Private Healthcare Facilities and Services Act 1998 – Is it Stifling Medical Progress in Malaysia?

Private Healthcare Facilities and Services Act 1998 – Is it Stifling Medical Progress in Malaysia?

The Private Healthcare Facilities and Services Act 1998 (Act 586) and Regulations 2006 (PHFA) on the medial practice in the corporate private hospitals (for profit) in Malaysia was implemented on the 1st May 2006. This historical Act 586,  regulates all private healthcare facilities and services for the first time in the country after 35 years, replacing the Private Hospitals Act 1971. It is an act that not only directs how a private health care facility should be set up but also stipulates how much a doctor can charge for a procedure. The whole medical fees that a doctor can charge are part of the Act as a schedule of fees.  This is something that I don’t think has ever been done in any other country in the world whereby the amount a doctor can charge a patient for a procedure is an Act passed by Parliament. This means that, if the doctor charges anything more than the amount stipulated in the Act, he is breaking the law!

I believe that in most countries the Ministry of Health with its Medical Councils create codes for charges for a particular procedure and insurance companies will use these codes as a guide for reimbursement.  However, in Malaysia, since doctors’ charges are part of the Act this guideline is mandatory.

I want to discuss how this Act is stifling progress in medicine. When the Act came into force in 2006, I was young.  I really welcomed this Act. Prior to this Act, I was charging way below the amount stated in this Law. The reason is that when Mahkota Medical Centre first opened in 1994, we were told by the management of the hospital that being a new hospital with young doctors, we must charge less to bring patients to the hospital. They said  low cost would help promote the hospital and make it popular to the people living in Melaka and its surrounding areas. Hence, our charges were way lower than what our colleagues were charging in Kuala Lumpur. I was lamenting at my misfortune of working in a small town as my earnings were only one third of that of my colleagues in Kuala Lumpur. I felt I should have chosen to work in a bigger city, at that time! With the introduction of the Private Healthcare Facilities and Services Act, the playing field was levelled. For my insurance patients, I could charge as much as my colleagues in Kuala Lumpur. My income increased and I was happy. However, as time went  by, I realised there were flaws in this Act.

1. Experience does not count

Firstly, the Act does not account for experience. A young doctor who has just joined a private hospital will earn the same amount as the most senior doctor in the hospital. The only difference will be the volume of work. With many patients a senior doctor will earn more compared to his junior colleagues but he has to work hard to earn his bread. There is no way of earning more because of his experience. Perhaps, with his experience he can do a procedure faster and thus able to do more cases with his time but the maximum amount he can earn per procedure is the same.

2. Reimbursement is the same whichever modality is used

The second problem is that the reimbursement for a procedure is the same whichever method it is done. I will give an example from my speciality, gynaecology. A common procedure performed by gynaecologists is hysterectomy, which is the  removal of the uterus. The charge code is the same whether it is performed using  the traditional open method,  laparoscopic hysterectomy, single incision laparoscopic hysterectomy, vaginal hysterectomy or using the latest technique vNOTES which is vaginal natural orifice endoscopic surgery (laparoscopic surgery performed vaginally). A vast degree of skills is  involved in performing the more advanced techniques.  It will require extra time and effort to learn these new techniques and to perform them well but the remuneration is the same. Even though there is a provision in the act which states that a doctor can charge 15% more to the fee schedule charges if the procedure is done via laparoscopy this is not something that the insurance company agrees with most of the time. In my 28 years of experience performing laparoscopic surgeries and having performed more than 7000 cases, not once I have used this clause.  As a result of this, many gynaecologists refuse to learn the newer techniques and just perform using the traditional open technique, which is faster and easier but who loses the benefit of the more advanced techinques?  the patients. This is the single reason why there is so little advancement is this latest technique among gynaecologists,  especially in private practice in Malaysia. Our adoption of the latest technique such as laparoscopic hysterectomy is far lower than almost all our neighbouring countries. And the reason is simple, you don’t get paid enough for performing more advanced techniques so why bother learning these techniques.

3. Revision of Charges is slow

The third reason is that the revision of the charges is slow. Revision of the fee schedule is done by the Ministry of Heath with special committees but this is done rarely and far in between. Unlike Japan, where revision of the fees is done every 2-3 years, in Malaysia this is deferred for long periods of time. The Private Healthcare Facilities and Services Act  adopted the Malaysian Medical Association  Schedule of  Fees 4th Edition 2002 when it implemented it in 2006. The next revision came 12 years later where there was an increase of 14.4% in professional fees. This was gazetted on the 16 December 2013. There has not been any revision since then. Increasing professional fees is not popular among the public. When there is a mention of increasing doctors’ charges, there will be a public outcry implying doctors are greedy and do not care for the public.  This is because an increase in the fees will ultimately lead to an increase in the insurance premiums, something that the public dislikes and so politicians avoid. Politicians drag their feet on this issue. In my speciality, the codes were created in the late 1990s. After 30 years,  we are still using the same codes. There are so many advances in medicine and we perform so many more complex procedures now compared to what we did 30 years ago. Certain procedures do not have any codes available, and we have to charge patients according to the codes that currently exists. This can be a ridiculously low amount for the skills required to perform such procedures. For example,  for vaginal vault prolapse, I perform laparoscopic Sacrocolpopexy, a highly complex procedure and there is no code available for this procedure. We just have to place the next “primitive” procedure code with a very low reimbursement. Why should any doctor learn to do such complex procedures when you get paid so little? This is the  reason no one wants  to learn how to perform such complex techniques.

Most Gynaecologists  just want to deliver babies and get paid the same amount as performing a complex procedure like laparoscopic hysterectomy or even laparoscopic Sacrocolpopexy because the reimbursement is the same. The creators of the codes in the 1990’s perhaps unknowingly made sure that there would be  no   progress in medicine and especially in OBGYN by creating very few codes for several simple surgeries. The Ministry of Health is too wary of changing anything.

Morever, hospital charges are not regulated. Hospital fees can be increased based on current economic conditions and inflation. Doctors’ indemnity charges and insurance premiums go up every year and so does the cost of living. Doctors are becoming poorer every year as they are not allowed to raise their fees and the fees do not commensurate with inflation.

4. No provision for an assistant

Even though there is a provision in the Private Healthcare Facilities and Services Act that in a “complex procedure” a second surgeon of the same speciality can assist the primary surgeon and the total charge of the second surgeon shall not exceed 50% of the total fees chargeable by the first (primary surgeon), this is universally not practiced and we are inundated with questions from  insurance companies when  two surgeons of the same speciality operate on a patient. As such, it is rare for a surgeon to call another surgeon of the same speciality to help especially if he wants to learn a new procedure such as laparoscopic surgery. If he does so, he has to split his fees with the assistant. This also causes problems in the advancement of  medicine because most doctors will not call for an assistant because it implies a loss of his income. He will just perform what he has learnt as a trainee which will be a traditional method. He will never attempt to improve himself by performing more advanced techniques.

The future

So now you can see how the Private Healthcare Facilities and Services Act is stifling progress in medicine in this country, especially in the private sector. I am only quoting my speciality and I am sure this holds true for all other specialities in this country. The Ministry of Health is only interested in the work done in  public hospitals where the tone is: take it or leave it. Since there is no incentive to do advanced work in public hospitals, the salary is the same whether you continue doing average work or exemplary work, – there is no incentive to perform advance techniques.

For the reasons I stated above, there is a degradation of advanced work in the private sector. I foresee a future where there is going to be a reduction in the national income from Medical Tourism. Our neighbours especially Indonesia is quickly catching up and will overtake us in the near future.  With poor advancement in medical and surgical fields in Malaysia especially in the private sector, I foresee a future where Malaysians will be travelling to Indonesia for medical treatment

So what advice can I give young doctors going into private practice

  1. Don’t think of money. Think of skills. Acquire new skills and stay at the cutting edge of medicine so that you will be competitive despite the low remuneration you get from doing advanced work. You will reap the benefits when you are older. I have been pushing the limits of laparoscopic surgery all through my years in private practice despite being paid so little but my skills have improved and my patients appreciate it.
  2. Remember that now you are young and getting paid the same as your older colleagues, you are happy. In not so long a distant future, when you are older you will be lamenting not being paid for your experience. There is no profession out that where the inexperienced gets paid exactly the same as the experienced. You just have to swallow your pride and carry on.
  3. Being doctors, our only concern should be giving the best to our patients and you need to try to improve yourself constantly to give the best to your patients even if you are not appropriately rewarded.
  4. Despite the challenges from the Ministry of Health, continue to perisit with engagement with themand to at least have an automatic increase of the doctors’ fees every 3 years in keeping with inflation



I would like to thank
My wife Sarojini for editing this article
Dr Gunasegaran for reading through the article and giving good suggestions for its improvement


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Dr. Selva

Dr. Selva

Dr S. Selva (Sevellaraja Supermaniam) is a Consultant Obstetrician and Gynaecologist and a subspecialist in Reproductive Medicine at a private hospital in Melaka, Malaysia. He heads the O&G unit and the IVF Centre at the hospital.

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