MALAYSIA’S HEALTHCARE SPENDING STANDS AT 4 PCT OF GDP; UNDERFUNDING A CHALLENGE -- MALAYSIAN RE

KUALA LUMPUR, March 27 (Bernama) -- Underfunding in Malaysia’s public health sector remains a key challenge, with healthcare expenditure standing at about four per cent of gross domestic product (GDP), according to Malaysian Reinsurance Bhd (Malaysian Re).

This is lower than the six to seven per cent average in comparable economies, the national reinsurer said in its annual research publication Malaysian Insurance Highlights (MIH) 2025.

“Meanwhile, the private sector faces its own hurdles, including non-aligned interests between policyholders, insurers, and healthcare providers, which have led to concerns over the overconsumption of healthcare services and inflated billing,” Malaysian Re said in a statement today on the release of MIH 2025.

Malaysian Re is a wholly owned subsidiary of MNRB Holdings Bhd, which underwrites all classes of general reinsurance business as well as general and family retakaful businesses through its retakaful division.

Its president and chief executive officer, Ahmad Noor Azhari Abdul Manaf, said there is an urgent need to introduce new healthcare provision and financing strategies in Malaysia to build a more efficient and sustainable healthcare system.

“The insurance industry plays a vital role in this transformation and must continue to innovate its products to address consumer needs while mitigating rising healthcare costs.

“Collaboration with regulators and healthcare stakeholders will be essential in sustaining the progress and momentum needed to tackle these challenges effectively,” he said.

The sixth edition of MIH provides an in-depth analysis of the challenges associated with healthcare financing in Malaysia’s dual public and private health system, explores emerging trends in medical and health insurance as well as strategies to ensure Malaysians to have access to quality and affordable healthcare.

It also highlights the key factors contributing to Malaysia’s escalating healthcare costs, including medical inflation, an ageing population, and the increasing prevalence of noncommunicable diseases.

The findings of MIH 2025 are derived from structured interviews and insights from industry experts, offering valuable perspectives on the complexities of healthcare financing and the opportunities available for reform. 

Ahmad Noor Azhari said access to healthcare is a fundamental right that underpins wellbeing, livelihoods, and economic stability.

In Malaysia, he said, the rising healthcare costs, coupled with inadequate public sector funding and misaligned interests within the private sector, pose significant challenges to establishing a sustainable healthcare financing framework.

“Recognising the importance of this issue and its impact to insurers and Malaysians as a whole, Malaysian Re has chosen to focus on this topic for MIH 2025,” he said.

-- BERNAMA