Health Care Around the World

Health Care in Malaysia

Malaysia is a middle income country (GDP per capita $26,600, about half of U.S. income levels) of 30.5 million people (about the population of New York and Ohio combined).  Life expectancy is 74.75 years, just 5 years below the U.S.  Health spending in Mayalsia is only 4% of GDP (compared to 17% of GDP in the U.S.).

A recent paper by Rannan-Eliya et al. (2016) describes their health care system.  All Maylasians are entitled to free or near-free health care provided by the government. The government provides not only primary care services, but also heart surgery and some expensive cancer treatments (e.g., Herceptin for breast cancer). The supply of high-cost treatments, however, may be limited and care rationed.  “In 2011 the public sector treated 49 percent of outpatients and 74 percent of inpatients.”

Some patients choose private insurance.

Private financing goes almost solely to private providers. Outof-pocket spending accounts for 79 percent of private financing. Third-party financing, by private insurance and employers that reimburse employees for using private providers or directly pay such providers, accounts for the remainder of private financing and mostly covers middle- or upper-income workers in the formal sector of the economy…Most health insurance is group insurance that substitutes for direct employer spending on health care.

The authors find that Malaysia’s out-of-pocket health care spending as a share of GDP (1.7%) is similar to high income countries such as Austria (1.8%) and Sweden (1.6%).  Although the authors do not examine the quality of care received, the Malaysia healthcare system appears to do an adequate job of protecting patients against the financial risk of health shocks.

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