Hospital mergers can raise competition challenges

BLOOMBERG’s report that IHH Healthcare Bhd may join the race to acquire Asia OneHealthcare ­raises the prospect of the creation of a giant healthcare group that could raise competition issues.

IHH already operates an extensive network of private hospitals under brands such as Pantai and Gleneagles, while Asia OneHealthcare controls Columbia Asia, Subang Jaya Medical Centre and several other major hospitals.

No doubt, a merger of the two groups would create an even more formidable healthcare group, potentially capable of competing more aggressively internationally.

Greater scale could also deliver efficiencies in procurement, technology and specialist services.

But at what cost to Malaysian patients?

Private healthcare costs are already spiralling, with ­medical cost inflation reaching 16% this year and insurance claims ­inflation remaining elevated.

Further consolidation could strengthen hospital operators’ pricing power, particularly in locations where patients have limited alternatives.

This brings into focus a longstanding weakness in Malaysia’s competition framework: the absence of general merger-control legislation.

Even the Competition Act amendments passed in July 2026 excluded merger-control provisions, leaving regulators without a comprehensive mechanism to scrutinise potentially anti-competitive mergers before they happen.

Some might argue that this regulatory gap actually benefits Malaysia by allowing local companies to grow into regional giants without unnecessary intervention.

There is merit in that argument. But creating national champions and preserving domestic competition need not be mutually exclusive.

A proper merger-control regime would not necessarily prevent consolidation. Rather, it would allow authorities to assess whether the economic benefits outweigh the potential harm to consumers, and impose conditions where necessary.

Ultimately, the question is not whether Malaysia should have larger healthcare companies, but whether their growth comes at the expense of affordable healthcare.

In a country already struggling with medical inflation, surely protecting patients deserves as much attention as creating corporate champions.