Tackle chronic diseases to rein in healthcare costs

PETALING JAYA: Malaysia must do more to prevent and better manage chronic diseases if it is to control healthcare costs over the long term.

Zurich Malaysia argues that reforms to medical insurance and healthcare financing alone will not address the underlying drivers of rising medical expenses.

Zurich Life Insurance Malaysia Bhd CEO Pauline Teoh said that while ongoing reforms to the medical and health insurance/takaful (MHIT) market are necessary to improve affordability and access to healthcare protection, the bigger challenge is the growing burden of chronic disease.

“The MHIT reforms are a necessary and constructive response to a very real challenge. Medical costs in Malaysia have been rising significantly, with medical claims inflation consistently outpacing general inflation and ranking among the highest in the region,” she told SunBiz.

Measures aimed at cushioning policyholders and certificate holders from medical claims inflation, improving transparency and introducing a more accessible baseline MHIT product were therefore addressing genuine concerns, she said.

“That said, I would add an important nuance. These reforms largely address the symptom, which is rising healthcare costs. The bigger challenge is addressing the root cause, which is the growing burden of chronic disease.”

The government is currently pursuing broader reforms under its RESET strategy, which brings together the Ministry of Finance, Ministry of Health, Bank Negara Malaysia and industry stakeholders to address medical inflation and improve the affordability and sustainability of private healthcare.

A key initiative is MediAsas, the new name for the Base MHIT Plan, which is being piloted ahead of a planned nationwide implementation in January 2027.

The standardised, standalone plan is intended to provide a more affordable baseline of private healthcare protection while supporting wider reforms to improve cost efficiency and value-based care.

Teoh said healthcare financing was only one part of the equation.
Zurich’s Value of Chronic Care report showed that a growing share of healthcare costs was linked to people living longer with chronic conditions, shifting financial risk from one-off medical events to sustained exposure that could last for decades.

“Diabetes is a good example. The report found that it affects between 11% and 28% of populations across the countries studied and identifies it as one of the most significant drivers of future healthcare costs because it can lead to serious complications such as heart disease, stroke and kidney failure.”

In Malaysia, she said approximately one in six adults was living with diabetes, while many cases remained undiagnosed, increasing the risk that patients would only seek treatment after developing more serious and costly complications.

“That is why the MHIT reforms strategy’s focus on healthcare financing reform, value-based care and greater price transparency is both timely and important.

“Complementing these efforts with stronger preventive healthcare, earlier detection and better chronic disease management can further improve health outcomes while helping to moderate long-term healthcare costs,” said Teoh.

The broader RESET strategy reflects the recognition that insurance reform alone cannot address rising private healthcare costs.

The government has identified five strategic thrusts: revamping MHIT, improving price transparency, strengthening digital health systems, expanding cost-effective healthcare options and transforming provider payment mechanisms.

Zurich Takaful Malaysia Bhd CEO Nur Fatihah Mustafa said the economic impact of chronic illness extended far beyond hospital and clinic bills.

“It’s difficult to put a precise figure on Malaysia’s preventable healthcare bill, because the true cost of poor health extends far beyond hospital treatment.

“It includes medication, loss of income and the caregiving burden that families often absorb without it ever appearing in official healthcare spending,” Nur Fatihah said.

According to figures cited by Zurich, non-communicable diseases (NCDs), including cardiovascular disease, stroke, cancer, diabetes and chronic respiratory conditions, account for about 72% of premature deaths in Malaysia.

The Ministry of Health estimates the annual economic burden of NCDs at RM64.2 billion, comprising RM12.4 billion in direct healthcare costs and RM51.8 billion in productivity losses, according to the interview responses.

“This shows that the impact of chronic disease extends well beyond hospitals and clinics, affecting companies, families and the broader economy,” Nur Fatihah said.

However, she cautioned that no definitive estimate exists of how much of the overall burden could be prevented.

“A substantial proportion could potentially be avoided, reduced or delayed through preventive healthcare measures.

“Earlier health screenings, healthier lifestyles, better disease management and improved health literacy can help reduce the incidence and severity of many chronic conditions,” she said.

The Ministry of Health’s investment case for NCD prevention, she added, suggested that stronger preventive healthcare interventions could save more than 180,000 lives and generate around RM30 billion in economic benefits over 15 years.

“The broader message is that Malaysia’s healthcare challenge is increasingly becoming a prevention challenge,” Nur Fatihah said.

“As the country moves towards becoming an ageing nation by 2040, investing in preventive healthcare, early intervention and long-term health protection will be critical to improving health outcomes while managing rising healthcare costs.”

Zurich argues that Malaysia needs to move beyond a system in which healthcare intervention begins only after people become seriously ill.

“If I had to name one change, it would be to make prevention a much more consistent part of everyday life, rather than something people think about once symptoms appear,” Teoh said.

Zurich’s research showed that chronic conditions were increasingly affecting people earlier in life, including those in their 30s and 40s, she said.

“That matters because the earlier these risks are identified and managed, the greater the opportunity to delay complications and reduce their long-term impact.”

For Malaysia, this meant encouraging people to understand their health risks earlier, participate in regular health screenings, and take action before conditions became harder to manage.
However, prevention often competed with more immediate concerns.

“For many working adults, health checks, lifestyle changes and financial preparation can easily be postponed amid careers, family commitments and other responsibilities,” Teoh said.
This is where Zurich sees an expanding role for insurers and takaful operators.

“Insurers and takaful operators have an opportunity to go beyond risk protection and become active partners in improving population health,” she said.

“By incentivising preventive care, supporting early diagnosis and enabling better chronic disease management, they can help create a healthier, more financially resilient Malaysia.”
The company is also looking to expand the healthcare support it provides customers.

“Looking ahead, we are also working towards introducing a comprehensive portfolio of enhanced healthcare support services through a planned collaboration with Teladoc Health, a global leader in virtual healthcare services,” Teoh said.

“Subject to final agreement, this would further strengthen our ability to help customers access trusted medical expertise, particularly when navigating serious or chronic health conditions.”

Zurich’s wider strategy reflects a growing recognition that insurers may increasingly need to play a role before a customer reaches the hospital, rather than simply reimbursing treatment after illness occurs.

The group’s Value of Chronic Care research, released in July, found that healthcare outcomes were not determined solely by how much countries spent, but also by how effectively care was coordinated, how early conditions were detected and how consistently patients were supported throughout their healthcare journey.

Nur Fatihah said Malaysia had several strengths, including a heavily subsidised public healthcare system, an established primary-care network and broad access to essential healthcare services.

But prevention and early detection remained underutilised.

“The latest National Health and Morbidity Survey found that two in five adults had not undergone screening for common health conditions in the previous year,” she said.

“At the same time, many people are living with risk factors or chronic conditions such as diabetes, hypertension and high cholesterol without knowing it, which can delay treatment until complications arise.”

Another challenge was continuity of care, she said. Chronic diseases require ongoing management, but patients often navigate multiple providers across both the public and private healthcare systems.

“This fragmentation can create gaps in follow-up, treatment adherence and long-term care planning,” Nur Fatihah said.

Zurich’s research similarly found that countries with comparable healthcare resources could produce very different outcomes depending on how effectively care was organised and coordinated, with fragmented systems struggling to manage conditions that require lifelong support.

The insurer said prevention also remained relatively underfunded compared with treatment.

“Healthcare systems often spend significantly more on managing illness than preventing it, even though some of the greatest long-term health and economic gains come from helping people stay healthier longer,” Nur Fatihah said.

She said Malaysia’s priority as its population ages should be to strengthen prevention, encourage greater participation in health screening, improve care coordination and support people throughout their chronic care journey.

For Zurich, the ultimate goal is to shift the healthcare conversation from simply paying for illness towards reducing the likelihood and severity of serious illness in the first place.

“If prevention becomes a routine part of how Malaysians manage their health, we have a better chance of delaying chronic disease, reducing complications and helping people stay healthier longer,” Teoh said.

“The benefits ripple far beyond the individual, supporting families, strengthening workforce productivity and contributing to a more sustainable healthcare system and stronger economy.”

“Building a sustainable healthcare ecosystem requires a holistic approach, one that combines effective healthcare financing, greater transparency, quality care delivery and stronger preventive health measures,” she added.

“Through collective action across all stakeholders, Malaysia can continue to improve health outcomes while ensuring healthcare remains accessible and affordable for future generations.”

 

Credit: The Sun