KUALA LUMPUR, June 25 — The Parliamentary Accounts Committee (PAC) has raised concerns over private hospital billing practices and pricing structures, warning that they are contributing to rising medical inflation and higher insurance premiums.

In a report tabled in Parliament, the bipartisan panel said private hospital billing systems lack transparency and may not accurately reflect actual costs, with medicines and supplies reportedly marked up by as much as 300 per cent to cross-subsidise operational expenses.

The inquiry was launched following public complaints over steep increases in medical insurance premiums, which reportedly rose between 40 and 70 per cent in recent cycles, prompting some policyholders to drop coverage and turn to public healthcare facilities.

Among the key issues highlighted was a practice known as “unbundling”, where hospitals impose separate charges for basic items such as pillowcases, alcohol swabs and clinical waste disposal, which are typically included in standard room fees.

“The PAC found the practice of unbundling charges for basic items such as clinical waste disposal, pillowcases, and alcohol swabs, which should have been included in the room charges,” Kapar MP Dr Halimah Ali, a PAC member, said when reading the report in Parliament.

The panel also noted price differences for patients using Letters of Guarantee (GL), who were sometimes charged higher rates compared to cash or pay-and-claim patients.

 “The primary driver of inflation is not the professional fees of doctors, which have been strictly regulated since 2013,” the panel said.

“Instead, it is the surge in non-professional charge components — including supplies, equipment, medication, laboratory tests, and high-end technology — which are not subject to any regulatory oversight.”

On drug supply, the PAC said Malaysia’s private healthcare sector remains heavily dependent on imports, which account for 94 per cent of medicines used.

It added that more than 1,500 types of drugs have only a single registered manufacturer in the country, creating market conditions that limit competition and allow higher pricing.

Retail price display enforcement under domestic law only began in May 2025.

“The private sector is dominated by impor ted medicines, which make up 94 per cent of the market. There are over 1,500 types of medicine with only a single registered manufacturer in Malaysia, thereby creating monopolies that set high prices without competition,” Dr Halimah said.

The PAC also noted that 17 recommendations were made to the government, including the establishment of an independent governance framework to better protect healthcare consumers.

It suggested amending private healthcare laws to allow the Health Ministry to regulate hospital costs beyond doctors’ professional fees, and urged Bank Negara Malaysia to encourage insurers to adopt smaller, more predictable premium adjustments instead of sharp increases over longer periods.