Private Healthcare Expenditure: Absolute and Relative Changes

Abstract

The unprecedented growth of the private medical sector has had wide ranging implications for the Malaysian healthcare system. High levels of private expenditures pose serious challenges to policy makers because most of these expenditures are out-of-pocket with insurance claims only covering a small segment of population. It is not clear whether these expenditures are sustainable as it can have a number of undesirable consequences so as to make healthcare services costly, unaffordable and uncertain. Out-of-pocket expenditure can lead to debt for those who cannot afford it. Catastrophic out-of-pocket payment can lead a household into poverty. Hence, this study investigates the changes of private healthcare expenditure in Malaysia. The interpretative approach was used to obtain a greater scope to address the issues. Trend analysis and broad-based review of research literature is combined to identify the kind of experiences of healthcare that can matter with considerations of why these experiences are important and relate to each other. The data in this study covers from 1997 to 2014. The evidence shows that Malaysia’s healthcare cost had faced a significant shift in the expenditure structure with private providers growing rapidly to account highest of the expenditure. The swift growth of private healthcare has transformed the healthcare system in Malaysia from one dominated by the public sector in both provision and financing, to one in which the private sector has an increasing presence in hospital and specialist care, as well as financing.