Malaysia is being told that expanding medical tourism will “grow the economy” and “strengthen healthcare.” But the truth is much simpler: medical tourism mainly benefits private hospital groups, investors, and the wealthy — not ordinary Malaysians. The revenue generated from foreign patients does not meaningfully return to public hospitals. Instead, profits circulate among corporations and shareholders while the public healthcare system remains underfunded and overstretched [1,2].

Public hospitals train most of the country’s doctors, nurses, and specialists using taxpayer money [3]. Yet many of these professionals migrate to the private sector, especially to hospitals that prioritise high-paying foreign clients. This creates a double burden on Malaysians:

First, they pay taxes to build and train the healthcare workforce; later, they face rising insurance premiums, increasing fees, and longer waiting times in public facilities because talent is drawn toward more lucrative private hospitals [4,5].

The private sector enjoys the profits without bearing the cost of producing the very workforce it relies on.

This imbalance deepens because private hospitals involved in medical tourism often receive generous tax incentives, such as investment tax allowances and promotional tax deductions [6]. While these incentives vary across budget cycles, the direction is consistent: medical tourism is encouraged through generous tax treatment. When corporations receive large tax exemptions, government revenue declines. The rakyat ultimately bears the burden through continued underinvestment in public hospitals, slower facility upgrades, and persistent staff shortages [1].

The private sector expands its profits, while the public sector struggles to serve millions.

Meanwhile, the medical tourism narrative distracts policymakers from Malaysia’s real structural issues: overcrowded wards, understaffed clinics, limited rural coverage, insufficient mental health services, and high out-of-pocket spending [2,7]. Instead of prioritising long-term investment in the public system, leaders chase “tourist dollars.” This represents a dangerous shift — one that widens the gap between those who can afford private care and those who cannot.

As medical tourism grows, Malaysia drifts toward a humiliating two-tier healthcare system. Foreigners and wealthy patients receive faster, more comfortable treatment, while ordinary Malaysians face longer delays and declining quality [8]. Healthcare shifts from a public service to a commodified industry. Patients are no longer citizens with equal rights but revenue sources to be optimised and marketed to. Malaysians risk becoming second-class patients in their own country.

Proponents claim that medical tourism increases GDP, as if GDP were an indicator of fairness or wellbeing. But GDP measures economic activity — not who benefits from it. GDP can rise even as inequality worsens. And when the profits from medical tourism stay concentrated within private hospital groups, corporate shareholders, and investment funds, GDP growth does not translate into better healthcare access for the rakyat. It does not raise wages for healthcare workers, expand rural services, or reduce household medical expenses. GDP growth without redistribution is not progress; it is a statistical illusion.

At its core, the expansion of medical tourism reflects a deeper ideological shift: the belief that market solutions can fix public problems, and that private profit can substitute for public responsibility. But every weakness in the public system pushes more Malaysians into private care, strengthening the corporate networks that benefit most from medical tourism [10]. This cycle intensifies inequality and erodes trust in the state’s ability to provide essential services.

Medical tourism will not solve Malaysia’s healthcare problems because the crisis is not about revenue — it is about priorities. A nation cannot outsource its moral duty to care for its people. A healthcare system built around foreign clients, market incentives, and corporate profit will never serve the rakyat with dignity or fairness.

Real progress requires the opposite approach:

1. Strengthen and expand public healthcare funding
2. Improve working conditions to retain medical staff
3. Ensure equitable access across Peninsular and East Malaysia
4. Reduce dependence on private-sector capacity
5. Review and limit tax exemptions that do not benefit the public
6. Uphold healthcare as a basic right, not a luxury commodity

Malaysia must decide whether it wants a healthcare system shaped by the logic of profit, or by the principle of justice. The measure of a moral nation is not how well it serves wealthy visitors — but how well it cares for its own people.

Medical tourism is not the path to a fairer healthcare system. Strengthening public healthcare is.

Noor Khairil Azhar bin Mohammed Noor
PSM Healthcare Campaign Committee
Parti Sosialis Malaysia

8th December 2025

Reference:

1. Ministry of Health Malaysia. Annual Report 2022–2023. Putrajaya: MoH.
2. World Health Organization. Malaysia Health System Review (Health Systems in Transition Series). WHO/Asia Pacific Observatory, 2022.
3. Ministry of Health Malaysia. Human Resources for Health Country Profile: Malaysia. 2022.
4. CodeBlue Malaysia. “Medical Officer Attrition and Transfer Trends 2019–2023.” Various reports.
5. Auditor-General’s Report Malaysia (LKAN). Management of Human Resources and Hospital Services. National Audit Department, multiple years.
6. Malaysian Investment Development Authority (MIDA). “Tax Incentives for Healthcare Services,” official guidelines and updates.
7. Khazanah Research Institute. The State of Households 2023 (Healthcare Chapter).
8. Boo, C. “Malaysia’s Two-Tier Healthcare Crisis.” CodeBlue, 2019–2024 analysis pieces.
9. Bank Negara Malaysia. Annual Report 2023 (Household Wellbeing & Healthcare Expenditure Trends).
10. Organisation for Economic Co-operation and Development (OECD). Health at a Glance: Asia/Pacific 2022.