MALAYSIA’S medium-term health expenditure growth is expected to be among the fastest in ASEAN backed by double-digit increases in the government’s healthcare budget in 2023 and 2024 alongside continued advancements in the private sector.

BMI Country Risk and Industry Research has forecast that Malaysia’s health expenditure will grow by a 2023-2028 compound annual growth rate (CAGR) of 8.3% with public expenditure growing by 8.5% and private expenditure by 8.1%.

The research house further expects the country’s ageing population, growing burden of chronic diseases and efforts to enhance public health infrastructure and improve access for under-served communities will drive public sector growth.

“Private healthcare providers will continue to attract patients with higher incomes including medical tourists and domestic patients looking to avoid long waiting times amid Malaysia’s shortage of physicians and nurses,” commented BMI whose views are independent of Fitch Ratings’ credit ratings despite being a Fitch Solutions company.

“Malaysia’s high single-digit expenditure growth will see it outpace regional peers such as Singapore, Thailand, the Philippines and Indonesia over the medium term.

“Additionally, its annual per capita health expenditure remains above global and emerging market averages, indicating strong capacity for spending on advanced medical products.”

Competition abounds

While Malaysia will continue to develop its healthcare offering to attract medical tourists, BMI nevertheless cautioned that the country would face strong regional competition from Thailand and Singapore.

“Singapore may increasingly struggle to compete with Malaysia and Thailand in terms of offering affordable costs for certain procedures and could increasingly target patients seeking more complicated procedures or those from developed markets with higher incomes as a result,” opined the research house.

“Medical tourists from both developed and emerging markets visit Singapore for a range of health services including health screenings, cardiology and oncology services as well as orthopaedic procedures”.

Meanwhile, BMI pointed to Thailand having recently signed a memorandum of understanding (MoU) with Saudi Arabia to attract medical tourists while the Thai government has also relaxed medical visas in 2023 to make healthcare more accessible for international patients.

The measure incudes reducing the cost of visas while increasing the amount of time patients can remain in the country.

“We expect partnerships will remain a feature of Malaysia’s efforts to enhance its medical tourism industry as it seeks to remain competitive amid strong regional competition,” projected BMI.

Recall that KPJ Healthcare had in February 2024 announced that two of its hospitals had joined the Mayo Clinic care network.

The collaboration will enhance the healthcare services provided by the private healthcare service provider which operates 29 hospitals in Malaysia to leverage Mayo Clinic’s knowledge and expertise to attract patients seeking advanced medical care.

“The hospitals will use digital health tools and promote individualised care through Mayo Clinic’s point-of-care database that includes clinical information on medical conditions while physicians will be able to use live video conferences to discuss cases with other doctors in the Mayo Clinic network,” observed BMI.

“This latest partnership follows one signed in January 2024 between private companies Sunway Healthcare Group and PT JCB International Indonesia, a subsidiary of JCB International to attract medical tourists from Indonesia.” - June 18, 2024 

https://focusmalaysia.my/bmi-malaysias-healthcare-market-will-be-one-of-the-fastest-growing-in-asean/