Malaysia’s healthcare system faces funding, cost challenges

The report also highlighted the key factors contributing to the escalating healthcare costs.

Underfunding remains a key challenge in Malaysia’s public sector, with its healthcare expenditure standing at around 4% of GDP—well below the 6% to 7% average seen in comparable economies, according to Malaysian Reinsurance Berhad’s (Malaysian Re) report.

Meanwhile, challenges in the private sector include non-aligned interests between policyholders, insurers, and healthcare providers, which have led to concerns over the overconsumption of healthcare services and inflated billing.

“There is an urgent need to introduce new healthcare provision and financing strategies in Malaysia to build a more efficient and sustainable healthcare system,” said Ahmad Noor Azhari Abdul Manaf, president and CEO of Malaysian Re.

“The insurance industry plays a vital role in this transformation and must continue to innovate its products to address consumer needs whilst mitigating rising healthcare costs,” he added.

The report also highlighted the key factors contributing to Malaysia’s escalating healthcare costs, including medical inflation, an ageing population, and the increasing prevalence of non-communicable diseases.