Abstract The newly established provincial healthcare commissions in Pakistan have started certification of healthcare providers. The policy-makers perceive that without third- party certification or licencing the healthcare quality will be suboptimal in the country. This paper reviews the current literature on third-party certification and studies objectives and progress of the largest healthcare commission in Pakistan. It analyses the certification role of the Punjab Healthcare Commission and draw lessons for future regulation and strengthening of the quality reporting process. It also documents the short-term and long-term trade-off resulting from the enforcement of quality certification in the absence of appropriate alternative investment in medical training and care provisions in the country for uncertified providers. The paper concludes with a roadmap for future research to improve healthcare regulation in Pakistan. Keywords: Healthcare provider, Regulation, Care quality, Third-party certification. DOI: http://doi.org/10.47391/JPMA.910 Introduction The regulation of healthcare industry in low- and middle- income countries (LMICs) is minimal. 1 LMICs in general, and South Asia in particular have mixed health systems where private and public healthcare services exist in parallel. There is a large government-funded national health system in many LMICs which is in some sense regulated due to standard operating rules and government ownership, but the substantial portion of demand of health services fall on private and non- government health system, and this fact can be validated by comparing out-of-pocket expenses on healthcare in South Asia, LMICs and high-income countries (HICs). 2 The private expenditures make up 57% of the total spending in South Asia compared to 24% in HIC, and out-of-pocket payments represent almost half of the current health expenditures in South Asia (Figure-1). Given the nature and extent of mixed health system, the regulation of private healthcare is an important agenda item in healthcare policy in LMICs, including South Asia. In addition, the transactions in healthcare industry involve imperfect information, where supplier of the service (a doctor) has different set of information than the consumer (patient) or in majority of the cases has more knowledge (asymmetric information) about the type of treatment required. 3 In the context of poor countries, asymmetric information in medical care generates incentives for the healthcare practitioner to oversubscribe or wrongly subscribe (e.g. quackery). This practice will have consequences for both prohibitive cost and low quality, or unnecessarily high quality, for the patients with limited information about the given treatment's effectiveness or diagnosis. In a large mixed health system, it is virtually impossible to monitor each transaction in the market. Therefore, the regulation of healthcare J Pak Med Assoc 1811 REVIEW ARTICLE Regulation, quality reporting and third-party certification of healthcare providers Amir Jahan Khan, 1 Muhammad Ashar Malik 2 1 Department of Economics, Institute of Business Administration, Karachi, 2 Aga Khan University, Karachi, Pakistan. Correspondence: Amir Jahan Khan. Email: ajkhan@iba.edu.pk Source: Authors compilation from, Global Health Expenditure Database. 26 Figure-1: Health finance stylised facts.