Kuala Lumpur: MIDF Amanah Investment Bank Bhd’s research arm, MIDF Research, has expressed continued optimism regarding Malaysia’s healthcare sector, projecting a compound annual growth rate (CAGR) of 6.0-8.0 percent until 2030.
According to BERNAMA News Agency, the research note highlighted that the healthcare sector contributed 2.1 percent to Malaysia’s gross domestic product (GDP) in 2023 and continues to play a significant role in job creation across both public and private segments. The real growth in private health services exhibited a solid average increase of 9.3 percent from 2022 to 2024, outpacing the 5.8 percent average growth recorded between 2016 and 2019. This surge underscores the increasing demand for private healthcare services and the sector’s pivotal role in employment due to the rising number of facilities in both government and private sectors.
Despite the positive outlook, MIDF Research warned of challenges posed by rising medical insurance premiums, driven by cost pressures from medical inflation. The issue of healthcare expenses growing faster than wages and general inflation is not unique to Malaysia but a global concern. In response, Malaysian insurers and takaful operators have taken steps to mitigate premium increases caused by medical claims inflation.
Additionally, MIDF Research emphasized Malaysia’s dual healthcare system, which comprises a heavily subsidized public sector and a technologically advanced private sector. This dual system has bolstered Malaysia’s reputation as a premier destination for medical tourism. Although the country has not fully implemented the Diagnosis-Related Group (DRG) system nationwide, adopting such a system is seen as a positive move towards standardizing efficiency, cost containment, and promoting data-driven care. These advancements are deemed essential for supporting medical tourism and reducing the burden on local patients.
In terms of investments, the research noted an uptick in hospital transactions and healthcare-related initial public offerings. The anticipated listing of Sunway Healthcare Group is expected to act as a catalyst for a sector-wide re-evaluation, potentially spurring further growth and investment.