The rising cost of medical care is a growing concern globally, and Malaysia is no exception. Medical insurance, often seen as a safeguard for future health needs, is experiencing price hikes due to several contributing factors. This article delves into the reasons behind the increasing prices of medical cards in Malaysia, based on insights from Allianz’s recent reports.
Factors Driving the Increase in Medical Costs
Inflation in the Medical Industry
Medical inflation in Malaysia has surged to 15% in 2024, up from 12% in 2022, significantly higher than the global average of 10.1%. This rise outpaces the general inflation rate for goods and services in Malaysia, which stands at 3.1% in 2024. Medical inflation can lead to higher premiums and reduced coverage limits, impacting the sustainability of medical insurance policies.
Advances in Medical Treatment and Technology
Innovations in medical treatments, technology, and quality of care, while improving patient outcomes, also contribute to higher costs. Key drivers include:
- New Treatments: Development and introduction of advanced medical treatments increase healthcare costs.
- More Advanced Medical Devices and Drugs: Cutting-edge medical devices and pharmaceuticals come with higher price tags.
- Specialists Fees, Procedures, and Services: The cost of specialist care and sophisticated procedures has risen.
Example: Precision medicine in cancer treatment provides personalized and targeted therapy, which, although more effective, incurs higher costs.
Importation of Medical Instruments
In 2022, Malaysia imported $842 million worth of medical instruments, making it the 30th largest importer globally. The majority of these imports originate from the United States, Singapore, and China. The cost of imported medical devices increased from RM6.7 billion in 2021 to RM8.2 billion in 2022, contributing to the overall rise in medical expenses.
Impact of Non-Communicable Diseases (NCDs)
Unhealthy urban lifestyles have led to a rise in non-communicable diseases (NCDs) such as diabetes, hypertension, and high cholesterol among Malaysians. The long-term treatment and complications associated with NCDs significantly increase healthcare costs. According to the NHMS 2023 report:
- 15.6% of adults have diabetes
- 29.2% have hypertension
- 33.3% have high cholesterol
- 54.4% are overweight or obese
Age-Related Diseases and Healthcare Expenditure
As the population ages, the prevalence of age-related diseases increases, driving up healthcare costs. Estimated costs for medical procedures in private hospitals in Malaysia in 2023 are substantial:
- RM80,000 for coronary bypass
- RM75,000 for stroke treatment
- RM395,000 for breast cancer treatment
Conclusion
The rising cost of medical cards in Malaysia is influenced by a combination of medical inflation, advancements in medical treatments and technology, importation costs of medical instruments, the prevalence of NCDs, and age-related diseases. Understanding these factors can help consumers and policymakers anticipate and manage future medical expenses more effectively.
References
- Aon’s 2024 Global Medical Trend Rates Report, page 8.
- Forum Addresses Medical Choices For Cancer Care, Credit to Dr. Azura Razila Ahmad.
- MIDA 2021 Report.
- NIMP 2030: Medical Devices Industry, page 17.
- NHMS 2023.
- Statista (2024), CodeBlue (2022).
