Private HealthCare Facilities and

Services Act (PHFSA) 1998

Private HealthCare Facilities
and
Services Act (1998)

Year 5 MBBS
Common Lecture
17th. January 2020
Compiled by Dr. P Y Lee
 The Parts of the Act
The Main Act
(a) the Regulations for Private Hospitals and
other private health care facilities have
– 29 parts
– 13 Schedules
(b) the Regulations for Private medical and
dental clinics have
– 14 parts
– 7 schedules
 Role of the Ministry of Health
Prior approval from the Ministry of
Health is require / mandatory to
establish a private hospital under the Act.
No person shall
– establish
– maintain
– operate,
a private clinic unless it is registered with
the Ministry of Health
 Functions: The Act and Regulations
Some important aspects of the (PHFS)
• aspects of infectious control
• emergency services, medical records
• valid consent from patients
• managed care organization
• mortality assessment
• patient grievance mechanism
• punishment for failure to comply
• enforcement etc.
 Some other roles
• physical structure and fittings of departments
described in great detail,
• fee splitting
• “any form of kickbacks or arrangements
made between practitioners, healthcare
facilities, organizations or individuals as
an inducement to refer or to receive a
patient to and from another practitioners,
healthcare facilities, organizations or
individual.”
 Fee splitting
• considered unethical
• some very special circumstances
– like in joint management of a case by
several doctors
Number of Private Healthcare Facilities in
Malaysia

Health Facilities (2008) NO. BEDS

• M0H Hospitals – 130
– 33,004 - Beds
• Special Medical Institutions (M0H)
– 6
– 5000 - Beds
• Non-M0H Government Hospitals
– 7
– 3,245 - Beds
 Health Facilities (2008) NO. BEDS

• Private Hospitals – 209 – 11,689 Beds.

• Private Maternity Homes –22 – 174 Beds.
• Private Nursing Homes – 12 – 274 Beds.
• Private Hospice – 3 –28 Beds

• December 2016, there is 135 public

hospitals and 9 special medical
institutions in Malaysia accommodate
41,995 beds.
 Health Facilities (2008) NO. BEDS
The private hospital beds increased
significantly from 1,171 beds which formed
5.8% of the total hospital beds in the
country in 1980
to 10,348 beds forming 28.4% of the total
beds in 2001(Chee and Barraclough, 2007).
In 2008, (total licensed )
209 private hospitals
had a total 11,689 registered beds.
 Corporate private hospitals
Rapid growth of private hospitals from the mid-
1980s,
– the “Malaysia Incorporated” concept
• serious repercussions
• social economic implications in the health
care sector
– inequitable medical and health resources,
– reports of poorer quality of care.
– unfavourable negative media reports
 Corporate private hospitals
• unethical practice in the management of
some of these private healthcare
facilities:
– questionable hospitals’ charges
– padded bills;
– emergency services denied
– unreported assessable deaths
• these are major concerns to policy
makers
 Corporate private hospitals

There were reports that

– professional medical indemnity
– reports of adverse events
– medical errors and
– negligence were all on the rise.
There was an urgent need for action. The
Government recognized the urgent need to
– address these issues of accessibility, equity, and
quality care
• under a new regulatory framework
 Corporate private hospitals
• the Malaysian Government stated explicitly
• reduce its role in the provision of health
service
• increase its regulatory and enforcement
functions in the Seventh Malaysia Plan - 5-year
development plans (1996-2000)
For that to happen, the government gazetted a
comprehensive legislation - Private Healthcare
Facilities and Services Act 1998 (Act 586)
which was implemented in May, 2006.
 Act 586
An Act to provide
• for the regulation and control of private
healthcare facilities and services
• and other health-related facilities
• and services and for matters related
hereto.
 Act 586
• An Act to provide for the regulations and
control of PHFS & other health related
facilities and services & for matters related
hereto [1May 2006, P.U. (B) 93/2006
• 19 Parts
• 122 Sections
• Gazette date: 27 Aug 1998
• Enforcement date: 1 May 2006
 Goals of Act 586
1.Impose and ensure minimum standards
in the private healthcare facilities and
services (PHFS).
2. Ensure integrity & professionalism
among healthcare professionals.
3. Ensure quality of PHFS e.g. Quality
Assurance, Mortality Review etc.
4. Address social and national interest
 Mode of Control
Location (zoning)
1. APPROVAL TO ESTABLISH/MAINTAIN
2. LICENCE TO OPERATE/PROVIDE
3. REGISTRATION
(a) Private Medical Clinic
(b) Private Dental Clinic
4. SUBMIT INFORMATION
(a) Managed Care Organization
 Mode of Control

1. Private Hospital
2. Private Psychiatric Hospital
3. Private Ambulatory Care Centre
4. Private Nursing Home
5. Private Psychiatric Nursing Home
6. Private Maternity Home
7. Private Blood Bank
 Mode of Control
8. Private Haemodialysis Centre (PHC)
9. Private Hospice
10. Private Community Health Centre *
11. Any other type of healthcare facility/
service to be gazetted from time to
time*
(** New Arrivals)
 Scenario1
• A patient presented at a private medical
clinic with backache for 3 days. There
was no history of trauma.
• Fracture was ruled out and treated
conservatively.
• After administration of IM Voltaren,
patient complained of swelling and pain
at the gluteal region.

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 Scenario 1
• Investigation results
– 2nd year houseman who was
doing locum gave the injection
– Examination showed swelling at
the lower inner quadrant of the
left gluteal region

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 Scenario 1
• Action(s) that can be taken
– Medical Act 1971 – Code of
Professional Conduct
• 1.1.1.(c) – The doctor is expected to
provide and maintain competent,
considerate and professional
management.
• 1.7.1. – Employment of unqualified
person – Not fully registered.
 What is wrong?

• Improper training?
• Arrogance
• Lack of awareness and Ignorance?
• Lacking in CME?
• Unlucky to get caught?
• Commercialism?

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 Scenario 2
• An open appendicectomy was performed
on a patient. A two-inch incision was done
at the right lower abdomen. Findings
revealed an inflamed appendix without
perforation.
• In addition to the hospital charges, the
surgeon charged RM1370 for laparoscopic
appendicectomy and another RM1370 for
adhesiolysis (freeing of adhesions).

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 Scenario 2
• Investigation results
– Unbundling/Fragmenting/Layering
• Action(s) that can be taken
– Private Healthcare Facilities and Services
Act 1998
• Compound
• Show cause notice
• Prosecution

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 Scenario 2
• Action(s) that can be taken
– Medical Act 1971 – Code of Professional
Conduct
• 1.15.4. – Unreasonable or exorbitant
professional fees.
• Council may investigate if there are
elements of exploitation or behaviour
prejudicial to good medical practice,
amounting to serious professional
misconduct.
 example of unbundling
The process of breaking apart something
into smaller parts.
• One example would be taking a bundled
computer system
• and unbundling it into its individual
pieces such as the monitor, keyboard,
and mouse, and then selling each of
these items individually.
 example of unbundling
• Another example of unbundling is a
service for which one final fee is charged
to the consumer, such as a utility bill,
• but the company displays on the bill the
different charges for each individual part
of the total service,
• such as the resource itself, its
distribution, and the state taxes.
 Layering of charges
• Two sets of management fees that are
paid by an investor for the same group of
assets. 
• This practice is found in many types of
investment vehicles such as wrap funds,
variable annuities, registered investment
advisor client accounts and even mutual
funds. 
 Scenario 3
• A G3P2 who gave birth via spontaneous
vaginal delivery, sustained a 2nd degree tear
and was discharged on D2 post delivery.
• On D7, she complained of lower abdominal
pain and passed foul smelling vaginal
discharge.
• Examination showed purulent yellow
discharge originating from the tear and a
ribbon gauze embedded on the tear.
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 Scenario 3
• Investigation results
– The attending doctor did not perform vaginal
examination prior to discharge.
– Did not follow standard operating procedure.
• Action(s) that can be taken
– Negligence – most probably gross.
– Ex-gratia payment (public healthcare
facilities or services);or
– Civil suit for claims of negligence.

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  Ex gratia payment
• A sum of money paid when there was
no obligation or liability to pay it. For
example, a lump sum payment over and
above the pension benefits of a retiring
employee. . 
• Ex gratia is Latin for "out of good will."