A person’s health information can have significant influence on their ability to obtain education, employment and insurance, among other personal matters. — Pixabay
Malaysia became a member of the General Agreement on Tariffs and Trade (GATT) on Oct 24, 1957.
With the services sector increasingly prominent as an engine of economic growth, Malaysia also made commitments to the General Agreement on Trade in Services (GATS).
GATT and GATS became integral parts of the World Trade Organization (WTO) when it was founded on Jan 1, 1995, on which date Malaysia became a member.
The initial commitments of Malaysia under GATS in 1994 were in the clinical specialities of forensic medicine, nuclear medicine, geriatrics, microvascular surgery, neurosurgery, cardiothoracic surgery, plastic surgery, clinical immunology, oncology, traumatology, anaesthesiology, intensive care, child psychiatry and physical medicine.
Practice was restricted to private hospitals of at least 100 beds at a specific location, with a change of location requiring specific governmental approval.
The establishment of individual or group practices was not permitted.
Foreign ownership allowed
Private hospitals and private clinics were owned by Malaysians until the 1990s.
With the inclusion of healthcare services in the WTO, this changed.
On Oct 7, 2011, the government announced that the ownership of private hospitals would be liberalised, with 100% foreign shareholding in private hospitals permitted.
Foreign medical and dental specialists would also be permitted to practise in local private hospitals.
Foreign ownership in private healthcare required approval from various governmental agencies, particularly the Health Ministry’s Special Committee On Foreign Equity Participation.
There is no public information available about this special committee.
It has been the Health Ministry’s policy not to permit foreign ownership of private general practice and dental clinics, blood banks, maternity homes, psychiatric hospitals and pathology laboratories.
This is summarised in the document from the Health Ministry’s Policy and International Division on foreigners’ investment and operation of private healthcare facilities (see Foreign Equity below).
Source: MOH Policy and International Relations Division
On TPAs
Third party administrators (TPAs), also called managed care organisations (MCOs), are companies that provide services like healthcare benefits management and claims processing for various businesses, including insurance companies and corporations.
TPAs handle administrative tasks that previously were the responsibility of the human resource departments of businesses, ostensibly to allow the latter to focus on their core operations.
ALSO READ: When TPAs start telling doctors what to do
TPAs arrived in Malaysian healthcare in the mid-1990s and have mushroomed since then, reflecting a trend in the outsourcing of critical operational services to third parties.
Some TPAs in Malaysia have disappeared, leaving unpaid private hospital, private clinic and doctor bills.
Among the prominent TPAs currently are “T1”, “T2” and “T3”.
According to data from the Companies Commission of Malaysia (obtained on Nov 18, 2025), the revenue of T1, T2 and T3 in 2023 all reached eight figures.
All three TPAs are owned by company “T4”, which is in turn owned by Japanese corporation “J”.
The revenue of T4 in 2023 was near nine figures, and profits after tax was eight figures with a dividend of seven figures declared.
General practitioners (GPs) have complained that T1, T2 and T3 charge a four-figure fee for a clinic to join its panel and a one-figure fee per patient bill or a certain percentage of the patient bill.
The insurance and corporate entities that utilise the TPAs’ services are charged as well.
On GP clinics
There are major concerns regarding foreign ownership in private healthcare in Malaysia.
The first is whether the ownership by T4 of T1, T2 and T3 puts it in a dominant position in private healthcare and whether it reduces competition.
In addition, GPs who cannot afford or refuse to pay the four-figure joining fee will be excluded from these three TPAs’ panels, thereby depriving employees of a choice of GPs to attend to their healthcare needs.
The second is that of J’s ownership of nearly 200 private GP clinics via company “C1”, which is owned by company “C2”, which is in turn majority owned by J, with the remaining shares held by four Malaysian individuals via another company “C3”.
The revenue of C1 and C2 in 2023 were both nine figures, with C2’s revenue nearing 10 figures.
Both companies had profits before tax of eight figures.
It has been the policy of the Health Ministry not to allow foreign ownership of private GP clinics.
Yet J, a Japanese corporation, was allowed to own such clinics.
The rationale for this approval has not been disclosed.
Concerns about patient privacy
Both the above concerns impact on the privacy of patients’ medical records.
The reasons are obvious.
Firstly, regulations 44(1) and 30(1) of the Private Healthcare Facilities and Services Act respectively states that a patient’s medical record is the property of a private healthcare facility or service, private medical clinic or private dental clinic.
ALSO READ: Your right to your medical records
Secondly, TPAs require the disclosure of patients’ medical information upon submission of a bill for payment.
This involves patients signing blanket consent forms.
Not only that, there are reports that typical managed care arrangements involve allowing employers access to their employees’ medical information.
An individual’s medical information impacts on their education, employment, marriage, insurance and other personal matters.
That is why confidentiality is fundamental in the patient-doctor relationship, as it is essential to the fostering of trust and open communication.
As the security, accessibility and assurance of confidentiality is a sine qua non in the care of medical records, whether TPAs operating procedures are robust enough to ensure this is so, is unknown.
The quantum of Malaysians’ medical information that foreign company J, with its ownership of T1, T2, T3 and C1, has access to or controls is unknown.
Unanswered questions
The Health Ministry owes the public an explanation of the rationale for the approval granted by its Special Committee on Foreign Equity Participation to J to own GP clinics.
Malaysian regulators have not taken active ownership of the regulation of TPAs.
This is difficult to fathom, notwithstanding that there is no specific MCO Act.
Could this conundrum be due to inter-agency coordination issues?
Bank Negara is the regulator of insurance companies, some of which have TPA subsidiaries.
Do these TPA subsidiaries fall outside Bank Negara’s ambit?
The Health Ministry enforces the Private Health Care Facilities and Services Act, which was implemented in 2006.
Section 83 in Part XV of the Act prohibits contract(s) that interfere with patients’ medical management and/or contravenes the code of ethics of doctors, dentists, nurses and midwives.
The penalties for MCOs are a fine of not more than RM500,000, and for the person responsible for the MCO, a fine of not more than RM100,000 or imprisonment not exceeding two years, or both.
The Health director-general reminded MCOs in October (2025) to comply with the law and ethics of medical practice.
The Health Ministry has also, in October (2025), required MCOs to provide corporate information and their contracts with private healthcare facilities.
However, the ministry has not requested information on the security of patients’ medical information in the MCOs’ possession.
Politicians were up in arms in 2005, questioning why a foreign corporation was holding major stakes in two governmental concessionaires – one providing hospital support services and the other, the health screening programme of foreign workers.
Yet, there has been deafening silence about a Japanese corporation owning three local TPAs and private GP clinics, as well as Malaysians’ medical information.
In summary, the authorities have a public duty to ensure that everyone’s medical information is protected.
Dr Milton Lum is a past president of the Federation of Private Medical Practitioners Associations and the Malaysian Medical Association. For more information, email starhealth @thestar.com.my. The views expressed do not represent that of organisations that the writer is associated with. The information provided is for educational and communication purposes only, and it should not be construed as personal medical advice. Information published in this article is not intended to replace, supplant or augment a consultation with a health professional regarding the reader’s own medical care. The Star disclaims all responsibility for any losses, damage to property or personal injury suffered directly or indirectly from reliance on such information.
