Market Structure and Competitiveness of Malaysian Private Hospital Industry: A Structure, Conduct and Performance Analysis

David Roland, Lesmana (2024) Market Structure and Competitiveness of Malaysian Private Hospital Industry: A Structure, Conduct and Performance Analysis. PhD thesis, Universiti Malaysia Sarawak (UNIMAS).

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Abstract

The continuous increase in Malaysia's health-related Consumer Price Index (CPI) reflects rising healthcare expenses, potentially impacting families, and individuals reliant on ongoing medical care. This raises concerns about their ability to access quality healthcare without bearing excessive financial burdens. The primary aim of this research is to analyse the market structure (HHI) of the Malaysian private hospital industry between 2002 and 2021. This study has found that the HHI result shows a significant drastic transition from monopoly to monopolistic market structure, coinciding with the enactment of the Competition Act in 2010. Also, both time series and panel data methodologies are employed to investigate the influence of HHI on medical inflation, and the impact between the market structure, conduct, and performance of this industry, utilizing the Structure-Conduct-Performance (SCP) Paradigm from Industrial Organisation theory. The time series results suggested that medical inflation is influenced by fluctuations in market concentration (HHI). While, in the panel model, it is found that there exists a reciprocal relationship between market share and concentration, with mutual reinforcement observed between capital intensity and return on sales. However, it is noted that only return on assets directly impacts return on sales. These findings emphasise the importance for policymakers to encourage healthy competition among economic entities operating within the Malaysian private hospital sector.

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