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This article is part of the supplement: Selected articles from Universal Coverage: Can We Guarantee Health For All?

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Financing Universal Coverage in Malaysia: a case study

Hong Teck Chua1* and Julius Chee Ho Cheah2

Author Affiliations

1 Performance Management and Delivery Unit (PEMANDU), Prime Minister’s Department, Malaysia

2 Global Public Health, Jeffrey Cheah School of Medicine and Health Sciences, Monash University Sunway Campus, Malaysia

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BMC Public Health 2012, 12(Suppl 1):S7  doi:10.1186/1471-2458-12-S1-S7

Published: 22 June 2012


One of the challenges to maintain an agenda for universal coverage and equitable health system is to develop effective structuring and management of health financing. Global experiences with different systems of health financing suggests that a strong public role in health financing is essential for health systems to protect the poor and health systems with the strongest state role are likely the more equitable and achieve better aggregate health outcomes. Using Malaysia as a case study, this paper seeks to evaluate the progress and capacity of a middle income country in terms of health financing for universal coverage, and also to highlight some of the key underlying health systems challenges.

The WHO Health Financing Strategy for the Asia Pacific Region (2010-2015) was used as the framework to evaluate the Malaysian healthcare financing system in terms of the provision of universal coverage for the population, and the Malaysian National Health Accounts (2008) provided the latest Malaysian data on health spending. Measuring against the four target indicators outlined, Malaysia fared credibly with total health expenditure close to 5% of its GDP (4.75%), out-of-pocket payment below 40% of total health expenditure (30.7%), comprehensive social safety nets for vulnerable populations, and a tax-based financing system that fundamentally poses as a national risk-pooled scheme for the population.

Nonetheless, within a holistic systems framework, the financing component interacts synergistically with other health system spheres. In Malaysia, outmigration of public health workers particularly specialist doctors remains an issue and financing strategies critically needs to incorporate a comprehensive workforce compensation strategy to improve the health workforce skill mix. Health expenditure information is systematically collated, but feedback from the private sector remains a challenge. Service delivery-wise, there is a need to enhance financing capacity to expand preventive care, in better managing escalating healthcare costs associated with the increasing trend of non-communicable diseases. In tandem, health financing policies need to infuse the element of cost-effectiveness to better manage the purchasing of new medical supplies and equipment. Ultimately, good governance and leadership are needed to ensure adequate public spending on health and maintain the focus on the attainment of universal coverage, as well as making healthcare financing more accountable to the public, particularly in regards to inefficiencies and better utilisation of public funds and resources.