The HEALTH | July-August. 2026

COST PRESSURES: Rising hospital charges and insurance premiums highlight growing affordability challenges in private healthcare

The committee ' s inquiry found that the financial pressures facing patients cannot be attributed to a single stakeholder. Instead, it identified a combination of private hospital billing practices, insurance product design and regulatory limitations that together have contributed to higher medical costs and increasing insurance premiums.

The investigation was prompted by widespread public concern over rising private hospital bills and medical insurance premiums, following sustained public discussion, media reports and parliamentary attention on the affordability of private healthcare. The committee found that the issue has placed considerable financial pressure on many Malaysians, particularly older policyholders who risk losing medical coverage as premiums rise.

COSTS BEYOND CONSULTATIONS

One of the inquiry ' s key findings challenges a common perception surrounding healthcare costs. According to PAC chairperson Datuk Mas Ermieyati Samsudin, doctors ' professional consultation and surgical fees are not the main driver of medical inflation, as these charges have remained regulated under the Private Healthcare Facilities and

• Rising healthcare costs are exposing weaknesses across Malaysia ' s private medical system.

• Hospital billing practices are under renewed scrutiny over transparency and fairness.

• Coordinated reforms are aimed at improving affordability and accountability.

SYSTEMIC ISSUES: PAC Chairperson Mas Ermieyati Samsudin says structural weaknesses are driving rising healthcare costs

Services Act 1998 since 2013.

Instead, she said the increase in healthcare costs is largely driven by nonprofessional charges imposed by private hospitals, including medicines, medical supplies, laboratory investigations, room charges, nursing services and the use of advanced medical technologies.

" The most surprising discovery for the committee was that medical inflation is not driven by doctors ' professional consultation fees, which have been strictly capped under Act 586. Instead, it is fuelled entirely by unregulated, highly granular private hospital charges and non-medical supplies," she said.

The committee also concluded that the issue reflects a broader systemic problem involving hospitals, insurers and regulators, rather than isolated practices within any single part of the healthcare sector.

BILLING UNDER SCRUTINY

Among the practices highlighted during the inquiry was the widespread use of fee-for-service billing, under which hospitals charge separately for individual services and consumables provided during treatment.

The PAC found evidence of " unbundling ", where items such as clinical waste disposal, pillowcases and alcohol swabs were billed separately instead of being incorporated into standard room or service charges. The committee said such practices contribute to lengthy hospital bills that may not accurately reflect the actual cost of care.

Evidence presented to the inquiry also showed that medicines and medical supplies are frequently subject to substantial mark-ups, in some cases reaching as much as 300 per cent. According to the committee, these additional charges are often used to subsidise operational expenses that hos-