APC crisis catalyst for regulatory reset and digital-first healthcare governance

KUCHING (Jan 9): The resolution of Malaysia’s Annual Practising Certificate (APC) crisis is expected to mark a structural reset in the relationship between healthcare regulators, medical practitioners and private hospital operators says analysts from MBSB Investment Bank Bhd (MBSB Research).

In its healthcare sector report from Jan 9, MBSB Research said the current crisis has not only exposed deep-seated weaknesses in our medical licensing and digital governance system, but also created a rare opportunity to modernise the system and move towards a digital-first regulatory framework that better safeguard patient care and professional livelihoods.

To recap, the APC crisis emerged at the start of 2026 after delays in certificate issuance left more than 14,000 doctors without visible valid licenses, despite many having submitted applications and payments on time.

The backlog was due to a surge in applications, bottlenecks in verification and capacity. Constraints within the Malaysian Medical Council’s (MMC) Medical Register Information and Technical System (MeRITS) digital platform.

While the MMC has issued an emergency amnesty that allows affected doctors to continue practising temporarily, MBSB Research noted that the move does not override the Medical Act 1971 which exposes doctors and hospitals to legal, insurance and fee-recovery risks.

MBSB said that for public-listed healthcare payers, this crisis is an obvious material risk and proves that their operations are highly dependent on a single, fragile government digital point of failure.

They stressed that the ultimate resolution of the current crisis is not merely about clearing a backlog of certificates, instead it represents a reset of the relationship between the regulator, the practitioners, and the public-listed healthcare industry.

To prevent a recurrence of such a crisis, MBSB Research guided that there should be a comprehensive digital overhaul of the MeRITS system, including automation, real-time tracking and rules-based approvals, as well as a amendments to the Medical Act 1971 to include statutory grace periods.

Meanwhile for private players such as IHH healthcare Bhd (IHH) and KPJ Healthcare Bhd (KPJ), the research house recommends that they should establish dashboards that track doctor’s CPD points and indemnity coverages, establish direct data-sharing agreements with insurers as a backup to government systems, and centralised agreements with third-party administrators (TPAs) to protect fee recovery during delays.

Additionally, MBSB Research also stressed that there would be a need for coordinated industry advocacy to ensure insurers and enforcement agencies recognise interim licensing status during any future system disruptions.

Despite the current crisis and legal risks facing private healthcare operators, MBSB Research maintained a Positive outlook on the sector, arguing that long-term demand fundamentals, medical tourism growth and impending regulatory reform continue to provide strong support.

“By the Jan 31 deadline, we expect that Malaysia’s healthcare system will emerge with a more modern, transparent, and resilient regulatory framework.

“This obstacle has paved the way for a digital-first era in medical licensing, ensuring that administrative failure never again compromises patient care or professional livelihood,” MBSB Research said.