Markets and Healthcare Services in Malaysia: Critical Issues

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Rajah Rasiah
Nik Rosnah Wan Abdullah
Makmor Tumin


This paper examines the critical issues facing healthcare in Malaysia. It starts by reviewing the dominant arguments on ownership and healthcare provision, viz., neoclassical, evolutionary and heterodox and the politics of interest groups. Given the imperfections and asymmetries associated with healthcare, as well as its properties as a social good that should reach everyone, the paper adopts evolutionary and heterodox arguments, and the views of political scientists on civil society. It then explores out of pocket payment trends in the world. It is obvious that out of pocket payments have increased dramatically in the developing countries when government funding still dominates healthcare fnancing in most developed countries. Malaysia has experienced a rapid shift from welfareoriented healthcare practices until the 1980s to privatization thereafter so that the private share of healthcare reached 55.6 per cent in 2007. A combination of falling resources and brain drain confronting public hospitals, with an expanding supply of private providers explains the increasing shift toward private healthcare in Malaysia. The paper fnishes with calls for increasing government budget for healthcare, and using merit as the basis for promotion in public hospitals, and the strengthening and enforcement of healthcare legislations for all providers.


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