Doctors were still providing emergency and intensive care but all other services have been halted indefinitely since Sunday, despite a court order for their immediate return to work.
The doctors are striking in support of leading orthopaedic surgeon Govinda K C who is heading the campaign for reform, and started a hunger strike 11 days ago.
Govinda, who works at the state-run Tribhuvan University Teaching Hospital in Kathmandu, is also protesting the alleged political appointment of the institution's new dean.
"We expect more doctors across the country to resign later today," NMA official Milan Chandra Khanal added.
Doctors have ignored a Supreme Court order issued on yesterday for the doctors to return to work immediately, citing a law which bans strikes in hospitals and health centres.
NMA general secretary Mukti Ram Shrestha told a press conference that the doctors "respected" the court, but added, "we will continue the strike because our demands have not been fullfilled yet".
"Dr K C must be saved, however, equally important is the duty to save the other patients whether in dire condition or even less severe cases", the newspaper said in an editorial.
The 56-year-old surgeon is campaigning against alleged political interference in appointing heads of medical colleges and pushing for greater transparency and autonomy in state-run teaching hospitals.
The surgeon, well-known in Nepal for his philanthropic efforts to help victims of disasters at home and internationally, is also urging authorities to open more medical colleges in remote areas instead of focusing on Kathmandu.
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