Rakan KKM a govt-led initiative, not a move towards privatisation: Dzulkefly

New Straits Times

14-07-2025

KUALA LUMPUR: Health Minister Datuk Seri Dr Dzulkefly Ahmad has sought to allay public concerns over the Rakan KKM initiative, stressing that the programme is is a government-led initiative, fully owned and regulated by public institutions.
In a post on his official X account last night, Dzulkefly clarified that Rakan KKM is 100 per cent owned by the Minister of Finance Incorporated.
"For those who have tagged me with their concerns that Rakan KKM is privatisation, I hope the following clarification resolves this conclusively," he said, acknowledging the public's concerns.
He explained that Rakan KKM Sdn Bhd is currently 100 per cent owned by the Minister of Finance Incorporated, and should a government-linked investment company (GLIC) later invest in the entity, ownership would remain within government control.
"When a GLIC investor comes in, the GLIC may take an equity stake in Rakan KKM Sdn Bhd. Ownership of Rakan KKM remains with the government, directly or through GLICs, throughout its operations."
He said the Health Ministry will function as the regulatory authority, responsible for critical decisions over the management of the company.
He added that initial funding of RM25 million had been allocated through the federal budget, with additional funding to be sourced from GLICs in the second phase.
These funds, he said, will be repaid through revenue generated by Rakan KKM, maintaining financial independence while keeping funding strictly government-linked.
Profits from Rakan KKM would be returned to the shareholders, including the Minister of Finance Incorporated and the GLICs.
Dzulkelfy said Rakan KKM was developed to achieve five public-interest objectives, among which were offering value-based "premium economy" healthcare services in response to rising medical costs; using excess revenue to cross-subsidise public healthcare services and improving retention of the ministry's health workers by creating opportunities to increase their incomes considerably.
The initiative also aims to serve as a price benchmark, including for services provided by private hospitals, moderate medical price inflation for all, including patients who do not directly use Rakan KKM services and deliver appropriate returns for its GLIC shareholders.
Dzulkefly said these goals demonstrate that Rakan KKM is grounded in public service, not profit maximisation.
On why Rakan KKM is licensed under the Private Healthcare Facilities and Services Act 1998 (Act 586), he clarified that the Act includes provisions for government-incorporated bodies.
He said the experts who drafted the Act had anticipated the possibility of the government offering healthcare through corporate bodies.
"This is important to ensure a level playing field with the private sector, especially if Rakan KKM is to play a role as a price benchmark."
He also cited Section 2 of Act 586, which differentiates between privatised healthcare facilities and those incorporated but still government-owned.
On July 7, Dr Dzulkefly said that the initiative is not a form of privatisation , but a transformative effort by the ministry to improve access to elective procedures in public healthcare facilities.
He said with the initiative, the ministry would be able to utilise its pool of specialists and the available capacity within its health facilities to offer patients the option of receiving elective treatments more quickly.
The programme offers 'premium economy' services at selected public hospitals for elective outpatient, daycare, and inpatient services, including personalised care, specialist choice and enhanced privacy.