In anticipation of Budget 2026, which will be tabled in Parliament on October 10, 2025, the Association of Private Hospitals of Malaysia (APHM) has put forward a set of proposed measures to the Ministry of Health (MOH) aimed at ensuring the long-term sustainability of private health care as a critical partner in supporting the nation’s health care system.
These proposals take into account rising health care costs, growing case volume, and the urgent need for reforms, while reinforcing Malaysia’s position as a provider of world-class health care services both for medical tourism and in attracting foreign investment.
APHM’s proposed measures are as follows:
Increased Allocation For Hospital Services Outsourcing Programme (HSOP)
In view of varying degrees of both inpatient and outpatient capacity among our member hospitals, especially for diagnostic tests and imaging, APHM suggests that the HSOP allocation to be increased and expanded.
We also hope that the HSOP programme can start earlier in the year, after allocations have been announced.
This will allow private hospitals to play a complementary role by providing relief to the public health care system through the utilisation of its existing spare capacity in private hospitals.
Refinement Of SST Structure To Avoid Double Taxation Within The Health Care Ecosystem
To avoid unintended SST-related cost burdens on patients, we propose an exemption for inter-facility transactions involving licensed health care service providers under the Private Healthcare Facilities and Services Act 1998 (Act 586).
This includes services exchanged between hospitals and clinics or between service providers operating under the same corporate group or licence.
Incentives Or Investment Tax Allowance (ITA) For Investments In AI, Robotics, And Health IT Infrastructure
To support Malaysia’s digital health care transformation and national electronic medical record (EMR) ambitions, we propose incentives or ITA for investments in patient-centric digital solutions (AI-driven diagnostics, robotic-assisted procedures, etc.), and core IT infrastructure and cybersecurity systems for hospitals and clinics.
Presently, major private hospitals are investing and employing AI to reduce wait times and improve health outcomes. These investments are critical for ensuring efficient, data-driven, and interoperable national health care services for the long term.
Malaysia Year Of Medical Travel (MYMT) 2026 Grant
To support the MOH’s MYMT 2026 initiative, we propose a matching grant scheme for hospitals listed under the Malaysia Healthcare Travel Council (MHTC) to promote Malaysian health care services abroad.
This grant could be up to RM10,000 per promotional trip, capped at 3 trips per year per hospital, and focused on promotional activities within Asean countries.
We strongly believe that this will help raise Malaysia’s profile as a regional hub for quality, affordable health care.
Accordingly, APHM urges the government to consider these proposals, as official support is critical to ensure the sustainability, quality, and continued advancement of the private health care sector in Malaysia as an indispensable, complementary pillar to the public health care system.
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