Its minister Dzulkefly Ahmad said in a written parliamentary reply that the country’s medical tourism sector is expected to remain competitively priced in the region, despite the 6% service tax imposed on foreign patients.

“This is because medical costs in Malaysia are still 30% to 40% lower than in neighbouring countries such as Indonesia, Thailand, and Singapore for key treatments including gastroenterology, cardiology, orthopaedics, and oncology,” he said.

He was responding to Dr Ahmad Yunus Hairi (PN-Kuala Langat) who asked about the implications of the expanded SST on Malaysia’s reputation as the leading medical tourism destination.

Yunus pointed out that Malaysia had generated over RM2 billion in revenue and attracted 1.3 million medical tourists from around the world in 2023.

In June, the finance ministry announced a 6% service tax on private healthcare, traditional and complementary medicine, and allied health services provided to foreigners. The tax applies to service providers whose total taxable revenue from all services exceeds RM1.5 million over the past 12 months.

Dzulkefly said the medical tourism industry continues to show highly positive growth.

“In 2024, the sector’s performance has seen even stronger growth, with revenue from health tourism rising to RM2.72 billion, a 21% increase from the previous year. This was driven in part by a 14% increase in arrivals, with 1.59 million health tourists recorded,” he said.

He added that Malaysia’s health tourism sector offers not only competitive pricing, but is also recognised for its quality of care, clinical effectiveness, and signature Malaysian hospitality.

Like many other countries, Malaysia must weather out the storm that is the COVID-19 pandemic and various restrictive safety measures imposed. The pandemic has greatly impacted the healthcare tourism industry, which was projected to reach new heights in 2020.

The CEO of the Malaysia Healthcare Travel Council (MHTC), Mohd. Daud Mohd. Arif, said that the industry was a significant contributor to the national economy, with a recorded Compound Annual Growth Rate (CAGR) of 17% between 2015-2019 and revenue of MYR1.7 billion (approx. USD403 million) prior to the COVID-19 pandemic.

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Healthcare travellers that came to Malaysia during this time were notably impressed by the safe and trusted healthcare and wellness amenities provided including world-class quality of care, ease of accessibility, and comparative affordability – the country has sparked international interest due to its “expert medical fraternity and healthcare infrastructure,” especially concerning the specialties of cardiology and fertility.

The National Heart Institute (IJN), for example, is the first hospital outside of the US to implant a Micra AV pacemaker, an advanced treatment option for slow heart rate(s). In addition, Malaysia boasts a success rate of one in two fertility patients for in-vitro fertilization (IVF), and provides advanced treatments including Oncofertility, and AI technology for fertility viability testing. Such developments attract a niche group of patients to Malaysia, looking for quality care that is both reliable and affordable.

Many healthcare facilitators are rightfully concerned that international patients under their care will be at risk of not receiving continued, quality care, in the face of uncertainty with the COVID-19 pandemic.

Mohd. Daud said the MHTC is endeavouring to rebuild the healthcare travel sector over the next four years by building upon the existing confidence and trust in Malaysia as a safe and trusted healthcare travel destination. New initiatives include publicity and branding campaigns, providing support, and facilitating end-to-end infrastructure such as digital adoption, as well as cementing Malaysia as a thought leader in healthcare travel.

These initiatives are part of those contained in Malaysia’s economic recovery (2021-2022) and rebuild (2023-2025) phases. Other key initiatives: establishing Malaysia as the Cardiology and Fertility Hubs of Asia and the Centre of Excellence for Oncology; the Flagship Medical Tourism Hospital Program; and positioning Malaysia as a destination for aged care. 

“We are also working closely with member hospitals to determine other areas or markets to focus on, such as the Middle East, which further drive the importance of public-private partnerships in spurring the sector as a key economic growth driver for post COVID-19 economic recovery.”

MHTC is an agency tasked to facilitate and promote the healthcare travel industry of Malaysia, with a special focus on target markets such as Indonesia, China, Vietnam, Cambodia, Singapore, and Brunei, and secondary regions. MHTC is hoping to propel the nation as the leading global destination for healthcare with a revenue target of at least MYR800 million (USD189.7 million) by 2022.