KUALA LUMPUR: The widely-cited 12.5 per cent medical inflation rate for private hospitals may not accurately reflect the actual rise in healthcare costs, according to the Association of Private Hospitals Malaysia (APHM).
In a press release, APHM president Datuk Dr Kuljit Singh highlighted the critical distinction between general healthcare cost increases and medical inflation.
He noted that this frequently-referenced statistic does not account for year-on-year inflation of identical items but rather reflects a broader increase in healthcare expenses.
"Notably, costs associated with specific medical technologies, such as X-rays, typically rise by only 3-5 per cent per annum — comparable to the Consumer Price Index (CPI) and annual inflation rates observed globally.
"This increase is primarily influenced by rising electricity tariffs, maintenance costs, staff salaries, and the increasing financial burden from medico-legal court judgments," he said.
APHM also noted that rising costs are largely driven by new technologies, such as robotic surgery and advanced cancer treatments, alongside investments in systems like electronic medical records (EMR) and artificial intelligence (AI).
These initiatives may lead to higher overall medical costs due to substantial investments in technology, specialised staff training, and related expenses.
Although Malaysia's healthcare remains among the most affordable in the region, costs for newer technologies appear proportionately higher due to a lower cost base, which needs to be considered when assessing the overall medical inflation rate.
"The introduction of innovative technologies results in higher percentage cost increases in Malaysia when compared to established markets where healthcare costs are already two to three times higher.
"This reality must be taken into account when evaluating claims of medical inflation," he said.
It noted that while models like Diagnostic-Related Groups (DRG) may help mitigate medical inflation, they have yet to show any consistent effectiveness in any of the healthcare systems worldwide.
Through the release of their factbook, APHM calls for a reexamination of the narratives surrounding medical inflation and urges all stakeholders to focus on understanding the true factors influencing healthcare costs in Malaysia.