MOF and MOH join forces to tackle private healthcare inflation in Malaysia

With private healthcare costs on the rise, a new joint committee will aim to drive coordinated, value-based healthcare, seeking improved affordability, transparency, and sustainability in the sector.

In an aim to address the growing strain of rising private healthcare costs on Malaysians, the Ministry of Finance (MOF) and the Ministry of Health (MOH) have formed the Joint Ministerial Committee on Private Healthcare Costs (JMCPHC).

The committee, which convened its first meeting on 25 June 2025, will serve as a central platform to coordinate national efforts aimed at improving the affordability and sustainability of private healthcare.

A joint leadership with broad representation

The JMCPHC is co-chaired by Senator Datuk Seri Amir Hamzah Azizan, Finance Minister II and Datuk Seri Dr Haji Dzulkefly Ahmad, Health Minister. Members include senior representatives from MOF, MOH, and Bank Negara Malaysia (BNM).

To support its work, the committee will be advised by a Consultative Council comprising stakeholders from across the private healthcare landscape including healthcare professionals, insurance providers and Takaful operators (ITOs), consumer advocacy groups, and academia.

Datuk Amir highlighted that the escalating cost of healthcare remains a major concern for Malaysians. He said the establishment of this committee signals the government’s commitment to work hand-in-hand with key stakeholders to shape a private healthcare system that is not only transparent and sustainable but also focused on delivering real value. At its core, he added, this is about protecting the well-being of Malaysians and reinforcing the nation’s resilience.

RESET framework as the foundation

The JMCPHC builds on earlier efforts to manage healthcare inflation, particularly those driven by BNM. This includes the implementation of co-payment requirements, as well as interim measures introduced to cushion the impact of medical premium adjustments for policyholders between 2024 and 2026.

At the centre of these efforts is the RESET framework. The framework is a strategic step endorsed by MOF, MOH, BNM, and key industry stakeholders. RESET outlines five core strategies aimed at addressing the root causes of rising private healthcare and insurance costs:

• Revamp medical and health insurance/takaful (MHIT)
• Enhance price transparency
• Strengthen the digital health ecosystem
• Expand cost effective options
• Transform provider payments

Focus areas already in motion

Looking ahead, the JMCPHC will serve as the main platform to guide and oversee the implementation of key reforms under the RESET framework.

Work on several critical areas has already begun. These include the development of a base MHIT product that strikes a balance between affordability and long-term sustainability. The phased rollout of Diagnostic-Related Group (DRG) payments, and measures to improve the transparency of healthcare pricing.

For current medical insurance policyholders, the reforms are expected to bring greater clarity around coverage and help lower out-of-pocket costs through more affordable and transparent options.

Beyond insurance reforms, the Committee will also explore ways to expand access to private healthcare, especially by strengthening primary care services and creating a more connected network of providers. These efforts will build on earlier initiatives, such as the Rakan KKM programme, which aims to make care more transparent.

Commenting on the RESET framework, Dr Dzulkefly noted that the RESET framework represents both ongoing and future efforts by the MOH to strengthen Malaysia’s healthcare system. He highlighted that the framework reflects a whole-of-nation commitment to implementing value-based care. This approach places greater emphasis on health outcomes.

“Such initiatives will deliver tangible benefits for all Malaysians who benefit through reduced overcrowding and congestion of public hospitals and clinics,” he added.

Collaboration as the foundation of sustainable change

The ministries said the JMCPHC recognises that successful implementation of the whole-of-nation RESET initiatives relies on multi-stakeholder collaboration. The Consultative Council plays a key role in bringing together input from industry stakeholders to support the shared goal of ensuring affordable, accessible, and sustainable private healthcare for all Malaysians.

Lead image / Dr Dzulkefly Ahmad