Health-care industry as one of the fastest growing industry in Malaysia has to cope with the pressure of demographic changes, aging population, emergence of new technologies and expectation of great quality of service in order to be competitive. As the Malaysian government is promoting medical tourism, the number of private hospitals increase and the competition also hardens. This study is designed to analyze the factors that contribute to the relationship between competitive advantage and customer satisfaction in private hospitals. The outcome of the hypothesis testing explains that service personnel service quality gives great customer satisfaction. Whereas other factors such as cheaper cost, good infrastructure, support personnel service, health program and new medical service doesn''t show any significant relationship between competitive advantage and customer satisfaction in private hospitals. The outcome of this study gives theoretical and practical implications.