Health & Wellness
The first hospitals in Malaysia were constructed for the purpose of treating tin miners who suffered from a variety of diseases during the late 19th century, prior to the country’s independence from the United Kingdom in 1957. The hospital considered to be the country’s oldest, Taiping Hospital, and which was originally known as Yeng Wah Hospital, was built in 1880.
Following independence, the expansion of Malaysian healthcare services became a national priority. In 1970, the country adopted its current public healthcare system, which comprises two fundamental components: first, health clinics that are staffed by doctors, dentists and other medical professionals; and second, community clinics, in which community nurses and midwives provide a range of patient services. Similar to the public system, the role of the private sector has also grown significantly over the last four decades: in 1980, there were just 50 private hospitals in the country; this number had increased to 220 by 2011.
Between 1995 and 2014, healthcare expenditure per capita grew . The expansion of the sector has seen the number of specialist hospitals, clinics and dental surgeries increase significantly, in particular over the last decade. In addition, having experienced continued industry growth since the beginning of the 1990s, wellness expenditure in Malaysia reached 2.2 billion in 2013.
In 2005, the Malaysian government began its efforts to promote the country’s medical tourism industry, with the creation of a small unit under the Ministry of Health (MOH). The subsequent growth of the industry prompted authorities to seek ways to facilitate the development of the burgeoning sector, which led to the establishment of the Malaysia Healthcare Travel Council in 2009.
1880 Construction of Taiping Hospital
1957 Independence from United Kingdom
1970 Adoption of modern-day healthcare system model
1971 Medical Act
1974 Pharmaceutical Services Division was established
2005 Ministry of Health creates unit to promote Malaysian medical tourism industry
2009 Establishment of Malaysia Healthcare Travel Council (MHTC)
2011 Incorporation of MHTC as standalone entity
State of the market
Healthcare in Malaysia operates under a two-tier system divided between the public and private sectors. The public sector provides subsidised universal care to all citizens. The private sector, on the other hand, supplies services on a fee-for-use basis and is internationally recognised for delivering world-class specialty healthcare offerings.
In terms of patient services, the public sector oversees approximately 82 per cent of inpatient care and 35 per cent of outpatient care nationwide. As such, 18 per cent of inpatient and is provided by the private sector.
Combined public and private health expenditure accounted for 4.2 per cent of Malaysian gross domestic product in 2014 . Despite healthcare expenditure per capita having more than tripled between 1995 and 2014, in conjunction with the corresponding expansion of private facilities, the public/private mix of healthcare financing has remained relatively stable. Accordingly, 52 per cent of all healthcare expenditure in Malaysia in 2013 corresponded to the public sector, compared to 48 per cent to the private sector.
Malaysia is widely regarded as a top regional destination for its growing healthcare tourism industry. This is primarily due to the fact that the medical tourism sector boasts a developed regulatory framework, affordable prices and a number of hospitals that are recognised by international healthcare accreditation schemes. As a result, the number of medical tourists in Malaysia tripled between 2003 and 2007 and the trend continues on an upward trajectory.
Although a global front-runner, the wellness industry in Malaysia is still in a nascent stage. The country holds approximately 151 spa facilities, which are either operated by local players or hotel and resort chains. Representatives from the sector expect the demand for healthcare services to continue to expand over the coming years. The primary drivers behind this expansion are the projected demographic and macroeconomic shifts in Malaysian society, including an increase in the ageing population, life expectancy and lifestyle diseases.
How the market operates
Malaysia has a number of federal agencies and authorities charged with regulating and promoting the health and wellness sector. The main bodies are as follows:
Malaysia Healthcare Travel Council (MHTC)
The MHTC operates as a coordinating agency for the healthcare travel industry in Malaysia. Among other functions, it coordinates promotional activities for Malaysian healthcare providers and related stakeholders, as well as driving industry collaborations and building public-private partnerships, in Malaysia and beyond.
Malaysian Investment Development Authority (MIDA)
MIDA is the government’s principal agency for the promotion of the manufacturing and services sectors in Malaysia. The entity provides a wide range of services to investors, including facilitating project implementation, providing information on investment opportunities, and expediting joint venture partnerships for companies. A number of senior representatives from key government agencies, such as the Department of Labour and the Immigration Department, are stationed at MIDA’s headquarters in Kuala Lumpur to advise investors on government policies and procedures.
Malaysian Medical Council (MMC)
The MMC was created to safeguard the highest standards of medical ethics, education and practice across the national health sector. Its main objective is to prioritise the interest of patients, the general public and the medical profession by means of the fair and effective administration of the Medical Act 1971.
Ministry of Health Malaysia (MOH)
The MOH is the country’s leading healthcare agency and is tasked with providing leadership and direction relating to health and healthcare development. Public sector health services are organised under a civil service structure and centrally administered by the Ministry. In addition, the MOH plans and regulates public sector health services and supervises the pharmaceutical industry, as well as and overseeing food safety standards.
National Pharmaceutical Regulatory Agency (NPRA)
The NPRA, formerly known as the National Pharmaceutical Control Bureau, is a government agency that operates under the Ministry of Health and is responsible for ensuring the quality, efficacy and safety of pharmaceutical products in Malaysia. Regulatory control is conducted by means of the country’s registration and licensing scheme and involves scientific testing on all products prior to their marketing.
Pharmaceutical Services Division (PSD)
A division under the Ministry of Health, the PSD is responsible for setting policies relating to the use of safe and good-quality drugs in public health facilities. It also manages the selection, procurement and distribution of pharmaceuticals for their use in the aforementioned premises.
The Malaysian healthcare sector has experienced significant growth over the past decade and the government is seeking to consolidate this trend by encouraging private investment in a range of sectors. This includes attracting investors in areas relating to the manufacture of pharmaceutical products and medical devices, clinical research and aged-care services, as well as fostering greater public/private collaboration through several incentivisation schemes. Current tax incentive initiatives provided by the government include a double deduction for the promotion of the export of services for medical and dental offerings. Additional exemptions are offered to healthcare services that target certain qualifying foreign clients, based on the overall value of the health providers’ increased export income.
Further incentives are aimed at the promotion of healthcare travel. These include income tax exemptions for companies that establish new private healthcare facilities or for existing private healthcare facilities that are undertaking expansion, modernisation or refurbishment, and which are specifically aimed at promoting healthcare travel. In addition, tax deductions are available for private hospitals that incur expenses during the process of obtaining domestic or internationally recognised accreditations.
Main players and market share
As of 2013, Malaysia’s two-tier medical system composed of the public sector, which operated 149 hospitals and 3,122 health and mobile clinics, and the private sector, which oversaw 214 hospitals, 54 outpatient care centres and 6,801 medical clinics. Of the 266 private hospitals and outpatient care facilities in operation at the end of 2013, 78 were active participants in the government’s Healthcare Travel Programme, which is aimed at promoting medical tourism in the country. Key players in the private healthcare sector include IHH Healthcare, Pantai Holdings and KPJ Healthcare.