Partnering for health

Transforming Malaysia’s healthcare through public-private partnerships

 Transforming Malaysia’s healthcare through public-private partnerships
  • Report
  • 5 minute read
  • June 2024

While the Ministry of Health (MOH) received one of the largest increases in allocation for Budget 2024 — a 13.5% increase from 2023 — funding remains insufficient to address the growing healthcare needs of an increasingly ageing nation and escalating medical inflation rates. 

In light of today's public healthcare challenges, Malaysia needs innovative solutions for the future. Private healthcare providers can be part of the solution through public-private partnerships. Our report discusses pragmatic public-private partnerships models globally, that have helped address healthcare delivery to growing nations, while managing overall costs and sustainability.

What are the challenges facing Malaysia’s healthcare system?

Ageing society and rising non-communicable diseases
With an ageing population, 9.5 years of life expectancy is expected to be spent in poor health, while non-communicable diseases cost the country at least RM9.65 billion annually.
A strained public healthcare system
Public clinics make up 28% of total primary healthcare facilities in Malaysia, but handles 64% of outpatient visits.
Underinvestment in public healthcare system
Malaysia, an upper-middle income country (UMIC), spends just 5.1% of its GDP on health—far below the UMIC average of 6% - 7%.

Nurturing Malaysia’s healthcare public-private partnership ecosystem

While not a silver bullet, establishing a clear legal and regulatory framework is essential for an effective, sustainable, and implementable PPP model in Malaysia.

Key roles, performance measures, fee payments, investment returns and financing costs must be set out transparently, to establish clear financial targets, outcomes, expectations, and responsibilities from the outset - laying a strong foundation for building trust and collaboration between all parties involved.

A successful model ensures that partners are sufficiently incentivised to act in the best interest of the collaboration.

This involves having appropriate financial incentives to enhance synergies and optimise resource integration between public and private health partners, ultimately delivering value-based care in a cost-effective manner.

In addition to health services delivery, PPPs must collectively involve key stakeholders in monitoring and execution.

This includes payors (for example, insurance, corporates), investors, financiers, infrastructure and construction companies, government sponsors/bodies, patients (beneficiaries) and healthcare workforce. Engaging these key stakeholders throughout the process is crucial to identify potential allies and address obstacles together for win-win outcomes.

The community is the recipient of health services rendered, hence it is crucial to closely engage the community through a targeted communication strategy, to build public trust in PPPs. 

In addition to public consultation and regular progress reporting, effectively communicating the health outcomes and successes of projects to the public is important. This creates trust, rallies community support, and amplifies the effectiveness of PPP in healthcare.

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Yennie Tan

Yennie Tan

Deals Partner Deals Strategy & Operations, and Healthcare Leader, PwC Malaysia

Tel: +60 (3) 2173 0551

Taariq Murad

Taariq Murad

Tax Partner; Public Sector Leader; and Inclusion & Diversity Leader, PwC Malaysia

Tel: +60 (3) 2173 1580

Redha Shukor

Redha Shukor

Consulting Partner, Operations & Transformations , PwC Malaysia

Tel: +60 (3) 2173 1832

Manohar Johnson

Manohar Johnson

Partner, Assurance, PwC Malaysia

Tel: +60 (7) 218 6001

Sean Soon

Sean Soon

Senior Manager Deals Strategy and Operations, PwC Malaysia

Tel: +60 (3) 2173 0611