PETALING JAYA: The Health Ministry’s (MoH) move to mandate a national registry for third-party administrators (TPAs) and managed care organisations (MCOs) is expected to pressure private hospitals to improve cost efficiency, with analysts saying larger hospital groups are better positioned to adapt despite lingering margin risks.
MBSB Research said the proposed TPA and MCO registry by the MoH, alongside Bank Negara Malaysia’s (BNM) interim measures, are likely to reshape the private-healthcare landscape by accelerating a shift towards fixed-fee and outcome-based care models.
“The TPA and MCO registry proposed by MoH as well as BNM’s interim measures are likely to force major hospital groups to prioritise clinical standardisation and cost efficiency,” the research house said, adding that hospitals able to manage internal costs below the fixed-fee system would stand to benefit, while weaker operators could see margins erode.
According to MBSB Research, large hospital networks such as IHH Healthcare Bhd
and KPJ Healthcare Bhd are better positioned to mitigate the impact through greater operational efficiency, revenue diversification and stronger clinical governance.
It noted that strategies including tighter cost controls, digitalisation of clinical pathways and revenue growth from medical tourism could help offset domestic pricing pressure from insurers and TPAs.
“Prioritising efficiency and quality over volume and high-margin consumables can enable private providers of medical services to transform the new TPA regulations into an opportunity to secure a long-term, sustainable business model,” MBSB Research said.
The regulatory push follows growing concerns over rising medical costs and allegations of clinical interference, where payers are perceived to influence doctors’ treatment decisions for cost-saving reasons. BNM has previously reported medical cost inflation of 15% last year, while industry players expect it to reach 16% by next year.
Earlier this month, MoH issued a directive requiring all MCOs and TPAs to be registered in a national database under Section 85(1) of the Private Healthcare Facilities and Services Act 1998.
All affected parties must furnish complete information by Jan 31, 2026, with non-compliance punishable by fines of up to RM300,000 or imprisonment of up to two years, or both.
MBSB Research said the registry would improve transparency and oversight of private medical claims while addressing long-standing governance gaps in the payer ecosystem.
Separately, MBSB Research said industry player PMCare Sdn Bhd, the oldest TPA in Malaysia, has called for a standalone act to regulate TPAs and MCOs under the MoH, arguing that the absence of dedicated legislation has resulted in low barriers to entry, inconsistent operational standards and ongoing disputes over clinical authority.
MBSB Research said the proposal stems from “the need to legitimise the industry, standardise operational practices, and clarify the contentious issue of clinical interference.
“We note that this regulation is crucial following news of nine medical groups demanding a revocation of a chronic-medicine policy for MiCare Sdn Bhd and its client Hong Leong Bank over a generic-drug-only policy, which places risk on practitioners from possibly misplaced clinical judgement and on patients through unsuitable treatments,” it said.
MiCare manages and administers medical claims for 50 insurers in the region, serving more than 6,500 corporate clients with more than 5,000 panel hospitals, clinics and pharmacies.
