ASIA MEDICAL UPDATE
Imminent Overtax of Malaysian Elderly
Healthcare System
Malaysia has a large middle class
that enjoys ASEAN’s second
highest average income below
Singapore, but the rate that health-
care costs have risen ahead of
income growth and the relatively
few healthcare providers catering
to the elderly in particular may
cause future bottlenecks as the
proportion of older citizens in-
crease. The country’s official re-
tirement age is 55. Presently, the
country’s population of those
aged 65 or older comprises less
than 10%. This will change as
Malaysia is forecasted to become
an aging nation with 15% of its
population above 60 in 2035, and
20.4% by 2050.
Malaysia’s per capita spending on
healthcare is US$455, ranks
among the highest in the region.
The country’s universal healthcare
system is riddled with flaws forcing
most people who can afford it to
rely on sparse private sector
healthcare facilities that have not
kept apace of demand. This per-
haps explains why people tend to
spend more of their money on
savings and life insurance rather
than health insurance.
Although three-quarters of all
hospital beds are in public hospi-
tals, private sector hospitals have
slowly increased their in-patient
facilities over the past decade. The
country has approximately 50,000
healthcare staff, of which 70%
serve in public hospitals where
shortages continue to be report-
ed. Staffing needs are taxed de-
spite growing numbers of doctors
and nurses over the past decade.
Doctors have increased by 50%
in the public sector and 20% in the
private sector. Nurses have in-
creased over the same period by
40% in the public sector and 50%
in the private sector. There is
currently one doctor for every 633
people and one nurse for every
333 people.
These limits may put a cap on
newer rising star industries such
as medical tourism which is a
US$55 billion industry, and the
much newer concept of senior
living. What is available today for
the elderly are predominantly
charity-run nursing homes that
usually focus on terminal patients
rather than long-term residential
facilities for the elderly.
Healthcare practitioners and pro-
viders are seeking new ways to
better deliver their services such
as using alternative care models
ranging from telehealth to retail
clinics to give access to more
patients. To achieve greater econ-
omies of scale, the industry is
witnessing greater numbers of
mergers and acquisitions and al-
liances, all of which aim to create
more streamlined and consolidat-
ed services to the general popu-
lace.
Given the growing pressure on
the healthcare system, it is vital that
the country promotes healthy
young adults who understand the
value of not being overweight or
obese as this will allow them to age
gracefully as healthier seniors less
prone to long-term non-communi-
cable diseases such as diabetes
and hypertension. As a tropical
country, new and old incurable
infectious diseases such as den-
gue fever, malaria, and even rabies
still exists and continues to be
battles that have to be fought.
Source: “Malaysia’s fledgeling elderly care pressured to cater to booming silver pool”, staff writers in Malaysia, 16 Aug 2018, Healthcare Asia
Medical Costs Rising Across Asia
(2018 – 2019)
Willis Towers Watson conducted
its industry leading 2019 Global
Medical Trends Survey and re-
ported that medical insurers have
indicated that the rate of rising
medical costs in many Asian
countries will outstrip its global
counterparts. Notably, while the
global and the Asia-Pacific region
average hovers just below 8%,
India is expected to hit double
digits for the first time in 2019,
while China, Indonesia, Malaysia,
the Philippines, and Vietnam have
4 PharMed & HealthCare
already stepped into the double
digit territory.
As more countries face a rapidly
growing aging population that
threatens to overwhelm their
equally aging public healthcare
systems, employers have to seek
more comprehensive ways to
control costs of their employee
health benefit plans without sac-
rificing quality. The drivers of cost
growth are primarily due to overly
cautious medical diagnoses lead-
ing to many and often unneces-
sary services that often require
the use of expensive medical
technology, while in-patient and
pharmacy rising costs are a new
trend. The growth of patients
needing frequent medical treat-
ment in countries like China and
India are also related to rising
numbers of people suffering from
lifestyle related chronic diseases.
Most of the claims today are due
to cancer and cardiovascular
problems, it is expected that the
top three illnesses in the next five
years will be mental and behavior-
al disorders.
HEALTH CARE BENEFITS COST
GROWTH (2017 – PROJECTED 2019)
2017 2018 2019
Global
6.7% 7.1% 7.6%
Asia Pacific 7.1% 7.0% 7.8%
Australia 4.9% 4.6% 4.6%
China
9.0% 10.1% 10.7%
Hong Kong 7.0% 8.0% 8.6%
India
7.6% 9.2% 10.6%
Indonesia 11.1% 10.9% 10.8%
Malaysia 9.0% 11.4% 13.1%
New Zealand 6.9% 5.4% 5.4%
Philippines 8.8% 10.3% 11.5%
Singapore 8.3% 8.8% 9.1%
South Korea 6.0% 1.4% 3.4%
Taiwan
7.2% 7.8% 9.3%
Thailand 6.4% 7.0% 8.5%
Vietnam
11.0% 15.0% 16.3%
Source: Willis Towers Watson
SEPTEMBER 2019