MIDF Research Remains Positive On Healthcare Sector, Forecasts 6-8 Pct Growth

KUALA LUMPUR, May 5 (Bernama) -- MIDF Amanah Investment Bank Bhd’s research arm, MIDF Research, continues to remain positive on Malaysia’s healthcare sector, forecasting a 6.0-8.0 per cent compound annual growth rate (CAGR) until 2030.

In a research note today, MIDF Research said the sector contributed 2.1 per cent to Malaysia’s gross domestic product (GDP) in 2023, and continues to support job creation in both the public and private segments.

“The real growth in private health services registered a robust average increase of 9.3 per cent from 2022 to 2024, surpassing the average growth of 5.8 per cent recorded between 2016 and 2019.

“This reflects a stronger demand for private healthcare services, with the healthcare sector also being a key contributor to employment due to the increased number of facilities in both the government and private sectors,” it said.

However, it cautioned that rising medical insurance premiums remain a challenge, driven by cost pressures from medical inflation. 

“The challenge of medical inflation, with healthcare expenses growing faster than both wages and general inflation, is a global issue affecting countries beyond Malaysia.

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“In response to medical claims inflation, Malaysian insurers and takaful operators have implemented measures to alleviate premium increases,” the research house said. 

MIDF Research also said that Malaysia’s dual healthcare system, consisting of a heavily subsidised public sector and a technologically-driven private sector, has helped to position the country as a leading destination for medical tourism.

“Malaysia had yet to fully adopt the Diagnosis-Related Group (DRG) system nationwide, yet DRG is believed to be a good step to standardise efficiency and cost containment, as well as encouraging data-driven care, which are crucial to support medical tourism while lessening the burden on local patients,” it said.

DRG is a classification system used by healthcare providers and insurers to categorise patients based on their medical diagnoses and treatments, grouping them into specific categories with a fixed payment rate for similar clinical conditions and treatments.

On investments, MIDF Research noted that there has been an increase in hospital transactions and healthcare-related initial public offerings, adding that the upcoming listing of Sunway Healthcare Group could act as a catalyst for the re-evaluation of the sector.

-- BERNAMA