Punjab finalises law to restructure specialised medical institutions

LAHORE: In a historic step toward revamping the province’s public healthcare and medical education system, the Punjab government has finalised the draft of Punjab Specialized Medical Institutions Act 2025, a landmark legislation, expected to be tabled in the Provincial Assembly shortly.

The proposed Punjab Specialized Medical Institutions Act 2025 establishes a legal framework to govern all public sector specialized medical and dental colleges and their affiliated teaching hospitals through independent boards of governors — marking a profound structural shift toward autonomy, transparency, and professional management.

For the first time in the province's history, public sector healthcare institutions offering specialized services will operate as corporate bodies with perpetual succession, empowered to manage their own financial, administrative, academic and operational matters. This sweeping reform aims to enhance the quality of patient care, streamline service delivery, raise standards in medical education and research, and institutionalize mechanisms of accountability and performance monitoring across the sector.

The Act applies to all specialized medical institutions notified by the government and defines them as publicly funded medical or dental colleges, teaching hospitals or other health-related academic institutions.

These will now function as self-governed entities through their respective boards of governors, which will consist of senior government officials and prominent members of the private sector, including healthcare professionals, financial experts, civil society representatives and academics.

Each Board will be chaired by a government-nominated private member and will hold comprehensive authority over institutional policies, human resource decisions, financial management, infrastructure development and academic oversight.

According to the draft, each institution will be headed by a Dean, who will act as the Chief Executive Officer and Principal Accounting Officer, ensuring alignment of institutional operations with the Act, rules and regulations. The Dean will be appointed by the Board for a four-year term, subject to performance-based renewal, and will oversee all faculty, academic councils and executive management committees. Supporting the Dean will be key directors: the hospital director, who will manage all non-clinical affairs including HR, procurement, engineering, pharmacy, and administration; the medical director, who will oversee all clinical functions, ensure compliance with healthcare standards, and manage clinical audits and program development; the nursing director, who will supervise nursing services, training, audits, and staffing; and the finance director, who will ensure budget discipline, pre-audit processes, and financial propriety in line with institutional regulations.

Each hospital within the institution will be managed through a hospital management committee headed by the Dean and comprising the aforementioned directors, along with two board-nominated experts.

The committee will be responsible for preparing budgets, reviewing operations and ensuring quality standards. Additionally, the institution will maintain an Academic Council, chaired by the Dean, to steer academic standards, curriculum, research, student admissions, and ethical practices. Clinical departments will be led by chairpersons appointed by the board, based on recommendations from the Dean.

To ensure merit-based selection of board members, a high-powered search and nomination committee will be established, chaired by the minister for Specialized Healthcare and Medical Education and including the additional chief secretary, relevant department secretaries, a retired senior medical professional, and civil society members nominated by the chief minister. This committee will recommend individuals of integrity and professional distinction for inclusion in the boards. Members may be appointed for a term of three years, with the possibility of one renewal, while the government retains authority to de-notify any member or dissolve a board in exceptional cases.

The Act also outlines strict eligibility and disqualification criteria for board members, barring individuals with insolvency, criminal conviction, or conflict of interest. Board meetings must be held at least six times per financial year, with decisions taken by simple majority and quorum requirements including representation from both government officials and private members.

Importantly, the legislation grants institutions the authority to retain and utilize revenue generated from fees, services, and other sources without deduction from government grants. A dedicated institutional fund will be established, composed of government grants, fee receipts, donations, user charges, and investment income, to finance operations, development, and research. The board is empowered to approve investments for surplus funds, though such funds may not be placed in listed securities or derivatives to avoid financial risks.

Human resource management under the Act will be governed by a special selection board constituted by the government on the recommendation of the board, which will handle appointments, determine service terms and take disciplinary action. Employees appointed under the Act will not be considered civil servants, though existing government employees may be deputed to these institutions with prior approval. Institutional-based private practice will be restricted to consultants and heads of clinical disciplines, and governed by policy guidelines.

The Act enforces uniform healthcare service standards across all patient categories—public or private—and mandates accurate medical recordkeeping and transparency in service provision. It also emphasizes regulatory compliance, ethical practice, and elimination of discriminatory treatment. Furthermore, the institutions will be subject to both internal audits and special third-party audits ordered by the chief minister, promoting financial integrity and institutional accountability.

Finally, the Act provides a mechanism for the government to remove administrative bottlenecks and resolve operational challenges by granting it powers to issue supplementary directions or temporarily assign additional powers to chairpersons when necessary. It also empowers both the government and the boards to formulate rules and regulations essential for the implementation of the Act’s provisions.

By transferring decision-making authority from bureaucracy to professionally governed boards, the Punjab Specialized Medical Institutions Act 2025 aims to create a sustainable, merit-based, and performance-oriented ecosystem within Punjab’s healthcare sector. It replaces archaic, centralized models with responsive, localized governance, enhancing the capacity of institutions to deliver quality healthcare and education in line with international standards. As implementation draws near, the Act is expected to serve as a transformative template for health sector governance not just in Punjab but across Pakistan.