The Public Accounts Committee (PAC) of Malaysia presented a report on June 25, 2026, highlighting non-professional charges as major drivers of rising medical costs in private hospitals[citation needed] [1, 2]. PAC chairman Datuk Mas Ermieyati Samsudin said that instead of doctors' professional fees, medical inflation is driven by charges for supplies, equipment, medicines, lab tests, and high-end technology, which remain unregulated [3].

Private hospitals engage in "unbundling" by separately billing patients for items normally included in room fees, such as pillowcases, clinical waste disposal, and alcohol swabs, the report noted [4, 2]. PAC member Dr Halimah Ali said charges for medicines and medical supplies are marked up significantly, sometimes as much as 300%, to subsidize operational expenses [4]. She added the billing structures do not reflect actual costs [2].

The private healthcare sector is dominated by imported medicines, accounting for 94% of drugs used, with over 1,500 types having only a single registered manufacturer in Malaysia. These monopolies contribute to higher prices [3, 2]. Some patients using guarantee letters faced higher charges than those paying cash or through pay-and-claim schemes [4, 5, 2].

Medical insurance premiums have risen sharply by 40% to 70% in recent cycles [6, 4, 2]. Azrul Mohd Khalib, CEO of the Galen Centre, called for an "independent statutory Private Healthcare Commission with an explicit consumer-protection mandate" to oversee hospital charges and insurance premiums [1]. He criticized current insurance risk pools for forcing higher costs on long-term policyholders by shifting healthier customers to new portfolios [6].

Currently, private healthcare oversight is fragmented. Bank Negara Malaysia regulates insurers and takaful operators, while the Health Ministry regulates hospital facilities but lacks power over billing. Third-party administrators remain largely unregulated [1, 6]. PAC said legislative amendments alone to the Private Healthcare Facilities and Services Act 1998 are insufficient without a dedicated regulator with enforcement powers [1, 6].

PAC issued 17 recommendations urging coordination between the Finance Ministry, Bank Negara Malaysia, and Health Ministry to address rising premiums and hospital charges [4]. The government’s RESET reform framework, supported by the Joint Ministerial Committee on Private Healthcare Costs, aims for clinical efficiency through phased adoption of Diagnosis-Related Group (DRG) payments starting 2026 and a national Electronic Medical Record system [3, 5]. The pilot phase of a base medical and health insurance/takaful plan under RESET is scheduled by the end of July 2026 [5].