The healthcare industry will be one of the top growth sectors in Malaysia, supported by a rising affluent class, a growing upper-middle income population who have better private health insurance coverage, as well as supported by medical tourism, according to AmBank Group Research.
In a thematic report today, AmBank group chief economist and head of research Dr Anthony Dass said rapid development in technology however, presents both challenges and opportunities to industry players, including pharmaceuticals, diagnostics, medical technology manufacturers, digital health vendors and healthcare service providers.
“Thus, healthcare companies need to have a technology strategy,” Dass said.
His concern however, is on the general population's affordability of private healthcare.
“The current model appears to benefit those in the upper-middle income, the affluent and medical tourists.
“The less privileged still rely on public medical care, which is their backbone,” Dass said.
Private healthcare is increasingly turning into a “commodity” — one that is supported by the society that can afford to buy it, implying income plays a key role in determining an individual’s ability to spend on private healthcare, he quipped.
This can widen the gap between those who can afford and cannot, if left unchecked, he added.
“Hence, one way is to introduce social health insurance to ensure that people across all economic groups have equitable access to healthcare.
“The regulatory role of the government should be strengthened further to create rules of accountability, transparency and governance. And it must be supported by strong enforcement,” he said.
Meanwhile, Dass said Malaysia’s medical inflation is on a rising trend and is projected to hover around 10%–15%, going forward.
“In 2018, the forecast medical inflation is around 13.2%, from 12.6% in 2017; compared to 2018’s headline inflation projected at 1.5% (3.8% in 2017).
“Hence, the net medical cost after deducting the headline inflation is 11.7% in 2018,” he said.
In 2017, Malaysia’s total healthcare industry spending was RM52 billion, and is projected to reach about RM80 billion by 2020, Dass added.
“Rising demand for healthcare services, emergence of new care models beyond traditional hospital settings, and increased consumer sophistication in relation to healthcare-related technologies, are the key drivers,” he said.