Govt rolls out MHIT to boost health financing options
by AKMAR ANNUAR
MALAYSIA'S move toward a diagnosis-related group (DRG) pricing model in private healthcare has begun with the rollout of a new Medical and Health Insurance and Takaful (MHIT) product, said Health Minister Datuk Seri Dr Dzulkefly Ahmad.
He said the initiative, developed in collaboration with the Ministry of Finance, Bank Negara Malaysia and the Employees Provident Fund (EPF), aims to widen private sector financing avenues and strengthen the foundation for value-based healthcare in the country.
'This marks a crucial step in establishing fairer rules for individuals with pre-existing conditions,' he said at the opening of the APHM International Healthcare Conference & Exhibition 2025 in Kuala Lumpur recently.
The MHIT product is part of broader national health reforms addressing long-standing challenges of affordability and sustainability in private healthcare, particularly against the backdrop of Malaysia's ageing population and rising burden of non-communicable diseases (NCDs).
Dr Dzulkefly explained that the DRG pricing framework—designed to reimburse healthcare providers based on the diagnosis and treatment provided rather than the volume of services—will promote more efficient, cost-effective care delivery.
Additionally, he said the diagnosis-related group (DRG) system encourages efficiency by rewarding healthcare providers based on the quality and appropriateness of care rather than the volume of services provided.
Plus this approach, he added, is expected to stimulate innovation in outpatient and day-case surgical procedures, while also promoting the adoption of cost-effective medical technologies that can improve patient outcomes and lower overall healthcare expenditure.
Beyond insurance reform, the government is also re-evaluating the country's health financing ecosystem to make it more inclusive and resilient.
This includes integrating tax-based funding, social health contributions, employer-backed schemes and targeted subsidies into a more progressive structure.
In line with this, the government has introduced the Generative Economy Action Roadmap for Upward Progress (GEAR-uP), which brings together six government-linked investment companies (GLICs) to invest RM120 billion in high-growth, high-value sectors over five years.
Dr Dzulkefly said a joint ministerial committee will oversee GEAR-uP's health-focused investments, which are expected to stimulate growth beyond traditional tertiary care providers.
'This is expected to drive further investments into the health sector, particularly in the spectrum of healthcare providers, not limited to large multi-specialty tertiary hospitals,' he said.
Meanwhile, progress has also been made in digitalising public primary care facilities. To date, 78 health clinics have adopted a cloud-based clinic management system, with an additional 90 set to implement the platform by year-end.
The digital shift has already shown measurable impact: Over 70% of patients are now receiving treatment within 30 minutes, while only 10% face wait times of more than 90 minutes.
The introduction of MHIT and the gradual shift toward DRG-based pricing underscore the government's intent to reshape Malaysia's healthcare delivery and financing landscape — aiming to make it more equitable, efficient and responsive to emerging health challenges.
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