Chua Hong Teck presented his views on public-private partnerships in healthcare financing at the SEA Healthcare and Pharma Conference, hosted by the National Cancer Society Malaysia (NCSM) on April 24, 2025.
Chua emphasized two key policies adopted by the government to address healthcare financing: Universal Health Coverage (UHC) and the outsourcing of healthcare services to the private sector. UHC ensures that all Malaysians have access to public healthcare without financial burden. This is evident in the widespread availability of health facilities, including mobile and flying doctor services. The Ministry of Health (MOH) has kept its service charges the same since 1982, with exceptions for new services and foreign patients. However, with rising demand for private healthcare, the government is planning to introduce higher fees for higher-income groups in the 2025 Budget.
In contrast, the private sector is stepping up to cater to those who can afford higher-quality services, often with shorter wait times and better facilities. The growing demand for private healthcare has led to an increase in private providers, such as IHH Healthcare, KPJ Healthcare, and KMI Healthcare. This trend results in a dual system of financing: the public sector, which remains highly subsidized, and the private sector, which relies on user-paid services, including insurance and out-of-pocket payments.
Over the past decade, Malaysia has spent 4 to 5 percent of its GDP on healthcare. In 2023, total health expenditure reached RM84.2 billion. Public sector health activities dominate, while private healthcare has been growing rapidly in urban areas. Despite the increase in the number of doctors and nurses in the public sector, the share of hospital admissions and outpatient visits remains stable.
Chua raised questions about whether the country is truly facing a shortage of doctors in hospitals, or if the issue lies in the distribution of healthcare resources across the public sector. Citing major financing studies conducted between 1985 and 2018, he noted that several proposals, such as social health insurance and earmarked taxes, were suggested but never implemented by the private sector. Instead, certain target groups have seen the introduction of limited standalone insurance schemes, like the Skim Perlindungan Insurance Kesihatan Pekerja Asing (foreign worker insurance) and the mySalam program for critical illnesses.
In the 12th Malaysia Plan (2021-2025), proposals aimed at financial sustainability in healthcare included reviewing current health charges, introducing health endowment funds from waqaf, and encouraging the M40 group to adopt health and employment insurance. However, many of these initiatives have yet to be implemented, with political factors and delayed decision-making being key reasons for their stagnation. The newly formed Health Transformation Office (HTO) is now tasked with exploring new healthcare financing options, such as voluntary private insurance schemes.
Chua raised concerns about the government’s recent focus on voluntary insurance in light of rising medical inflation and insurance premiums. The government had outsourced its responsibility for healthcare, and only when the sustainability of private insurance came into question did it begin offering more support. This has highlighted the vulnerability of relying heavily on private financing for healthcare.
In conclusion, while public-private partnerships in healthcare financing have provided some benefits, they have been far from perfect. The government has actively outsourced healthcare services to the private sector, but the model’s sustainability remains in doubt. Furthermore, the government’s ability to invest more in public health facilities is limited due to its fiscal position. The 5 percent GDP spending on public healthcare remains an unrealistic goal without alternative sources of revenue.
Chua suggested that the government should recognize the role of the middle class, who pay taxes but also contribute significantly to private healthcare costs. The continued presence of private healthcare is inevitable, and it plays a crucial role in the national health system. Transforming the healthcare financing and delivery system will require incremental reforms with clear timelines, and a whole-of-government approach is necessary to ensure a healthy nation for future generations.
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