Healthcare costs in Malaysia are expected to climb by 16% next year, driven by a combination of a shrinking pool of local healthcare professionals and rising prices of specialty drugs, according to MBSB Research.
Photo via Malay Mail
The firm highlighted a growing brain drain as a key factor, noting that many doctors, nurses, and medical specialists are leaving for better-paying opportunities abroad. “This labour shortage directly increases the cost of hiring and retaining talent in the private healthcare sector,” the report said, as cited by Berita Harian. Globally, labour expenses make up more than half of hospital operating costs, a trend now mirrored in Malaysia.
Private hospitals are responding by offering higher salaries to attract and retain specialists who previously moved from the public sector. Between 2020 and 2024, 440 healthcare professionals left the Health Ministry (MOH) for overseas positions, including five medical specialists, 54 medical officers, and 381 nurses, Health Minister Datuk Seri Dr Zulkefly Ahmad told Parliament in September.
Rising prices of specialty drugs are also pushing medical bills higher. High-value medicines for non-communicable diseases—such as GLP-1 treatments for diabetes and obesity—have become more expensive due to costly Active Pharmaceutical Ingredients, putting additional pressure on local pharmaceutical manufacturers.
The adoption of new medical technologies further adds to hospital operating costs. Major private healthcare operators, including those under IHH Healthcare Bhd, face a dual challenge of retaining skilled staff while managing rising drug and technology expenses.
In response, the government plans to introduce structural reforms aimed at controlling medical inflation and enhancing transparency in healthcare spending. Finance Minister II Datuk Seri Amir Hamzah Azizan recently announced the rollout of a basic ‘Medical & Health Insurance/Takaful (MHIT)’ product by the end of next year.
The scheme is designed to provide Malaysians with affordable coverage for hospitalisation and selected outpatient care while addressing cost pressures within the healthcare system.
