improving across the four key professions over the last seven years as can be seen
in Figure 2.9 below. The rate of change is highest for pharmacists at -7.7 per cent
followed by doctors (-5.8 per cent) nurses (-5.1 per cent) and dentists (-4.1 per cent).
For medical doctors and nurses, the trends look like reaching the plateau of a
middle-income economy.
Figure 2.9: Medical Professional to Population Ratio
10000
9000
8000
7000
6000
Doctors
5000
Dentists
4000
Pharmacists
3000
Nurses
2000
1000
0
2006
2007
2008
2009
2010
2011
2012
2006
2007
2008
2009
2010
2011
2012
Rate of change
(%)
Doctors
1214
1145
1105
927
859
791
758
-5.8
Dentists
9061
8586
7618
7936
7437
6810
6436
-4.1
Pharmacists
6207
5945
4335
4137
3652
3355
3039
-7.7
559
556
512
477
410
387
345
-5.1
Nurses
Source: MOH Health Fact 2006-2013*
However, further comparative analysis as in Table 2.3, the ratios are still far from
satisfactory. The ratio for doctors at 1:835 (2010) is still below the world’s average at
1:710 (2009). Here we are only nearly comparable to the middle-income economies
at 1:806 (2009). We are still far from the high-income economies like Australia,
United Kingdom and the United States of America. As for nurses, the ratio at 1:306
(2010) is better than the world’s average at 1:351 (2009) and even better than the
middle-income economies at 1:449 (2009). Again when compared with high income
economies, we are still a long distance away.
13
Table 2.3: Doctor-to-Population & Nurse-to-Population Ratios
Doctors
2009
MALAYSIA
World Average
High-income Countries
Middle-income Countries
Australia
United Kingdom
United States
Nurses
2010
1:835
1:710
1:362
1:806
2009
2010
1:306
1:351
1:137
1:449
1:260
1:365
1:412
1:104
1:99
1:102
In theory, we can improve up our supply capacity to produce more medical
professionals. However, the supply has to match the demand side of the
employment equation. Medical professionals such as doctors and dentists have the
opportunity for self-employment but such is not so for nurses. The recent experience
where many private institutions started producing nursing graduates has resulted in
a glut of unemployed nursing graduates. The demand side will depend on the growth
of hospitals in the country.
2.4
Growth of Private Hospital Sector
In the earlier years from 1980 to 2000, the number of private medical facilities
experienced the highest growth from 50 to 224. Although the figures include nursing
and maternity homes, the bulk of these facilities were private hospitals. During the
period the number of private hospital beds also grew from 5.8% share of total beds
to 28.4 in 2001. The rapid grow of the sector has been fuelled primarily be the rapid
rise in national income. [1b].
Over the last seven years from 2006 to 2012, the number of private hospital grew
from 199 to 209 with an average growth rate of a mere 0.8 percent. For the same
period, the number of private hospital beds grew from 11206 in 2006 to 13568 in
2012 with an average growth of 3.7 percent. The higher growth rate of beds is
probably due to hospital expansion of existing hospitals and larger hospitals being
established during the period. Although the physical growth rate has been positive,
the growth rate has not been overly impressive (see Figures 2.10 and 2.11).
14
Figure 2.10: Registered and Licensed Private Hospitals
Private Hospitals
225
220
215
210
205
200
195
190
185
180
2006
Private Hospitals
2007
2006*
199
2008
2007
195
2009
2008
209
2009
209
2010
2010
217
2011
2011
220
2012
209
2012
Growth %
0.84
[* Note: Estimated by deducting the number of nursing homes, maternity homes and hospice for year 2006]
[**Note: Health Fact 2012 & 2013 statistics are for year 2011 & 2012 respectively]
Source: MOH-Health Fact 2007 to 2013**
The relatively slow growth rate could be due to various reasons, the main being that
it is a highly regulated business. For example, it takes more than four years to
establish a new private hospital, from planning, to construction and final operation.
The gestation period to breakeven for a new hospital can be long unless it is already
an existing known brand name, such as the KPJ group or the Pantai group of
hospitals. However, this slow and steady growth will continue and a few more private
hospitals are expected to come into operation by 2015.
The constitution of private hospitals has grown in complexity over the last few years
with the emergence of large corporate groups like the IHH Healthcare, a holding
company under Khazanah Nasional, which is listed in Bursa Malaysia or the KPJ
Healthcare group under Johor Corporation, also listed in Bursa Malaysia. These
large corporate groups managed chain of hospitals within the country and
internationally. The significance of such corporate groups in the growth of private
hospitals and in particular, the export of healthcare services will require a separate
study.
There are two generic aspects of private hospitals, the for-profit and the not-for-profit
private hospitals. The not-for-profit hospitals are not investor-owned and they are
usually governed by a board of directors who give their service voluntarily, or do so
because they are part of a religious group. They generally operate on the same
basis as any other for-profit private hospitals, except that they have a charitable
mission.
15
Figure 2.11: Growth of Private Hospital Beds
15000
14500
14000
13667
13568
13500
13186
13000
12500
12216
12000
11500
11689
11206
11291
11000
10500
10000
2006
Beds
2006
11206
2007
2007
11291
2008
2008
11689
2009
2009
12216
2010
2010
13186
2011
2011
13568
2012
2012
13667
Growth %
3.66
The not-for-profit hospitals have earlier origins than the for-profit hospitals. The Tung
Shin Hospital and the Lam Wah Ee Hospital are firmly embedded in the history of the
Chinese community, tracing their beginnings to the late nineteenth century. The
Penang Adventist Hospital, run by Seventh Day Adventist Christians, was started
before the Second World War, while Assunta Hospital, Hospital Fatimah and Mount
Miriam Hospital were established by Christian missionaries in the post-war period.
Recent growth in the number of non-profit hospitals is limited, particularly since the
proliferation of for-profit hospitals [1b].
The majority of private hospitals are for-profit. Some of them were originally small
ventures begun by a group of medical doctors, but have since been sold to large
public-listed companies. Examples of this are the Penang Medical Centre (PMC),
started by a group of doctors in 1973, later sold to the Gleneagles group, and Pantai
Hospital, established in 1974, and later sold to the Pantai conglomerate. Other
examples are the Tawakal Hospital, established in 1984 and the Ipoh Specialist
Hospital, established in 1981in 1981, both eventually taken over by KPJ Healthcare
[1b].
Some private hospitals were established in conjunction with the interests of property
developers who developed housing estates as large townships. To make the
township attractive as a residential centre, hospitals and colleges were also
developed in the township. SJMC is owned and operated by Sime Darby, the
conglomerate that also developed the Subang Jaya housing estate, while Sunway
16
Medical Centre is managed by Sunway City Bhd., a corporation involved in housing
development in Sunway [1b].
Out of the 220 licensed private hospitals, 113 of them are listed as members of the
Association of Private Hospitals Malaysia web-site (http://www.hospitalsmalaysia.org). The distribution of these hospitals across the country is illustrated in
Table 2.4 above. Almost all of these hospitals are located in cities and major towns
of the states.
Table 2.4: Distribution of Private Hospitals in Malaysia
State
Johor
Kedah
Kelantan
Melaka
Negeri Sembilan
Pahang
Perak
Pulau Pinang
Sabah
Sarawak
Selangor
Kuala Lumpur
Total
<50 beds
8
0
2
0
1
0
3
4
1
4
11
10
44
51-100 beds
3
2
0
0
3
3
2
2
1
2
7
3
28
101-200 beds
2
2
1
1
1
0
1
3
1
1
5
5
23
>200 beds
1
0
0
2
0
0
2
3
0
0
4
6
18
Total
14
4
3
3
5
3
8
12
3
7
27
24
113
Source: Association of Private Hospital Malaysia (Membership list)
Growth of Private Healthcare Professionals
The private hospital sector has contributed significantly to the employment of
knowledge workforce in the country. Figure 2.12 illustrates the private healthcare
workforce for four critical professionals. It could be seen that the growth of
employment for nurses has been large over the last three years with the 5-year
average growth of 17.9 per cent from 2006 to 2011. The growth for private medical
practitioners has been steady at five percent. The growth of private sector dentists
was a mere 2.9 per cent while that of pharmacists, there was a dropped by 0.4
percent.
Although the that macro-ratios do not place Malaysia at the level of the more
developed and high-income economies, the country cannot rammed-up the
production of medical professionals without balancing the demand side of
employment, as discussed earlier. Apart from this balancing act, there is the issue of
quality and specializations. The quest to produce more professionals must not be
made at the expense of lowering the standards of medical education or the qualifying
level of intake. The healthcare industry not only requires high quality workforce but
17
also more with specialist skills, both for medical doctors and nurses. Specialist
doctors and nurses with additional post-basic skills are in high demand.
Figure 2:12: Growth of Health Professionals in Private Hospitals
35000
28879
30000
24725
25000
21118
Doctors
20000
15633
15000
13044
10000
8602
5000
3403
1572
Dentists
14315
12766
9440
3321
1625
10006
3327
10344
2907
1718
10550
3149
10762
3344
1801
1755
1709
11240
Pharmacis
ts
Nurses
3744
1894
0
2006
Doctors
Dentists
Pharmacists
Nurses
2007
2006
8602
1572
3403
13044
2008
2007
9440
1625
3321
12766
2008
10006
1718
3327
15633
2009
2009
10344
1709
2907
14315
2010
2010
10550
1755
3149
21118
2011
2011
10762
1801
3344
24725
2012
2012
11240
1894
3744
28879
Growth %
5.11
3.41
1.67
20.23
Exports of Healthcare Services – Health Tourism
Health services can be exported in three ways. Foreigners can seek treatment in the
country, health professionals can temporarily move overseas to provide their
services, or healthcare professionals based in the country can provide information
and/or advice to clients located overseas [6]. In this study, we are concern with
foreigners coming to Malaysia specially to seek treatment in the private hospitals
here. We are not looking at our medical professionals who have moved overseas to
practices (specialists, nurses and other health professionals), but rather to look at
bring these professionals back to the country to practice here.
Private hospitals early foray into serving foreign out-of-pocket paying patients went
way back in 1998. There is great potential in health or medical tourism as many
foreign countries are looking at other alternatives due to the rising medical costs in
their home countries. In others like Indonesia, there are high-income individuals who
are looking for better medical services which are not conveniently available their
home countries[7]. Mahkota Medical Centre in Melaka, for example, was one of the
early pioneers in health tourism. It has established itself well in the Indonesian
18
market with six foreign offices there to cater for almost 30 per cent of its current
business.
Figure 2.13: Health Tourists
Source: MTHC; www.mhtc.org.my
Health tourism has grown quickly over the last five years after MOH established a
health tourism promotion unit in 2005. MOH started the campaign to brand
Malaysian health tourism with the launching of the Malaysia Healthcare logo and
tagline "Quality Care for Your Peace of Mind' in June 2009. This led to the
establishment of the Malaysia Health Tourism Council (MHTC) in 2009 under the
ambit of MOH. The purpose of MHTC is to streamline healthcare travel service
providers and industry players in both private and government sectors so as to drive
the industry to greater heights[8].
Over the last five years (2007-2012) the health tourists grew by an average of 19.4
per cent see Figure 2.13 above. The majority health tourists were from Indonesia
which recorded 57 per cent in 2011[7]. The health tourism revenue, although is only a
small portion of the total tourism revenue of Malaysia, is a significant contribution to
GDP and has grown by 30.1 per cent over the last five years (2007-2012), see
Figure 2.14 below. The total health tourism revenue is expected exceed RM600
million in 2012.
The costs for medical procedures in Malaysia are relatively competitive with many
countries, Table 2.5. Together with the good tourism infrastructure and being a
relatively lower cost for many services, Malaysia is a competitive health tourist
destination. Indonesian health tourists feel comfortable in Malaysia because of
common language, foods, religions and the convenience of travel here.
19
Figure 2.14: Health Tourism Revenue
HealthTourism Revenue in RMY millions
600
511
RMY millions
500
378
400
300
299
288
2009
2010
254
204
200
100
0
2007
2008
2011
2012
Source: Penang Monthly: www.penangmonthly.com
In general Malaysian private hospitals are well equipped and staffed adequately to
serve the local and international needs. Malaysian healthcare providers, particularly
those in health tourism, have quality health care accreditations. Most of the private
hospitals and medical centres have local accreditation by the Malaysian Society for
Quality in Health (MSQH)[10]. According to the Association of Private Hospitals
Malaysia (APHM) who has 113 registered members, 33 of their members have the
local MSQH accreditation and six have the Joint Commission International (JCI)
quality accreditation.
Table 2.5: Medical Tourism Procedure Cost Comparison in USD
Heart Bypass
Heart Valve
Replacement
Angioplasty
Hip Replacement
Hysterectomy
Knee Replacement
Malaysia
$12,000
USA
$130,000
India
$9,300
Thailand
$11,000
Singapore
$16,500
Korea
$34,150
$15,000
$160,000
$9,000
$10,000
$12,500
$29,500
$8,000
$10,000
$4,000
$8,000
$57,000
$43,000
$20,000
$40,000
$7,500
$7,100
$6,000
$8,500
$13,000
$12,000
$4,500
$10,000
$11,200
$9,200
$6,000
$11,100
$19,600
$11,400
$12,700
$24,100
Source: Wellness Visit: www.wellnessvisit.com
20
CHAPTER THREE: BEST PRACTICE REGULATIONS AND REGULATORY BURDENS
3.0
Cost of Regulation
There are multiple costs in regulation to achieve policy objectives. These costs impact
upon businesses, consumers, the government and the community in general (Figure
3.1). What is important is that the benefits accrued from achieving the regulatory
objectives must be greater that the total cost of regulation.
Some regulatory costs are inevitable as can be viewed as the price of the benefits
which the regulation brings. High quality regulation is both effective in address an
identifiable problem and efficient in terms of minimizing unnecessary compliance and
other costs imposed on the community. The best regulations achieve their objectives
and at the same time deliver the greatest benefit to the community. By contrast, poor
regulation may not achieve its objectives and can impose unnecessary costs, impede
innovation, or create unnecessary barriers to trade, investment and economic
efficiency. Given the pervasiveness of regulations in the country, it is not surprising that
regulation and red-tape continue to impose significant compliance costs [1].
Direct compliance costs can include the time taken to comply with regulations, the need
for additional staffing, the development and implementation of new information
technology and reporting systems, external advice, education, advertising,
accommodation and travel costs. As well as having a direct impact on regulated
businesses and individuals, compliance costs also impact indirectly on the community,
by changing pricing and distorting resource allocation, impacting on international trade
and delaying the introduction of new products or services. There remain concerns that
such costs are excessive [1].
In an international study in 1998, the OECD estimated from survey responses that
taxation, employment and environmental regulations imposed over $17 billion (2.9 per
cent of GDP) in direct regulatory compliance costs on small and medium-sized
businesses in Australia. The cost components are:
 employment regulations accounted for 40 per cent (OECD average was 35 per
cent);
 compliance with tax regulations accounted for 36 per cent (OECD average, 46
per cent); and
 environmental regulations accounted for 24 per cent (OECD average, 19 per
cent) [1].
Two categories of compliance costs of most concern for businesses as illustrated in
Box 3.1. It has been known that there are serious concerns on the time it takes to do
paperwork and the difficulties understanding the obligations and keeping up with
compliance changes. The paperwork burden is increasing to a point that businesses
are questioning the value of staying in business.
21
Figure 3.1: Multiple Costs of Regulation
Types of costs
Deadweight loss arising from
distortions caused by
regulation:
•prices
• access
Delay costs:
• deferred investment
• change in competitive
position
• underutilisation of
Time and other costs to
discover and comply with
regulatory requirements:
• internal resources
• external resources
Fees and charges levied by
government
Administrative costs to
government agencies
Costs to the economy in
forgone economic activity
(return to capital and to
labour
Cost to business and
consumers
(depends on ability to pass on
costs to consumers)
Benefits of regulation need to exceed costs
Uncertainty impacts:
• defensive behaviour
• inertia
• resistance to innovation
Who bears the costs
Net cost to government
expenditure
(cost to taxpayers)
Costs should be minimised for any given benefit achieved
Source: Research Report , AGPC (November 2008)
The more advanced countries like Australia have taken measures to improve the costeffectiveness of regulations and to reduce compliance burdens and red-tape. These
measures include [3]:
 the increased adoption of performance-based regulation;
 the consideration and adoption of implementation options that minimize redtape;
 the improvement of regulatory services through the employment of new
technology;
 increased electronic publication of regulatory information;
 licence reform and reduction;
 streamlining of government paperwork requirements;
 privatization of certification functions; and
 business focus groups and pilot test programs
22
Box 3.1: Categories of Compliance Costs
Categories compliance costs
Paperwork compliance costs
These costs include the costs imposed on the administrative structures of a business
due to filling out forms and providing information. It also includes costs such as
record keeping costs and the cost of obtaining advice from external sources in the
course of providing information.
Non-paperwork compliance costs
These costs include human capital and physical investment costs, costs of modifying
output to conform to regulations, capital holding costs associated with regulation
induced delays in business projects, costs associated with dealing with inconsistent
and duplicative regulation across jurisdictions, and the cost of time spent in meeting
regulatory requirements such as audits and inspections.
Source: Research Report , AGPC (November 2008)
3.1
What are Unnecessary Regulatory Burdens?
As the country moves towards the national aspiration of a high-income and developed
economy, the government will be facing the challenges of conflicting economic and social
objectives which are aimed to benefit the community generally. Good regulations and
good regulatory regime will be necessary to achieve the balance. The healthcare sector,
and in particular, the private hospitals which are highly regulated will have to meet these
challenges.
There are sound reasons for much regulation. It can reflect and enforce the community’s
values and the rights of the individual. It can reduce risks to people’s health and safety
(such as through consumer policy), address discrimination (such as with equal opportunity
laws), and protect the environment from overuse or degradation. Regulation is also part of
the institutional architecture for markets to work efficiently, including by establishing
property rights and enforcing contracts [2].
Much regulation is aimed at addressing sources of market failure — asymmetric
information; monopoly power; externalities, and public goods. Market failures can reduce
productivity, result in over- or under-production relative to community preferences, and
distort consumption and production decisions. Regulation can also reduce social and
environment risks. However, regulation to correct market failures or to address risks, still
needs to be efficient and effective, with the benefits of such corrections outweighing the
costs of implementing and complying with the regulation [2]. In addressing market failures,
policy makers should be wary of creating government failures.
Regulation can be used to protect some producers at a cost to others, favour the use of
some resources relative to others, and benefit some consumers over others. In some
23
cases such changes are intentional and desirable — for example, to look after vulnerable
consumers and the environment to encourage longer-term sustainability. However, in
other cases, there may be no merit in this; the costs imposed can be considerable and not
justified by the benefits [2].
3.2
Regulation of the Private Hospitals
From a national perspective, governments impose regulations and taxes for a variety of
reasons — but their underlying purpose is to benefit society as a whole by serving and
balancing economic and social goals. Economic regulations are principally intended to
improve the efficiency of markets, while social regulations are intended to protect social
values and rights. A third type of regulation — administrative — controls how a
government collects, manages and allocates funds and property [3].
Regulations are requirements imposed by governments that influence the decisions and
conduct of businesses, other organisations and consumers. They may also restrict the
range of activities that are undertaken. Expressed most succinctly, best practice regulation
achieves worthy objectives at least cost. Over the years, analysts have identified the more
important characteristics which regulation must satisfy to pass this test (Box 3.2).
The usual regulatory instrument used for private hospitals is licensing. The objectives of
this control are primarily for:
 ensuring the quality and safety of private hospital services, and/or
 ensuring the provision of the “right” level of hospital services, and
 ensuring universal accessibility through an appropriate geographical distribution of
those services and an appropriate cost structure.
Box 3.2: Reasons on Need for Regulations
The need for regulations
Externalities
The problem with externalities is that the persons giving rise to the external effects
do not take them into account. The role for government in such cases is to make the
parties to the externality–creating activity take these effects into account in their
decision making, thus forcing them to adjust their activities or behaviour to reflect
optimal or socially acceptable levels. Regulation is a tool by which the externality can
be made a direct concern of the relevant party.
Uncompetitive markets
If markets are not competitive, they will not operate efficiently. Some of the factors
that can lead to uncompetitive and inefficient markets include:
 barriers to entry
 small number of suppliers or a sole supplier
24

information constraints.
Therefore the role for government is to take steps to create more efficient markets or
to regulate so as to approximate efficient outcomes.
Social objectives : equity and consumer protection
There are many situations where governments intervene in a market in the pursuit of
social objectives. These include redistribution of income, consumer protection, public
health and safety, law and order, cultural objectives and the preservation and
protection of environmental resources. In many instances governments will choose
to pursue a particular social goal at some cost to economic efficiency. (Source:
Victorian ORR, 1995.)
Source: Staff Research Paper, Industry Commission Australia (December 1997)
There are also non-regulatory mechanisms to promote quality and safety, such as;
 quality accreditation scheme like the local MSQH accreditation or the international
JIC accreditation;
 the strong commercial and ethical incentives for hospital operators and doctors to
ensure safety and quality standards are maintained; and
 contractual requirements with health insurances or other health funds, which
typically contain quality requirements, including accreditations [4].
Private hospital licensing for facilities and services
Through licensing controls, regulators can exercise significant control over the nature of
private hospital services and hospital conduct. The controls usually cover a range of
matters including:
 location, type of patient or service, and the number of patients or beds,
 maintenance and improvements, for instance no renovations, alterations or
extensions to hospitals can be undertaken unless approved,
 the type or character of the licensee, for example, the licensee must be of ‘good
character and repute’, be a ‘fit and proper person’ and must have ‘sufficient
material and financial’ resources. The licensee must be a registered medical
practitioner, management and staffing,
 for example, hospital must comply with minimum nursing staff to patient ratios and
mix of nursing staff requirements,
 premises, facilities and equipment, for example, there are provisions relating to
room access and size, as well as to ablution, electrical, air-conditioning, cooking,
ward, storage, cleaning, laundry, maternity and surgical facilities,
 registers and records. There are requirements to document and keep patient’s
medical history and supporting ‘prescribed information’, reporting and notification
of information.
25

Hospital administrative practices and policies Hospitals must establish and
document administrative and operational policies, processes and procedures for
all their functions and services.
Licensing also include a range of miscellaneous requirements covering such things as
patient rights, medical and procedure fees, fire safety and emergency evacuation,
storage and handling of drugs and chemicals, waste management and disposal, food
safety and infection control. Private hospitals regulation may also specify compliance with
other legislations and/or regulations [4].
Healthcare occupational licensing
For healthcare providers, occupational or professional licensing is a norm. Medical
practitioners, dentists, pharmacists, nurses and other healthcare professionals are
subjected to regulatory licensing to practise. Occupational licensing is intended to raise
standards and provide a better guarantee to users of the service. This is especially
important when consumers are infrequent participants in a market and so may have
inadequate information about the market.
Another important reason is that occupational licensing in healthcare is necessary to
exclude incompetent or dishonest practitioners before they do damage rather than
dealing with the consequences of their actions later. However, occupational licensing has
serious cost impacts on the healthcare business and raises costs to consumers [5].
Private hospital planning control for licensing
Licensing arrangements include planning controls which cover the location of private
hospitals, the nature of services available in them, and the number of beds. Underlying
these controls are concerns that relying solely on the market to determine locations and
level of private hospital services could lead to inappropriate outcomes, such as overinvestment in, and use of, private hospitals and a geographical distribution of hospitals
skewed in favour of urban areas [4].
Among the planning criteria considered when assessing new licence applications are (a)
the suitability of the location taking into account of the availability of other community
facilities and the safety and amenity of the environment, and (b) whether the new facility
would result in ‘over-supply’ of private hospital services in an area.
There are several related rationales for these controls, including:
 Facilitating ‘orderly’ industry development, particularly through reducing the level of
unused bed capacity in private hospitals,
 Promoting equitable access to private hospital services,
 Guarding against supplier-induced demand, and
 Containing healthcare costs by limiting access to expensive, high technology
equipment.
26
3.3
Sources of Unnecessary Regulatory Burden
Like many developing countries, we have been developing and implementing regulations
following the practices of past administrations and often to address immediate problems
without considering all their impacts. We follow what the previous generation has done
without following principles of good regulatory development and practices. We have not
even reviewed regulations that have been in force in any structured manner. As such we
are experiencing problems with our regulatory systems, such as:
 overuse of inflexible regulations
 rapid growth of regulations
 a sense of being “over-regulated”, while still recognizing the need for regulations to
achieve desired economic and social outcomes [3]
 a large stock of regulations with urgent need of review.
There are three broad areas that comprise the “regulatory burdens” on business.
They are:
1. Time, effort and financial costs involved in complying with government regulatory
and taxation requirements. The main dissatisfaction has been increased irritation
with the paperwork and compliance burden associated with the taxes and
regulations;
2. The negative impacts on firms’ productivity arising from disincentives, distortions
and duplication caused by these government requirements; and
3. Variety of other non-economic costs involved (Box: 3.3).
Box 3.3: Regulatory Burdens
Defining the regulatory burden on business
We define the regulatory burden as the costs imposed on businesses by the
regulatory framework — which consists of legislative, regulatory and taxation
measures. These costs or burdens include:
 the costs involved in meeting the substantive requirements of the regulatory
framework;
 the administration and paperwork costs involved in complying with the
regulatory framework;
 the costs arising from the disincentives, distortions and duplication attributable
to the regulatory framework; and
 other costs (such as psychological stress) associated with compliance.
Source: Staff Research Paper, Industry Commission Australia (December 1997)
Regulatory burdens are often necessary for the government to achieve national policy
objectives for the continuous development of the country. However, when regulations are
poorly written or enforced or inefficiently implemented, regulatory burdens will exceed
what is necessary to achieve desired objectives, giving rise to “unnecessary regulatory
burdens” [6].
27
Unnecessary burdens might arise from:
1. excessive coverage of the regulations, including ‘regulatory creep’ — that is,
regulations that encompass more activity than was intended or required to achieve
their objective
2. subject-specific regulations that cover much the same ground as other generic
regulation
3. prescriptive regulation that unduly limits flexibility such as preventing businesses
from using best technology, making product changes to better meet customer
demand or meeting the underlying objectives of regulation in different ways
4. Overly complex regulation
5. Unwieldy licence application and approval processes
6. excessive time delays in obtaining responses and decisions from regulators
7. rules or enforcement approaches that inadvertently provide incentives to operate in
less efficient ways
8. an overlap or conflict in the activities of different regulators
9. inconsistent application or interpretation of regulation by regulators
10. unnecessarily invasive regulatory behaviour, such as overly frequent inspections or
requests for information [7].
3.4
Best Practice Regulation
Policy objectives can be achieved by regulatory or non-regulatory means. The OECD has
identified various characteristics on good regulations (see. Box 3.4).
Box 3.4: Good Regulations
What is ‘good’ regulation?
According to the Organisation for Economic Cooperation and Development (OECD),
‘good’ regulation should:
 serve clearly identified policy goals, and be effective in achieving those goals
 have a sound legal and empirical basis
 produce benefits that justify costs, considering the distribution of effects
across society and taking economic, environmental and social effects into
account
 minimise costs and market distortions
 promote innovation through market incentives and goal-based approaches
 be clear, simple, and practical for users
 be consistent with other regulations and policies
 be compatible as far as possible with competition, trade and investmentfacilitating principles at domestic and international levels.
Source: OECD (2005)
There is, of course, other mix of options including self-regulation, quasi-regulation or coregulation [8] to achieve the same purpose. Regulations that have been formulated through
a Best Practice Regulation process can achieve policy objectives without imposition of
unnecessary regulatory burdens on business.
28
There are a number of characteristics which are likely to indicate that regulations are well
written and less likely to impose unnecessary burdens on business. The checklist for good
quality regulations is given in Box 3.5 [9].
Box 3.5: Regulatory Quality
Checklist for assessing regulatory quality
Regulations that conform to best practice design standards are characterised by the
following seven principles and features.
 Minimum necessary to achieve objectives
o Overall benefits to the community justify costs
o Kept simple to avoid unnecessary restrictions
o Targeted at the problem to achieve the objectives
o Not imposing an unnecessary burden on those affected
o Does not restrict competition, unless demonstrated net benefit
 Not unduly prescriptive
o Performance and outcomes focused
o General rather than overly specific
 Accessible, transparent and accountable
o Readily available to the public
o Easy to understand
o Fairly and consistently enforced
o Flexible enough to deal with special circumstances
o Open to appeal and review
 Integrated and consistent with other laws
o Addresses a problem not addressed by other regulations
o Recognises existing regulations and international obligations
 Communicated effectively
o Written in ‘plain language’
o Clear and concise
 Mindful of the compliance burden imposed
o Proportionate to the problem
o Set at a level that avoids unnecessary costs
 Enforceable
o Provides the minimum incentives needed for reasonable compliance
o Able to be monitored and policed effectively
Sources: OECD (1995); Office of Regulation Reform (Vic) (1996); Council of
Australian Government (1997); Australian Office of Regulation Review (1998); and
Cabinet Office (UK) (2000c).
Source: Staff working Paper, Australian Productivity Commission (July 2003)
A regulator plays an important role in regulatory regimes by encouraging compliance
through education and advice, as well as enforcing laws and regulations through
disciplinary means [2]. Enforcing regulations, however, with established principles of good
practices can enhance regulatory practices to achieve policy objectives. The New Zealand
29
Treasury has established guiding principles to achieve best regulatory practices as given
in Box 3.6.
Box: 3.6: Principles for Best Regulatory Practice [9]
The Principles for Best Regulatory Practice
1. Proportionality: the burden of rules and their enforcement should be
proportionate to the benefits that are expected to result. Another way to
describe this principle is to place the emphasis on a risk-based, cost-benefit
regulatory framework and risk-based decision-making by regulators. This
would include that a regime is effective and that any change has benefits that
outweighs the costs of disruption.
2. Certainty: the regulatory system should be predictable to provide certainty to
regulated entities, and be consistent with other policies. There can be a
tension between certainty and flexibility. A principles or performance-based
regime that provides for safe harbours such as deemed-to-comply standards
tries to resolve this tension, but ensuring both attributes are optimally reflected
is a challenge.
3. Flexibility: regulated entities should have scope to adopt least cost and
innovative approaches to meeting legal obligations. A regulatory regime is
flexible if the underlying regulatory approach is principles or performancebased, and policies and procedures are in place to ensure that it is
administered flexibly, and non-regulatory measures, including self-regulation,
are used wherever possible.
4. Durability: closely associated with flexibility; the regulatory system has the
capacity to evolve to respond to new information and changing
circumstances.
5. Transparency and Accountability: reflected in the principle that rules
development and enforcement should be transparent. In essence, regulators
must be able to justify decisions and be subject to public scrutiny. This
principle also includes non-discrimination, provision for appeals and sound
legal basis for decisions.
6. Capable Regulators: means that the regulator has the people and systems
necessary to operate an efficient and effective regulatory regime. A key
indicator is that capability assessments occur at regular intervals, and subject
to independent input or review.
7. Growth Supporting: economic objectives are given an appropriate weighting
relative to other specified objectives. These other objectives could be related
to health, safety or environmental protection, or consumer and investor
protection. Economic objectives include impacts on competition, innovation,
exports, compliance costs and trade and investment openness. A regime
embodies this attribute if the identification and justification of trade-offs
between economic and other objectives are explicit parts of decision-making.
Source: New Zealand Treasury: http://www.treasury.govt.nz/economy/regulation/bestpractice
When regulators are transparent and accountable in their enforcement role and they have
incorporated good guiding principles into their operating systems there will be a less
30
burden on business. This is pertinent in regulating the healthcare industry, and in
particular, the private hospital sector.
Government Initiative in Best Regulatory Practice
The Government has recently implemented the initiative on best regulatory practice with
the launching of the document on National Policy on the Development and Implementation
of Regulations. This policy document applies to all federal government ministries,
departments, statutory bodies and regulatory commissions. It is also applicable for
voluntary adoption by state government and local authorities. The policy document spells
out the objective, operating principles, responsibilities, requirements and process for the
regulatory process management.
The national policy also specifically mandates the Malaysia Productivity Corporation
(MPC), through its responsibility to the National Development Planning Committee
(NDPC), to implement the functions of the national policy. MPC is to assist in the
coordination for implementing this policy [11].
The Best Practice Regulation Handbook was launched together with the national policy.
This handbook provides the detail guidance on carry out best practice regulation – the
systematic process to the development of regulations. Basically, a regulator has to carry
out regulatory impact analysis (RIA) and produced a comprehensive report, the
Regulatory Impact Statement when it is introducing any regulation that may impact upon
businesses. MPC role here is to ensure that the RIS is adequately prepared before it is
submitted to NPDC for further action [12].
3.5
Regulatory
approaches:
Prescriptive-based,
Performance-based,
Principle-based and Process-based Approaches to Regulatory Design
A common approach for regulating particular activities is the use of rules or standards.
There are four main categories:
 prescriptive rules focus on the inputs and processes of an activity, specifying the
technical means used in undertaking an activity. They are rules which prescribe
how an outcome is to be achieved where the focus is on the methods of operation
or inputs (as in the mandatory installation of speed limiters or restrictions on vehicle
engine capacity);
 performance-based rules performance-based rules which specify a particular
outcome without prescribing the method to be used to achieve it (as in a speed limit
of 60Kph);
 principle-based standards outline the desired outcomes by specifying the spirit or
broad intention of the regulation and require interpretation according to the
circumstances (requiring drivers to travel at a speed ‘appropriate to the conditions’
or ‘not in a manner dangerous’); and
 system-based or process-based; or management-based regulations where
businesses develop their own risk management strategies which are audited by
regulators [5 & 6].
31
The temptation for a regulator is to lay down a prescriptive rule that must be adhered to.
This encourages certainty, particularly in the short term, and will suffice when dealing with
issues for which limited alternatives exist for achieving the objective of the regulation
(such as outright prohibitions). Against that though, a major problem with prescriptive rules
is that they can limit flexibility in meeting regulatory objectives and can retard innovation.
Other problems with prescriptive rules are that they can be rendered superfluous by
technological change or encourage wasteful by-passing tactics by industry [5].
Such ‘black letter’ prescriptive rules are falling out of favour because regulators will never
be as smart as those they seek to regulate. Regulators limit themselves when they define
behaviour by prescription. Business who has met the limits of prescribed behaviour will
take it as meeting their obligations, and behaviour which falls outside their limits, whether
fitting the intent of the law or not, is acceptable. At the other extreme, business may take
the prescribed limit as a challenge “to find ways to get around it” [5].
Malaysia has traditionally followed the prescriptive approach in regulation, more so in
areas where safety and health is concern. However, there is now interest in pursuing the
performance-based rules as is being done in other benchmarked countries like Australia.
Performance-based rules are most suited to areas for which the desired outcome is easily
quantifiable. In specifying the desired outcome, individuals and firms can seek out the
optimum cost for achieving it.
However, performance-based rules also have their limitations. Firstly, while allowing firms
flexibility in achieving an objective, performance rules provide no flexibility in the objective
itself. For example, emission controls generally specify a maximum amount that can be
emitted from a particular factory, but the effect on the receiving medium will vary
according to a variety of factors, including weather conditions, time of day, and the level of
emissions from other factories at the same time. Secondly, as with prescriptive standards,
once an individual or firm has met the performance-based standard, there is little incentive
to go beyond that standard even when it would be socially desirable. For example, firms
may reduce emissions to levels prescribed in a performance standard but would have little
financial incentive to reduce them further, even if further reductions could be achieved at
little cost [5].
Apart from both prescriptive-based and performance-based rules, some regulators have
considered the use of principle-based standards. The use of principle-based standards
assumes that the detailed preventative rules cannot possibly anticipate and proscribe the
inexhaustible variety of human heartlessness and negligence, and at the same time will be
often be harshly over inclusive. From this perspective, the appropriate strategy is to draft
broadly worded statutes and regulations, laced with words such as “reasonable” and “so
far as feasible,” enabling regulatory officials to “custom tailor” regulatory requirements and
penalties to particular enterprises and situations [5].
32
CHAPTER FOUR: HEALTHCARE REGULATIONS IN MALAYSIA
4.0
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].
4.1
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 country’s 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.
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.
33
Table 4.1: Regulation of Healthcare Professionals
No.
Professions
1
Medical
practitioner
(Doctors) &
specialists
2
Dentists
3
Nurses
4
Midwives
5
Pharmacists
6
Medical
Assistants
7
Opticians &
Optometrists
8
Allied Health
Professionals
(32 categories)
Acts & Regulations
Medical Act 1971 (Act 50)
Regulators
Malaysian
Medical Council
Dental Act 1971 (Act 51)
Malaysian
Dental Council
Licensing
Registration &
Annual Practicing
Certificate
Registration &
Annual Practicing
Certificate
Nurses Act 1950 (Act 14) & Malaysia
Registration &
Nurses Registration
Nursing Board
Annual Practicing
Regulations 1985
Certificate
Midwifery Act 1966 (Act
Malaysia Midwife Registration &
436)
Board
Annual Practicing
Certificate
Registration of
Malaysia
Certification of
Pharmacists Act 1951 (Act Pharmacy Board Registration &
371) &
Annual Retention
Registration of
of Registration
Pharmacists Regulations
2004
Medical Assistants
Medical
Annual Certificate
(Registration) Act 1977
Assistants
of Registration
(Act 180)
(Registration)
Board
Optical Act 1991 (Act 469) Malaysian
Registration and
Optical Council
Annual Practicing
Certificate
Bill has been drafted.
Registration
required by 2011.
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.
34
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 By-laws 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 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)
35
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.
4.2
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 multi-dimensional.
Depending on the context, there can be different dimensions to them. Malaysia’s approach
has been to formulate prescriptive regulations as in the PHFS Regulations 138.
Accessibility
From the World Health Organization’s (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-on-investment to the
shareholders.
36
Figure 4.1: Income Distributions in Malaysia
60.00
51.40
51.45
50.00
46.00
46.21
40.00
2007
30.00
21.49
2009
21.64
20.00
13.7
8.72
10.00
13.72
8.65
4.69
4.54
0.00
Top 20%
Second 20%
Third 20%
Forth 20%
Lowest 20%
GINI Index
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
provider’s 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.
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
37
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 13 th
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.
Box 4.1: Relevant PHFS Regulations for Private Hospitals
Parts of Requirements of PHFS Regulations 138 for Private Hospitals:
II
III
IV
V
VI
VII
VIII
IX
X
XI
XII
XIII
XIV
XV
XVI
: Application for approval to establish or maintain or license to operate or provide private healthcare
facilities or services and other applications
: Organization and management of private healthcare facilities and services
: Policy
: Registers, rosters and returns
: Grievance mechanism
: Patient medical record
: Consent
: Infection control
: General provisions for standards of private healthcare facilities or services
: Standards for Obstetrical or Gynaecological care
: Standards for newborn nursery facilities
: Standards for paediatric patient care
: Standards relating to Anesthesia
: Standards for surgical facilities and services
: Special requirements for critical care on intensive care unit
38
XVII
XVIII
XIX
XX
XXI
XXII
XXIII
XXIV
XXV
XXVI
XXVII
XXVIII
XXIX
:
:
:
:
:
:
:
:
:
:
Special requirements for emergency care services
Special requirements for pharmaceutical services
Special requirements for central sterilizing and medical-surgical supply facilities and services
Standards for dietary services
Special requirements for blood bank services, blood transfusion services or blood donation programme
Special requirements for haemodialysis facilities and services (Applicable in some hospitals)
Standards for rehabilitation facilities and services (Not applicable)
Standards for specialist outpatient facilities and services
Standards for ambulatory care (Not applicable)
Special requirements for radiological or diagnostic imaging services and radiotherapy and radioisotope
services
: Standards for private nursing homes (Not applicable)
: Special requirements for hospice and palliative care services (Not applicable)
: 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.
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

Community’s 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
39

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
2. Productivity and Innovation through K-economy
3. Creative and Innovative Human Capital with 21st Century Skills
4. Inclusiveness in Bridging Development Gap
5. Quality of Life of an Advanced Nation, and
6. 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
1. Health sector transformation towards
a more efficient and effective health
system in ensuring universal access
to healthcare
2. Health awareness and healthy
lifestyle
3. Empowerment of individual and
community to be responsible for their
health
Strategies
1.
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
40
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.
4.3
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.
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
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
Local and municipal councils, Ministry of Housing
and Local Government
Note: Kuala Lumpur, Putrajaya and Labuan come
under a different Act and Ministry.
Town and Country Planning Act 1976
Uniform Building By-laws 1984
Competition Act 2010
Price Control and Anti Profiteering Act 2011
Utilities
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
Employing
workers
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)
Ministry of Human Resource
Employees Provident Fund (EPF)
Social Security Organisation, (SOCSO), Ministry of
Human Resource
Human Resource Development Fund (HRDF)
41
Ownership of
property
Getting credit/
raising fund
Protecting
investors
Enforcing
contracts
Winding-up/
Receivership
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
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
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 Minister’s
Department
Bank Negara Malaysia
Securities Commission (SC)
Bursa Malaysia (Bursa)
Attorney General’s Chambers (AGC)
Malaysia Department of Insolvency (MDI)
Note: Author’s addition in ‘bold italic’
Source: MITI-PwC Report 2013 [1]
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 website 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
42
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.
Table 4.3: Facilities and Services Regulations and Regulators for Private Hospitals
Primary Activity
Acts and Regulations
Regulatory body
Establishment
 Healthcare
professionals
 Specialists
 Medical supplies
 Facilities
 Medical tourists
Private Healthcare Facilities and Services Act
1998
(Private Hospitals and Other Private
Healthcare Facilities) Regulations 138/2006
Medical Act 1971
Ministry of Health (various departments)
Operations
 Services
 Healthcare
professionals
 Specialists
 Diagnostics
 Treatment
 Rehabilitation
 Reporting
(statistics &
incident reporting)
Sales & Marketing
 Promotion
 Brand development
 Market development
Services
 Immigration
 Transportation
 Accommodation
 Financial
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
(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
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
Requirements
Immigration Act 1959/63
Insurance Act 1996
Exchange Control Act 1953
Tourism Industry Act 1992
Land Public Transport Act 2010
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)
(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: Author’s addition in ‘bold italic’
43
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 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
44
unwholesome or deleterious to health.
Section 4(2)(b) : Power to destroy any drug wherever found which is decayed or
putrefied.

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

Pharmacy Board
Malaysia
National
Pharmaceutical
Control Bureau
Medicine
Advertisement
Board
Food Safety and
Quality Division
Disease Control
Division
 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 professional bodies with similar roles as MMA, although not as
authoritative, are listed in Table 4.5 below.
45
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.m
y/
Association of Private
Hospitals Malaysia
http://www.hospitalsmalaysia.org/
Malaysian Pharmaceutical
Society
http://www.mps.org.my/
Malaysian Society of
Anaesthesiologists
http://www.msa.net.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.

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.
46



Malaysian Nurses
Association
http://www.mna.org.my/
Malaysian Association of
Medical Assistants
http://www.pppmalaysia.co
m/
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 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.
Private Hospital Life-cycle Value Chain - Regulatory Regimes
Having identified the various Acts and Regulations the linkage to the business life-cycle
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.
47
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
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
facilities
Medical Device Act 2012
Medical Device Regulations 2012
Atomic Energy Licensing Act 1984
Environmental Quality Act 1974
Factory and Machinery Act 1967
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
o Midwives
Registration of Pharmacists
o Medical Assistants
Regulation 2004
o Opticians & Optometrists
Optical Act 1991 (Act 469) &
o Pharmacists
Optical Regulations 1994
o Other Allied Health
Professionals
Employment (Amendment) Act 2011  Other employment
requirements
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
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)
 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)
48
 Local Government Act 1976
 Land Public Transport Act 2010
 Similar to operation and
maintenance
 Similar regulations are applicable
as for establishing a new hospital







 Other business licensing





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


Companies Act 1965

Income Tax Act 1967
Bankruptcy Act 1967
Employment (Amendment) Act 2011
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
49
CHAPTER FIVE: THE BURDENS OF LICENCE RENEWAL
5.0
Regulatory Burdens in the Private Hospital Sector
The stringent regulation of private hospitals came into being with the enactment of the
Private Healthcare Facilities and Services Act 1998 (Act 586), but was implemented only
on the first of May 2006 with the gazettal of the Private Healthcare Facilities and Services
Regulations (Private Hospitals and Other Private Healthcare Facilities) Regulations 2006,
P.U. (A) 138/2006. As discussed in Chapter Four, this is a highly prescriptive Act
specifying the regulatory requirements for establishing, maintaining and operating a
private hospital. Few regulations are perfectly designed or implemented, and regulatory
burdens arise from different sources. Unnecessary burdens can come about due to
poorly prescribed requirements or from inefficient means of implementation and/or its
processes. Regulatory burdens can increase overall cost to the business and often this is
passed on to consumers. Poor regulatory regimes can impact negatively on the
development and growth of the private hospital sector.
In order to determine the regulatory issues that might be burdensome to private hospitals
feedback was obtained from a sample of private hospitals. This was done by conducting
interviews with senior representatives from a range of selected private hospitals across the
country. Interviews were carried out from May 2013 to August 2013. The private hospitals
were selected from the members list of the Association of Private Hospitals Malaysia
(APHM) which is published on the website www.hospitals-malaysia.org. This chapter
reports on the analysis of these consultations. Depending on subsequent feedback the
final findings of this study may change.
From these exploratory interviews, a total of 27 respondents from 12 organizations (11
private hospitals and APHM) were interviewed. The organizations interviewed were from
Penang (2 hospitals), Selangor (2), Kuala Lumpur (2), Melaka (2), Kuching (2) and Kota
Kinabalu (1).
After the preliminary analysis of the interviews, the research team then verified the
findings with the respondents by getting further comments and inputs from them. The
summary of the feedback from the interviews is given in Appendix 5.1. This was then used
to draft this chapter which proposes options to the key issues raised by the respondents.
The Draft Report provides the basis for a public consultation to be carried out with the key
stakeholders - the private hospitals, medical professionals and the regulators.
From these exploratory interviews nine key issues of regulatory burdens that are of most
concern to the private hospitals related to:
1. the renewal of operating licences
2. the planning approval for facilities improvements (including upgrading renovation,
expansion, any physical changes)
3. approval for advertisements and advertising materials
4. workforce regulation and quality and availability of professionals
50
5.
6.
7.
8.
9.
exports of healthcare services (Health tourism)
personal data protection
Malaysian Standard for Quality Healthcare (MSQH) accreditation;
regulated medical fees
information and reporting.
The concerns about these key issues (summarized in Appendix 5.1) were sent to those
interviewed for their validation and further input. At the end of August 2013 the responses
that were received were then summarized as in Appendix 5.2. This chapter discusses the
issues relating to licence renewal for private hospitals.
It is important to note that the issues raised were the experiences of the respondents in
dealing with the regulatory regimes and the regulators. They are based on their
perspectives and their experiences with regulations were not all the same. Certain issues
impacted more on some respondents and less on others. This variability in experience
may also reflect inconsistencies in the implementation of the regulatory regimes by the
different regulatory officers. The regulators concerned may not agree with the perceptions
of the respondents and have their own views on the issues. This is to be expected for it
would indicate the gaps on understandings between two parties. It will be important to
understand any differences in perceptions and resolve them in ways that maintain the
effectiveness of regulations while removing unnecessary burdens on business. It is hoped
regulators will provide their views on these matters to MPC.
5.1
Licence Renewal
Operating licensing renewal appears to be the most burdensome aspect of private hospital
regulation. This is because there are many requirements in the governing Act 586 and its
accompanying regulation PHFS Regulations 138/2006.
One aspect is the regulatory requirements as prescribed in the PHFS Regulations
138/2006 and how these regulations have been implemented. Implementation concerns
involve a few different issues. Some issues may be more complicated and may take longer
to study and implement, while some may be taken as “quick-wins”.
Another aspect is the regulatory burdens as reflected: on the basis of the number of
interactions (dealings with regulators) and the difficulty experienced; the cost of each
interaction (direct cost, overhead and opportunity costs); and the waiting time (delays and
their consequences). The regulatory burdens of most concern include:
1. documentation required for renewal application submission (Section 5.2)
2. complying with PHFS Regulations 138/2006 (Section 5.3)
3. dealing with licensing officers (on-site inspections, audits, or surveys) (Section
5.4)
4. fragmented processes among multiple regulators (Section 5.5)
5. annual Practising Certificates for all healthcare professionals (Section 5.6)
51
5.2
Issue No. 1: Application Documentation
An application for operating licence renewal requires a lot of documentation, which
involves a huge burden in paperwork and administrative overheads for private hospitals.
An example of the burden for a large private hospital is shown in Box 5.1. Documentation
requirements for personnel are a huge burden. For example, if the hospital has 500
personnel, at least 500 interactions (with regulators) are required to prepare the
documentation for licensing personnel.
Box 5.1: Estimated Costs and other Burdens
This is a feedback from a large private hospital in a state outside Kuala Lumpur: The hospital
has over 350 beds with 1500 employees with over a thousand licensed medical professionals
(doctors, nurses, dentists, medical assistants, etc).
Licence Renewal:
1. Estimate cost of processing and licence fees : >RM10,000;
2. Duration to obtain approval – approx. 9 months;
3. Estimated amount of paper required for submission – 25 reams of A4 paper;
4. All documents are to be submitted in 3 sets and all the Annual Practising Certificates are
required to be certified. This includes certificates for staff from the non-allied health
professionals and those in non executive positions. (All board members and senior
management personnel also have to obtain the statutory declarations of good standing).
Planning Approval for Renovation
1. Estimate of cost – processing fee of RM1000;
2. Time to get approval – approx. 6 - 9 months;
3. Number of interactions (meetings) with regulators – via tele-conversation;
4. Documentation requires hospital to provide precise drawings. This is costly and time
consuming and of doubtful benefit if the renovations are not major
Source: Author (additional input from interviews is added in “italic”)
Documentation requirements include occupational licensing for healthcare professionals
in the form of annual practising certificates (APC). These have to be cleared first by the
various boards, registrars and councils. Should there be a delay in any one of, the
licensing process is delayed. Compounding this burden is the need to submit the
licensing application at least six months before the current licence expires (explicitly
stated in PHFS Regulations 138/2006). A delay in submission results in a heavy fine. The
occupational certificates need to be collected, duplicated (three copies) and each page
as a certified “true copy” by senior management and then collated for the submission.
It takes little imagination to see the administrative and secretarial difficulty and burden of
the documentation process and yet is not clear that it is legally required to fulfil regulatory
requirements nor served a useful purpose. While for non-healthcare professionals,
statutory declarations must be made depending on the number or persons involved it is
quite common to increase costs by a few thousand Ringgits. Considering this burden,
various options might be considered. As well as providing all this written documentation,
the hospitals must also provide the same information over the Internet. So there is
duplication in supplying information.
5.2.1 Option No. 1: No change and continue with the existing practice
There is always the option of making no change and continuing with current practice and
letting the private hospital sector continue to bear the burden (and also the resulting
52
administrative burden to the regulators). The situation can only become more costly with
time as more private hospitals and other healthcare facilities come into being and the
regulators become more overloaded than they are now. The long term impact is a lot of
lost opportunities to improve productivity on the non-value added activities such as the
unnecessary paperwork. The burden will continue to be translated into overhead costs
and which ultimately fall onto the consumers, negating the policy objectives of cost
containment, sustainability and affordability. It will continue to reduce Malaysia’s
healthcare export competitiveness and keep costs to local users higher than they need
be.
5.2.2 Option No 2: Using information technology
This would be a relevant solution to any sort of data and information management and
processing. The MOH is in the process of using ICT to carry out information transactions.
An online information submission was being implemented at the time of the interviews.
However, the online system was not easy to use and unstable and the hospitals had to
submit online and at the same time submit documents the current manual way. Going
online and using IT for managing processes without changing and re-engineering the
paper requirement results in increased rather than decreased costs to private hospitals.
The change from “evidence-based” practice to “information-based” practice (see Option
No. 3 below) will reduce the information load and simplify information processing may be
a good example towards successful online application.
Instead information could be compressed into digital form for submission (a USB storage
drive) thereby eliminating the need to produce hard copy documents for submission. This
would significantly reduce the paperwork burden. A total online solution always looks
good and desirable, but it is a highly challenging change. Such solution need to take into
consideration the IT resources of the applicants and the Internet capability of the
applicants’ locality.
5.2.3 Option No 3: Moving from “evidence-based” to “information-based” by removing
duplication of requirements by different regulators within the MOH
The requirement for occupational certificates to be certified as “true-copies” basically is to
ensure validity of the documents, which is termed here as “evidence-based” concept. This
occurs because different arms of government are not coordinating their information
requirements. This results in a duplication of information requirements on business which
is contrary to best practice. Healthcare occupational licences are issued by regulators
within the MOH. In other words, the evidence sought by the private hospital licensing
authority, in this case the Private Healthcare Practice Control Branch (CKAPS) of MOH,
are already held within the MOH such as the Malaysian Medical Council, the Nursing
Board among others. Given they are all regulators within the MOH, the question arises,
“Why does the regulator need to seek such evidences from the licensee?” What the
CKAPS needs is the latest employment information, which can be obtained from these
Councils and Boards for it to cross-verify with the other databases of occupational
licensees. If this was implemented, the total burden of preparing occupational
documentation would be significantly reduced for private hospitals. Hospitals would only
53
need to generate their employment information from their human resources databases to
meet the application requirements thereby reducing overhead cost to near zero,
administrative and secretarial processes efforts and time to near zero, and even reducing
the burden of document management significantly for the regulator. The regulator will be
able to reduce their filing and records burden significantly.
5.2.4 Recommended Option to Resolve Issue No. 1
It is recommended that the Medical Practice Division – Private Medical Practice Control
Section (CKAPS) of the MOH pursue Option No. 3 above to resolve the issue on
application documentation involving occupational and personnel certifications. The
regulators should follow the one-government (single-window) policy in dealing with
businesses.
5.3
Issue No. 2: Complying with Licensing Requirements
The governing regulation for private hospital licensing is the PHFS Regulations 138/2006.
The implementation of this regulation in the licensing process integrates all other
regulatory requirements from other regulations such as fire and building safety,
machinery and equipment safety, environment, safety on drugs usage, information
asymmetry, patient rights, public safety and the like. The outcome of integrating all these
into a single licensing process has created complexity and seriously burdens the
licensees and the regulator. For example, the application process and the required
documentation has become highly burdensome, as discussed above. Hence, an
important aspect of this analysis is to look at the requirements of this governing
regulation.
The PHFS Regulations 138/2006 [1]
This document is comprehensively crafted to meet the regulatory intentions for private
healthcare facilities and services. It is also a highly prescriptive regulation. There are some
benefits from good prescriptive regulation. It provides for standardized regulation across
private hospitals - facilitating regulators to be consistent in applying objectively the
prescriptive requirements, at least in theory. Prescriptive requirements are also be helpful
for those who are not well-versed in quality health care, and the minimum specifications
should enable them to achieve the minimum standard for quality care.
However, prescriptive requirements can pose serious challenges to both the hospital and
the regulator. They tend to reduce the motivation to achieve beyond the minimum stated
requirements and innovation may be restricted. An example from the interviews is the
requirements to record all drug prescriptions into a physical register (a bound book). It was
claimed that the auditor refused to accept the electronic register and therefore the
electronic data had to be printed out and bound into a physical register (book). This
example of a prescriptive requirement is from the Poison (Pyschotropic Substances)
Regulations 1989 where Regulation No. 23 on “Form of Register” states that:
Every register required under these Regulations shall:
54
a) be in the form of a bound book or in the form which has the written approval of
the Licensing Officer; and
The licensing officer has conveniently ignored the part “…or in the form which has the
written approval…” in her decision.
Prescriptive requirements can go into too much detail imposing rigidity in operations and
can be impracticable to apply. For example in the PHFS Regulations 138/2006,
Regulation No. 151 on “Newborn Nursery Room” specifies that:
(1) A newborn nursery room shall be sufficiently large so that bassinets will stand
at least 15.2 centimetres from the walls and partitions and be spaced at least
0.3 metre apart and aisles used for passageways shall be at least 0.9 metre
wide.
While these requirements may be unnecessarily restrictive in themselves, measurements
of distances, etc. can add an extra burden In this case, questions arise as to whether the
measurement needs to be specified to 0.1 centimetre accuracy. Also, while spatial
dimensioning is a guide for good management practice, when explicitly stated in a
regulation, it becomes an offence in law. There are also other requirements relating to the
physical layout, utilities (water, electricity, telecommunication and sewerage system), air
conditioning and ventilation which are highly prescriptive and explicitly specified in the
regulation.
On this, it is important to understand the differences between regulatory requirements
relating to physical dimensions and the management of dimensions. Regulation specifies
absolute numbers while management deals with variability. Therefore the practical
concept is of a tolerance limit to be used in managing risk. If regulators were transparent
about their concept of tolerance limit in physical dimensioning and the objective being
served by these requirements it would both increase regulatory effectiveness and reduce
unnecessary burdens on business.
Many private hospitals that were established before 2006 did not meet the explicit
requirements of the regulation. As many of the requirements involve the physical building,
they are costly and inconvenient to upgrade. However, this should not be the excuse for
not meeting regulatory requirements for quality care and the MOH has given reasonable
time for the hospitals to make the improvement changes. Also, unless it can be
demonstrated that these precise dimensions must be met to address significant risks, the
idea of grandfathering the regulatory requirements should be applied – this means existing
buildings do not need to meet these requirements unless they undertake renovations.
Newly-built hospitals have less concern with this issue as they are built according to the
explicit requirements. Nevertheless, the prescriptive nature of the regulation is posing
serious regulatory burdens to private healthcare providers which appear to be
unnecessary. To the author’s knowledge, there is scan analysis on the impact of the
governing regulation on private hospitals, except for the recent study of Nik Rosnah and
Lee 2011. The study concluded that full compliance with these regulations remained a
55
challenge and they do not contribute to achieving ultimate objectives with regard to the
quality of private healthcare. What are the options then?
5.3.1 Option No. 1: No change
If no affirmative action is taken, negative experiences with regards to complaints, overload
of work, etc. are likely to increase. This will penalise hospitals unnecessarily by requiring
them to satisfy prescriptive requirements which are unnecessary to achieve regulatory
objectives. This, in turn, will restrict growth of healthcare unnecessarily and adversely
impact on the national aspiration of liberalising healthcare and making it an economic
growth sector. If the growth of private hospital services is constrained this will put a
greater load on public hospitals. Taken from the perspective of the total health system,
shifting some of the load from the public hospitals by those who could afford out-of-pocket
payment for private healthcare services will improve accessibility for the middle and lowerincome groups to public hospital services.
5.3.2 Option No. 2: Review the PHFS Regulations 138/2006 and Adopt Best International
Practices
A special study could be conducted to revisit the governing regulation and benchmark with
Australia or another country on private hospital regulation.
In Australia, more requirements for regulating private hospitals are established as
guidelines which are not mandatory while regulations are more performance basede. The
Private Hospital Guidelines – Guidelines for the Construction, Establishment and
Maintenance of Private Hospital and Day Procedure Facilities [3] provide specific
guidance and indicate which requirements are mandatory ans which are “advisory”. The
Australian guidelines have included the notation:
“Formatting of the Guidelines has been designed to assist the user. Bold text
identifies important or mandatory requirements. Mandatory requirements
are identified by the word shall.”
In the glossary of terms:
"shall" - implies that the referenced requirement is mandatory.
"should" - implies that the stated requirement is recommended, but is not
mandatory [1].
Guidelines are like the system standards such as the ISO 9000 Standards and such
Standards are reviewed on a periodic intervals, usually every 5 years; by a Technical
committee, which monitors and studies the use of the Standards over the period.
There is also another guideline, Australasian Health Facility Guidelines, Revision V4.0
(2010), by the Australasian Health Infrastructure Alliance (AHIA) in Australia and New
Zealand for reference by private hospitals. The PHFS Regulations 138/2006, are unlike
Standards in that every requirement is mandatory and not complying with any constitutes
an offence in law. Offences for non-compliance under this regulation would result in stiff
penalties, either hefty fines and/or prison terms. Where the requirements are not crucial to
ensuring a safe health service, they impose unnecessary burdens on private hospitals.
56
This option would involve the MOH analysing the conceptual development of this
governing regulation and learning from the experience since its implementation, to make it
more pragmatic, without compromising the policy intent. In some cases, outcome-based,
process-based or performance-based requirements might be considered. Any of these
requirements would provide opportunities for private hospitals to make innovative
improvement to their delivery services and management systems.
5.3.3 Option No. 3: Transparency through Continuing Education on Licensing Requirements
Another way to achieve the policy intent of good quality healthcare is to educate private
healthcare providers on the requirements of the governing regulation and other related
regulations on a continuing basis. This would not only ensure that there is a proper
understanding of the requirements but also, through greater transparency, increase
understanding of the expectations of the licensing officers. Such an initiative would
appropriately be undertaken by the MOH. As it is the authority of the governing regulation
it could provide expert inputs to the private healthcare providers. The licensing authority
should be transparent in its expectation of the licensee and on how it carries out the
licensing evaluation, on its inspection and auditing procedures, and give reasons for what
it is doing. On this, there should also be consistency among licensing officers at all levels
(state and Putrajaya). As the governing Act is so complex, such understanding can only be
achieved through continuing education and communication between regulators and
licensees.
This continuing education is also applicable and necessary for all the officers involved in
the licensing process, in order to ensure common understanding of requirements and
ensuring transparency of regulators actions. This could be termed “calibration” of the
people doing the assessment and evaluation to reduce variations and inconsistencies.
5.3.4 Recommendation to Resolve Issue No. 2
It is recommended that options 2 and 3 should be considered by the Medical Practice
Division – Private Medical Practice Control Section (CKAPS) of the MOH for immediate
action. The PHFS Regulations 138/2006 have been in operation for over seven years and
the MOH and the private hospitals should have sufficient knowledge and experience of it. It
would be consistent with the current initiative on modernising business regulations to
review its contents and incorporate appropriate global best regulatory practices. Option
no. 3 on continuing education of stakeholders should be an on-going exercise as people,
technology and practises change. This is a win-win situation whereby the licensee will
have good understanding of the requirements of the regulations and the expectations of
the implementing authority, and with this understanding the licensee will be able to meet
the expectations and thereby ease the task of the licensing officers.
57
5.4
Issue No. 3: Dealing with licensing officers (on-site inspections, audits, or
surveys)
There are a number of concerns when dealing with licensing officers which i contribute to
burdens of delays and wasted efforts. One concern is the variation in the assessment
results. There are cases where an assessor cites requirements that are different from
another assessor, or where different levels of strictness are used in assessing whether the
requirements of the PHFS Regulations 138/2006 have been fulfulled. Such variations
create confusions for the licensee and at times result in costly (and possibly unnecessary)
corrections being made. As noted above, the PHFS Regulations 138/2006 is an
extensively prescriptive document covering a wide area of specialties from clinical
management, general management, policy making, human resources management,
medical technology, and different types of other regulations. Ensuring consistency among
different assessors requires careful calibration of assessment competency. Compounding
this is the frequent transfer of officers within the Ministry. Inconsistency in the interpretation
of the prescriptive requirements has been identified as an issue. It has also been cited that
different auditors apply different levels of stringency in assessing requirements.
Communicating with Licensing Officers has always been a hassle for the licensee. There is
always the difficulty of contacting the right person for information, follow-up or consultation.
Hospitals complain that the officer-in-charge for the particular licensing is frequently
unavailable. This is understandable as Licensing Officers are heavily loaded with work as
there are more than 200 licensed private hospitals and other healthcare facilities that the
licensing department has to deal with. Some hospitals find that tele-consultations are
frequently ineffective in resolving issues and have to travel to Putrajaya in person for
consultations, but even then problems might not be resolved in a single visit. This means
additional costs and inconvenience to hospitals. Is the limited business understanding of
the regulatory requirements due to the regulators not transparent in their processes and/or
the requirements?
The need to submit extensive amount of documents for vetting and assessment and then
to carry out on-site audit or assessment, results in a lot of duplication in the licensing
process. Submissions should be for the purpose of preparing the on-site assessment or
inspection programme and most of the information should be assessed on-site. This is
important because with on-site assessment, the auditors see the real thing, particularly
when the period between submission and the on-site assessment may be many months
apart. (Note that the submission has to be made at least six months before expiry of the
current licence).
5.4.1 Option No. 1: Transparency through Separating Auditing from Licence approval
As discussed in the previous section, transparency in requirements and processes would
contribute to reducing burdens and inconveniences for the private hospitals. If the
submissions are made “right the first time” because requirements and processes are
transparent, then the need for consultation would not be limited. Transparency is better
achieved through continuing education than face-to-face consultation between licensee
58
and regulator. The principal-agent theory is relevant here and requires limited face-to-face
interactions which might compromise its intent. To many face-to-face interactions between
licensing officer and the applicants may result in conflict of interests or lead to undesirable
practices.
5.4.2 Option No. 2: Transparent Standard Operating Procedure
Good regulatory practice requires the regulator to adopt a Standard Operating Procedure
(SOP) for the licensing process which is also transparent to the licensee. The licensee
must be provided with some degree of assurance that its application will be successful.
Refusal to renew private hospital licences has very serious consequences and must only
occur if the hospital demonstrably poses high risk to good patient care. A hospital
operation cannot simply stop overnight as there are in-patients and long-term follow-up
patients to consider. Because of the costs involved, the licensee needs to know the
criteria, the process and the timing – the process can take up to six months. With a
transparent SOP the licensee could track the licensing progress and take any corrective
actions to achieve the licensing requirements should there be any observed weaknesses
in the hospital system. The details for such a SOP have to be established and it would be
essential that traceability and tracking and promised timelines are built into the total
process.
5.4.3 Option No. 3: Establishing a Help-desk
An immediate action that the MOH can do is to establish a Help-desk facility for resolving
issues over the telephone or through the email. What is important here is to be able to
provide feedback and progress tracking to the applicants and also provide expert inputs to
resolve any issues or areas of non-compliance. The intention of licensing is to ensure that
private hospitals meet the minimum regulatory requirements.
5.4.4 Option No. 4: Providing Appeal Provisions
The licensing renewal process is burdened by the highly prescriptive nature of the PHFS
Regulations 138/2006, the variation of competency of licensing officers and auditors, the
conflicting objectives and business and regulations, the risk level of hazard and the
likelihood to compliance. Such complications would invariably result in differences between
regulator and the hospitals. As many differences may be subjective in nature, it would be
appropriate to have an appeal provisions for licensing renewal. An appeal mechanism
would allow any disputes in opinion or interpretation to be heard fairly and decided by an
independent third party.
5.4.5 Recommended Options to Resolve Issue No. 3
The short-term solution would be to adopt Option No. 3 by the Medical Practice Division:
Private Medical Practice Control Section (CKAPS) of the MOH, i.e. to set up a Help-desk
facility for dealing with private healthcare providers. This would alleviate the uncertainty
experienced by the licensees.
The recommended options for the long term are Option No. 2 and 4 – to establish a
transparent SOP for the licensing process where the licensee can track the progress of her
59
application and would feel assured of getting licence approved, or to appeal for any
rejection.
5.5
Issue No. 4: Fragmented Processes
Licensing issues also involve different units, divisions and different regulators within the
MOH itself. To cite some key players, there are the engineering department, the licensing
department, the pharmaceutical services, and the various professional licensing boards
and councils that the licensee needs to interact with throughout the licensing process. In
theory, CKAPS is the single window to the licensing of private hospitals, but the reality is
different. Then there are the other regulators outside of the MOH that the licensee has to
satisfy first before the license application could be made. There are the DOSH, BOMBA,
DOE, JPJ, Immigration, and the local authorities among some of the key players. The roles
of all these players are explicitly or implicitly specified in the governing regulation. These
fragmented processes lead to huge burdens for private hospitals.
5.5.1 Option No. 1: No direct action
To continue with the existing situation means that the private hospitals will continue to bear
the regulatory burdens resulting from the fragmentation in the regulatory regimes.
5.5.2 Option No. 2: Redefining the regulatory oversights functions
Where there is fragmentation it is likely the Local Government licensing authority is
duplicating the oversight functions of other regulators. In many instances, fragmentation
leads to duplications in assessment, evaluation and inspection. In the current situation,
there are a number of regulators that implement various regulatory regimes under various
Acts relating to business operations.
The regulatory oversights for healthcare professionals are provided by their respective
Acts and Regulations, such as the Medical Act for medical doctors, the Dental Act for
Dentists, Nurses Act for nurses, and so forth. The regulatory regimes involve registration
with the various councils or boards and through the issuance of Annual Practising
Certificates. For fire safety, the oversight function is with the BOMBA under the provision
of the Fire Services Act. Regulatory oversights for passenger lifts and pressurised medical
equipment, they come under the Factory and Machinery Act which is the responsibility of
DOSH. Oversight for safety of radioactive equipment and use of radioactive materials for
medical purposed comes under the Atomic Energy Licensing Act under the purview of the
Engineering Department of MOH. The details of these regulators and their oversight
functions are provided in Boxes 4.2, 4.3, 4.4 and 4.5 in Chapter Four.
The oversight function of the private hospitals licensing authority in the MOH is to ensure
that the management, operation and maintenance of private hospitals comply with the
requirements of the PHFS Regulations 138/2006. The MOH need not duplicate the
oversight functions of other regulators. The licensing process is to ensure that the
management systems and the facilities are adequately maintained and in compliance with
60
all the established regulations. The private hospital licensing authority has to review this
and ensure that its processes do not duplicate the functions of the other regulators.
Option No. 2 should be into serious consideration by the Medical Practice Division: Private
Medical Practice Control Section (CKAPS) of the MOH. The other regulatory oversights
functions should be assumed to be effectively carried out and the licensing processes
should only involve random and sampling inspections on these oversight functions in the
licensing audits of the hospitals. For example, there should be sampling inspections of
Annual Practising Certificates (APCs) during the on-site licensing audit to ensure that the
management system for occupational licensing is adequately maintained. Any observed
inadequacy should then be corrected followed by appropriate corrective actions by the
management.
5.6
Issue No. 5: Annual Practising Certificates for Healthcare Professionals
The current practice on this requirement invariably adds significant burdens to the
licensing process for private hospitals. For the individual medical doctors, dentists,
pharmacists, etc. this regulatory regime is of little burden – after all it is only once a year
requirement. However, for a hospital that may have, say 500 healthcare professionals, the
burden of having to monitor and process these certificates for the licence renewal is
significant.
It appears that the expiry of APCs has been standardized at the 31 st day of December
each year. The Health Facts 2013 statistics showed that there were 38718 medical
doctors, 4558 dentists, 9652 pharmacists, 11846 medical assistants and 84968 nurses
registered in the country for the year 2012. One can imagine the kind of workload at the
end of each year on the issuance of APCs. Any hiccup in the issuance processing system
will invariably cause problems to the private hospitals.
There has been a suggestion that healthcare professionals apply for their renewal of their
APCs more than six months before expiry of existing APCs so that the renewal of hospital
licences is not affected. This of course is a total disregard to good management practises
in process efficiency, delivery timeliness and the client charter, and disregarding the
objective of APCs.
5.6.1 Option No. 1: No change to existing practice
The regulator could choose to disregard all the consequential burdens arising from the
issuance of APC and let the industry find its own solution to any issues arising. This would
mean the significant burdens on private hospitals would continue.
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5.6.2 Option No. 2: Online Registrations
The obvious solution is to have a totally computerized and on-line system to handle
activities. The use of an integrated on-line system would reduce the burden of application
for renewal of APCs for the healthcare professionals but the initial outlay for such a system
will be high and the maintenance of an online system is generally costly. In any case, it is
necessary to migrate towards such a system in the near future, if it is not already in the
pipeline.
5.6.3 Option No. 3: Revamping the APC concept and practice
An option is to relook at the concept of renewing APCs. What is the purpose of renewing
the certificate? Can it not be an automatic renewal? Application for renewal can be
converted to notification, in which case, there is no need for issuance of a certificate – only
the original certificate on first application. The regulator can maintain an on-line register of
APCs for the public reference. What the regulators need are the annual fee and the
updates of information e.g. Continuous Professional Development (CPD) updates. In this
manner, there will be no more hassle in private hospitals licence renewal with regard to
APCs because all the required information would be available in the on-line register.
5.6.4 Recommended Option on APC
It is always a better to adopt a better solution than to have an improvement on a less
efficient option. In this case, Option No. 3 is recommended as it will be a win-win solution
both for the regulators and the healthcare professionals and the private hospitals.
Changing the concept of operation will eliminate the operational burden for the regulators,
reduce hassles faced by every healthcare professional and reduce the paperwork and cost
burdens for private hospitals, as well as the various boards and councils such as the
Malaysian Medical Council, Malaysia Dental Council, Malaysia Nursing Board, etc. that
issue the APCs.
5.7
Concluding Remarks
As discussed earlier, there are two perspectives on the issue of licence renewal: the
design of the regulations and the implementation or administration of the regulatory
regime. It is not a matter so much of selecting the best options, but to prioritize the
implementation of the relevant options in the most efficient manner. Maybe resolution
would be a more appropriate term than option here, but we shall stick to option as it is the
common term used in regulatory review. For example, the review of the PHFS Regulations
138/2006 ought to be made periodically, say every five years. This is to ensure that it is
up-to-date with changing technology and management practices. Together with this, the
regulatory system and processes should also be reviewed in line with the review of the
regulation. So, these two areas are not options but part of the principles of transparency
and accountability of regulators.
Many of the issues would likely not arise if Good Regulatory Practises (GRP) had been
adopted. GRP is organized on a set of principles which were discussed in Chapter 3,
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where an example of Best Regulatory Practise Principles is illustrated in Box 3.5. At this
point of the discussion, it is important to emphasize two key principles here –
Transparency and Accountability. The definition given in the example cited is as follows:
Transparency and Accountability: reflected in the principle that rules
development and enforcement should be transparent. In essence,
regulators must be able to justify decisions and be subject to public scrutiny.
This principle also includes non-discrimination, provision for appeals and
sound legal basis for decisions.
Here, transparency, to put it simply, means that the business that is being subjected to a
particular regulatory regime must be informed in sufficient detail on:
a) What is being done?
b) How will it be carried out?
c) Why is it carried out in that manner?
d) Who will do it?
e) When will it take place?
Accountability, on the other hand, refers to the responsibility on the regulator to report its
performance and actions to interested parties, and in particular, the directly affected party.
Here it is a matter of telling the interested parties what the affected parties should know. In
other words, regulators must justify their decisions and actions with evidence and rational
explanations. Added to this, there should be an appeal mechanism so affected parties who
disagree with any decisions can appeal. This key principle is conspicuously absent in our
regulatory regimes and needs to be addressed immediately.
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CHAPTER SIX: THE BURDENS IN PLANNING APPROVALS, WORKFORCE
REGULATION, MEDICAL ADVERTISING AND REGULATED MEDICAL FEES
6.0
Regulatory Burdens in Private Hospital Sector 2
The exploratory survey carried out raised nine key issues contributing to the regulatory
burdens on private hospitals. Chapter Five analyses the various issues relating to the
renewal of operating license for private hospitals. This chapter will discuss and analyze
the following issues:
1. The planning approval for facilities improvements (including upgrading renovation,
expansion, any physical changes);
2. Workforce regulation and quality and availability of professionals;
3. Approval for advertisements and advertising materials
4. Regulation on medical consultation and procedure/treatment fees
It has to be noted that the analyses and the resulting explanations could be hypothetical.
As such these would need further verification with other healthcare players and the
regulators in order to add them more substance. These will be done through further
meetings the regulators and further consultation with the players for their inputs to these
analyses in the next stage of analysis. The options are formulated in a kind if heuristic
manner to resolve these difficult issues.
6.1
Issue No. 1: Planning Approval for renovation, upgrade, extension, etc.
The approval for any changes in existing facilities (renovation or upgrading) or expansion
of facilities (extension or addition of new facilities) is of concern to private hospitals as the
process takes too long with too many interactions involved. It appears that there is no
differentiation between minor and major changes as the principle regulator treats all the
approvals the same. When the waiting time for approval takes too long together with an
uncertain lead time it would adversely affect the hospital planning efficiency. Process
uncertainty and unreliability give rise to unnecessary burdens for the private hospitals.
6.1.1 Option No. 1: No change and continue with the existing practice
No action means that private hospitals would continue to bear the burden on uncertainty
and unreliability of the approval process. Continuing with the status quo would add
inefficiency the private hospitals operation and additional cost burden which would
eventually pass down to the consumers. In the long term it would stifle the development of
private hospitals and defeat the national aspiration of universal access, healthcare cost
containment and growth.
6.1.2 Option No 2: Eliminate Planning Approval for minor renovation
Eliminate the need for approval for all renovation of private hospitals facilities and
replacing it with notification. It would be appropriate for planning approval to be required for
new buildings or major extension to an existing building. The rationale being that the
64
existing hospital has already gone through the licensing process and has met the licensing
requirements during its establishment. The notification would allow the regulator to plan for
the on-site inspection during the licence renewal.
There could be different categories of approval for upgrading renovation of existing
building (major or minor renovations), for major extension or addition of new facilities or for
construction of new buildings. For minor renovation or upgrading, notification could replace
approval as on-site inspections could be carried out during the licence renewal. This would
enable hospitals to plan and carry out continuous upgrading of existing facilities without
approval uncertainty.
6.1.3 Option No 3: Adopt Risk-based Approach for Planning Approval
The regulator might opt for a risk-based approach to regulating planning approval. Riskbased methodology takes into consideration the evaluation between the level of hazard
and the likelihood of compliance together with the measures on potential consequences
with their probability to decide on the level or degree of regulatory control needed [2]. There
could be different levels of approvals with different fixed lead time depending on the
magnitude of the changes and the level of hazard. Guidelines for this would be crucial and
this would reduce the burdens of the approval process.
Option 3 should be pursued as there cannot be “one-size-fits-all” process in a competitive
environment. What is more important is that there should be reliable lead time for planning
approvals that would facilitate the hospital in its management planning. Large variation in
lead time leads to uncertainty and results in unnecessary burdens to hospital
management. The Medical Practice Division: Private Medical Practice Control Section
(CKAPS) of the MOH should consider this recommendation.
6.2
Issue No. 2: Workforce Quality
Occupational licensing is an important regulation for healthcare professionals. High degree
of competence is required in the healthcare services as we are dealing with safety and life
of the patients. The regulatory regime, however, has been a significant burden in hospital
licence renewal. This has been discussed in Chapter Five. The other key concerns are
with regards to the availability specialists and quality of new graduate health professionals.
We are also aspiring to be world-class in healthcare services and therefore the
competitively high standard for quality care must be maintained. These are not only
dependent on the best healthcare technology invested or the management best practices
adopted. High quality, competent and committed healthcare professionals are crucial here.
With the importation and adoption of advanced healthcare technology and new
sophisticated treatments and procedures, specialists’ skills are in great demand. There
have been shortages in specific skills in the industry and it is very challenging to maintain
the balance of available medical facilities with the skilled resources. To compound the
65
problem is the frequent “brain-drain”, where specialists in the country are bought over by
better offers elsewhere. The demand for specialists is world-wide. The private healthcare
providers have to compete internationally for specialists healthcare resources. Current
immigration policy frequently becomes burdensome for recruitment of such skilled
workforce from the international market. It takes special created vehicles like the Talent
Corporation and the Iskandar Development Corporation to tackle such burdens.
Commercialization of medical education seems to take its toll on the quality of fresh
graduates in the country, where two areas seem to be of major concern in the current
situation. There are the graduate medical doctors and nurses. Commercial educational
institutions have to grow their market and revenue and also to achieve a certain level of
return on investment. In the past, when there is limited intake by education institutions,
only the best students with the greatest enthusiasm for the specific profession do get into
the institutions. For the medical profession, this natural demand-supply constraint ensures
that only the best students become medical doctors or the most committed students
become nurses.
Another important observation is that even the best students did not make it through their
undergraduate studies. The first year into the course would invariably filter out some of the
less suitable undergraduates. So we would expect that when you intake candidates will
minimum qualifying grades, then there would be more being filtered out in the course.
However, in a commercial context, failing candidates do not make for good business. Here
then lies the tension between business objectives and the need to produce high quality
professionals.
With commercialisation of education, any students with the minimum qualifying grade but
can afford out-of-pocket payment can enter for any professional education. To make it
possible for even those who cannot afford out-of-pocket payment, there are easy
government loans and even commercial loans for this. An example is the listed company
Masterskill Education Group Berhad (MEGB), which provides education for the nursing
profession. The ambitious corporation expanded quickly after its Initial Public Offering
(IPO) of its shares. It has been highly dependent of the government education loans
facilities through the Perbadanan Tabung Pendidikan Tinggi Nasional (PTPTN)
[http://www.ptptn.gov.my/] for its intake of students. It started to produce large number of
graduate nurses1. There are also other non-public listed institutions in this business of
medical education. The result is that we have large number of nurses which the private
hospitals do not want because they found that the quality graduates are not up to their
requirements. This has been a hard learning experience for the country.
Note:
1
Author’s Note: The performance of MEGB could be studied from the Bursa Malaysia and other investment
research reports [http://www.bursamalaysia.com/market/]. This public-listed company performance has been
disappointing, with the current market price of its share hovering at RM0.50 as compared to the IPO price of
RM3.10. Whenever the PTPTN reduces the issuance of education loans, the company suffered in its
performance. The current situation of a large number of unemployed graduate nurses has further dampened
its market and revenue growth.
66
Another aspect from the commercialization of health education is the imbalance between
supply and demand. The drive for growth on higher education in healthcare has not match
adequately the demand side of the equation, particularly for local graduates. Here, the
growth of healthcare facilities, in particular, the private hospitals has not match the supply
side, resulting in excess numbers of graduates, in this case nursing graduates. The
situation may not be so bad for medical doctors or dentists as these professionals can
always be self-employed, and the numbers involved are not that any. Nevertheless,
imbalance is also experience here and will be getting worse in the near future. In this case,
the imbalance is on the availability of houseman positions for fresh graduates to practise.
In the current situation, only public hospitals and teaching hospitals are providing
houseman training for fresh medical graduates.
The entrepreneurs are very good at bringing in educational products into the country as
can be seen from the vast variety of educational offerings over the last many years. We
are also good at re-engineering these products to suit our local demands. Unfortunately
not all knowledge products could be easily introduced effectively. In knowledge products,
there two types of knowledge contents – the explicit knowledge content and the tacit
knowledge content. We tend to import the explicit knowledge content – these being easily
purchased and transferred – but not so for tacit knowledge. Tacit knowledge remains with
the developers and instructors of the knowledge products. Tacit knowledge is gained
experientially through the applications of the knowledge products over time. So when we
bring in knowledge products and use instructors and trainers who do not process adequate
level of tacit knowledge (competence, experience, the research and learning) the end
result would be poor quality graduates. This can be particularly serious for professional
knowledge like healthcare and engineering.
For example, our medical education for medical doctors provided by the older public
universities like University Malaya, are world-class, and recognized by many countries.
Our public universities for medical courses take in only the best students because of
limited enrolment. The best of the best will have to compete for the intakes. Also, these
universities have teaching hospitals – the university hospitals - where medical
undergraduates could gain some form of tacit knowledge. The teaching faculty are highly
qualified with vast amount of explicit and tacit knowledge through their practices,
researches and teachings. The same situation is in the public nursing schools and those
nursing schools of private hospitals. Many of the private medical educational institutions
have limited such resources and teaching hospital facilities.
6.2.1 Option No. 1: Maintain existing practice
It is always possible not to take any positive action to alleviate the current issue. We let the
issue continue and carry out any recovery action on the consequences arising from this. In
other words, we let the market learn experientially, and the government to initiate any
correction or recovery action for any negative situation. For example, the government
initiative to introduce the Skim Latihan 1Malaysia (SL1M) initiative to mob-up the
unemployed graduate nurses in the market.
67
6.2.2 Option No. 2: Monitoring Education Quality by the MOH
It is insufficient that regulators approved and licensed educational institutions on the
programmes and resources. Enforcement through on-site monitoring is required,
particularly for professional courses that will have impact on safety and health of the public
in the future. These monitoring must be made by the professionals themselves. As such,
the occupational regulators should be empowered to carry out such on-site enforcement,
or the respective professional bodies are engaged to do this. For example, the Nursing
Board needs to monitor the educational institutions for nursing education like MEGB, or the
Malaysia Nurses Association (MNA) or the APHM engaged to do this. The same should
apply to other healthcare professional education.
6.2.3 Option No. 3: A Formula for Supply-Demand Balance
There ought to be better planning on demand-supply of healthcare professionals in the
drive for growth in higher education. The regulators for both the MOH and the Ministry of
Education (MOE) need to work intimately together in their regulatory enforcement to
ensure an adequate demand-supply balance is achieve, particularly for healthcare
professional education as these knowledge resources are expensive to develop. A suitable
framework or formula needs to be formulated for this control.
6.2.4 Recommended Option No. 3 to Resolve Issue on Workforce
Although the quality of education may be a crucial issue here, the root cause for this
problem is likely the imbalance between supply and demand for healthcare human
resources. When the supply growth is higher than the demand growth, then the
unemployment and underemployment problem arises with costly consequences in terms of
waste in knowledge resources. This is where regulatory control can play its crucial role. It
is recommended that the MOH and MOE work together to formulate an appropriate
regulatory framework to achieve this demand-supply balance in healthcare human
resources in the country.
6.3
Issue No. 3: Approval for Advertisement and Advertising Materials
The private hospitals generally perceived that the current requirements on approval of
advertising materials are burdensome in terms of cost (the fee charge per approval at
RM100.00), the interactions with the Medicine Advertisement Board, the MAB, (particularly
for those hospitals located away from Klang Valley, the lead time (more than one week is
deemed too long for hospital management planning) and the paperwork (need to send
multiple hard copies for approval instead of on-line electronic media). Currently, the
application has to be made to Putrajaya for any approval and submission has to be in hard
copies. The approval process has to go through the MAB meeting chaired by the DG of
Health. Any postponement or cancellation of MAB meeting invariably leads to delay in
getting the approval.
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6.3.1 Option No. 1: Maintain existing practice
The private hospitals have to bear with the current system for processing approval. The
management would need to allow for at least three weeks for the approval of any
applications. The MOH has established and disseminated the guidelines for the purpose
on the web, and the private hospitals should refer to it for its operation. This would reduce
the non-compliance and the associated delay in approval.
6.3.2 Option No. 2: Electronic means of submission and application
An on-line application, submission and approval system is the logical requirements in this
era of ICT. Obviously, this has not been the case as yet.
6.3.3 Option No. 3: Change the approval application to notification using ICT
Since the guidelines for advertisement has been established and accessible in the
Pharmaceutical Services Division web-site, and also that the MAB is educating the
healthcare business through seminars (example: Seminar on Vetting Medicine
Advertisement, on 29 October and 3rd December 2013) MABcan consider the changing the
regulatory regime from approval to notification (and enforcement). Notification could be
made on-line. In this manner, private hospitals will not need to wait for approval and the
regulator could sanction them should they fail to comply with the guidelines.
6.3.4 Recommended Option No. 3
The liberalization process means that regulators need to move from the approval control or
licensing regimes to that of notification and enforcement regimes. As the private healthcare
industry matures, regulators should advance towards a more knowledge work such as
research and development and continuing education of the businesses rather than
continue with the current paradigm of regulatory control. In this manner, they can facilitate
business growth and promote business competitiveness in the healthcare sector. After all,
the Pharmaceutical Services Division of the MOH is well established and a mature
regulator in Healthcare products and services and has established and documented
guidelines and protocols in place as can be seen in its website,
http://www.pharmacy.gov.my/v2/en [see some references below].
6.4
Issue No. 4: Regulated Medical Fees
The regulation for medical fees has been there since private medical healthcare services
enter the economy. As for the private hospitals, the current schedule of medical fees is
established as the Thirteenth Schedule in the PHFS Regulations 138/2006. The schedule
of fees is an important instrument to put monetary value to an otherwise difficult-to-price
service. It provides the medical professionals with a sort of standard pricing for their
consultation services and the different medical procedures. At the same time this provides
some regulatory protection to consumers from over charging in a market where there is
high degree of information asymmetry [8].
“The asymmetry of information makes the relationship between patients and
doctors rather different from the usual relationship between buyers and
sellers. We rely upon our doctor to act in our best interests, to act as our
69
agent. This means we are expecting our doctor to divide herself in half - on
the one hand to act in our interests as the buyer of health care for us but on
the other to act in her own interests as the seller of health care.
In a free market situation where the doctor is primarily motivated by the
profit motive, the possibility exists for doctors to exploit patients by advising
more treatment to be purchased than is necessary - supplier induced
demand…”
One key concern is the need for periodic review on the Thirteenth Schedule to ensure that
changes are aligned to economy and income growth and in keeping up with changes in
medical technology. In recent months there was the call by the Malaysian Medical
Association (MMA), which represents the physician fraternity in the country to review and
revise the medical fees in the Thirteen Schedule. It was reported in the local news that the
proposed increase ranges from 30 per cent to over seventy per cent on the scheduled
rates. Although the MMA has proposed an increase for the consultation fee by 30 percent,
the MOH has counter proposed the increase of 14.4 percent.
In general, the charges for medical services from private medical clinics in the country are
affordable to the lower and middle income groups. However, with continuing inflation, the
consumers are sensitive to any significant price increase. As there were 6675 registered
medical clinics in the country as at end of December 2012 [9], the general practitioner
business can be very competitive. To many general practitioners, the current regulated
fee is not lucrative.
However, the high and escalating costs of private hospital services continue to be a
serious issue with the public, particularly to the middle-income group. When compared to
public hospitals, the cost of specialist treatment at a private hospital could be 50 times
higher than that of public hospitals. The private hospitals could be “creative” in computing
hospital charges. For example, a recent report in the Sunday Star claimed that a 35 days
stay in a private hospital without a major procedure could still run up a medical tab of
RM60,000 [10]. Even with the high charges many private hospitals still struggle to achieve
reasonable returns on investment. The Association of Private Hospitals Malaysia claimed
that the overhead for running a hospital is extremely high. This begs the question on
whether the regulating of medical fees has contained medical costs.
It could be surmised that the PHFS Regulations 138/2006 does contribute to the high
overhead. The prescriptive requirements of the regulations meant that the hospital has to
bear a fixed overhead for its licensed capacity. For example, the number of nursing staff to
patient ratio is prescribed and if the hospital is not running at full occupancy then it has to
bear the full burden of its fixed overheard. Another example is the prescribed
requirements for the emergency care service. This is another cost centre cited by the
private hospitals. The prescriptive requirements of the regulation greatly constrain
managerial innovation to achieve better cost efficiency. It seems that regulating
consultation fee is effective in containing primary care cost by private clinics but is
effective in controlling healthcare charges at the private hospitals.
70
6.4.1 Option No. 1: No change but review the Thirteen Schedule periodically
Removing the Thirteen Schedule would be a sensitive issue for the country as the
Malaysian public perceives that price control is necessary to control medical costs. The
control is effective at least for the private clinics at there are few opportunities for
“creative” charges for medical treatment here. This cannot be said for the private hospitals
as there are many opportunities for imposing all kinds of charges for hospital stay and
treatment which are not specified in the Thirteen Schedule.
6.4.2 Option No. 2: Remove the regulation on medical fee together with government
sponsored patients
Countries like Singapore and Australia do not have regulated medical fee, or either the fee
structure is managed by the trade association. This would allow for free competition in the
private healthcare sector. The government could introduce a scheme to use private
healthcare services for the general public with a certain fixed level for medical claims like
the form of medical care in Australia. Such government sponsored patients would improve
the capacity loading of private hospitals enabling them to operate more cost-effectively,
which might lower the total medical costs. This would also achieve the government
aspiration for universal access to private hospital services by the public. Such an initiative
would be a long-term solution and would require further study.
6.4.3 Option no. 3: Revamp the PHFS Regulations 138/2006 to reduce fixed overhead costs of
private hospitals
The prescriptive requirements of the regulation constrain the management from achieving
managerial and cost efficiency in the private hospital operation. Moving towards an
outcome-based and/or a process-based regulation would stimulate managerial innovation
towards cost efficiency in private healthcare. Private entities like the MSQH, APHM and
MMA could have greater role and responsibility in assuring quality healthcare in private
hospitals.
6.4.4 Recommended options: long-term solutions from Option No. 2 and 3
Revising upwards the Thirteen Schedule would continue to be a sensitive public issue yet
not revising it on a periodic basis would stifle the private health services. If private
healthcare providers cannot achieve profitability, then the whole aspiration of growing the
private health sector will fail. There will not be any quick solutions for containing escalating
healthcare costs and as such, multiple initiatives would be needed. The PHFS
Regulations 138/2006 could be reviewed to remove the constraints to managerial
innovation in private hospitals. At the same time, the government could look into utilizing
private healthcare services for the public. On one last note; this issue does not post
unnecessary regulatory burdens in its administration. Rather it is more a policy issue but
regulation is being use to address the public interest.
71
6.5
Other Issues
As introduced in Chapter Five, there are other issues nine issues identified from the
survey. This report has considered the top five key regulatory issues. The other issues are
left out of the analysis as they are not direct regulatory issues, as discussed below.
6.5.1 Export of Healthcare Services (Health Tourism)
The key concern to the growth of health tourism has been cited as the logistical
convenience for the patients from their country. If there are direct air connections from the
target country to the city where the healthcare facilities are located, then there will be
more patient arrivals to the hospitals. For example, in the case of private hospitals in
Penang, when there are increased flights to certain city in Indonesia, there has been a
jump in health tourist arrivals. In the case of hospitals in Melaka, the private hospitals have
to provide bus services from Kuala Lumpur International Airport to the hospitals on and
regular schedule. In Sarawak, across the border land travel is the key concern. The
immigration authority limits the number of trips per year for the transport agents who are
engaged by the private hospital.
6.5.2 Personal Data Protection
The newly implemented Personal Data Protection Act has raised cause concerns with
some of the private hospitals. The initial perception of a couple of hospitals interviewed
was that it has increased the requirements on personal data protection to the already
stringent requirements of the current medical regulation. However, the other hospitals
interviewed do not seem to have any issue regarding this as they already have sufficient
control system in place. Their views are that requirements of this new Act do deviated
from what is current practice by the medical profession.
6.5.3 MSQH Accreditation
It is understood from this interviews that the MSQH accreditation complies strictly with the
requirements of the PHFS Regulations 138/2006. The private hospitals surveyed
generally perceived that the auditors for MSQH accreditation follow the regulatory
requirements and in certain areas even exceed the minimum regulatory requirements. The
concern is that when the licensing lead time is too long and this affects the hospital’s
schedule for MSQH audits. The other concern raised is that the MSQH assessors are
medical specialists who come for other competing private hospitals. Here there are
concerns on the loss of business confidentiality and the possibility of biasness in the
assessments.
6.5.4 Information and Reporting
There are various requirements with regards to information and statistical submissions
and other pertinent reporting to the regulators. This would add regulatory burdens that the
industry must bear for the continuing development of the economy. Without good
information or reporting, development and improvement initiatives cannot be effectively
formulated for the continuing development of the industry. The main concern to the private
hospitals is that there is little useful knowledge output from the regulators or rather the
72
published statistical reports are out-of-date be of use to the business. For example, a lot of
statistics is collected on prescriptions of medication, but the official statistical reports only
come out five years later. The latest report on medicine, for example, is the Malaysian
Statistics on Medicine 2008 available in http://www.pharmacy.gov.my.
6.6
Concluding Remarks
Even with the availability of information and the ease of accessibility to it, there exists a
high level of information asymmetry in healthcare services. The consumers have to place
their trust on the healthcare providers that is, the medical practitioners for their treatment.
For this reason, it is pertinent that some form of regulatory control is in place to protect the
public. Here the agency theory also known as the principal-agent theory applies, with the
regulator acting as the principal and the healthcare providers as the agent. The regulator
role as the principal is to ensure that the interests of the public are protected. These
interests cover aspects such as patient rights, safety, quality care, the environment and the
charges for the care provided. The regulator maintains a continuous oversight on the
behaviour of the healthcare service providers.
On the same notion, this question then arose: “Who keeps an oversight over the
regulator?” In the general sense, there are various civic societies or bodies that keep some
sort of “birds-eye view” oversight on the government and its regulators. These civic
societies include the professional bodies, the trade associations, the consumer
associations, the media, and many other non-governmental organizations existing in the
country. Some of the healthcare-related civic societies have been listed in Table 4.5 of
Chapter Four. However, these civic societies provide oversights only when issues arise.
There is no institutionalized body to provide oversight on regulatory regimes. The AuditorGeneral Office does provide oversights on government agencies, but the focus is more on
the effective and efficient use of government budgets.
To earn stakeholders and public trust, the regulators have to behave based on universally
accepted principles. Transparency and accountability are two key principles which should
always be considered. These principles will provide guidance to regulators on how they
should behave in the interest of the stakeholders and the public. As such these principles
should be established, documented and maintained by the regulators.
73
Food for Thoughts
The concept on reducing unnecessary regulatory burdens to business also provides food
for thoughts. Might there be some fundamental flaw in the conceptual objective because it
focuses on the benefits to business and the economy. This begs the question on “What is
it for the administration and the individual government worker?” Clearly, there would be the
resulting improvement in administrative efficiency and regulatory effectiveness. This would
eventually lead to elimination of duplication, redundancy, non-value adding tasks and jobs.
There might be organizational shrinkage, less recruitment, lost of job positions,
redeployment, retraining, transfer and change of jobs. These would not be incentives for
change in the administration. Like any employees the administrative employees would
need to see opportunities for growth, better benefits and income and a better future. This
focus seems to be missing in the Reducing Unnecessary Regulatory Burden (RURB)
concept!
74
CHAPTER SEVEN: FEEDBACK FROM REGULATORS AND OTHER STAKEHOLDERS
7.0
Presentation to the Healthcare Consultative Panel (HCP) of MPC
It was decided that the findings of the study be presented to the Healthcare Consultative
Panel (HCP) of MPC to get the experts’ feedback on the analyses and the proposed
options on the regulation of private hospitals. The HCP is represented by key stakeholders
and regulators – International Medical University (IMU - Chairman), KPJ Healthcare
Berhad, Association of Private Hospitals of Malaysia (APHM), Malaysian Society for
Quality in Health (MSQH), Ministry of Health Malaysia, United Nations University (UNU)
International Institute for Global Health, Malaysian Medical Association (MMA), UKM
Medical Centre, Malaysia Investment Development Authority (MIDA), Malaysia Healthcare
Travel Council (MHTC), Malaysia Nursing Board, Ministry of Health (MOH), and Nilai
University. Briefly, the function of the HCP is to advise and provide input to MPC on the
development and productivity issues relating to the healthcare industry. It also encourages
and advises on productivity initiatives carried out by MPC in the healthcare industry such
as the benchmarking programme among private hospitals. As such this RURB study on
private hospitals will be on interest to the panel. The following findings (Box 7.1) were
presented to the HCP Meeting No. 2/2013 on the 1st November 2013 to inform the
members on the issues and the proposed options and to get their feedback.
Box 7.1: Issues and Proposed Options in Private Hospital Regulation
Issue No. 1: Application Documentation
Application for operating licence renewal requires a lot of documentations, which contributes to huge
burden in paperwork and administrative overheads to private hospitals. To compound this burden is
the need to submit the licensing application at least six month before the current license expires
(explicitly state in PHFS Regulations 138/2006). The proposed options are:
Option No 1: No change – continue with the existing practice
Option No 2: Using information technology
Option No 3: Moving from “evidence-based” to “information-based”
Issue No. 2: Complying with Licensing Requirements
The implementation of PHFS Regulations 138/2006, the licensing process integrates all other
regulatory requirements from other regulations such as fire and building safety, machinery and
equipment safety, environment, safety on drugs usage, information asymmetry, patient rights, public
safety and the like. The outcome of integrating all these into a single licensing process invariably
creates complexity and seriously burdens both the licensee and the regulator. The proposed options
are:
Option No. 1: No change – let the change occur organically
Option No. 2: Review the Implementation of PHFS Regulations 138/2006 and Adopt Best
International Practices
Option No. 3: Transparency through Continuing Education on Licensing Requirements
Issue No. 3: Dealing with licensing officers (on-site inspections, audits, or surveys)
There are variations on the assessment results. There are cases where an assessor citing
requirements that are different from another assessor, or that the different level of strictness in the
treatment of the requirements of the PHFS Regulations 138/2006. Such variations create confusions
on the licensee and at times created costly corrections being made. The governing regulation, PHFS
Regulations 138/2006 is an extensively prescriptive. The proposed options are:
Option No. 1: Transparency through Continuing Education
75
Option No. 2: Transparent Standard Operating Procedure
Option No. 3: Establishing a Help-desk
Issue No. 4: Fragmented Processes
There are the DOSH, BOMBA, DOE, JPJ, Immigration, and the local authorities among some of the
key players. The roles of all these players are explicitly or implicitly specified in the governing
regulation. This fragmented processes leading to private hospital licensing create huge burdens to
private hospitals. The proposed options are:
Option No. 1: No change or not direct action
Option No. 2: Redefining the regulatory oversights functions
Issue No. 5: Planning Approval for renovation, upgrade, extension, etc
The approval for any changes in existing facilities (renovation or upgrading) or expansion of facilities
(extension or addition of new facilities) is taking too long to process and too many interactions are
involved. It appears that there is not differentiating between minor and major changes renovation. The
proposed options are:
Option No. 1: No change and continue with the existing practice
Option No. 2: Eliminate Planning Approval
Option No 3: Adopt Risk-based Approach for Planning Approval
Issue No. 6: Occupational Licensing and Workforce Quality
With commercialisation of education, any students with the minimum qualifying grade but can afford
out-of-pocket payment can enter for any professional education. Commercialization of health
education is the imbalance between supply and demand. The drive for growth on higher education in
healthcare has not match adequately the demand side of the equation, particularly for local
graduates. The proposed options are:
Option No. 1: No change to current practice
Option No. 2: Monitoring Education Quality by the MOH
Option No. 3: A Formula for Supply-Demand Balance
Issue No. 7: Approval for Advertisement and Advertising Materials
Current requirements on approval of advertising materials are burdensome in terms of cost (the fee
charge per approval at RM100.00), the interactions with the Medicine Advertisement Board, the MAB,
(particularly for those hospitals located away from Klang Valley, the lead time (more than one week is
deemed too long for hospital management planning) and the paperwork (need to send multiple hard
copies for approval instead of on-line electronic media). The application has to be made to Putrajaya
for any approval and submission has to be in hard copies. The proposed options are:
Option No. 1: No change to current practice
Option No. 2: Electronic means of submission and application
Option No. 3: Change the approval application to notification using ICT
Source: Author
7.1
Feedback from the HCP Members
Various HCP members gave their feedback on the findings presented to the panel. The
Chairman maintained that patient safety and treatment outcome is most important in
private healthcare services. He reiterated that it is also important that existing regulations
are reviewed continuously to ensure that they meet with changing requirements of the
healthcare industry.
Feedback from APHM Representative
1) The President of APHM gave his feedback on various issues. On the government
initiative on the SL1M programme for unemployed graduate nurses, he reported
that there private hospitals did not get good response from the group. Many have
76
turned down the offer as they are already employed elsewhere with better wages
than the training allowance.
2) APHM also raised the concern on the availability of houseman positions for new
medical graduates. The output of medical graduates has exceeded the capacity of
public hospitals to provide houseman positions. Unless the houseman training
capacity is increased, the supply of new medical doctors will affect the demand.
3) On various approval certifications from other regulatory agencies such as DOSH,
BOMBA, and others, the APHM stand that is that MOH oversight on these are
necessary to ensure patient safety at the private hospitals. He reiterated that he
observed that many public hospitals do not maintained these requirements
because there is lack of such oversight.
4) On the issue of approval of advertisement materials, the panel was informed that in
some countries patients’ testimonials were being used. This is not allowed here.
Feedback from the MOH Representative
1) The MOH recognizes some of the issues raised and have been working on
reducing these burdens to business. The regulator has been trying out the online
submission for documentations and is in the process of ironing out the teething
problems. At the moment, the online licensing renewal for private clinics has been
successfully implemented.
2) On the submission of certified copies of APC, the regulator is already looking into
the submission of personnel information rather than the certified evidences as
required in the present practice.
3) On the inconsistencies in assessments by licensing officers, the MOH recognizes
the problem, particularly with constant turnover of officers. The MOH has been
making efforts to provide continuous training and supervision to new officers.
Comments from the HCP Chairman
The Chairman generally agrees with the feedback given by the members. He
reiterated that the regulator should periodically review the regulations to keep up
with the expectations of business and consumers.
7.2
Feedback from the Licensing Authority of the Ministry of Health (CKAP)
The focus of the meeting with officers from the licensing authority of the MOH represented
by comprising Dr. Ahmad Razid Salleh, Director, Administration, Dr. Afidah Ali, Deputy
director, CKAPS, and Dr. Alicia Liew Hsiao Hui, KPP, CKAPS (MOH), is to obtain
clarification and understanding on the rationale and intent of the regulatory requirements
and administrative processes involved in the regulation of private hospitals. A copy of the
presentation made to the HCP was given to the regulator for reference. Specific questions
of interest were then posed to the regulator and the recorded feedback is given in
appendix 7.1. The analysis is reported below. The author’s views are given in italic.
77
1) The Six-month Application Lead Time
From the regulator’s perspective, the long lead time is to facilitate the private
hospitals to meet the licensing requirements. The long lead time is to reduce the
probability of delay in the issuance of the licence due to any compliance issues.
Should the applicant experience any non-compliance issue, the lead time will be
necessary for the applicants to make corrections non-compliance. However, the
good intention of the regulator has created the sense of uncertainty and anxiety on
the applicants.
A good tracking and monitoring system would help alleviate the uncertainty and
anxiety for the applicants. An online system where the applicant can track (and
monitor) the progress of their applications will help the applicant to manage their
compliance issues. At the same time, such a system will ensure that the licensing
officers are not subjected to undue interruptions to their work.
2) Online Computerize Application
The MOH has already implemented the online licence renewal application for
private medical clinics. It is aiming to do the same for the case of private hospitals.
However, the MOH is has poor initial trail of this application with the private hospital
and is experiencing budget constraint to develop a more robust system. In the
meantime it is trying to develop the system with internal resources (by the IT
division of the MOH).
The view is that it is easier to develop the less complicated system for private
clinics as the amount of application information to capture is small. The amount of
information to capture for private hospitals will be a few hundred times more than
that of a private medical clinic and as such the system will be very much more
complicated. Also, the reliability of the Internet in various parts of the country is
poor. Applicant will likely experience interruption in the data entry process when
large amount of data need to be input.
3) On the necessary to capture large amount of data during the application
On the question - why the applicant needs to submit large amount of data in the
application as the site audit or survey will be carried out during for the licensing?
According to the MOH, certain data are required (specified in the regulation) that
the MOH need to update its database and also this information form the basis for
the issuance of licence. Another point is that the site audit assesses and evaluates
other aspects of the hospital system that are not submitted in the application.
It is important that pertinent data are captured for the licensing process. Data
capture can be reduced if only data on changes are captured. In other words, only
data for updating the licensing requirements are captured. This would reduce the
repeat submission of same data in the application process.
78
4) Difficulty with dealing with licensing officers
The issue of the difficulty of contacting the right person at the MOH for consultation
on application issues is recognize by the MOH. As such, the MOH has schedule
special-client day on every Friday of the week where applicants can meet with the
regulators to sort out any issues they may have.
This is a good initiative by the MOH to be a facilitating regulator.
5) On continuing education of the private hospitals
The MOH currently does not have any allocation for such a programme. The limited
personnel resources will not be able to cope with this. However, the MOH has
carried out one-off briefings in the past to update the private hospitals on
compliance issues.
The MOH could consider using external resources for such continuing education. It
could engage business association such as APHM and MMA to support the
continuing education programme for regulatory compliance.
6) On the approval for advertisement
We were informed that there has been proposal to amend the Medicines
Advertising Regulation to put the responsibility of advertisement approval to CKAP.
This will integrate the private hospital regulation to a single authority in the MOH.
This would be a good integration effort to have all approvals under one licensing
authority as the requirements for advertising for private hospitals are different from
medicine advertisement. However, there need to be some amendment to the
existing PHFS Act 586 and the PHFS Regulations 138/2006.
7) On the planning approval for upgrade, renovation and extension
The team was informed that the approval process is much simpler than that of the
planning approval required for the establishment of a new hospital. The planning
approval is required as the upgrade, renovation or extension will require change in
the licence details.
8) Annual Practicing Certificates
Although the occupational licensing of medical practitioners (physicians, nurses,
midwifes, medical assistants, dentists, pharmacists) are the purview of the various
councils and boards and govern under their respective Acts, any issues relating to
the licensing processes will affect the licensing of the private hospitals. The APCs
are important to hospital licensing because they define the place of occupation of
the professionals and the positions and responsibilities they hold with respect the
hospital. Currently, the legal definition for Annual Practicing Certificates is on the
year ending on the 31st day of December. This means that at the end of each year
these councils and boards will be busy processing thousands of renewal
applications. Thus there is the usually yearend jam for APCs renewal.
79
It does not appear that the various occupational regulators for medical
professionals (MMC, MDC, MNB, MMB, MMAB and MPB) have the incentive to
change the existing regulations.
9) Certified Copies of Annual Practicing Certificates (APC)
The rationale on the need to submit certified copies of APC in the licence renewal
application was posed. The MOH realized the burden of having to prepare these
documents, particularly for large hospitals which employ hundreds of medical
professionals. The MOH informed that it is reviewing this requirement and
proposing to change from this evidence-based input to a more efficient informationbased input, where applicant will only have to submit the staff information, but
certified true and accurate in the application. This is also a recommended option
from this study.
7.3
Concluding Remarks
Firstly, the short 2-hour meeting has given valuable understanding on the regulatory and
administrative rationale and intent of the regime. However, the time constraint did permit a
more comprehensive review with the regulator. Continuing consultation will be made with
the regulators at the next phase of the study – the Public Consultation phase.
The private healthcare business is highly regulated and this is important to ensure
adequate oversight is made to protect the consumers in terms of patient safety, quality
healthcare and patient rights. In business the focus on cost efficiency and revenue
generation or profitability can be strong motivation to disregard these protections. As such,
the regulator such as the MOH has the important oversight role to ensure that private
healthcare providers behave in an acceptable manner.
To achieve patient safety certain specified minimum requirements with regards to the
movement of patients must be met. This is to ensure that ambulatory patients can be
move quickly and safely out of the hospital building during an emergency such as fire.
Even within the building, patient must be able to be move quickly and along the safest and
shortest route during a medical emergency. As such, location, layout and flow
considerations become paramount to a good hospital system.
Quality health care can be achieved when all the key resources of people, materials,
treatment and supporting facilities, utilities, the physical environment and standards for
work processes are effectively organized and managed for systemic and integrated
efficiency. A specialist medical centre, for example, must have the required resident
specialists, it must have reliable treatment and supporting facilities, it must maintain the
environment that will support adequate treatment and recovery, and other supporting staff
and professionals. All these make the private hospital business a highly complex entity
with high overheads and maintenance costs. There will always be the tension between
maintain a high standard for healthcare and the need to control cost and generate
80
revenue. The quest to generate revenue may motivate private healthcare business to
provide unnecessary treatments to patients.
For private hospitals, the licensing renewal ensure that the MOH provide adequate
oversights to protect the consumers and at the same time to maintain the country
healthcare system to international standards. The current regulatory regimes and the
regulators have proven their effectiveness in the oversight control. Nevertheless, the
existing regulations need to be reviewed and the implementation processes and be
improved to reduce and/or eliminate unnecessary regulatory burdens on private
healthcare business.
81
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Part 1: Paper 5: The growth of corporate health care in Malaysia; Chee Heng Leng
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83
APPENDIXES
Appendix 2.1: Healthcare Services and Related Sectors MSIC2008
Class
2100
Item
21001
21002
21003
21004
21005
21006
21007
21009
2660
26600
Description
Manufacture of pharmaceuticals, medicinal chemical and botanical
products
Manufacture of medicinal active substances to be used for their
pharmacological properties in the manufacture of medicaments
Processing of blood
Manufacture of medicaments
Manufacture of chemical contraceptive products
Manufacture of medical diagnostic preparation
Manufacture of radioactive in-vivo diagnostic substances
Manufacture of biotech pharmaceuticals
Manufacture of other pharmaceuticals, medicinal chemical and botanical
products n.e.c
Manufacture of irradiation, electro medical and electrotherapeutic
equipment
Manufacture of irradiation, electro medical and electrotherapeutic
equipment
MSIC 2000
24230p
24230p
24230p
24230p
24230p
24230p
24230p
24230p
33110p
32500
Manufacture of medical and dental instruments and supplies
Manufacture of medical and dental instrument and supplies
25199p, 33110p
46421
46422
Wholesale of pharmaceutical goods and toiletries
Wholesale of pharmaceutical and medical goods
Wholesale of perfumeries, cosmetics, soap and toiletries
51391p
51391p
3250
4642
47722
Retail sale of pharmaceutical and medical goods, cosmetic and toilet
articles in specialized stores
Stores specialized in retail sale of pharmaceuticals, medical and
orthopaedic goods
Stores specialized in retail sale of perfumery, cosmetic and toilet articles
72103
72104
Research and experimental development on natural science and
engineering
Research and development on medical sciences
Research and development on biotechnology
73105
73109p
82200
Activities of call centres
Activities of call centres
74991p
4772
47721
7210
8220
8292
82920
8412
84122
861
8610
86101
86102
862
8620
86201
86202
86203
8690
86901
86902
Packaging activities
Packaging activities on a fee or contract basis, whether or not these involve
an automated process
Regulation of the activities of providing health care, education,
cultural services and other social services, excluding social security
Administrative health care services
Hospital activities
Hospital and maternity home activities
Hospital activities
Maternity home services (outside hospital)
Medical and Dental practice activities
Medical and dental practice activities
General medical services
Specialized medical services
Dental Services
Other human health activities
Dialysis Centers
Medical laboratories
52310p
52310p
74950
75122
85110p
85110p
85121p
85121p
85122
85110p
85121p
84
86903
86904
86905
86906
86909
8710
87101
87102
87103
Physiotherapy and occupational therapy service
Acupuncture services
Herbalist and homeopathy services
Ambulance services
Other human health services n.e.c.
Residential nursing care activities
Homes for the elderly with nursing care
Nursing homes
Palliative or hospices
87901
87902
Residential care activities for mental retardation, mental health and
substance abuse
Drug rehabilitation centres
Others residential care activities for mental retardation n.e.c.
Residential care activities for the elderly and disabled
Residential care activities for the elderly and disabled
Other residential care activities (the activities may be carried out by
government offices or private organizations)
Orphanages
Welfare homes services
87909
Other residential care activities n.e.c.
8720
87201
87209
8730
87300
8790
8810
88101
88109
8890
88902
88909
941
9411
94110
9412
94120
Social work activities without accommodation for the elderly and
disabled carried out by government offices or by private organizations
Day-care activities for the elderly or for handicapped adults
Others social work activities without accommodation for the elderly and
disabled
Other social work activities without accommodation n.e.c.
Child day-care activities
Other social work activities without accommodation n.e.c.
Activities of business, employers and professional membership
organizations
Activities of business and employers membership organizations
Activities of business and employers membership organizations
Activities of professional membership organizations
Activities of professional membership organizations
85192
85199p
85193
85194
85121p
85191p, 85312p
85191p
85199p
85316
85319p
85312p
85311p
85311p, 85315,
85319p
85313, 85314,
85319p
85329p
85329p
85325
85322, 85324,
85329p, 91993p,
91999p
91110
91120
Source: Department of Statistics, Malaysia Standard Industrial Classification 2008 Version 1
85
Appendix 4.1: Analysis of Act 586
1.
Analysis of Approval for establishment and maintenance, License-to-Operate and Inspections (Premise,
Services & Facilities)
Private Health Care Facilities and Services Act 1998 (Act 586)

Date of operation 1st May 2006, Ministry of Health Malaysia
Process Theory Analysis
Process
Input
Output
Policy Objectives/Outcomes (MOH Country Health Plan 2011-2015)
1. Integrated public-private health services delivery
2. Universal Access - equity of access – physical ease of access (including cost containment)
3. High quality and safe care (including sustainability, compliance to quality standards and responsive to population needs)
Act/Regulation
Control
Prescribed
Documents/Information
Policy assessment/
Instrument/type
Requirements &
Regulatory
Process
Burdens
Section 8:
1. Formal application
1. Prescribed application forms
MOH Perspectives:
Approval in
2. Application fee
2. Comprehensive plans:
Approval to
writing by DG:
 Patients’ rights to
3. Submission of
a. Site plan
quality, safety,
establish or
 Location
comprehensive
b. Building layout plan
accessibility and
 Services &
maintain
plans:
c. Architectural & engineering plans
equitability of
facilities
d. Specifications of facilities
health care
 Acute beds
e. Manpower arrangements
 Social/public and
f. Personal & company details
national interest
(statuary declaration)
g. Other information as determined by
Assessment criteria
DG.
for private hospital
Section 9:
As in Section 8
1. Nature of facility or
Market feasibility study report
establishment:
Matters to be
service
 30 Km radius
considered
2. Facilities or services
 Multi-discipline: 2
before approval
available
beds/1000
to establish or
3. Need for facility or
 Types of
maintain is
service
facilities/services
granted.
4. Future need for the
facility or service
 Future projection
5. Any other matters
3 years
deemed relevant.
Section 14.
Time limit on
Written application to
Application with justifications.
Health Plan 2011Application for a
approval granted
DG
2015:
licence to operate in Section 8
 Towards a more
or provide to be
efficient &
made within three
effective health
years.
system
Section 15.
License to
1. Prescribed forms & manner
 Equity of access –
Application for
operate (2 years
2. Prescribed form
2. Prescribed fee
physical ease of
licence to operate limit)
and manner
3. Information, particulars & documents
access
or provide.
3. Prescribed fee
4. Additional information as required by
 High quality &
4. Specified
DG
safe care
information and

Equity of access –
documents
financial
5. Any additional
 Cost containment
information within
 Compliance to
prescribed time
quality & standard
6. Subject to
 Responsive to
inspection
population needs
(Section 16)
Section 16.
Licence to
1. On-site inspection
1. Building layout plans, design,
Inspection of
operate
of premises
construction and specifications and
premises.
2. Inspection
information submitted in planning
facilities.
approvals.
3. inspection of
2. Inventory of equipment, apparatus,
operations and
instrument, material, article, sample
maintenance
or substance or any other thing
4. Within three years
found in the premises
of planning
3. Registers, rosters, records, policies,
approval or
standard operating procedures,
extension
clinical practice guidelines or the
management
Section 22.
1. Prescribed forms & manner
 Licence to
2. Prescribed form &
2. Prescribed fee
operate;
Duration and
manner
3. Specified information, particulars &
renewal
renewal of
3. Prescribed fee
documents
every
2
licence to operate
4. Specified
4. Additional information as required by
years
or provide
information &
DG
 DG may
documents
vary the
86
terms or
conditions
2.
5. Subject to
inspection
(Section 16)
Analysis of Operational Responsibilities: Operation, Registration, Reporting and Notification
[Part VI: Responsibilities of a Licensee, Holder of Certificate of Registration and Person In Charge]
Act/Regulation
Section 31.
Responsibilities
Section 32.
Person in charge.
Control
Instrument
Operation:
Prescribed
Requirements
1. Registered by law
person in charge
2. Qualified and with
experience
3. Periodic
inspection of
facility by owner
4. Notify DG within
14 days on
change of person
in charge
Documents/Information
Policy assessment
Person in charge:
 Competent
person with valid
practicing license
 Ensure
accountability
 To ensure quality
health care and
safety of patients
 Protection of
patients’ rights
Prescribed
policy statement
Plan of
grievance
mechanism
Reporting to DG
Make available to
patients
Established plan and
procedure
Documented policy statements
Incident reporting
Incident reports
Availability of
emergency
services
Emergency measures,
procedures and
services


Section 33.
Change of person
in charge
Person in
charge
Personal
care aide
Section 34.
Personal care
aide.
Section 35. Policy
statement.
Section 36.
Patient grievance
mechanism.
Section 37.
Incident reporting.
Section 38.
Emergency
treatment and
services
Section 53.
Conditions for
closure,…
healthcare facility
or service
1. Notify in
1. Notify DG not less
writing to
than 30 days.
DG
2. Compliance to DG
2. Directives
directives
of DG
3. Immediately upon
3. Surrender
discontinuance.
of license
PART X - BLOOD BANK
Section 57.
Application of
Application to DG with
Import and export
import & export
prescribed form..
natural human
certificate.
blood and blood
Payment of prescribed
product.
Prescribed fee
fee.
PART XI - BLOOD TRANSFUSION SERVICES
Section 59.
Operation &
1. maintain proper
Storage facilities.
maintenance of
blood storage
blood bank
facilities
2. adequate control
and supervision
3. stored in
refrigerators
4. alarm system &
regularly
inspected
Section 60.
Operation &
1. Minimum blood
Minimum blood
maintenance of
supply
supply
blood bank
2. Alternative source
of supply
Section 61.
Maintain
Recording receipt and
Maintain records
records
use of blood.
of receipt &
indicating the
disposition of
receipt and
blood
disposition
Section 62.
Transfusion
reactions.
Section 63.
Recommendations
to the Medical
Advisory
Committee
Section 67.
Investigate all
transfusion
reactions.
Investigation
procedures &
reporting.




Prescribed qualification, training and
experience
Registered person
Prescribed duties and
responsibilities
Notification of change
Documented plans and procedures


Defined nature and scope.
Established measures, procedures
and services.
1. Written notice of intention to DG
2. Indicate compliance to DG
directives
3. Surrender of certificate
Application form.
 Quality assurance
 Control of dangerous
blood-related diseases
Established and documented
procedures.
Control of dangerous
blood-related diseases
Control records
Stock control records.
Contract for alternative supply.
Records of use and disposition.
Records of investigation and
reporting to MAC.
Records of improvement.
Reporting to
MAC
Improvement made.
Reporting
Notify assessable
Notice to DG.
87
Reporting of
assessable deaths
assessable
death to DG
within 72 hours.
Reporting by
medical or
dental
practitioner.
death to DG within 72
hours.
Section 68.
Reports on
Medical reports by practitioner.
Medical or dental
procedures relating to
Clinical and medical records.
practitioners to
death and clinical &
provide
medical records.
information
Section 72. MAC
Establishing &
May establish and
Reporting of assessable death.
at private
maintaining of
maintain a functioning
MAC assessment and
healthcare facility
MAC.
MAC.
recommendations
or service level.
PART XIII - QUALITY OF HEALTHCARE FACILITIES AND SERVICES
Section 74.
Establishing
Provide information on Quality system documentation and
Quality of
health quality
quality system and
records.
healthcare
system.
Standards to the DG.
facilities and
services
Section 76.
Incorporation of
Continual
DG directives on quality assurance
Power of DG to
DG directives in
improvement to quality (orders & guidelines)
issue directives,
quality system.
system processes and
orders or
procedures.
guidelines relating
to quality
assurance
PART XIV - BOARD OF MANAGEMENT AND ADVISORY COMMITTEE
Section 77. Board Board of
Establishing BOM &
Documents of committee’s function.
of Management
Management
its function
Records of committee’s work.
and composition
 Patient safety and
rights
 Accountability for
continual improvement
Section 78.
Medical or
Establishing
Medical or Dental
Dental Advisory
MAC/MDC & its
Advisory
Committee.
function
Committee.
Section 79.
Midwifery Care
Establishing MCAD &
Midwifery Care
Advisory
its function
Advisory
Committee
Committee
Section 80.
Nursing
Establishing NAC & its
Nursing Advisory
Advisory
function
Committee
Committee
References:
1. Private Health Care Facilities and Services Act 1998 (Act 586)
2. MOH, Country Health Plan, 10th Malaysia Plan, 2011- 2015
3. MOH, Dr. Afidah Ali (Presentation), Location of Private Hospital From MOH Perspective, 31st October 2012
88
Appendix 4.2: PHFS Regulations 138/2006: Requirements for Private Hospitals
Part
Title
II
IV
Application for approval to
establish or maintain or
license to operate or provide
private healthcare facilities or
services and other
applications
Organization and
management of private
healthcare facilities and
services
Policy
V
Registers, rosters and returns
28 to 37
VI
VII
VIII
IX
X
Grievance mechanism
Patient medical record
Consent
Infection control
General provisions for
standards of private
healthcare facilities or
services
38 to 41
42 to 46
47-48
49
50 to
132
XI
Standards for Obstetrical or
Gynaecological care
Standards for newborn
nursery facilities
Standards for paediatric
patient care
Standards relating to
Anesthesia
133 to
148
149 to
169
170 to
175
176 to
185
XV
Standards for surgical
facilities and services
186 to
217
XVI
Special requirements for
critical care on intensive care
unit
emergency care services
218 to
227
XVIII
pharmaceutical services
238 To
249
XIX
central sterilizing and medicalsurgical supply facilities and
services
Standards for dietary services
250 to
262
blood bank services, blood
transfusion services or blood
donation programme
277 to
300
III
XII
XIII
XIV
XVII
XX
XXI
Reg.
No.
3 to 10
Prescribed requirements
The method and requirements for application on planning approval for
establishment (including extension and alternation) and for application of licence to
operate.
11 to 20
Mandates the planning of the organization and management of the private
hospitals, a plan of organization outlining the staff and practitioners and the chain
of command. Specify Person-In-Charge accountability, role and responsibility.
21 to 27
Establish management intentions through documented policies, procedures and
guidelines with specific focus on patient’s rights.
The management of information and records, and that of data and statistics
relating to the patients and staffs (including volunteers).
Define the establishment and maintenance of a patient grievance mechanism
Maintain a patient record management system
Define how patient consent is to be managed
Establish a Infection Control Committee to manage a infection control programme
These requirements are organized into 14 chapters prescribing the minimum
standards for healthcare facilities covering the spatial requirements, environmental
ventilations requirements, utilities requirements, housekeeping management,
laundry management, waste management, patient room facilities, management of
nursing services, medical assistant services, transport arrangement and
communications requirements and maintenance management. The requirements
aim to achieve a standard level of patient safety, patient care and comfort, patient
service and the control of infection.
The minimum requirements for maternity services and facilities are prescribed in
these regulations for hospital providing maternity services.
The minimum requirements for newborn nursery facilities in conjunction with the
maternity services and facilities are prescribed in these regulations.
The minimum requirements for the facilities, organization and management of the
service (nursing care & special care) are defined here for hospitals providing these.
The minimum requirements for facilities and equipment (anesthetic apparatus,
machines, equipment, etc), room facilities, qualified persons, processes,
monitoring of patient and patient recovery, privacy are defined.
Define the minimum requirements for the facilities (equipment, supplies, suitable
environment, ventilation, supporting facilities, staff and administrative facilities,
maintenance and housekeeping) and the requirements to establish (policy),
document (including records management) and maintain the management system
(including patient rights) for surgical services.
Define the minimum requirements for the facilities (location, room size, design
features, acoustics, clean & soiled & storage rooms,), equipment, support services
and facilities and staff for the ICU.
Organized into three chapters on requirements as follows:
Chapter one: Disaster preparedness – to establish and maintain such a plan for all
personnel
Chapter two: Emergency care and facilities – toe establish and maintain an
emergency care services
Chapter three: Pre-hospital care services, ambulances and transportation of
patient services – defined the requirements for managing and maintaining such
services if provided by the hospital on a regular basis.
This part defines the requirements of pharmaceutical staff according to hospital
size, and specifies the management of pharmaceutical facilities within the hospital
and the management and preparation of medicines usage.
If manufacturing is involved, the facility also requires a manufacturing license
issued under the Control of Drugs and Cosmetics Regulations 1984 [P.U. (A)
223/1984].
Define the minimum requirements for the facilities (location and design) and the
processes (receiving, disassembling, cleaning, assembling, packaging and
equipment), facilities for sterilizing and storage, organization, management and
control of the operations.
Define the minimum requirements for the facilities kitchen, storage, refrigeration,
wash rooms) and the organization, staffing, diet, food preparation and serving and
management (policies) of the services.
The special requirements are organized into General Requirements and three
chapters comprising:
General requirements which prescribed who the person-in-charge, person allowed
to collect blood and the person to screen and process blood and blood products;
Chapter one on Standards for private blood bank: prescribes the facilities, staffing,
spatial requirements, utilities requirements, ventilation and toilet/shower/washing
facilities;
Chapter two on Special provision on healthcare facilities: prescribes the
228 to
237
263 to
276
89
XXII
haemodialysis facilities and
services
301 to
322
XXIII
Standards for rehabilitation
facilities and services
Standards for specialist
outpatient facilities and
services
323 to
332
333 to
338
Standards for ambulatory care
services
radiological or diagnostic
imaging services and
radiotherapy and radioisotope
services
Standards for private nursing
homes
hospice and palliative care
services
Miscellaneous (other facilities
and ancillary services)
339 to
344
345 to
352
XXIV
XXV
XXVI
XXVII
XXVIII
XXIX
requirements management of blood bank services (including quality assurance
and safety of personnel and environment). Disposal of waste need to comply with
the provisions under the Environmental Quality Act 1974 [Act 127];
Chapter three on the Selection and retention of donors and code of ethics:
specifies the requirements for managing blood donors.
If the hospital has such services, these special requirements define the minimum
requirements for such facilities and the standards for managing the facilities and
services (including location, staffing, facilities and equipment, processing,
monitoring, waste disposal, safety of personnel, control of infection) and incident
and statistical reporting to the regulator.
Usually not applicable to private hospital.
Note: Private hospitals are not allowed to maintain a outpatient facility or services
except specialist outpatient facility and services.
Define the minimum requirements for the facility and the management of the
specialist outpatient facility and services.
A separate healthcare facility and service.
Define the minimum requirements for the facilities and the services and the
purpose, staffing and managing the records (and registers) on the operations.
Need to comply with requirements of Atomic Energy Licensing Act 1984 [Act 304]
353 to
387
388 to
416
A separate healthcare facility and service.
417 to
434
These requirements are prescribed for all other necessary facilities and services
that need to be provided in private hospitals. They include the mortuary, public
amenities (toilets and nappy change, public telephone, cafeteria, breastfeeding
room, prayer room), staff facilities (rest room, toilets, prayer room, and library),
social and welfare, prescribed fee schedule, and defined offence (for non
compliance) and penalty.
A separate healthcare facility and service
90
Appendix 4.3: Regulatory Regimes for Healthcare and Health-related industries
No.
1
2
3
4
License/Permit/Approval
Lesen Premis (Premise license)
Lesen Iklan (Advertising License)
Lesen Tempat Letak Kereta (Vehicle Parking License)
Lesen Premis Makanan (Food premise License)
5
Kelulusan Vehicle Type Approval (VTA)
6
Perakuan Pendaftaran untuk
Menubuhkan/Menyenggarakan/Mengendalikan/Menyediakan Klinik Perubatan
Swasta
Perakuan Pendaftaran untuk Menubuhkan/Menyenggarakan/
Mengendalikan/Menyediakan Klinik Pergigian Swasta
Kelulusan bagi Pemindahan Hakmilik/ Penyerahakan Perakuan Pendaftaran
Kelulusan Bagi Pemindahan Hakmilik/ Penyerahhakan Kelulusan/Lesen
Kemudahan/ Perkhidmatan Jagaan Kesihatan Swasta
Kelulusan bagi Pindaan Perakuan Pendaftaran bagi Klinik Perubatan Swasta
dan Klinik Pergigian Swasta
Kelulusan Pindaan Perakuan Kelulusan atau Lesen bagi Kemudahan/
Perkhidmatan Jagaan Kesihatan Swasta lain
Perakuan Kelulusan untuk Menubuh/Menyenggara Kemudahan/Perkhidmatan
Jagaan Kesihatan Swasta lain
Lesen Untuk Mengendalikan/Menyediakan Kemudahan/Perkhidmatan Jagaan
Kesihatan Swasta lain
Kelulusan bagi Melupuskan Perakuan Pendaftaran
Kelulusan Bagi Melupuskan Perakuan Kelulusan/ Lesen Kemudahan/
Perkhidmatan Jagaan Kesihatan Swasta lain
Kelulusan Bagi Peluasan/Pengubahan kpd Kemudahan/Perkhidmatan Jagaan
Kesihatan Swasta lain (Berlesen)
Perakuan Pendaftaran Penuh (Perubatan)
Perakuan Pendaftaran Sementara (Perubatan)
Perakuan Amalan Sementara Warga Asing (Perubatan)
Perakuan Amalan Tahunan (Perubatan)
Perakuan Peperiksaan Kelayakan Perubatan
Letter of Good Standing (Perubatan)
Perakuan Pendaftaran Pembantu Perubatan
Perakuan Pembaharuan Pendaftaran Tahunan (Pembantu Perubatan)
Perakuan Pendaftaran Pembantu Hospital Estet Percubaan
Sijil Peperiksaan Pembantu Hospital Estet
Perakuan Pendaftaran Penuh Juruoptik
Perakuan Pendaftaran Penuh Optometris
Perakuan Pendaftaran Sementara Juruoptik
Perakuan Amalan Tahunan Juruoptik
Perakuan Amalan Tahunan Optometris
Sijil Kebenaran Mempreskripsi dan Mendispens Kanta Lekap
Photo Name Certificate (Optik)
Letter of Good Standing (Juruoptik / Optometris)
Lesen Racun Jenis A, B, D, E / Permit NaOH (Natrium Hidroksida)
Permit Psikotropik
Kebenaran Import Dadah Berbahaya
Kebenaran Eksport Dadah Berbahaya
Kebenaran Import Bahan Psikotropik
Kebenaran Eksport Bahan Psikotropik
Kebenaran Pengeksportan Prekusor/ Bahan Kimia Terkawal (Acetic
Anhydride, Ephidrine, Pot.Permanganate, Sulphuric Acid, Hydrochloric Acid,
Toluence, dll)
Kebenaran Import Bahan Kimia Terkawal
Sijil Pendaftaran Penuh Ahli Farmasi
Sijil Pendaftaran Pertubuhan Perbadanan
Sijil Tahunan Ahli Farmasi
Sijil Tahunan Pertubuhan Perbadanan
Sijil Pendaftaran Sementara Ahli Farmasi (Warga Asing)
Letter of Good Standing (Ahli Farmasi)
Kelulusan Iklan Ubat/Keluaran Penjagaan Kesihatan/Perkhidmatan Hospital
Swasta, Klinik, Klinik Radiologi dan Makmal Perubatan
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
Ministry/Agency
Kementerian Wilayah Persekutuan
dan Kesejahteraan Bandar
(Ministry of Federal Territory and
Urban Wellbeing)
Dewan Bandaraya Kuala Lumpur (City
Hall KL)
Jabatan Pengangkutan Jalan (Road
Transport Department)
Kementerian Kesihatan
(Ministry of Health - MOH)
Cawangan Kawalan Amalan
Perubahatan Swasta (CKAP)
MOH
Majlis Perubatan Malaysia
(Malaysian Medical Council - MMC)
MOH
Lembaga Pembantu Perubatan
(Medical Assistants Registration
Board)
MOH
Majlis Optik Malaysia (Malaysian
Optical Council - MOC)
MOH
Seksyen Penguatkuasaan Farmasi
(Pharmaceutical Control Section)
MOH
Lembaga Iklan Ubat (Medicine
91
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
Lesen Pengilang (Farmaseutikal)
Lesen Pemborong (Farmaseutikal)
Lesen Mengimport (Farmaseutikal)
Sijil Pendaftaran Keluaran Entiti Kimia Baru/Bioteknologi
Preskripsi dan Bukan Preskripsi Suplemen Kesihatan Produk Semulajadi
Kosmetik
1. Sijil Kesihatan Berdasarkan Jenis Makanan
2. Sijil Kesihatan Makanan Am
3. Sijil Kesihatan Udang Sejuk Beku yang telah dimasak
4. Sijil Kesihatan Daging Diproses Haba
5. Sijil Kesihatan Minyak Makan Kelapa Sawit, Palm Olein dan Palm
Stearin
6. Sijil Kesihatan Air Minuman Berbungkus
7.
Sijil Kesihatan Air Mineral Semulajadi
Sijil Penjualan Bebas
Sijil Non-Genetically Modified Food (Non-GMF)
Sijil Akuan Kandungan Melamine
Sijil Hazard Analysis and Critical Control Point (HACCP)
Sijil Kesihatan bagi pengeksportan Hasilan Ikan ke Kesatuan Eropah
Skim Pensijilan Good Manufacturing Practice (GMP)
Kelulusan Punca Air Mineral Semulajadi dan Air Minuman Berbungkus
Lesen Bahan Pemanis Tanpa Zat
Kelulusan Pengimportan Bahan Perisa
Pensijilan GMP 1 Malaysia
Pengikitirafan Sekolah Latihan Pengendali Makanan (SLPM)
Ujian Saringan Tenaga Pengajar Sekolah Latihan Pengendali Makanan
(SLPM)
Pengikitirafan Tenaga Pengajar Sekolah Latihan Pengendali Makanan (SLPM)
Kelulusan Penyenaraian Premis Eksport Untuk Pengeksportan Hasilan Ikan
Ke Kesatuan Eropah (EU)
Kelulusan Penyenaraian Pengeluar Ais Yang Digunakan Sepanjang Rantaian
Pengeluaran Hasilan Ikan Ke Kesatuan Eropah (EU)
Kelulusan Penyenaraian Premis Bahan Mentah Separa Proses Yang
Membekalkan Bahan Mentah Ke Premis Eksport
Kelulusan Kenderaan Pengangkutan Yang Digunakan Sepanjang Rantaian
Pengeluaran Hasilan Ikan Ke Kesatuan Eropah (EU)
Kelulusan Puinca Bahan Mentah Yang Diimport Yang Membekalkan Bahan
Mentah Ke Premis Eksport
Lesen penyediaan ais bagi maksud perdagangan dan perniagaan
Kelulusan Pendaftaran Syarikat Melalui Sistem FoSIM Import (Online) Untuk
Agen dan Importer
Kelulusan pengiktirafan pengeksport Minimally Processed Foods Untuk
Eksport ke Singapura
Perakuan Pendaftaran Premis Makanan
Permit Mengimport dan Mengeksport Tisu Manusia atau mana-mana
bahagiannya
Permit Mengimport dan Mengeksport Mayat atau mana-mana bahagiannya
Permit Mengimport dan Mengeksport Organisma atau Bahan Patogenik atau
mana-mana bahagiannya
Pemeriksaan Kapal dan Pengeluaran Ship Sanitation Control Certificate
(SSCC) / Ship Sanitation Control Exemption (SSCEC) Certificate
Sijil Demam Kuning
Yellow Fever Vaccination Centre
Permohonan Lesen Pewasapan
Lesen Kelas A (Bahan Radioaktif), Kelas C (Radas Penyinaran) dan Kelas
A&C (Bahan Radioaktif & Radas Penyinaran) dibawah Akta Perlesenan
Tenaga Atom 1984 (Akta 304) bagi maksud perubatan
Lesen Kelas H (Juru Perunding Fizik Perubatan) dibawah Akta Perlesenan
Tenaga Atom 1984 (Akta 304) bagi maksud perubatan
Sijil Perakuan Pengalaman Jururawat Tahunan (Jururawat Berdaftar/
Jururawat Masyarakat/ Penolong Jururawat (APC)
Sijil Pengamalan Sementara (TPC)
Pendaftaran Jururawat
Letter of Good Standing
Pendaftaran Pengamal Pergigian
Sijil Pengamalan Pergigian Tahunan
Sijil Pengamalan Sementara (Pergigian)
Letter of Good Standing (Pergigian)
Sijil Perakuan Bomba
Melesenkan penggunaan atom bagi aktiviti bukan perubatan (mengikut kelas)
Kelas A – Bahan Radioaktif
Kelas B – Bahan Nuklear
Kelas C – Radas Penyinaran
Kelas D – Pengangkutan
Kelas E – Import/Eksport
Advertising Board)
MOH
Biro Pengawalan Farmaseutikal
Kebangsaan (BPFK) (National
Pharmaceutical Control Bureau)
MOH,
Bahagian Keselamatan Dan Kualiti
Makanan
(Food Quality & Safety Division)
MOH
Bahagian Kawalan Penyakit
Diseases Control Division)
MOH
Bahagian Perkhidmatan Kejuruteraan
(Engineering Services Division )
MOH
Lembaga Jururawat Malaysia
(Malaysian Nursing Board)
MOH
Majlis Pergigian Malaysia (Malaysian
Dental Council)
Jabatan Bomba & Penyelamat
Ministry of Science, Technology and
Innovation (MOSTI)
Lembaga Perlesenan Tenaga Atom
(Atomic Engergy Licensing Board)
92
96
97
98
99
100
101
102
103
104
105
106
107
108
Kelas F – Pepasangan Nuklear
Kelas G – Pelupusan/Penstoran Sebelum Pelupusan
Kelas H – Lain-lain Aktiviti Selain Kelas A hingga Kelas H
Pendaftaran di bawah Akta Perlesenan Tenaga Atom 1984 (Akta 304)
Pengiktirafan Akta Perlesenan Tenaga Atom 1984 (Akta 304)
Kebenaran Akta Perlesenan Tenaga Atom 1984 (Akta 304)
Permit Membayar Gaji Lewat
Permit Potongan Gaji
Permit Mengumpul Rehat Mingguan
Permit Kelonggaran Waktu Kerja Biasa
Permit Pendahuluan Gaji
Permit Kebenaran Waktu Kerja Syif
Permit Bekerja Melebihi Sekatan Waktu Lebih Masa
Permit Kelulusan Skim Bayaran Insentif
Permit Simpan Daftar Pekerja
Permit Sekatan Wanita Kerja Malam
Kebenaran Pendaftaran Jentera
Jabatan Tenaga Kerja (JTK)
Jabatan Keselamatan dan Kesihatan
Pekerjaan (Department of
Occupational Safety & Health - DOSH)
Kementerian Dalam Negeri
Jabatan Imigresen Malaysia
(Immigration Department)
109
Permit Penerbitan
110
Pas Lawatan Ikhtisas
111
Pas Residen
112
Pas Pengajian
Note: Other local authorities, municipal councils , city and town councils will have their own regulatory regimes which may be
similar to that of DBKL
Source: MPC Regulatory Review Directorate Database
93
Appendix 5.1: Summary of Survey Output
No.
Regulatory
Requirement
Issue
Consequence or Burden
1
Licence renewal (every
2 years)
1.
1. Long wait, sometimes until
licence lapsed
2. High overheads to prepare
documents for submission
2.
Reference:
1.
Private Health Care
Facilities and
Services Act 1998
(Act 586)
 Part III: Approval for
establishment and
maintenance,
License-to-Operate
and Inspections
(Premise, Services &
Facilities)
 Section 15.
Application for
licence to operate
or provide.
 Section 16.
Inspection of
premises.
 Section 22.
Duration and
renewal of licence
to operate or
provide
 Part VI:
Responsibilities of a
Licensee, Holder of
Certificate of
Registration and
Person In Charge
 Part VIII: Quality of
Healthcare Facilities
and Services.
and
2.
Private Health Care
Facilities and
Services (Private
Hospitals or Other
Healthcare
Facilities)
Regulations
138/2006
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
2
Planning Approval for
expansion, renovation,
upgrading
Long waiting time for renewal,
sometimes exceeding 6 months.
A lot of documents required in
application (2 sets), certified copies
required. Every piece of paper needed
to be signed. Too much paperwork
required. Additionally, now have to keyin data online.
Many different units involved in the
process, difficult to deal with and to
access to them.
Different auditors assessing and
interpreting the requirements
differently, some stricter than others.
Variation in competency and
experience of auditors.
The older hospitals (those approved
before Act 586) have problems with
meeting some of the new dimensional
requirements.
Need to write officially to resolve
issues, oftentimes do not receive
replies to queries. Frequently need to
travel to Putrajaya to resolve issues, a
costly burden for those from other
states, e.g. East Malaysia.
Parts of PHFS Regulations 2006 are
not specific causing different
interpretations of requirements
New requirements are not published
and made known to hospitals until the
audit.
Delay in the issuance on professional
license contributes to overall delays.
Also results in delay for quality
accreditation.
Two levels of audit in some states,
state office and Putrajaya. Sometimes,
state gave comments which could be
over-ruled by Putrajaya auditors.
Have to deal with different regulators
(State MOH, BOMBA, Local Authority,
Immigration, DOSH) before applying.
East Malaysian states have a
additional requirements on
immigrations which results in delays.
Need costly statutory declaration by
board members and licence/certificate
holders for every renewal.
1. All types and level changes on physical
building has to go through the same long
and difficult approval processes.
2. Difficulty in meeting requirements
because of absence of guidelines or
3. Too many interactions with
different units on requirements
4. Variability in assessments
causes confusion.
5. Expensive on structural
changes and causes serious
interruption to services.
6. Time consuming and causes
delays.
7. Delays in getting requirements
rectified in submission & cost.
8. Costly delays to meet
requirements.
9. Licensing delays result in other
consequences, e.g. MSQH
accreditation.
10. Give rise to costly changes and
delays.
11. Fragmented and uncoordinated
process (merry go-round) and
delays.
12. Cause delays and added
administrative burdens.
13. Unnecessary costs and
administrative burden.
1. Delays resulting in heavy
overheads, many interactions,
inconveniences to services.
2. Many interactions and burdens of
resulting delays.
94
Reference:
1. Private Health Care
Facilities and
Services Act 1998
(Act 586)
establishment and
maintenance,
License-to-Operate
and Inspections
(Premise, Services &
Facilities)
 Part VI:
Responsibilities of a
Licensee, Holder of
Certificate of
Registration and
Person In Charge
and Services.
and
3
Facilities and
Services (Private
Hospitals or Other
Healthcare Facilities)
Regulations 138/2006
Approval for
advertisements and
advertising materials
Reference:
1. Medicine
(Advertisements
and Sales) Act 1956
(Revise 1983) Act
290
 Section 4A.
Prohibition of
advertisements
relating to skill or
service.
 Section 4B.
Advertisements of
medicines to be
approved.
and
specification standards.
3. Different officers specifying the
requirements differently (depending of
competency of officers).
4. Long and difficult process for land
conversion for expansion.
5. Difficulty in contacting right officers to
resolve issues through the phone.
Oftentimes, need to travel down to
Putrajaya to resolve issues or to speed
up approval. Need to have good
networking to get things done.
6. Submission for approval of new clinic
has to be complete. Any missing
requirements require a re-submission.
3. Difficult approval process with
consequential delays.
4. Delays in introduction of new
services (State/Land issue)
5. Inconvenience, costly and
process delay.
6. Costly payment, administrative
burden and delays.
Note:
This approval is treated the same as
establishing a new facility (hospital),
therefore undergoes the burdensome
building approval processes.
1. All applications have to be sent to
Putrajaya. This is inconvenient for
hospitals located in other states.
2. Medicine Advertisements Board (MAB)
has recently introduced this control on
printed materials for internal distributions
(information for medical staffs and
patients).
3. Lots of paperwork on number of hard
copies needed in application, and also as
hospitals produced many such materials
throughout the year.
4. Too many changes required to
submissions because there is no
established guidelines by regulators.
5. Different requirements from different
regulators as local authorities also
regulate advertisements.
6. No communication or information on
revisions on requirements. Only knew
upon application.
7. Problem with getting approvals for
materials in other languages (Japanese,
Russian, Chinese, etc.).
1. Burdensome in terms of cost,
convenience and delays.
2. Additional burdens and also
delays implementation of hospital
educational programs for staff and
patients.
3. High overhead costs and total
compliance costs. Delays to
hospitals efficiency programs.
4. Increased interactions, delays and
cost burden.
5. Confusion and burdensome to
achieve compliance.
6. Confusion and burdensome to
achieve compliance.
7. Delays and additional burden on
compliance.
2. Medicine
Advertisements
Board Regulations
1976 P.U.(A) 283/76
 Regulation 5. Issue
approvals.
 Regulation 7.
Numbering of
approvals
 Regulation 8.
Application and fees.
95
4.
Workforce regulation
and quality and
availability of
professionals.
Reference:
1.
2.
3.
4.
5.
6.
5
Medical Act 1971
Act 50
Medical (Amend.)
Act 2012
Nurses Act 1950
Act 14 (Revised
1969)
Registration of
Pharmacists Act
1951 Act 371
(Revised 1989)
Registration of
Pharmacists
Regulations 2004
Registration of
Medical Specialist
Other Issues:
1. Export of Healthcare
Services (Health
Tourism)
There is no specific
regulation for health
tourism but hospitals are
expected to register with
Malaysia Health Tourism
Council and to obtain
MSQH accreditation.
2. Personal Data
Personal Data
1.
The quality of nurses graduating from
some private colleges is not up to
employable requirements resulting in
many unemployed graduates.
2. Shortage of experienced and specialist
skilled nurses. Restriction on
recruitment of foreign nurses to mop up
the unemployed graduates.
3. Public hospitals are pinching private
hospitals’ experienced nurses (better
benefits and security).
4. Poor enrolment by hospital nursing
school due to unemployed nurses.
5. Shortage of specific medical specialists
is preventing the expansion of
healthcare services as foreign
professionals are not allowed to
practice here.
6. Suspect poorer quality of medical
graduates as a result of
commercialisation of medical
education.
7. Unbalance expansion of medical
education to the resources (hospitals
and supervisory) for houseman
internship.
8. Incentive for continuous professional
development has been discontinued.
Also difficult to make HRDF claims for
courses not registered, even though
the provider is MOH.
9. Burdensome procedures for engaging
foreign specialists when applying to
MMC. Lots of forms to fill, 11 copies
required and take months.
10. Long wait to get registered with NSR
by specialists.
11. Sabah & Sarawak have restrictions on
employment of professionals from
other states. Immigration restrictions on
“foreign” staff are burdensome.
12. Requires a 24-hour pharmacist on
standby for issuance of drugs.
Assistant Pharmacist is not accepted.
13. Government imposition of program to
mob-up unemployed graduate nurses
with SL1M initiative.
1. Health tourism requires good air services
to host country. Penang hospitals receive
more health tourists with addition flights
to Indonesia.
2. Health tourists to hospital in Melaka need
to come through KLIA, which has poor
transportation to Melaka.
3. Control on advertisements, inefficiency in
licensing and other approvals are stifling
health tourism.
4. Health tourism is not the main focus of
hospital in Klang Valley. Travel
inconvenience and higher costs.
5. Sarawak has added issue with land
travel issues. There is a restriction of
crossing border (180 times/year) for
Indonesian agents.
1. Some hospitals are concern with the
implementation of the new Act. There are
no guidelines and hospitals are
experiencing different requirements from
1.
2.
3.
4.
5.
Difficult and costly to retrained
these graduate; they are not
passionate in the profession.
Burden on hospitals to employ
poor quality graduate nurses by
Nursing Board.
Rising cost of employment for
hospitals.
A hospital tries to re-open
school but unsuccessful.
Difficulty to expand healthcare
services for country to be a
medical hub.
6.
Experience poorer type of
medical graduates.
7.
Burden on hospital to supply
places for houseman internship.
8.
Burdensome application for
claims and cost burden on
hospitals.
9.
Delays, costly, and
administrative burdens.
10. Delays in getting license for new
specialist clinics.
11. Approval delays add to
administrative burden.
12. High staff cost.
13. Hospital has to bear the burden
of training these nurses.
1. Limited inbound flights are
curbing health tourist arrivals in
state.
2. Additional burden of having to
arrange transportation to and from
KLIA.
3. Burdensome regulatory
processes stifling growth.
4. Only a small per cent of health
tourist trade in Klang Valley.
5. Added administrative burdens.
1. Some hospitals are feeling the
administrative burdens of the
regulation.
96
Protection Act 2010
(Act 709)
regulators. Too many restrictions from
interpretation of the requirements.
3. MSQH Accreditation
MSQH is a voluntary
accreditation scheme.
MOH has made it a
requirement for health
tourism.
1. Auditors for MSQH are from medical
professionals from competing hospitals,
not independent.
2. Auditors are not trained or did follow
standard auditing protocols.
1. Perceived threat and unfairness in
assessments.
4. Medical fee
Private Healthcare
Facilities and services
(Private Hospitals and
Other Private
Healthcare Facilities)
Regulations
Thirteenth Schedule
(Regulations No. 433)
5. Information &
reporting
1. The capped on procedure fee stifle
innovativeness as specialists are
reluctant to try new procedures because
the risk (of litigation) outweighs the
returns.
2. Hospitals find it difficult to introduce new
services which are not listed in the
schedule.
1. Stifle innovativeness in private
hospitals.
1. Needed to keep summary of
prescriptions in a book (register). A
physical book is required. IT register is
not accepted (yearly inspection of
books).
2. Need to submit statistics online on
monthly basis, e.g. Nursing Board. Poor
online system is a hassle. DOS also
requires quarterly input.
1. Additional administrative burden
to maintaining a physical book.
2. Perceived inconsistencies and
variations in assessments.
2. Stifling to growth of new services.
2. Administrative burden for hospital.
97
Appendix 5.2: Validation Response on Survey Output
Validation Response No. 1
Issue No. 1: Licence Renewal
No. 5: To be fair, the MOH has been
very judicious in the insisting on
structural changes on older facilities
where it has direct impact on patient
safety. Older operation theatres, ICU,
CCU and Labour
Rooms may require renovations to
meet with current patient safety
requirements.
No. 7: The respondents must be more
specific here.
No. 9: The hospitals can be more
proactive by applying for renewals of
Professional Licenses at least 6
months before expiry.
No. 10-11: Agree, duplication of work,
time lost, cost overruns. This has to be
looked into e.g. set up one stop centre
where all regulatory authorities sit
together.
No. 12: This is tied up with conditions
agreed to when Sabah and Sarawak
became one with Malaysia.
No13: This is part of the requirements
and can be taken up with the MOH.
 Long wait, sometimes until
licence lapsed. Sometimes the
hospitals get their license after
or very near the expiry date.
We hope that MOH can review
the application submitted and
conduct site inspection as soon
as they received the application/
documents so that any missing
document or follow-up action
can be addressed accordingly
within adequate timeframe.
Hence, no delay in issuance of
new license.
 Despite the online application,
hospitals are required to submit
paper application and in 2 sets.
This involved a lot of paperwork.
Also almost every document
requires to be certified true
copies. We feel that there is a
duplication of work and also
waste of time having to do the
same thing twice but differently.
Perhaps MOH should consider
looking at asking hospitals to
only submit any new document
such the latest/valid APC or
certification of the doctors, staff,
etc. instead of getting the
hospital to re-submit everything.
 There also seem to be frequent
changes in the personnel
dealing with licensing, hence,
no consistency and sometime
when the person is new to the
job she doesn’t know very much
when asked about certain
things.
Frustrating because unable to
get clarification or information
needed promptly. Sometimes
the people giving the
information seemed unsure or
lack of knowledge when asked
to clarify certain things. So
when information is not clear it
is difficult to proceed to the next
level.
There should not be too much
changes/ movement of
personnel involved in the
process so that there is proper
follow-up and easy to access.
 Not only board members and
licence holder but also other
5. Estimate cost,
i. Processing and licence fees
: >RM10,000
6. Duration to obtain approval –
approx. 9 months
7. Estimated amount of paper
required for submission – 25
reams of A4 paper.
8. All documents are to be
submitted in 3 sets and all the
certificates are required to be
certified. This includes the
certificates for staff who are
from the non-allied health
professionals and nonexecutive positions.
98
employees (almost everyone) –
require statutory declaration to
be submitted.
Issue No. 2: Planning Approval for expansion, renovation, upgrading
No. 1: It has to be so as spatial
requirements, patient-flow, access to
service areas may change with the
proposed expansion, renovations, etc.
No. 2: The PHFS Regulations are
specific in what is required in terms of
spatial requirements etc. All that the
MOH wants is the final layout and “as
built plans for it to vet.
Applicant should be made to
submit the missing
requirement/document only
instead of having to re-submit the
whole application again.
For renovation work:
1. Estimate of cost – processing
fee of RM1000
2. Duration to get approval: 6 - 9
months
3. Number of interactions
(meetings) with regulators – via
tele-conversation only;
4. Application requires hospital to
provide precise drawing scale to
the renovation. This is costly
and time consuming especially
if the renovations are not major.
Issue No. 3: Approval for advertisements and advertising materials
No. 1: The Medicine Advertisement
Board (MAB) is chaired by the DG and
therefore the applications need to go to
Putrajaya.
No. 2: As a past member of the MAB, I
can affirm that printed materials meant
for use WITHIN the hospital do NOT
require approval.
No: 4. The hospitals should refer to
“Advertising Guidelines for Healthcare
Facilities and Services (Private
Hospitals, Clinics, Radiological Clinics
and Medical Laboratories” which came
th
into effect on the 27 of July 2010. This
is also available in the Pharmacy
Division MOH Website.
Issue no. 4: Workforce regulation and quality and availability of professionals.
No. 1-4: Problem brought about by the  To produce quality nurses, the
Ministry of Higher Education in its
Nurse Educators and Clinical
approval of far too many private
Instructors (CI) themselves
nursing colleges.
should be qualified to teach and
No. 5: Foreign Medical Specialists can
mentor the student nurses.
be brought in subject to them meeting
Some of the CIs are graduates
requirements of the Malaysian Medical
with only 1 or 2 years nursing
Council (MMC). This is to ensure they
experience which renders them
possess recognized post-graduate
unfit and unqualified to mentor
qualification, come from recognized
the student nurses.
medical schools and have sufficient
 The MOH should not take short
post graduate experience as
cut by employing experienced
determined by the MMC. The intention
nurses working and trained in
is NOT to have a closed-shop policy
the private sector to work for
but more on ensuring only qualified and
them, leaving the private
experienced foreign specialists get to
hospitals with only fresh
practice in our country. This not unique
graduates to run the wards.
to Malaysia
 The MOH should relax the
No. 7: Private hospitals WANTING to
requirement of hiring qualified
take in housemen will first have to meet
and skilled foreign specialists to
requirements as set by the MOH. I
work in Malaysia. The same
have been involved in meetings with
should be extended to local
the MOH on this issue and to date, I do
Malaysians working overseas
not know of any private hospital which
who wish to come back to serve
provides houseman training.
the country. More incentives
No. 9: Same as No.5 in above.
should be given to them to
99
Hospitals should look at the
requirements of the MMC (as in its
website) or speak to the Secretary of
the MMC AND put in the applications
early.
No. 12: Yes it is a requirement and
hospitals should willingly spend some
money to engage the required number
of Pharmacists - patient safety being
the issue here.
No. 13: SLIM is not an imposition by
the MOH as yet.
return to Malaysia.
Reduce the number of
documents required and speed
up the registration process.
 Should allow qualified and
trained Asst. Pharmacist to be
on standby/on-call.
Issue no. 5: Export of Healthcare (Health Tourism)
No response
Issue No. 6: Personal Data Protection
Act 709: It relates to Patient
Confidentiality and has to be addressed
by the hospitals.
Issue No. 7: MSQH Accreditation
True to some extent.
Issue no. 8: Regulated Medical Fees
Singapore had the Professional Fee
Schedule for Medical specialists as in
our country but later did away with it.
Yes the MOH can consider doing the
same too.
Issue No. 9: Information & reporting
Information and Reporting. Yes it could
be reviewed and streamlined by the
MOH.
100
Appendix 7.1: Reports of Meeting with the MOH
DISCUSSION ON REDUCING UNNECESSARY REGULATORY BURDENS (RURB) –
SETTING UP AND OPERATING A PRIVATE HOSPITAL
Industry Concerns & Recommendations
Date
:
19 November 2013 (Tuesday)
Time
:
3.00p.m – 12.30p.m
Venue
:
Bilik Mesyuarat CKAPS, Tingkat 3 Blok E1, KKM, Putrajaya
1.
2.
3.
4.
5.
6.
7.
Dr. Ahmad Razid Salleh, Pengarah, Pentadbiran (MOH)
Dr. Afidah Ali, Timbalan Pengarah, CKAPS (MOH)
Dr. Alicia Liew Hsiao Hui, KPP, CKAPS (MOH)
Mr. Goh Swee Seang, MPC Associate
En. Alamin Rehan, MPC
Ms. Musfirah, MPC
Pn. Jamaliah Daud, MPC (WGILF Secretariat)
Attendance
Main Discussion Points:1.
MPC shared the slide presentation on RURB on setting up and operating a Private Hospital (please
refer to the attachment). Some of the discussion points are as follows:Item / Concern
1.
Certified APC
Discussion Points
 Online System:
 CKAPS is moving towards information-based
input. No more APC two copies of the renewal
documents required.
 In-house system has been developed for online
input of application (renewal of APC)
information. The system shall allow medical
professionals to update and check on their
professional information with declaration of
compliance or “Aku Janji” at the end of the form,
to certify that the information provided by them
was correct. The system is an online “manual
check” and not yet integrated with other systems
e.g. MMC, BLESS.
 Enforcement (implementation) is targeted by
January 2014.
 MOH system has been initiated in RMK9,
however various system issues faced e.g. no
link to clinics’ database, network data
communication issues and no unique ID
assigned for personnel’s (medical practitioner’s)
identification.
 APC application and renewal period / frequency:
 Yearly renewal is seen as burdensome for both
regulators and business – as it happened at the
end of the year, in December.
 However, change in the renewal period or
frequency requires amendment to the
regulation. This is up to the council board to
deliberate and act.
 Annual renewal is required for MOH to ensure
that the medical practitioners are still practising
at the stated place of practice (private hospitals
or clinics), i.e. as per their registration record;
 APC determines the place of practice; thus
101
Item / Concern
Discussion Points
necessary for licensing renewal;
It is in the planning that MMC will also monitor
the practitioner’s performance for credentials,
privileges and continuation of medical
education.
 APC application vs. notification:
 APC application is a requirement by the act;
hence self-notification (similar to renewal of
driving license, at any particular time) may not
be possible under current regulation.
 APC on-site audit:
 Two years after renewal, inspection is
conducted by MOH with state agency;
 On-site audit is to check on evidences and
confirm submission of the documents as defined
in the requirement (stated place of practice,
expiry, staffing, OT records, etc.);

2.
Planning
approval for
expansion

Less detailed that the application of a new hospital
establishment, thus there is no need to change the
license to incorporate the change (expansion)
3.
Advertising
approval

The approval process is currently handled by Lembaga
Iklan Ubat (Medicines Advertising Board)
There is a proposal to move the approval process to
CKAPS but this requires change in both acts

4.
Incident
Reporting

Required under the Act, MOH collects the reports but so
far no analysis has been done.
5.
Dealing with
licensing officers

Business finds it difficult to meet or reach MOH officers
regarding their applications;
Common scenario exists where business
representatives prefer to meet with the head and senior
officers only.
To handle this issue, MOH has allocated a special client
day on every Friday of the week to consult with
business.


2.
6.
Performance
indicators

MOH is considering using performance indicators in
future for private hospital regulation and would also be
interested in study on impact of regulation on private
hospital performance.
7.
Continuing
education on
business

This is normally done on a one-off basis. There is no
planned allocation for this and lack of expertise
(resource) to conduct it on a programmed basis.
8.
Six-month
application lead
time

The intention is to reduce the probability of license
lapse.
MPC shall maintain continuous engagement with MOH upon decision on the implementation of the
recommendations (focusing on reviews on regulatory framework), if any.
102
Appendix A: Study Methodology (Presentation by Sue Holmes)
APPENDIX A: STUDY METHODOLOGY BY SUE HOLMES
Tips for gathering useful information
on unnecessary regulatory burdens
Sue Holmes
2 April 2013
1
1.
2.
3.
4.
5.
6.
7.
Sources of information
existing data and analysis
interviews with one stakeholder
surveys
synthetic analysis
focus groups
consultants
submissions
103
existing data and analysis
Very important because:
• less effort than creating your own
• avoids unnecessary repetition
• reduces ‘review fatigue’
• may foreworn you of what will not work
Action:
• list existing information sources
• ensure each is checked for content by at least one team
member who then shares what he/she has read
interviews with one stakeholder at a
time
Important because:
• stakeholder more likely to share if not worrying about what is revealing
to others
• able to explore in detail issues of concern to the particular stakeholder
• able to gather different views on the one issue – where you get
conflicting views this is an indication that this may be an important issue
Approach:
• need to guarantee confidentiality and will only make public information
gained after clearing with the stakeholder
• need to create a sense of trust and that undertaking of confidentiality is
never breached – does this create any issues over freedom of
information laws, etc?
104
interviews with one stakeholder, ctd
Preparation:
• have one team member prepare background notes, usually from
information available on the internet, about the activities, interests,
mission statement, etc of the stakeholder
Conduct of the interview:
• provide background to the review, that are interested in reducing
burdens on business while still achieving social, economic and
environmental objectives, and part of a broad reform programme
• explain comments are confidential and will only make public
information gained after clearing with the stakeholder
• explain what you consider to be under scope both in terms of industries
and regulation – broadly defined - and that you are interested in both
the written regulation and how it is administered
• move to asking questions which should start general and become
gradually more specific, if necessary
interviews with one stakeholder, ctd
Conduct of the interview, ctd:
• sorts of questions include:
• Which regulations concern you the most? Why?
• Which regulations are the hardest to comply with?
• Which regulations do you think are too onerous given what they are trying to
achieve?
• Do you think any regulations are not justified at all?
• Are some regulatory requirements inconsistent?
• Do you consider inspectors and other regulatory administrators do a good or a poor
job? In what ways?
• Do you find inspectors and administrators are consistent in their decisions?
• Do you find they are helpful or unhelpful in advising you how to comply? Are there
any publicly available guidelines?
• How long do regulators take to respond to applications, etc? [Other questions based
on the sources of unnecessary burdens and the types of adverse impacts on
business contained in slides on core concepts.]
• Do you have any suggestions for reducing the burden of compliance of regulations?
• Ask any specific questions that you have due to research you have already done or
because of issues raised by other stakeholders – do not share who has raised the
issue with you previously unless is already public.
• Are there any other issues you want to suggest we should cover in our review?
105
surveys
Useful because:
• can ensure statistical soundness of observations and so can make
statements about the whole sector or industry including
significance of reg’y costs
• ensure ask all those surveyed the same questions and can
compare responses
• as with interviews are also able to gather different views on the
one issue
Disadvantages:
• take a long time to develop and then to get responses and to
process and analyse
• risk of low response rate, especially from businesses
Need to tailor length and types of questions to the target
population.
synthetic analysis
Involves:
• a desk based analysis of how long it takes to fulfil regulatory
requirements, such as filling in an application form
Benefits:
• produces data which can be compared across jurisdictions or
regulators
Disadvantages:
• may not be representative of actual business experience
• cannot capture all the substantive elements that businesses have
to undertake for example, the time taken to attend interviews or
lodging forms
106
focus groups
Disadvantages:
• limits what people may want to say to you
• PC’s experience was that businesses had limited knowledge
of the cost of compliance so focus groups were not cost
effective
• also suffered from low attendance by businesses
Advantages:
• most useful after the Green Report has been released
because can see how widely held are assessments of the
report and may lead to collective agreement on solutions
Checklist for assessing the
quality of written regulation
1.
2.
3.
4.
5.
6.
7.
Minimum necessary to achieve objectives
Only prescriptive where fully justified
Accessible, transparent and accountable
Integrated and consistent with other laws
Communicated effectively
Mindful of the compliance burden imposed
The regulation was prepared using Regulation Impact Analysis
Source: Productivity Commission 2006, page 54, based on: Argy and Johnson (2003); OECD
(1995); Office of Regulation Reform (Vic) (1996); COAG (2004) — as amended; ORR (1998);
and Cabinet Office (UK) (2000).
107
quality of administration and
enforcement
1. Maximises the potential for voluntary compliance
2. Maintains an ongoing dialogue between government and the
business community
3. Use risk analysis to identify areas of intrinsically potential high
adverse impacts and/or possible low compliance
4. Develop a range of enforcement instruments so regulators can
respond to different types of non-compliance – responsive
regulation
5. Adequately resource regulatory agencies and improve their
governance – transparency and accountability – to reduce
compliance burdens on business
6. Monitor compliance trends in order to gauge the effectiveness
and efficiency of enforcement activities
Source: Based on Parker (in OECD 2000).
References
•
Information on information sources can be found at:
•
Appendix B ‘Approach to gathering information’ of Performance Benchmarking of Australian
Business Regulation: Occupational Health and Safety, 2010. This includes an explanation of
how existing information, surveys – including survey questions for regulators and businesses and synthetic sources were used.
•
and New Zealand Business Regulation: Food Safety, 2009. This includes an explanation of
how existing information, surveys – including survey questions for regulators and for one
retailer - and a consultancy on regulatory differences were used.
•
Business Regulation: Planning, Zoning and Development Assessment, 2011. This includes an
explanation of how surveys – including survey questions for state regulators, local
government, the community and developers - were used.
•
Business Regulation: Local Government as Regulator, 2012. This includes an explanation of
how surveys – including survey questions for state regulators, local government and
businesses - were used.
Performance Benchmarking of Australian Business Regulation: Cost of Business Registrations,
2008 made extensive use of synthetic estimates.
•
108
Sources of unnecessary burdens on
business
•
•
•
•
•
•
•
•
•
•
•
excessive regulatory coverage - regulations that encompass more activities than
required to achieve their objective
prescriptive regulation that excessively limits the ways in which businesses may
meet the underlying objectives of regulation
overly complex regulation
inconsistent regulatory frameworks across jurisdictions affect businesses
operating across state or regional borders
regulations which do not allow businesses to use the best technology, meet
consumer demand and/or generally be flexible to changing circumstances
similarly, rules or enforcement approaches can create perverse incentives to
operate in less efficient ways, such as distorting choice of inputs
multiple regulations or regulators which overlap or conflict
unwieldy licence application and approval processes
excessive time delays in obtaining responses and decisions from regulators
unnecessarily invasive regulator behaviour, such as overly frequent inspections or
information requests
inconsistent application or interpretation of regulation by regulators
Types of adverse impact on business
• administrative and operational costs
• reporting, record keeping, publications and
documentation
• education and consulting costs required to interpret
legislation and guidelines)
• changing the way products are produced or services are
provided
• changing the characteristics of what is produced
• lost production and marketing opportunities
109
quality of written regulation
1.
2.
3.
4.
5.
6.
7.
Minimum necessary to achieve objectives
Only prescriptive where fully justified
Accessible, transparent and accountable
Integrated and consistent with other laws
Communicated effectively
Mindful of the compliance burden imposed
The regulation was prepared using Regulation Impact Analysis
Source: Productivity Commission 2006, page 54, based on: Argy and Johnson (2003); OECD
(1995); Office of Regulation Reform (Vic) (1996); COAG (2004) — as amended; ORR (1998);
and Cabinet Office (UK) (2000).
Source: Sue Holmes
110
Appendix B: Study Questionnaires and Conceptual Framework
Interview Questionnaires
Primary Questions:
A. General Questions for hospital operations
1.
Which regulations concern you the most? Why?
2.
Which regulations are the hardest to comply with?
3.
Which regulations do you think are too onerous given what they are trying to achieve?
a. What do you think of the current costs involved in getting your application to setup a
business?
b. How about the application’s processing time? Which exact processing stage is the most
burdensome to your setting up the business?
4.
Do you think any regulations are not justified at all?
5.
Are some regulatory requirements inconsistent?
6.
Do you consider inspectors and other regulatory administrators do a good or a poor job? In what
ways?
7.
Do you find inspectors and administrators are consistent in their decisions?
8.
Do you find they are helpful or unhelpful in advising you how to comply? Are there any publicly
available guidelines?
9.
How long do regulators take to respond to applications, etc?
10. Do you have any suggestions for reducing the burden of compliance of regulations?
11. Are there any other issues you want to suggest we should cover in our review?
Supplementary Questions
B. Specific Questions for Health/Medical Tourism:
1. What types of services/treatments offered? (Diagnostic, treatment, others)
2. Why and how do foreign patients come to you? (Referral? Excellence? Price? Overall costs? Ease of
entry (medical visa)? Supporting services (travel, transport, accommodation, others)? Funding
arrangement?)
3. Who are your customers (market)? (Which countries? Percentage? What types you want? Medical
tourists? Foreign students? Others?)
4. What are your overall capacity and utilization, in terms of facility, human resources? Can you handle
more? If not what changes what increase your capacity to handle more?
5. What per cent of business for health/medical tourism? (Number patients, admissions (out-patients, inpatients)? capacity used? revenue? What are other potential markets you are looking at?)
6. What are your constraints/challenges for more medical tourists? (Regulations? Marketing? Human
resource? Capacity? Supporting services? Culture & language?)
7. What information challenges faced by you? (On your market? By foreign patients? Marketing and
promotion?) Knowing legal regulatory requirements and what will meet them?
8. What regulatory issues faced by your foreign patients? (Entry? Length of stay? Travel and
accommodation? To accompanying helper/relatives?)
9. What current regulatory burdens you faced in medical tourism? (What institutional, regulatory and other
arrangements which impede efficiency? Regulation effectiveness? Administrative efficiency? Information
availability and accessibility? Facilitating/ambivalence of regulators?)
10. What sources of waste and inefficiency in the delivery of you services and possible options for
change?
11. What kinds of institutional, regulatory and other arrangements that can assist the medical tourism
industry? (Marketing & advertising? Information? International referral network? Improving
efficiency/quality/capacity? Medical visa? Supporting services?)
C. Specific questions on health workforce:
1. What are the classifications of health care workforce? (Professional and non-professional? Doctors,
Nurses, Dentists, Pharmacists, Allied health professionals, others.)
2. What are the current workforce issues? (Shortages: types, skills and competencies, specialists…
types, quality and quantity, others?)
3. What are the institutional, regulatory and other factors that affect supply, entry, mobility and
retention of health care workforce? Doctors, specialists, nurses, allied health professionals, etc.?
What are your views on these factors:
a. National (policy) health service planning and health workforce planning?
b. Differences and common goals across organisations and sectors?
111
4.
5.
6.
7.
8.
9.
10.
11.
c. Supply… VET, undergraduate and postgraduate education and curriculum, clinical training?
d. Workforce participation?
e. Workforce satisfaction and productivity?
Are current policies and regulatory regimes impeding future workforce requirements on new
professions, skills, competencies? (From perspectives of technology changes, information
technology, higher income, and aging population?)
Are current regulations and practices impeding workforce change?
a. Professional registration,
b. Clinical training,
c. Continuous Professional Development,
d. entrenched customs and practice (codes),
e. fragmented roles (different registration bodies),
f. inflexible regulatory practices
g. Payments
Is the current regulatory administration on medical workforce burdensome to your
operation/business? (Cost, time, interactions, others?) In what way can you suggest for the
regulator to improve the administration of regulation?
What do you think current restrictions on foreign health care professionals? Is it impeding growth,
competition, knowledge transfer, others? How would you suggest that foreign health professionals
be regulated in the future?
Do you have any suggestion how and which area the government should do to further improve the
health workforce? (Skills, competencies, job redesign, retention and deployment, job satisfaction
and productivity, meeting changing technological and business requirements?)
Should the government be reviewing the existing health care workforce legislation? (Medical Act,
Nurses Act, etc.?) Which areas or aspects (regulatory bodies and their roles, associations) and
why?
Do you have any other suggestions:
a. to improve current process of employing local and foreign medical workforce?
b. to develop, expand or optimize future workforce in healthcare industry
Are there are any other issues you would like raise with us? Are there any particular people or
organizations who you think we should talk to?
Concepts of Regulatory Burdens and Regulatory Burdens Dimensions
A. Measures quantifying burdens:
1. Costs (direct… fees, charges; indirect… revenue loss, overheads)
2. Time (days of contact with regulators)
3. Interactions (with regulators for each process)
4. Frequency (times per period)
5. Number of types (license, inspection, registration, etc.)
6. Number of regulators/agencies
7. Human resources (internal allocation)
8. Professional services (external bought-in)
9. Capital expenditure (ICT, other facilities)
B. Types of control actions and burdens:
1. Approvals (for plans, proposals)
2. License to operate/use
3. Certificate of practice (application and renewal)
4. Permits to do
5. Inspections (periodic, random)
6. Registration (application, CPD and renewal)
7. Notification
8. Reporting (periodic, incident-base, as-requested)
9. Standards, agreements and third-party certification (quality, safety, environment, out-sourcing
contracts)
C. Regulatory process & regulators (Principles and Practices)
1. Transparent – clear rules and processes
2. Accountable – explain the performance
3. Consistent – the same approach is applied within and across sectors
4. Proportionate – actions are governed by the risk
5. Targeted – focus on the most important health/safety outcomes
112
6. Codes of practice/Practice guidelines – published and make known, eg. UK Regulator’s Compliance
Code
7. Competency – knowledge, skills and experience
8. Professionalism & ethical conduct (Facilitating or ambivalence)
9. Information (Availability and Accessibility, Comprehensiveness and Clarity)
D. Unnecessary burdens might arise from:
11. excessive coverage of the regulations, including ‘regulatory creep’ — that is, regulations that
encompass more activity than was intended or required to achieve their objective
12. subject-specific regulations that cover much the same ground as other generic regulation
13. unduly prescriptive regulation which does not allow businesses to use the best technology, choose
the best inputs, meet the best inputs, meet customer demand and/or limits the ways in which
businesses may meet the underlying objectives of regulation
E. Conceptual Framework
Source: Author
113
Appendix C: APHM Members List
Member Hospitals Of APHM By States
(JOHOR)
NAME
ADDRESS
WEBSITES
Colombia Asia
Hospital
Persiaran A Fiat, Taman
Kesihatan A Fiat, 79250
Nusajaya,
www.colombiaasia.c
om/nusajaya
T : +607 2339999
Hospital Penawar
17 & 18 (A-D), Pusat
Perniagaan Pasir
Gudang, 81700, Pasir
Gudang
www.hospitalpenaw
ar.com
T : +607 2521800
Lot PTD 7522, Jalan
Kempas Baru,
www.kempasmedical
.com
T : +607 2368999
-
T : +607 4317579
Kempas Medical
Centre
CONTACT NUMBER
NO.OF BEDS
82
F : +607 2339900
50
F : +607 2518199
47
F : +607 2368222
81200, Johor Bharu
Klinik Rakyat dan
Hospital Bersalin
5-2, Jalan Zabedah,
KPJ Johor
Specialist Centre
39-B, Jalan Abdul Samad
80100 Johor Bahru
www.jsh.kpjhealth.co
m.my
T: +607-223 7811
F: +607-224 8213
263
Medical Specialist
Centre
Wisma Maria Jalan Ngee
Heng
80100 Johor Bharu
-
T: +607-2243888
F: +607-2236785
70
Pantai Hospital
Batu Pahat
95, Jalan Bintang Satu
Taman Koperasi Bahagia
83000 Batu Pahat
www.pantai.com.my
/pantai-hospitalbatu-pahat
T: +607 4338811
F: +607 4331881
106
Pelangi Medical
Centre
68A Jalan Kuning Taman
Pelangi
80400 Johor Bahru
-
T: +607-3331263
F: +607-3345823
12
Pusat Pakar
Kluang Utama
1 Susur 1, Jalan Besar
86000 Kluang
-
T: +607-7718999
F: +607-7728999
30
Pusat Pakar
Perbidanan &
Sakitpuan Raja
133-1 Jalan Salleh
84000 Muar
-
T: +606-9522224
11
Puteri Specialist
Hospital
33, Jalan Tun Abdul
Razak (Susur 5)
81100 Johor Bahru
www.psh.kpjhealth.c
om.my
T: +607-225 3222
F: +607-223 8833
158
Regency Specialist
No. 1 Jalan Suria, Bandar
Seri Alam
www.regencyspeciali
T: +607-3817700
58
83000, Batu Pahat,
18
F : +607 4323022
114
Hospital
81750 Masai, Johor
Bahru
st.com
F: +607-3887666
T.K Tan O&G
Specialist Clinic
No.2, Jln Sri Perkasa 1/5
Taman Tampoi Utama,
81200 Johor Bahru
-
T: +607-2411100
10
Tey Maternity
Specialist & Gynae
Centre
21 Jalan Sulaiman
84000 Muar
-
T: +606-932 9187
19
(KEDAH)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Kedah Medical
Centre
175, Jalan Pumpong,
Mukim Alor Merah
05250 Alor Setar
www.kedahmedical.c
om.my
T: +604-7308878
F: +604-7332869
84
Metro Specialist
Hospital
1, Lorong Metro
08000 Sungai Petani
www.hospitalmetro.c
om
T: +604-4238888
F: +604-4234848
106
Pantai Hospital
Sungai Petani
1 Persiaran Cempaka,
Bandar Amanjaya
08000 Sungai Petani
www.pantai.com.my
/pantai-hospitalsungai-petani
T: +604-442
8888/9999
F: +604-442 6805
80
Putra Medical
Centre
888, Jalan Sekerat, Off
Jalan Putra
05100 Alor Setar
www.putramedicentr
e.com.my
T: +604-7342888
F: +604-7348882
124
(KELANTAN)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Kota Bharu
Medical Centre
Pt 179-184, Jalan Sultan
Yahya Petra, Lundang,
15200 Kota Bharu
www.kbmc.com.my
T: +609-7433399
F: +609-7478271v
44
KPJ Perdana
Specialist Hospital
Lot PT 37 & 600,
Seksyen 14, Jalan
Bayam, 15200 Kota
Bharu
www.perdana.kpjhea
lth.com.my
T: +609-7458000
F: +609-7472877
110
Pusat Rawatan
Islam An-Nisa
JKR 284, Jalan Sultan
Ibrahim
15050 Kota Bharu
www.annisa.com.my
T: +609-741 4444
F: +609-747 8197
17
115
(MELAKA)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Mahkota Medical
Centre
3 Mahkota Melaka Jalan
Merdeka
75000 Melaka
www.mahkotamedic
al.com
T: +606-2848222
F: +606-281 0560
356
Pantai Hospital
Ayer Keroh
No.2418-1 KM 8 Lebuh
Ayer Keroh
75450 Melaka
www.pantai.com.my
/pantai-hospitalayer-keroh
T: +606-231 9999
120
Putra Specialist
Hospital
169 Jalan Bendahara
75100 Melaka
www.psh-group.com
T: +606-283 5888
F: +606-281 0518
F: +606-231 3299
225
(NEGERI SEMBILAN)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Columbia Asia
Hospital
No. 292, Jalan Haruan 2,
Oakland Commercial
Center,
70300 Seremban
www.columbiaasia.c
om/seremban
T: +606-6011988
F: +606-6011848
65
KPJ Seremban
Specialist Hospital
Lot 6219 & 6220 Jalan
Toman 1 Kemayan
Square, 70200
Seremban
www.ssh.kpjhealth.c
om.my
T: +606-7677800
F: +606-7675900
137
Mawar Renal
Medical Centre
No. 71, Jalan Rasah
70300 Seremban
www.mawar.com.my
T: +606-7647048
F: +606-7647092
55
N.S Chinese
Maternity
Hospital
Lot 3900 Jalan Tun Dr
Ismail
70200 Seremban
-
T: +606-7622104
F: +606-7630105
74
NCI Cancer
Hospital
PT 137/7, Jalan BBN 2/1
71800 Nilai
www.nci.com.my
T: +606-8500 999
F: +606-8500 733
25
116
(PAHANG)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Darul Makmur
Medical Centre
Jalan Kempadang
Makmur, Taman
Kempadang Makmur,
26060 Kuantan
www.dmmc.com.my
T: +609-5349988
F: +6095349966/9987
91
Kuantan Medical
Centre
No.1 Jalan Tun Ismail 9
25000 Kuantan
www.kmcsb.com.my
T: +609-5142828
F: +609-5147688
79
Kuantan Specialist
Centre Sdn Bhd
51 Jalan Alor Akar,
Taman Kuantan
25250 Kuantan
www.ksh.kpjhealth.c
om.my
T: +609-5678588
F: +609-5678098
81
(PERAK)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Apollo Medical
Centre
271 Jalan Taming Sari
34000 Taiping
-
T: +605-8056000
F: +605-8076000
30
Colombia Asia
Hospital, Taiping
No.5, Jalan Perwira
34000 Taiping
www.colombiaasia.c
om/taiping
T: +605-8208888
F: +605-8208999
82
Hospital Fatimah
1 Lebuh Chew Peng
Loon, Off Jalan Dato' Lau
Pak Khuan, Ipoh Garden,
31400 Ipoh
www.fatimah.com.m
y
T: +605-545 5777
F: +605-547 7050
226
Kinta Medical
Centre
20 Jalan Chung Thye
Phin
30250 Ipoh
www.kmc.com.my
T: +605-2542125
F: +605-2543264
48
KPJ Ipoh Specialist
Hospital
26 Jalan Raja Dihilir
30350 Ipoh
www.ish.kpjhealth.co
m.my
T: +605-2408777
F: +605-2541388
260
Pantai Hospital
Ipoh (Paloh
Medical Centre
Sdn Bhd)
Lot No. 126, Jalan
Tambun
31400 Ipoh
www.pantai.com.my
/pantai-hospital-ipoh
T: +605-540 5555
F: +605-545 1163
121
Perak Community
Specialist Hospital
277, Jalan Raja
Permaisuri Bainun (Jln
Kampar), 30250 Ipoh
www.pcsh.com.my
T: +605-2545594
F: +605-2554288
75
Taiping Medical
Centre
45 - 49, Jalan Medan
Taiping 2, Medan
Taiping, 34000 Taiping
www.tmc.kpjhealth.c
om.my
T: +605-8071049
F: +605-8063713
48
117
(PULAU PINANG)
NAME
ADDRESS
WEBSITES
CONTACT
NUMBER
NO.OF
BEDS
Gleneagles
Medical Centre
1 Jalan Pangkor
10050 Pulau Pinang,
Malaysia
www.gleneagles-penang.com
T: +604-220
2151
F: +604-226
2994
227
Hope Children
Hospital
25 B-D, Jalan Gottlieb
10350 Pulau Pinang,
Malaysia
-
T: +6042286557
F: +6042286559
29
Island Hospital
308 MacAlister Road
10450 Pulau Pinang,
Malaysia
www.islandhospital.com
T: +604-228
8222
F: +604-226
7989
192
KPJ Penang
Specialist Hospital
No 570 Jalan Perda
Utama, Bandar Perda,
14000 Bukit Mertajam
www.kpjpenang.kpjhealth.com.my
T: +604-548
66 88
F: +604-548
6700
130
Lam Wah Ee
Hospital
Jalan Tan Sri Teh Ewe
Lim
11600 Georgetown
www.hlwe.com.my
T: +604-657
1888
F: +604-657
0940
442
LohGuanLye
Specialists Centre
238, Macalister Road /
19 & 21 Logan Road,
10400 Pulau Pinang,
Malaysia
www.lohguanlye.com
T: +604-238
8888
F: +604-229
0287
265
Mount Miriam
Cancer Hospital
23, Jalan Bulan Fettes
Park, Tanjong Bunga,
11200 Pulau Pinang,
Malaysia
www.mountmiriam.com
T: +604-890
7044
F: +604-890
1583
40
Pantai Hospital
Penang
82 Jalan Tengah, Bayan
Baru,
11900 Bayan Lepas
www.pantai.com.my/pantaihospital-penang
T: +604-643
3888
F: +604-643
2888
180
Peace Medical
Centre
81 Lorong Selamat
10400 Pulau Pinang,
Malaysia
-
T: +6042266032
F: +604-228
2472
24
Penang Adventist
Hospital
465, Jalan Burma,
10350 Georgetown
www.tanjungmedical.com.my
T: +6042262323
F: +6042299008
94
118
Tanjung Medical
Centre
473 Jalan Burma
10350 Pulau Pinang,
Malaysia
www.tanjungmedical.com.my
T: +6042262323
F: +6042299008
94
Tropical Medical
Centre (Penang)
12-A, Jalan Masjid
Negeri
11600 Pulau Pinang,
Malaysia
www.tmcpenang.com
T: +6048299188
F: +6048286118
24
(SABAH)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Kota Kinabalu
Specialist Hospital
Lorong Pokok Tepus 1,
Off Jalan Damai
88300 Kota Kinabalu
www.dsc.kpjhealth.com
T: +6088-222922
F: +6088-255692
53
Rafflesia Medical
Centre
Lots 5-8 Millennium
Commercial Centre Jalan
Lintas Kepayan
Penampang
88200 Kota Kinabalu
www.rafflesiamedicalce
ntre.com
T: +6088-272620 / 630
F: +6088-272640
14
SMC HealthCare
Sdn Bhd (aka.
Sabah Medical
Centre)
Lorong Bersatu, Off
Jalan Damai, Luyang
88838 Kota Kinabalu
www.sabahmedicalcent
re.com
T: +6088-211333
F: +6088-272622
175
(SARAWAK)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
Columbia Asia
Hospital Bintulu
Lot 3582, Block 26,
Kemena Land District,
Jalan Tan Sri Ikhwan,
Tanjung Kidurong
97000 Bintulu
www.columbiaasia.com
/bintulu
T: +6086-251888
F: +6086-252888
19
Columbia Asia
Hospital Miri (fka.
Selesa Medical
Centre)
Lot 498 Jalan Jee Poh
2,Off Jalan Bulatan Pujut,
58000 Miri
/miri
T: +6085-437755
F: +6085-425677
45
KPJ Sibu Specialist
Medical Centre
52A-F Brooke Drive
96000 Sibu
www.ssmc.kpjhealth.co
m.my
T: +6084-329900
F: +6084-327700
26
Kuching Specialist
Hospital
Lot 10420 Block 11,
Muara Tebas Land
District, Tabuan Stutong
Commercial Centre,
www.kcsh.kpjhealth.co
m.my
T: +6082-365777
F: +6082-364666
59
119
Jalan Setia Raja , 93350
Kuching
Miri City Medical
Centre
Lot 916-920 Jalan
Hokkien, C.D.T. 100
98009 Miri
www.mcmcmiri.com
T: +6085-426622
F: +6085-438096
30
Normah Medical
Specialist Centre
P.O.Box 3298
93764 Kuching
www.normah.com
T: +6082-440055
F: +6082-442600
130
Timberland
Medical Centre
Lot 5164-5165 Block 16
KCLD 2 1/2 Mile Rock
Road Taman Timberland
93250 Kuching
www.timberlandmedica
l.com
T: +6082-234 466
F: +6082-232 259
72
ADDRESS
WEBSITES
(SELANGOR)
NAME
CONTACT NUMBER
NO.OF BEDS
Arunamari
Specialist Medical
Centre
168 Jalan Batu Unjur 1,
Bayu Perdana, 41200
Klang
-
T: +603-33243288
F: +603-33243288
67
Assunta Hospital
Lot 68 Jalan Templer
46990 Petaling Jaya
www.assunta.com.my
T: +603-7780 7000
F: +603-7781 4933
344
Bandar Baru
Klang Specialist
Hospital Sdn Bhd
No 102, Persiaran
Rajawali / Ku 1, Bandar
Baru Klang, 41150 Klang
www.kpjklang.com
T: +603-33777888
F: +603-33777800
67
Colombia Asia
Hospital Puchong
No. 1, Lebuh Puteri,
Bandar Puteri Puchong,
47100 Puchong
www.colombiaasia.com
/puchong
T: +603-80648688
F: +603-80648788
78
Columbia Asia
Extended Care
Hospital
Lot No 2, Jalan Baung
17/22, Seksyen 17,
40200 Shah Alam
/shah alam
T: +603-55417833
F: +603-55411366
46
Columbia Asia
Hospital Bukit
Rimau
3 Persiaran Anggerik
Eria, Bukit Rimau,
Seksyen 32, 40460 Shah
Alam
/bukit-rimau
T: +603-51259999
F: +603-51259998
84
DEMC Specialist
Hospital
No 4, Jalan Ikhtisas,
Seksyen 14
40000 Shah Alam
www.demc.com.my
T: 03-55151888
F: 03-55151815
130
Hospital Pakar
An-Nur Hasanah
No. 14 & 16, Medan
Pusat Bandar 1, Seksyen
9, 43650 Bandar Baru
Bangi
www.annur.com.my
T: +603-89266036
31
Hospital Pusrawi
No. 62,63 & 64, Jalan
Raja Haroun
-
F: +603-89266067
T: +603-87347570
7
120
SMC Sdn. Bhd.
43000 Kajang
F: +603-87347571
Kelana Jaya
Medical Centre
No. 1, Fas Business
Avenue, Jalan
Perbandaran SS 7,
Kelana Jaya,
47301 Petaling Jaya
www.kjmc.com.my
T: 03-7805 2111
F: 03-7806 3505
23
Klinik Damo &
Pusat Bersalin
Lot 26326/26327
Persiaran Raja Muda
Musa, Jalan Telok
Gadang
41200 Klang
-
T: +603-33710757
F: +603-3332360
20
Klinik Pakar
Wanita Sheela dan
Rumah Bersalin
36,38 & 40, Jalan Batai
Laut 3, Kaw.16, Taman
Intan, Off Jalan Batu 3
Lama, 41300 Klang
-
T: +603-3341 4500 /
3341 2834
F: +603-3343 6926
21
KPJ Ampang
Puteri Specialist
Hospital
No. 1, Jalan Mamanda 9,
Taman Dato Ahmad
Razali, 68000 Ampang
www.apsh.kpjhealth.co
m.my
T: +603-4270 2500
F: +603-4270 2443
230
KPJ Damansara
Specialist Hospital
119 Jalan SS20/10
Damansara Utama,
47400 Petaling Jaya
www.kpjdamansara.co
m
T: +603-7122598
F: +603-7122617
209
KPJ Kajang
Specialist Hospital
Jalan Cheras
43000 Kajang
-
T: +603-87692999
F: +603-87692831
145
KPJ Selangor
Specialist Hospital
Lot 1, Jalan Singa 20/1,
Seksyen 20
40300 Shah Alam
www.kpjselangor.kpjhe
alth.com.my
T: +603-5543 1111
F: +603-5543 1722
173
Metro Maternity
Sdn Bhd
34, Jalan Pasar
41400 Klang
www.metromaternity.co
m
T: +603-3341 2277
F: +603-3342 4479
33
Pantai Hospital
Klang
42 Persiaran Raja Muda
Musa
41100 Klang
www.pantai.com.my/pa
ntai-hospital-klang
T: +603-3374 2020
F: +603-331 4979
87
Pusat Rawatan
Islam Az-Zahrah
34, Medan Pusat Bandar
1, Section 9
43650 Bandar Baru
Bangi
www.azzahrah.my
T: +603-8921 2525
F: +603-8921 2677
23
QHC Medical
Centre
11A, Jalan USJ 10/1A,
UEP
47620 Subang Jaya
-
T: +603-80245760
F: +603-7316342
11
Salam Medical
Centre
4-12 Jalan Nelayan 19/B
Section 19
40300 Shah Alam
www.salam.com.my
T: +603-5548 5161
F: +603-5541 0503
26
Sime Darby
Medical Centre
No 2, Jalan Lapangan
Terbang, Seksyen U2,
www.simedarbyhealthc
are.com/companyinfo/facilities/sdmc-ara-
T: 03-56391212
F: 03-78420923
75
121
Ara Damansara
40150 Shah Alam
damansara
Sime Darby
Medical Centre
Subang Jaya
1 Jalan SS12/1A
47500 Subang Jaya
www.simedarbyhealthc
are.com/companyinfo/facilities/sdmcsubang-jaya
T: +603-7341212
F: +603-7335910
393
Sri Kota Specialist
Medical Centre
Lot No.167-172, Jalan
Mohet
41000 Klang
www.srikotamedical.co
m
T: +603-33733636
F: +603-33736888
173
Sunway Medical
Centre
No.5, Jalan Lagoon
Selatan, Bandar Sunway,
46150 Petaling Jaya
www.sunway.com.my/s
unmed
T: +603-7491 9191
F: +603-56324688
185
Tropicana Medical
Centre
No. 11 Jalan Teknologi,
Taman Sains Selangor 1,
PJU 5, Kota Damansara
47810 Petaling Jaya
www.tropicanamedicalc
entre.com
T: +603 6287 1111
F: +603 6287 1212
70
Tun Hussein Onn
National Eye
Hospital
(THONEH)
Lot 2, Lorong Utara B
Jalan Utara
46200 Petaling Jaya
www.thoneh.com
T: +603-77181488 extn
1565
F: +603-7957 5128
44
(WILAYAH PERSEKUTUAN KUALA LUMPUR)
NAME
ADDRESS
WEBSITES
CONTACT NUMBER
NO.OF BEDS
CMC Coop Medical
Centre (formerly
Sambhi Clinic and
Nursing Home)
17-19, Jalan Medan Tuanku
50300 Kuala Lumpur
Malaysia
-
T: +603-26924594
F: +603-26929245
14
Damai Service
Hospital (HQ)
115-119, Jalan Ipoh, First
Mile
51200 Kuala Lumpur
www.dsh.com.my
T: +603-4043 4900
F: +603-4043 5399
53
Damai Service
Hospital
(Melawati)
Lot 9132, 9133 & 9134
Wisma Damai, Jalan Bandar
4 Taman Melawati
53100 Kuala Lumpur
www.dshm.com.my
T: +603-4108 9900
F: +603-4108 9388
50
Dato’ Harnam
E.N.T Specialist
Clinic Sdn Bhd
3rd Floor, UMNO Selangor
Building, 142, Jalan Ipoh,
51200 Kuala Lumpur
-
T: +603-40410092
F: +603-40416336
9
Gleneagles
Hospital Kuala
Lumpur
282-286 Jalan Ampang
50450 Kuala Lumpur
www.gleneagleskl.co
m.my
T: +603-4141 3000
F: +603-4257 9233
311
Hospital Pusrawi
Lot 149, Jalan Tun Razak
www.pusrawi.com.m
T: +603-26875000
111
122
Sdn Bhd
50400 Kuala Lumpur
y
F: +603-26875001
HSC Medical
Centre
Lot 3A-1, Menara HSC, 187
Jalan Ampang, 50450 Kuala
Lumpur
www.hsc.com.my
T: +603-27120866
F: +603-27120766
7I
Imran ENT
Specialist Hospital
62, Jln Ang Seng
50470 Brickfields
-
T: +603-2274 0599
F: +603-2274 0577
7
Institut Jantung
Negara (IJN)
145 Jalan Tun Razak
50400 Kuala Lumpur
www.ijn.com.my
T: +603-2981333
F: +603-2982824
424
KPJ Tawakkal
Specialist Hospital
No 1 Jalan Pahang
53000 Kuala Lumpur
www.tawakal.kpjheal
th.com.my
T: +6034026 7777
F: +6034228063
188
Lourdes Medical
Centre
244 Jalan Ipoh
51200 Kuala Lumpur
www.lourdes.com.m
y
T: +603-40425335
F: +603-40420479
33
Pantai Hospital
Ampang
Jalan Perubatan 1 Pandan
Indah
55100 Kuala Lumpur
www.pantai.com.my
/pantai-hospitalampang
T: +603-4289 2828
F: +603-4289 2829
114
Pantai Hospital
Cheras
NO. 1, Jalan 1/96A, Taman
Cheras Makmur, 56100
Kuala Lumpur
www.pantai.com.my
/pantai-hospitalcheras
T: 603-9132 2022
F: 603-9132 0687
143
Pantai Hospital
Kuala Lumpur
8 Jalan Bukit Pantai
59100 Kuala Lumpur
www.pantai.com.my
/pantai-hospitalkuala-lumpur
T: +603-2296 0888
F: +603-2282 1557
264
Poliklinik
Kotaraya
9154 Jalan Bandar 4 Taman
Melawati Hulu Kelang,
53100 Kuala Lumpur
-
T: +603-41084621
F: +603-41058786
10
Prince Court
Medical Centre
39, Jalan Kia Peng
50450 Kuala Lumpur
www.princecourt.co
m
T: +603 2160 0000
F: +603 2160 0010
212
Roopi Medical
Centre
86, Jalan Dato Haji Eusoff,
Damai Complex, 50400
Kuala Lumpur
-
T: +603-4042 3766
F: +603-4042 5644
24
Samuel &
Specialist
Maternity Centre
& Specialist Clinic
for Women
313 Jalan Tun Razak
50400 Kuala Lumpur
-
T: +603-9618736
F: +603-9810395
14
Sentosa Medical
Centre
36 Jalan Chemur Damai
Complex
50400 Kuala Lumpur
www.sentosa.kpjheal
th.com.my
T: +603-4043 7166
F: +603-4043 7761
201
Sentul Hospital
631 Jalan Sentul
51000 Kuala Lumpur
www.sentulmedical.c
om.my
T: +603-40416962
F: +603-40422231
15
Taman Desa
Medical Centre
45 Jalan Desa (Off old Klang
Road),
-
T: +603-7982 6500
F: 03-7820705
128
123
58100 Kuala Lumpur
Tung Shin
Hospital
102 Jalan Pudu
55100 Kuala Lumpur
www.tungshin.com.
my
T: +603-2037 2288
F: +603-2070 0345
238
UKM Specialist
Centre
7th Floor, Clinical Block,
UKM Medical Centre, Jalan
Yaacob Latif, Bandar Tun
Razak, 56000 Kuala Lumpur
www.ukmsc.com.my
T: 603 - 9172 6064
F: 603 - 9171 2837
45
UM Specialist
Centre
No 28, Lorong Universiti,
Lembah Pantai
50603 Kuala Lumpur
www.umsc.my
T: +60378414188/4000
F: +603-79543233
70
124
Appendix D: Summary of Interviews Output
The Study on Reducing Unnecessary Regulatory Burdens in Private Hospital Sector – Focusing on
Hospital Operation, Workforce and Health Tourism.
Introduction:
The Survey was carried out through interviews with senior representatives on selected private hospitals over
th
the country. The first interview was carried out on 14 May 2013 and the survey will continue until end of
August 2013. The private hospitals were selected from the members list of the Association of Private
Hospitals Malaysia (APHM), as listed in the website www.hospitals-malaysia.org .
At the point of reporting, a total of 27 respondents from 12 organizations (private hospitals and/or their
parent corporations and APHM) had been interviewed. The organizations are from Penang (2 hospitals),
Selangor (2), Kuala Lumpur (2), Melaka (2), Kuching (2) and Kota Kinabalu (1).
With this preliminary analysis from the first round of survey, the team will then verify the findings with the
respondents. Then the findings will be used to draft the study report, which will propose options to the key
issues raised by the respondents. The feedbacks from the interviews will be verified with the regulators to
get a better understanding of the issues raised by the private hospitals.
Along the journey of drafting the study report, the drafted chapters with be reviewed by Ms. Sue Holmes, the
APC advisor to the project. The final draft report will then be submitted to MPC for further actions.
Summary of Interviews Outputs
No.
1
Regulatory
Requirement
Issue & Problem
Consequence & Burden
License renewal (every 1. Long waiting time for renewal,
1. Long wait, sometimes
2 years)
sometimes exceeding 6 months.
until licence lapsed
2. A lot of documents required in
2. High overheads to
application, certified copies required.
prepare documents for
Too much paperwork required.
submission
Reference:
3. Many different units involved in the
3. Too many interactions
process, difficult to deal with and to
with different units on
access
to
them.
requirements
Facilities and Services
4.
Different
auditors
assessing
and
4.
Variability in
Act 1998 (Act 586)
interpreting
the
requirements
assessments causes
differently,
some
stricter
than
others.
confusion.
establishment and
maintenance, LicenseVariation in competency and
5. Expensive on structural
to-Operate and
experience of auditors.
changes and causes
Inspections (Premise,
5. The older hospitals (those approved
serious interruption to
before Act 586) have problems with
services.
 Section 15.
meeting
some
of
the
new
dimensional
6.
Time consuming and
Application for licence
requirements.
causes delays.
to operate or provide.
6.
Need
to
write
officially
to
resolve
7.
Delays in getting
 Section 16. Inspection
of premises.
issues, oftentimes do not receive
requirements rectified in
 Section 22. Duration
replies to queries.
submission.
and renewal of licence 7. PHFS Regulations 2006 are not specific 8. Costly delays to meet
to operate or provide
causing different interpretations of
requirements.
 Part VI: Responsibilities
requirements
9. Licensing delays result in
of a Licensee, Holder of
8. New requirements are not published
other consequences, e.g.
Certificate of
and
made
known
to
hospitals
until
the
MSQH accreditation.
Registration and Person
audit.
In Charge
9. Delay in the issuance on professional
license contributes to overall delays.
and Services.
Also results in delay for quality
and
accreditation.
125
2.
2
Private Health Care
(Private Medical
Clinics or Private
Dental Clinics)
Regulations 2006
Approval for
expansion, renovation,
upgrading
Reference:
Act 1998 (Act 586)
establishment and
maintenance, Licenseto-Operate and
Inspections (Premise,
 Part VI: Responsibilities
of a Licensee, Holder of
Certificate of
Registration and Person
In Charge
and Services.
and
1. All types and level changes on physical
building has to go through the same
long and difficult approval processes.
2. Difficulty in meeting requirements
because of absence of guidelines or
specification standards.
3. Different officers specifying the
requirements differently (depending
of competency of officers).
4. Long and difficult process for land
conversion for expansion.
Note:
1. Delays resulting in heavy
overheads, many
interactions,
inconveniences to
services.
2. Many interactions and
burdens of resulting
delays.
3. Difficult approval process
with consequential
delays..
4. Delays in introduction of
new services (State/Land
issue)
This approval is treated the same as
establishing a new facility (hospital),
therefore undergoes the burdensome
building approval processes.
(Private Medical Clinics
or Private Dental
Clinics) Regulations
2006
3
Approval for
advertisements and
advertising materials
1. All applications have to be sent to
Putrajaya. This is inconvenient for
hospitals located in other states.
2. Medicine Advertisements Board
(MAB) has recently introduced this
control on printed materials for
internal distributions (information for
Reference:
medical staffs and patients).
3.
Lots of paperwork on number of hard
1. Medicine
copies needed in application, and also
(Advertisements and
as hospitals produced many such
Sales) Act 1956 (Revise
1983) Act 290
materials throughout the year.
 Section 4A. Prohibition 4. Too many changes required to
of advertisements
submissions because there is no
relating to skill or
established guidelines by regulators.
1. Burdensome in terms of
cost, convenience and
delays.
2. Additional burdens and
also delays
implementation of
hospital educational
programs for staff and
patients.
3. High overhead costs and
total compliance costs.
Delays to hospitals
efficiency programs.
4. Increased interactions,
delays and cost burden.
126
service.
 Section 4B.
Advertisements of
medicines to be
approved.
and
2.
4.
Medicine
Advertisements Board
Regulations 1976
P.U.(A) 283/76
 Regulation 5. Issue
approvals.
 Regulation 7.
Numbering of approvals
 Regulation 8.
Application and fees.
Workforce regulation
and quality and
availability of
professionals.
Reference:
1.
2.
3.
4.
5.
6.
5
Medical Act 1971
Act 50
Medical (Amend.)
Act 2012
Nurses Act 1950 Act
14 (Revised 1969)
Registration of
Pharmacists Act
1951 Act 371
(Revised 1989)
Registration of
Pharmacists
Regulations 2004
Registration of
Medical Specialist
Other Issues:
1. Health Tourism
There is no specific
regulation for health
tourism but hospitals are
expected to register with
Malaysia Health Tourism
Council and to obtain
5. Different requirements from different
regulators as local authorities also
regulate advertisements.
6. No communication or information on
revisions on requirements. Only knew
upon application.
7. Problem with getting approvals for
materials in other languages
(Japanese, Russian, Chinese, etc.).
5. Confusion and
burdensome to achieve
compliance.
6. Confusion and
burdensome to achieve
compliance.
7. Delays and additional
burden on compliance.
1. The quality of nurses graduating from
some private colleges is not up to
employable requirements resulting in
many unemployed graduates.
2. Shortage of experienced and specialist
skilled nurses. Restriction on
recruitment of foreign nurses to mop
up the unemployed graduates..
3. Public hospitals are pinching private
hospitals’ experienced nurses (better
benefits and security).
4. Poor enrolment by hospital nursing
school due to unemployed nurses.
5. Shortage of specific medical specialists
is preventing the expansion of
healthcare services as foreign
professionals are not allowed to
practice here.
6. Suspect poorer quality of medical
graduates as a result of
commercialisation of medical
education.
7. Unbalance expansion of medical
education to the resources (hospitals
and supervisory) for houseman
internship.
8. Incentive for continuous professional
development has been discontinued.
Also difficult to make HRDF claims for
courses not registered, even though
the provider is MOH.
9. Long wait to get registered with NSR
by specialists.
1. Difficult and costly to
retrained these graduate;
they are not passionate
in the profession.
2. Burden on hospitals to
employ poor quality
graduate nurses by
Nursing Board.
3. Rising cost of
employment for
hospitals.
4. A hospital tries to reopen school but
unsuccessful.
5. Difficulty to expand
healthcare services for
country to be a medical
hub.
6. Experience poorer type of
medical graduates.
7. Burden on hospital to
supply places for
houseman internship.
8. Burdensome application
for claims and cost
burden on hospitals.
1. Health tourism requires good air
services to host country. Penang
hospitals receive more health tourists
with addition flights to Indonesia.
2. Health tourists to hospital in Melaka
need to come through KLIA, which has
poor transportation to Melaka.
3. Control on advertisements, inefficiency
in licensing and other approvals are
stifling health tourism.
1. Limited inbound flights
are curbing health tourists
arrivals in state.
2. Additional burden of
having to arrange
transportation to and
from KLIA.
3. Burdensome regulatory
processes stifling growth.
4. Only a small per cent of
9. Delays in getting license
for new specialist clinics.
127
MSQH accreditation.
4. Health tourism is not the main focus of
hospital in Klang Valley. Travel
inconvenience and higher costs.
health tourist trade in
Klang Valley.
2. Personal Data
1. All hospital are concern with the
implementation of the new Act. There
are no guidelines and hospitals are
experiencing different requirements
from regulators. Too many restrictions
from interpretation of the
requirements.
2. Some hospitals are
feeling the administrative
burdens of the regulation.
Personal Data Protection
Act 2010 (Act 709)
3. MSQH Accreditation
MSQH is a voluntary
accreditation scheme.
MOH has made it a
requirement for health
tourism.
1.
1. Perceived threat and
unfairness in
assessments.
2. Perceived inconsistencies
and variations in
assessments.
4. Medical fee
1.
1. Stifle innovativeness in
private hospitals.
Private Healthcare
Facilities and services
(Private Hospitals and
Other Private Healthcare
Facilities) Regulations
Thirteenth Schedule
(Regulations 433)
Auditors for MSQH are from medical
professionals from competing
hospitals, not independent.
2. Auditors are not trained or did follow
standard auditing protocols.
The capped on procedure fee stifle
innovativeness as specialists are
reluctant to try new procedures
because the risk (of litigation)
outweighs the returns.
2. Hospitals find it difficult to introduce
new services which are not listed in
the schedule.
2. Stifling to growth of new
services.
128

private hospitals

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