KUALA LUMPUR, Jan 19 — Dzulkefly Ahmad has projected that private health care spending in Malaysia will exceed public expenditure, due to rising private investments and the government’s fiscal constraints.
The health minister acknowledged that public health care spending should reach 5 per cent to 6 per cent of the country’s gross domestic product (GDP), but said he didn’t want to “repeat” this, saying it was sometimes about inefficiency or how the Ministry of Health (MOH) “fails to spend”.
“I’m a minister not just for the public sector, but also the entire ecosystem and landscape of health, which is public and private,” said Dzulkefly in his New Year address at MOH Putrajaya last January 6.
“We are a dual construct, almost like now 50-50. I believe soonest, the private sector will surpass our spending that is constrained in fiscal space.
“They are ramping up their investment and soon, they will be spending more. Therefore, it’s very important for me to ensure that the private sector not only helps, but isn’t excessive in terms of inflation in that sector.”
According to the MOH’s Malaysia National Health Expenditure (MNHA) 2011-2023 released in December 2024, which is the latest data available, Malaysia’s total expenditure on health reached 4.6 per cent of GDP in 2023, comprising 2.4 per cent public and 2.2 per cent private spending.
Malaysia’s public sources of health care financing amounted to about RM44.4 billion in 2023, some RM4.5 billion higher than RM39.8 billion in private sources of financing. The public sector comprised 52.7 per cent of the country’s total expenditure on health, compared to 47.3 per cent private.
According to the MNHA, private insurance only comprised 17 per cent of private sources of financing in 2023, compared to private household out-of-pocket (OOP) expenditure at 76 per cent.
Of private household OOP spending, 46.4 per cent went to private hospitals, followed by private medical clinics (18.3 per cent). Outpatient services consumed the biggest chunk of OOP expenditure at 39.1 per cent, followed by inpatient services (22.8 per cent).
For private health care expenditure to surpass public spending, there needs to be a dramatic increase of at least RM4.5 billion in OOP spending and insurance companies’ payments of health insurance claims, based on 2023 figures – or for the government to cut MOH’s annual budget.
Major private hospital groups like Sunway Healthcare Holdings Bhd and Asia OneHealthcare are planning initial public offerings (IPO) this year. Both valuations are reported to be at least RM16 billion in market capitalisation.
Large investments, however, do not necessarily translate to health care expenditure, such as patients either self-paying or insurers paying for treatment.
Dzulkefly also said in his New Year address that MOH’s attrition rate is an average of 10 staff monthly in public health care facilities.
“I’ve been going around, I ask the pengarah, how many are you losing – average of 10 per month,” he said, without specifying if these were doctors, nurses, or other health care workers.
He touted Rakan KKM to retain specialist doctors, pledging to launch the MOH’s private-wing programme in the first quarter of the year.