If you feel like hospital bills and insurance premiums are eating more and more of your income, you’re not alone. Many Malaysians now have two big fears: getting seriously sick and growing old without enough Employees’ Provident Fund (EPF) money.
The latest “solution” being floated is to let people use their EPF savings to pay for private medical insurance.
On the surface, that sounds caring. In reality, it’s asking you to spend your retirement to keep feeding a system where prices keep climbing.
What almost nobody talks about is this: the government already has a much better way to deal with medical inflation – through the big companies it owns that run many of our private hospitals, and which are already making billions from them.
Who really makes money from your hospital bill?
When you see names like Pantai, Gleneagles, or KPJ, you might think “private sector” and rich shareholders somewhere far away.
In truth, Khazanah, a government‑linked fund, is a major owner of IHH Healthcare, the group behind Pantai and Gleneagles. Johor Corporation (JCorp), a state government-linked corporation (GLC), controls KPJ hospitals all over the country. EPF and Permodalan Nasional Berhad (PNB) – which manage ordinary Malaysians’ savings – also hold sizeable stakes in these hospital groups.
These hospitals are not scraping by; they are doing very well.
Look at IHH Healthcare. In 2023, IHH made RM20.9 billion in revenue, up 16 per cent from the year before. Its profit after tax and minority interest (PATMI) nearly doubled to about RM3.0 billion, helped by some one‑off gains. Its hospital business is the main driver of this money.
Look at KPJ Healthcare. In 2024, KPJ’s revenue rose 15 per cent to RM3.92 billion. Its net profit jumped from about RM263 million to RM354 million, a 34 per cent increase.
More patients came, more beds were filled, and profits grew fast.
Together, these two groups are pulling in close to RM25 billion in revenue from hospital operations a year.
So yes, private hospitals are big business. And our own public funds are part of that business.
How big is this for EPF and the other funds? Now, someone might say, “But surely EPF and Khazanah need these profits, right?”
Here’s the scale. EPF earned RM57.57 billion in investment income in just the first nine months of 2024. Khazanah’s main investment portfolio is worth around RM122.5 billion. PNB recorded RM13.04 billion in net income in 2023.
Compared to those numbers, even a highly profitable hospital group like IHH – with RM20.9 billion revenue and RM3.0 billion profit – is important, but not everything.
For these big funds, income from private hospitals is likely in the single‑digit percentage range of their total yearly income, noticeable, but far from their lifeblood.
That’s the key point.
GLCs and government-linked investment companies (GLICs) are making very good money from private health care. But they could afford slightly lower profit growth from hospitals if that helped keep medical inflation under control.
Why Using EPF For Insurance Is Risky For Ordinary People
Against this backdrop, think again about the idea of using EPF to pay medical insurance premiums. In the short term, it feels like a relief: “My premium went up, but at least I can use EPF.”
But in the long term, it means that your EPF balance at 55 or 60 will be smaller. The same system that pushed prices up gets to keep going – now funded by your retirement savings.
Meanwhile, hospitals like IHH and KPJ continue to grow revenue and profits. EPF and other funds continue to earn dividends and capital gains from those shares.
You, the member, are paying twice: Once as a patient/insurance customer. Again as a future retiree whose EPF is being used to support high prices instead of being saved for old age.
It’s like paying for an expensive meal now with a credit card that you’ve decided your future self will settle – with interest.
A better way: fix prices using the power we already have. Instead of raiding EPF, the government should start by asking more from the GLCs and GLICs that profit from private hospitals.
Because they are big shareholders, they can push hospital boards to limit how fast prices go up for common treatments, demand clearer, upfront package prices so patients aren’t shocked by their bills, and tie part of hospital CEOs’ bonuses to keeping costs under control and avoiding unnecessary tests and “upgrades”.
Big hospital groups like IHH and KPJ set the tone for the whole market. If they move towards more transparent and disciplined pricing – guided by their public‑fund owners – smaller hospitals and insurers will have to follow.
On top of that, when public money is used to fund new hospital projects, expansions or “private wings” in government hospitals, that money should come with strings attached:
You want capital from EPF or Khazanah? Then you must also commit to fairer pricing and reasonable price increases over time. That’s what it means to treat public investment as a tool for the public good, not just a way to maximise returns.
Don’t pay today’s bill with tomorrow’s retirement. We need a simple rule everyone can understand. Don’t fix today’s hospital bill by quietly emptying tomorrow’s EPF account, especially when we haven’t even tried to use the power we already have over hospital prices.
Malaysia is in a special position. Few countries have a government that is both a major regulator of health care and a major owner of private hospitals through public funds.
That can be a conflict of interest or it can be a powerful way to protect citizens.
If we’re serious about helping ordinary Malaysians, we shouldn’t start by treating their retirement savings as a spare tyre for a system that refuses to slow down.
We should start by asking the hospitals and funds that are already making billions from health care to share more of the burden of keeping costs fair.
The first lever to pull is not the EPF counter at the bank; it is the boardroom of the hospitals that your money already owns.
Dr Pearl Leong is your friendly budget-conscious neighbourhood GP.
- This is the personal opinion of the writer or publication and does not necessarily represent the views of CodeBlue.
