Malaysia’s healthcare sector is marked by robust growth, supported by government investments, strategic policies, and private sector contributions, positioning it for continued expansion and regional leadership in healthcare services.

Introduction: Transformation in Progress

Malaysia’s healthcare sector is a rapidly growing and evolving industry that plays a pivotal role in the country’s economic development and social well-being. With a mix of advanced public and private healthcare services, the sector is recognised as one of the most developed in Southeast Asia. The government has placed significant emphasis on improving healthcare services, infrastructure, and accessibility, positioning Malaysia as a regional hub for medical tourism and high-quality healthcare services.

With an estimated population of over 34.1 million, as per openDOSM report, Malaysia faces the challenges of an aging population, which is expected to see a 6.3% annual growth in the number of people aged 65 and above by 2025. This demographic shift is contributing to the rising prevalence of chronic diseases such as diabetes, hypertension, and heart disease, which are driving up the demand for healthcare services. According to an article on Lens by MONASH University, more than 11% of Malaysians have prediabities, further underlining the urgent need for healthcare system expansion and modernisation.

This chapter offers a comprehensive overview of Malaysia’s healthcare landscape in 2025, exploring the key trends, driving forces, challenges, and opportunities that are shaping the future of the industry. As the healthcare sector navigates a period of rapid transformation, this analysis delves into the evolving dynamics, uncovering both the obstacles it faces and the opportunities it holds. By examining these elements, we aim to provide a deeper understanding of a sector at a crucial juncture, poised for change and innovation.

Current Market Landscape (2025) | A Nation Prioritising Healthcare Transformation

Malaysia’s healthcare industry is experiencing a period of significant transformation, driven by several key factors:

• Market Size and Growth: FitchSolutions stated that Malaysia’s health expenditure is projected to grow at a compound annual growth rate (CAGR) of 8.3% from 2023 to 2028, outpacing regional peers such as Singapore, Thailand, the Philippines, and Indonesia. This growth is attributed to an aging population, the rising prevalence of chronic diseases, and efforts to enhance public health infrastructure and improve access for underserved communities.

• Policy Reforms and Fiscal Measures: According to a report by APnews, in October 2024, Prime Minister Anwar Ibrahim announced a national budget for 2025 that includes aggressive fiscal reforms to narrow the country’s deficit. These reforms involve restructuring subsidies for gasoline, education, and healthcare, as well as introducing new taxes. The government plans to implement targeted subsidies for gasoline from mid-2025, aiming to save RM8 billion annually. Additionally, subsidies for government boarding schools and healthcare will be adjusted so that higher-income individuals contribute more to these services.

• Prioritising Malaysia’s Potential for Medical Tourism: Malaysia seeks to establish itself as a premier medical tourism hub in Southeast Asia by capitalising on its state-of-the-art medical facilities, highly skilled healthcare professionals, and cost-effective treatment options. The healthcare tourism sector has been a significant contributor to Malaysia’s economy. A Malaysian Investment Development Authority report dated August 4, 2024, stated that in 2023, the industry generated RM2.25 billion in revenue, with over one million health tourist arrivals, marking a 15% increase from the previous year. The Malaysia Healthcare Travel Industry Blueprint 2021-2025 aims to position the country as a leading global healthcare destination by 2025.

• Private Hospitals Driving Healthcare Growth: Private healthcare providers have demonstrated robust performance. KPJ Healthcare, for instance, reported double-digit growth in revenue and earnings in the first nine months of fiscal year 2024. Key growth drivers include an aging population, the rising prevalence of chronic diseases, and advancements in healthcare infrastructure and medical technologies.

• Increased Focus on Healthcare Infrastructure: Malaysia’s healthcare infrastructure, particularly public health facilities, will continue to improve. There are ongoing efforts to enhance medical technology, upgrade facilities, and integrate digital health solutions like telemedicine and e-health platforms. According to Ministry of Finance Malaysia, In the 2025 Budget, the government has set aside RM45.3 billion for healthcare, a 10% year-on-year increase

• ICT Spending: According to report by Bloomberg, In October 2024, Malaysia’s central bank announced a provision of MYR 2.6 billion (approximately USD 598 million) to upgrade the technology infrastructure across various industries, including healthcare. This funding aims to bolster the digitalisation efforts within the healthcare sector. Statista report stated that the digital health market in Malaysia is projected to reach USD 613.27 million by 2025. This growth is driven by the increasing adoption of digital health solutions, including electronic health records (EHR), telemedicine, and mobile health applications. Malaysia’s Health White Paper outlines plans to transform healthcare service delivery by implementing a Ministry of Health (MOH) ICT Masterplan. This initiative focuses on harnessing technology for storing, sharing, and analysing healthcare information, aiming to improve service delivery and patient outcomes.

Key Trends and Influences Shaping Malaysia’s Healthcare Landscape

• Aging Population and Non-Communicable Diseases (NCDs)

• Growth in Medical Tourism

• Digital Health Transformation

• Rise of Personalised Medicine

• Rise of Health and Fitness Apps

Aging Population and Non-Communicable Diseases (NCDs)

• Malaysia’s aging population is one of the primary drivers of change in the healthcare sector. The number of elderly individuals (aged 60 and above) in Malaysia is expected to rise significantly over the next few decades. According to the Department of Statistics Malaysia, the percentage of elderly people is projected to increase from 7.5% in 2020 to 15.5% by 2040.

• The Malaysian Ministry of Health reports that NCDs account for more than 70% of all deaths in the country.

• With the elderly population set to double by 2040 and NCDs responsible for over 70% of deaths, telecommunication companies can leverage digital health solutions to address the needs of these groups. Telcos can develop telemedicine services, remote patient monitoring, and health tracking through mobile apps and wearable devices. By partnering with healthcare providers, telcos can offer solutions that allow elderly patients to manage chronic conditions, access healthcare remotely, and stay connected with healthcare professionals. Furthermore, telcos can help reduce the burden on healthcare facilities by providing home-based care options, improving the accessibility and efficiency of healthcare services for an aging population while contributing to early detection and management of NCDs. These advancements not only create new revenue streams for telcos but also improve healthcare outcomes for Malaysia’s growing elderly population.

Growth in Medical Tourism

• Malaysia aims to become a leading medical tourism destination by leveraging its modern healthcare facilities, highly skilled professionals, and competitive pricing for surgeries and procedures compared to developed nations. Malaysia has been positioning itself as a key destination for medical tourism due to its affordable healthcare services and high-quality medical care. Medical tourism has been a growing segment of the healthcare industry, attracting international patients, particularly from nearby countries such as Singapore, Indonesia, and the Middle East.

• According to the Malaysian Healthcare Travel Council (MHTC), Malaysia is ranked as the 12th most popular medical tourism destination in the world, with medical tourism contributing more than USD 1.5 billion annually to the country’s economy. Malaysia’s healthcare sector is expected to generate USD 2.1 billion in revenue by 2025 from medical tourism

• Telcos can provide essential services such as high-speed internet, seamless connectivity, and mobile health applications for international patients. These services can enhance the medical tourism experience by enabling teleconsultations, appointment scheduling, and real-time access to medical records. Additionally, telcos can offer tailored data plans and connectivity solutions to medical tourists, ensuring smooth communication with healthcare providers and their families.

Digital Health Transformation

• The integration of digital technologies in healthcare is a major trend in Malaysia. This includes telemedicine, electronic health records, health apps, and other digital health solutions designed to improve efficiency and patient outcomes. The Malaysian government has been implementing digital health policies through the Health White Paper, aiming to enhance the country’s healthcare delivery system by embracing technological advancements. This transformation is expected to improve access to care, especially in rural and underserved areas, by offering telemedicine and other remote services.

• A Government of Malaysia report stated that By 2025, the Malaysian government aims to increase the adoption of digital health technologies in the healthcare sector, with a focus on artificial intelligence (AI) and big data analytics. Malaysia’s Ministry of Health has also launched initiatives like the Telehealth initiative to promote remote consultations and digital health infrastructure.

• With the government focusing on telemedicine, electronic health records, and AI-driven healthcare solutions, telcos can provide the necessary infrastructure for high-speed connectivity, ensuring seamless communication between patients and healthcare providers. By offering reliable mobile networks, cloud services, and digital platforms, telcos can enable remote consultations, data sharing, and real-time monitoring, especially in rural and underserved areas. As the adoption of digital health technologies grows, telcos can partner with healthcare providers to expand digital health services and improve patient outcomes, positioning themselves as key enablers of Malaysia’s healthcare transformation.

Rise of Personalised Medicine

• Personalised or precision medicine is gaining ground in Malaysia, driven by advancements in genetic testing, biotechnology, and genomics. This approach tailors treatment plans to individual patients based on their genetic makeup and other personal factors. Personalised medicine offers the potential for more effective treatments with fewer side effects, improving patient outcomes. It also opens up new business opportunities for pharmaceutical companies and healthcare providers in the genomics and biotechnology sectors.

• According to BioTech Corp, In 2023, Malaysia’s biotech industry saw investments of over RM 500 million in personalised medicine research and development.

• The Malaysia Genomics Resource Centre (MGRC) reported a 25% year-on-year increase in the number of genetic tests being conducted in the country, particularly for cancer and rare diseases

• Telecommunication companies can provide the essential infrastructure for secure data transmission and storage of genetic information, ensuring seamless communication between patients, healthcare providers, and biotechnology companies. With the increasing use of genetic tests and biotechnology in treatment plans, telcos can offer solutions such as cloud-based platforms for data sharing, telemedicine services for genetic counseling, and mobile health apps for patient monitoring. By enabling real-time access to genetic data and facilitating remote consultations, telcos can enhance the delivery of personalised care.

Rise of Health and Fitness Apps

• Health and fitness apps have become a prominent trend in Malaysia’s healthcare landscape as more people turn to technology to monitor and improve their health. These apps provide individuals with tools for tracking their physical activity, nutrition, sleep, mental health, and other aspects of wellness. The rise in mobile app usage, coupled with the increasing awareness of health and wellness, has made these apps more popular. These apps track daily steps, exercise routines, and physical activity levels. They often integrate with wearable devices like fitness trackers or smartwatches. Some apps monitor sleep patterns, offering recommendations to improve sleep quality and overall restfulness.

• By offering real-time tracking and personalised health recommendations, these apps help individuals take charge of their health. Users can monitor their physical activity, food intake, and mental well-being, leading to healthier lifestyle choices and better disease prevention. The widespread use of health and fitness apps can encourage people to adopt healthier habits before they develop chronic conditions. For example, regular monitoring of physical activity and weight can reduce the risk of obesity, diabetes, and heart disease, which are prevalent in Malaysia.

• A report by Grand View Research stated that the global market for fitness and health apps is expected to grow at a CAGR of 21.6% from 2023 to 2030, and Malaysia is part of this growing trend with local app developers entering the market

• With the growing popularity of these apps for tracking physical activity, nutrition, and overall wellness, telcos can provide the necessary infrastructure for seamless connectivity, data storage, and real-time synchronisation between devices and health platforms. By offering mobile data plans optimised for fitness app usage, telcos can support the increasing demand for health monitoring, especially as wearable devices and fitness trackers become more integrated with these apps. Additionally, telcos can collaborate with app developers to create personalised health solutions, contributing to disease prevention and promoting healthier lifestyles for Malaysians.

Industry Challenges | Hurdles on the Path to Progress

Despite the significant advancements, the Malaysian healthcare landscape faces several challenges that need to be addressed to ensure optimal patient care and continued progress:

• Healthcare Workforce Shortages

• Rising Healthcare Costs

• Aging Population

• Limited Public Health Funding

• Technological Integration and Adoption

Healthcare Workforce Shortages

• Challenge: The shortage of healthcare professionals, including doctors, nurses, and specialists, is a critical issue that impacts the overall effectiveness of Malaysia’s healthcare system. Despite the government’s efforts to increase the number of healthcare workers, the rapid population growth, especially in urban areas, and the migration of healthcare professionals from rural regions to cities exacerbate this challenge. This has led to a situation where certain areas, particularly in rural and remote locations, are underserved, resulting in longer waiting times for medical consultations and a higher patient load for healthcare providers. The government has struggled to meet the growing demand for healthcare professionals, with an ongoing gap in the number of doctors needed to serve the population. Additionally, the healthcare sector is facing high levels of burnout among medical staff, especially in public hospitals, where the demand for services is high but the resources available to care for patients are limited. This shortage not only affects patient care but also places significant stress on the healthcare system, causing delays in treatment and impacting overall health outcomes. According to Ministry of Health Malaysia, there is a shortage of approximately 5,000 doctors, particularly in government hospitals

• Impact: The shortage of healthcare professionals in Malaysia leads to significant strain on the healthcare system. Overworked and overstretched healthcare workers are forced to manage large caseloads, resulting in reduced time per patient and potential for lower quality care. In public hospitals, this often translates into long waiting times for patients, particularly in areas like specialty consultations and elective surgeries. The scarcity of professionals in rural and remote areas exacerbates healthcare inequity, as these populations are forced to travel long distances to access necessary medical care. This shortage can also lead to burnout among healthcare workers, further exacerbating the situation, and potentially leading to high turnover rates in the profession. In the long term, it may discourage new healthcare professionals from entering the field or lead to migration to other countries, compounding the shortage.

• Solution and Telco Role: Telcos can play a crucial role by providing telemedicine and remote consultation services, helping to bridge the gap between patients and healthcare providers, especially in underserved rural areas. By enabling video consultations, telehealth platforms, and mobile health services, telcos can reduce patient waiting times and ease the burden on overworked healthcare professionals. Additionally, telcos can support healthcare workers with tools for better coordination, training, and access to resources, improving job satisfaction and reducing burnout. As the demand for healthcare services continues to rise, telcos can enhance the overall efficiency and accessibility of healthcare while helping to alleviate the strain on the healthcare workforce.

Rising Healthcare Costs

• Challenge: As Malaysia’s healthcare sector grows, so too do the associated costs, creating challenges for both the government and the population. Rising medical costs are driven by factors such as advances in medical technology, an increase in the prevalence of chronic diseases, and the growing demand for specialised care. The costs of medicines, treatments, and procedures are increasing, particularly in the private healthcare sector, making it difficult for individuals without health insurance to afford care. This issue is compounded by the fact that a significant portion of the population still relies on the public healthcare system, which is often overburdened. While the public system remains relatively affordable, it faces challenges like long waiting times and overcrowding. On the other hand, private healthcare is often considered too expensive for the average Malaysian, further exacerbating health inequities. The increasing costs, combined with an aging population and a rise in non-communicable diseases, place considerable strain on both the public and private sectors, leading to significant financial challenges for individuals and the government alike.

• Impact: The escalating cost of healthcare has profound effects on both individuals and the government. For individuals, the rising cost of private healthcare means that many may forgo necessary treatments or opt for delayed care, leading to poorer health outcomes. For lower-income groups, the inability to afford private healthcare means they may have to rely on overcrowded public healthcare facilities, where the quality of care may not be optimal. On the other hand, rising healthcare costs also place pressure on the government to allocate more funds to the public healthcare system, diverting resources from other areas such as education or infrastructure. This imbalance may lead to a situation where the quality of public healthcare continues to decline while private healthcare remains increasingly inaccessible for large portions of the population. In the longer term, the financial burden of healthcare costs can contribute to greater societal inequality, as wealthier individuals continue to receive better care.

• Solution and Telco Role: Telcos can support the adoption of telemedicine and digital health platforms, enabling remote consultations and reducing the need for expensive in-person visits. By offering affordable mobile data plans and healthcare-focused apps, telcos can make healthcare more accessible to lower-income groups, particularly in rural areas where public healthcare is overburdened. Additionally, telcos can collaborate with insurers to offer digital health services, improving the overall efficiency and affordability of care.

Aging Population

• Challenge: Malaysia is experiencing a demographic shift, with an increasingly aging population. By 2040, the number of Malaysians aged 60 and above is expected to double as compared to 2022, posing significant challenges to the healthcare system. Older adults generally require more frequent medical attention, often due to chronic diseases such as hypertension, diabetes, and cardiovascular problems. The aging population places immense pressure on healthcare infrastructure, as the demand for geriatric care, long-term care facilities, and healthcare services specifically catered to the elderly increases. The need for skilled healthcare professionals in geriatrics also grows, but there is already a shortage in this specialized field. This demographic trend will continue to drive up healthcare costs, as elderly individuals often require ongoing treatments and specialized services. The healthcare system must adapt to these changes by expanding its capacity to serve older populations, implementing preventive healthcare measures to reduce age-related diseases, and ensuring that both medical and social support systems are in place for this demographic. According to National Population and Family Development Board Malaysia, by 2040, about 15% of Malaysia’s population is expected to be aged 60 or older, which will place a substantial burden on healthcare services

• Impact: The aging population in Malaysia presents significant challenges to both healthcare systems and society at large. Older adults typically require more healthcare services due to the higher prevalence of chronic diseases and age-related conditions. This puts a strain on the healthcare system, especially as the number of elderly individuals grows faster than the supply of geriatric care. The aging population increases demand for long-term care, such as nursing homes and palliative care, which are currently underdeveloped in Malaysia. Additionally, the growing prevalence of elderly patients leads to higher healthcare costs, both for individuals and the government, as more resources are required to meet their medical and social needs. The societal impact of an aging population also includes a potential shortage of working-age individuals to support the economy and care for the elderly, leading to increased pressure on the younger generation to provide both financial and caregiving support.

• Solution and Telco Role: Telecommunications companies in Malaysia can address the aging population’s healthcare needs by offering innovative solutions such as telemedicine platforms like DoctorOnCall, wearable health devices (e.g., Fitbit, Apple Watch), and mobile health apps like MySejahtera for chronic disease management. They can also design elderly-friendly mobile plans and phones like MaxisONE Elderly Plan, promote digital literacy programs, and support home healthcare services with remote monitoring and emergency alerts. These solutions can help reduce healthcare burdens, improve accessibility, and enhance the quality of care for Malaysia’s growing elderly population.

Limited Public Health Funding

• Challenge: Malaysia’s public healthcare sector, while relatively affordable, is often constrained by limited funding, which affects its capacity to meet the growing demands of the population. Public healthcare funding struggles to keep up with the rising costs of medical technology, medicines, and the increasing demand for services, particularly due to the aging population and the rise in non-communicable diseases. The public sector, which serves the majority of the population, is often overburdened, leading to overcrowded hospitals, long waiting times for treatments and consultations, and a lack of sufficient resources for preventive care. As a result, patients in public hospitals sometimes experience delays in receiving care, and the quality of services can be inconsistent. The Malaysian government has worked to increase healthcare funding, but the allocation still falls short in addressing the rapidly expanding needs of the population. This gap in funding makes it difficult for the government to maintain and upgrade existing healthcare infrastructure, invest in new medical technologies, or hire sufficient staff to handle the growing demand for services, thereby limiting access to quality care. According to a World Bank report, Malaysia allocates only 5.6% of its GDP to healthcare, which is lower than the average 10% seen in high-income countries

• Impact: Limited public health funding affects the ability of the government to address the growing demands on the healthcare system. Insufficient funding results in overcrowded public hospitals, with patients often experiencing long waiting times for treatment. It also means that the quality of healthcare services in the public sector may be compromised, as hospitals and clinics may not have the resources to upgrade their facilities or invest in advanced medical technology. As a result, patients may not receive the most effective or timely care. The financial strain on public healthcare also means that preventive health programs may be underfunded, leading to an increased burden of preventable diseases like obesity, diabetes, and cardiovascular issues. Limited funding can also hinder efforts to address disparities in healthcare access, particularly in underserved rural areas, further exacerbating health inequities across the population.

• Solution and Telco Role: To address Malaysia’s limited public health funding, telcos can play a crucial role by providing innovative digital solutions to enhance healthcare delivery. For example, Telcos can partner with the government to expand telemedicine services, allowing rural and underserved populations to access healthcare remotely, reducing the burden on overcrowded hospitals. Additionally, telcos could support the integration of electronic health records (EHRs) across public healthcare facilities to streamline patient care and improve resource allocation. Offering low-cost internet data packages specifically for healthcare access can further empower individuals to engage in preventive care and seek timely consultations. These digital solutions can improve efficiency, reduce waiting times, and help the government maximise its limited resources.

Technological Integration and Adoption

• Challenge: While Malaysia has made significant progress in integrating technology into healthcare, the pace of adoption remains slow, particularly in public healthcare facilities. Despite the potential benefits of electronic health records (EHRs), telemedicine, and other digital health technologies, many healthcare institutions are still reliant on traditional methods of record-keeping and face challenges in adopting new technologies. There are several reasons for this slow adoption, including resistance from healthcare professionals who may be unfamiliar with new technologies, concerns about data security and privacy, and the high costs associated with implementing digital systems. As a result, Malaysia’s healthcare system has not yet fully realised the efficiencies that digital technologies can provide, such as improved patient management, better diagnostic capabilities, and reduced administrative burdens. Furthermore, rural areas are less likely to benefit from technological advancements due to limited internet access and infrastructure. A Malaysian Healthcare Association survey revealed that only 20% of Malaysian healthcare institutions had fully integrated EHR systems, and less than 10% of hospitals were using telemedicine regularly.

• Impact: The slow pace of technological integration in Malaysia’s healthcare sector limits the potential benefits that digital health tools can provide. The failure to fully adopt electronic health records (EHR), telemedicine, and other digital technologies results in inefficiencies in patient management, delays in diagnosis, and fragmented care. Without comprehensive digital systems, medical professionals may have limited access to patient histories, leading to errors and duplications in treatment. Furthermore, the lack of technological integration reduces the ability to monitor public health trends in real-time, hindering effective disease prevention and management. In rural areas, where internet connectivity and digital infrastructure are often lacking, the benefits of telemedicine and online consultations are not fully realised, further exacerbating healthcare access disparities. The failure to embrace digital health innovation also places Malaysia at a disadvantage compared to other countries that are leveraging technology to improve healthcare delivery, reduce costs, and enhance patient outcomes.

• Solution and Telco Role: Telecommunications companies in Malaysia can play a pivotal role in accelerating the adoption of digital health technologies by providing affordable connectivity and infrastructure, especially in underserved rural areas. Telcos can partner with healthcare providers to enhance telemedicine services, such as DoctorOnCall, by offering affordable data plans that ensure wider access to remote consultations. They can also help facilitate the transition to electronic health records (EHRs) by providing secure cloud storage solutions and ensuring data privacy. Telcos can work with the government and healthcare institutions to improve internet infrastructure in rural areas, making digital health tools more accessible to these populations. By offering training and support for healthcare professionals, telcos can ease the integration of new technologies into daily practices, improving overall healthcare efficiency and patient care.

Key Takeaways | The Future of Malaysian Healthcare

• Digital Health Integration: Malaysia is focusing on integrating digital technologies like telemedicine and electronic health records to improve healthcare efficiency and access, especially in underserved areas.

• Aging Population: Malaysia’s aging population and rising non-communicable diseases are increasing healthcare demand and costs. These challenges are worsened by a shortage of healthcare professionals, especially in rural areas, and limited public health funding. Addressing these issues is crucial for sustainable and accessible healthcare services.

• Health Apps Growth: The rise of health and fitness apps is supported by telcos through connectivity and data solutions, promoting healthier lifestyles and disease prevention.