KUALA LUMPUR, July 21 – Malaysia is poised to become a major healthcare hub, driven by quality care, advancing technologies, and the growth of the hospitality sector, said MBSB Investment Bank Bhd (MBSB IB).
In a note today, the bank said that the healthcare sector is undergoing a transition due to evolving national healthcare needs.
“Malaysia is progressing from a developing to a high-income nation, and its healthcare system is grappling with the complexities that accompany this shift.
“The epidemiological transition from communicable to non-communicable diseases, coupled with an ageing population, reflects a maturing society that now faces diseases of affluence and lifestyle,” it said.
MBSB IB noted that challenges are no longer merely about basic access, which has largely been achieved in Peninsular Malaysia, but now concern quality, efficiency, equity, and sustainability amid rising costs and demand.
Malaysia is not rigidly adhering to a single ideological model – whether fully public or private – but is instead adopting a pragmatic, dual-tier system with increasing public-private partnerships, it said.
The bank said strong government support forms the backbone of the sector.
“The government’s continued heavy subsidisation of public healthcare and its active pursuit of universal health coverage through various initiatives, such as PeKaB40, Skim Perubatan Madani, and the National Health Fund, demonstrate a firm commitment to ensuring that healthcare remains a right for all citizens, not merely a privilege.
“This is reflected in the Budget 2025’s allocation of RM45.3 billion for the domestic healthcare sector. The willingness to address high out-of-pocket expenses also highlights a focus on financial risk protection for the population,” it said.
MBSB IB also noted the Ministry of Health’s emphasis on digitalisation, data analytics, and value-based healthcare, which indicates a forward-looking approach, recognising that technology and efficiency are essential for long-term sustainability.
“Malaysia is also leveraging healthcare as an economic engine. Beyond providing care for its citizens, the country actively promotes itself as a leading healthcare destination.
“As of writing, Malaysia has been named the number one destination for medical tourism, generating over RM2 billion in annual revenue on average, with over 1.3 billion foreign patients seeking treatment and surgery at local facilities,” it said.
This, the bank said, highlights an understanding of healthcare’s dual role – as both a vital social service and a key contributor to the national economy through foreign exchange earnings and the creation of high-value jobs.
“The global halal hub aspect further showcases a strategic niche marketing approach, catering to specific global demographics,” it added.
MBSB IB maintains a positive outlook for the sector and has upgraded KPJ Healthcare to ‘buy’, with a target price of RM3.02, citing the group’s strong market presence, strategic growth initiatives, and improving financial performance as key advantages.
