THE HEALTH CARE SECTOR

Recently, the Malaysian health care sector has experienced strong growth in both the number of private and public institutions. Specific areas of growth are among others telemedicin and health tourism.

You can find more information about the health care sector, including market opportunities, on the underlying pages, or download the complete report in PDF-format. 

• Introduction 
• Market size indicators
• Market trends
• Market opportunities

Introduction:

Malaysia is as part of ASEAN, a gateway to the rest of Asia, which has the fastest growing economies and where 75% of the world’s population resides. To this, Asia’s health care market constitutes approximately 40% of the global health care market and this share is expected to increase to around 45% by the end of 2005. Accordingly, a diverse range of medical equipment has to be imported to meet the growing needs.

The health care sector in Malaysia has received increasing focus throughout the last couple of years and was rated as number one on the American Embassy “New economy sector” as the sector in Malaysia with the best business opportunities in 2004.

There are two types of medical services in Malaysia, namely, the public medical sector and the private medical sector. The public sector is the main provider accounting for approximately 57% of the total health care expenditures; however, during the last two decades the private sector has developed significantly. The government wants gradually to shift from its role as being a provider to that of a regulator, who sets norms and standards for both the public and private healthcare.

Some of the steps in the privatisation process are listed below:

· Rapid growth in the number of private hospitals. In 1980 there were only 50 private hospitals with less than 2,000 beds, and currently there are 224 private hospitals with almost 9,000 beds.

· Privatisation of non-clinical services, such as cleaning, laundry, facility maintenance, and waste management.

· Privatisation of pharmaceutical distribution. The previously public Pharmaniaga, which distributes about 75% of all drugs in the public sector, was privatised in 1994.

The Malaysian government finances the public health care sector, whereas the private sector is either financed by charity organizations, run on a non-profit basis or as profit-oriented companies. Although the government does not finance the private sector it is still very supportive, as the private sector supplements the public sector in meeting the demand for health services.

Market size indicators:

Public
Many different government bodies are involved in the public health care sector; however, the Ministry of Health acts as the main provider, planner and organiser of the medical and health services of the country. Although the healthcare sector in Malaysia is already well developed it is expected that the Ninth Malaysian Plan continue to place importance on the expansion and development of the health care sector in order to strengthen the quality.With a rising and ageing population, the government wish to improve in many areas including the refurbishment of existing hospitals, building and equipping new hospitals, expansion of the number of polyclinics, improvements in training, and expansion of Telehealth.

According to the widely accepted indicators of health complied by the World Health Organization, Malaysia has a health status that is almost as good as other more industrialised countries. Malaysia has low infant mortality rate and high life expectancy; to this the health care expenditure was only approximately 3% of GDP in 2004. But the expenditure is rising and the government has allocated almost US$ 1.5 billion for developing the health care sector in the period 2001-2005. 95% of the money is earmarked for the construction and the equipment of 31 new hospitals and 41 new clinics, as well as for upgrading of existing hospitals and clinics.

Allocation for Health Services under the 8th Malaysia Plan

Source: Eight Malaysia Plan 2001-2005

Currently there are 124 public hospitals out of which 6 are special medical institutions, with a total of 39,450 beds.  
 

Private
There are 224 private hospitals (including maternity and nursing homes), which provide almost 9,000 beds. The majority is located in urban areas and unlike many of the public hospitals they are equipped with the latest diagnostic and imaging facilities. This is possible because they provide services for the rich segment of the population and are not financed by the government and thus have no restrictions when it comes to procurement of equipment.

The fact that the private hospitals do not have restrictions when it comes to payment also means that the doctors at the private hospitals are paid much more than at the public hospitals. This creates at shortage for medical professionals in the public sector. 8,118 out of the 18,191 doctors in Malaysia are working in the private sector, which corresponds to 45%, compared to that they are only serving 9,000 out of the 48,450 beds in the country, corresponding to 18.6%.   
  
Market trends:

There are two new areas of interest to the Malaysian government in the health care sector. The two areas are the Telehealth project under the Multimedia Super Corridor and health tourism.

Telemedicine  
The essence of telemedicine is the exchange of information at a distance, whether the information is voice, an image, elements of a medical record, or commands to a surgical robot. Telemedicine has recently been defined as “Telecommunication that connects a patient and a health care provider through live two-way audio, two-way video transmission across distances and that permits effective diagnostic, treatment and other health care activities”. 

The Malaysian Telehealth project or integrated Telemedicine is one of the seven flagships of the Multimedia Super Corridor (MSC), which is an area set aside for information and communication technology and multimedia development in Malaysia.

The telemedicine project, which started in October 2000, aims at transforming Malaysian health care from a physical and facility-based environment to a virtual environment. If the project is successful it should be able to reduce health care spending with up to 20%.

Health Tourism
The number of foreign tourists seeking treatment in Malaysian private hospitals almost tripled from 39,000 in 1998 to 100,000 in 2002 and this development has continued in a slower pace ever since. Revenue generated by health tourism rose substantially from US$2.5 million in 1998 to US$ 39 million in 2002. By 2010, this sector is targeted to bring in revenue of over US$ 526 million. Currently there are 34 private hospitals involved in health tourism.

Health tourism promotions are targeted at less-developed countries like Indonesia, Bangladesh, Vietnam, and countries in the Middle East. Common treatments are in cardiology, cardio thoracic surgery, radiotherapy, and radiology. The private sector is allowed to advertise their services to the public.
 
The government is promoting Malaysia as the place to go for private health and medical requirements. To do this Malaysia needs to be competitive and need the newest equipment. At the moment medical charges and hospitalisation costs are very competitive compared to those in many developed countries. For example, a normal cardiac bypass surgery (CABG) costs in the region of US$ 6,000–7,000.  It is also said that the Malaysian medical expertise is ranked among the best in the world.

Market opportunities:

There are possibilities for Danish companies in the healthcare sector in Malaysia, because of the fast development and the focus from the government. Below are some of the interesting areas listed.

· Planning, design, and management of specialised healthcare facilities
· Training and specialised medical education for healthcare personnel (nursing, paramedical, and management programs)
· Innovative / specialised / niche medical equipment
· Telehealth consultancy
· Health IT systems and services
· Health consulting services

Furthermore, there are also opportunities in the area of rehabilitation and care for the elderly, amongst others based on the aging population.