A new report by Malaysia’s AmBank Group predicts the healthcare industry will be one of the top growth sectors in Malaysia, supported by a growing upper-middle income population who have better private health insurance coverage, and medical tourism. Medical cost inflation is rising however.
AmBank, a leading Malaysian banking and insurance group, has published a new report that says that rapid development in technology presents both challenges and opportunities to healthcare service providers.
Another concern is on the affordability of Malaysia’s private healthcare. AmBank argues that the current model appears to benefit those in the upper-middle income bracket, the affluent and medical tourists. The less privileged still rely on public medical care.
Private healthcare is increasingly turning into a commodity that is supported by the society that can afford to buy it; implying income plays a key role in determining an individual’s ability to spend on private healthcare. This can widen the gap between those who can afford and cannot, if left unchecked. One answer is to introduce social health insurance to ensure that people across all economic groups have equitable access to healthcare.
The report also says that the regulatory role of the government should be strengthened furher to create rules of accountability, transparency and governance. It must also be supported by strong enforcement.
Malaysia’s medical inflation is rising. In 2018, forecast medical inflation is 13.2%, from 12.6% in 2017; compared to 2018’s headline inflation projected at 1.5% (3.8% in 2017). So the net medical cost after deducting the headline inflation is 11.7% in 2018. For some medical tourists, increasing prices could drive them away from Malaysia. Healthcare inflation in Malaysia is the highest in the Asia-Pacific region.
In 2017, Malaysia’s total healthcare industry spending was RM52 billion, and is projected to reach RM80 billion by 2020. Rising demand for healthcare services, emergence of new care models beyond traditional hospital settings, and increased consumer sophistication in relation to healthcare-related technologies, are the key drivers. Universal healthcare insurance is urgently needed to ensure equitable access to healthcare amid rising healthcare costs, particularly in ensuring quality medical treatment for the elderly and those with lower incomes.
The barriers to universal healthcare include insufficient government spending on public healthcare and the number of medical professionals. With the growing need for a more efficient healthcare system to ensure sustainable economic growth, technology enabled care solutions may help fill the gap. The use of mobile technology to overcome infrastructure and technical barriers in fragmented healthcare systems, and connect pharmacies, physicians and patients, will be good. Users of such a platform could enjoy discounts on medication, have a better understanding of their health conditions and receive reminders to refill prescriptions. It will help improve their medical observance and health outcomes.
The regulatory role of the government should create an environment that takes into account efficiencies in the healthcare and discourages abuses by commercial entities that resort to maximise profits. Clear rules of accountability, transparency and governance have to be put in place to ensure that standards are maintained, conflict of interest issues are checked, and that healthcare continues to remain accessible to everyone.
There must also be strong enforcement to ensure that regulations are adhered to, and that there is also enough staff with the relevant expertise to carry out effective monitoring and enforcement measures.
Despite rising healthcare costs, the healthcare industry will be one of the top growth sectors in Malaysia in the future; with rising medical tourism if price rises can be kept in check.
For a detailed 2018 analysis of inbound medical tourism to Malaysia, visit the IMTJ Country Report.
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