Malaysia’s private healthcare sector is expected to remain on a long-term growth trajectory despite near-term challenges from rising medical costs and affordability concerns, according to CIMB Securities following the Association of Private Hospitals Malaysia (APHM) 2026 Conference.
CIMB noted that discussions among policymakers, hospital operators and insurers focused on collaborative solutions to address healthcare inflation while preserving the financial sustainability of the industry.
“We came away from the APHM 2026 Conference with a more constructive view of Malaysia’s private healthcare sector,” the research house said.
Premium cap expected to expire
One of the key takeaways from the conference was policymakers’ indication that the temporary cap on medical insurance premium increases is likely to expire as scheduled in December 2026, as broader healthcare reforms begin to take shape.
According to CIMB, allowing the temporary measure to lapse would restore greater pricing flexibility for insurance and takaful operators, while easing tensions between healthcare providers and insurers.
The research house believes this would help establish a more balanced reimbursement environment, enabling private hospitals to improve both pricing and case mix over time.
Such developments could support stronger revenue intensity for hospital operators, providing upside that has yet to be reflected in CIMB’s current earnings forecasts.
Focus shifts to sustainable healthcare ecosystem
The conference also highlighted the importance of strengthening collaboration between private hospitals and insurance providers rather than relying solely on cost containment measures.
Panellists acknowledged that while greater transparency enables patients to better understand treatment options, medical costs and insurance coverage, transparency alone would not be sufficient to curb healthcare inflation.
Speakers further stressed that efforts to manage healthcare costs should not come at the expense of clinical autonomy or compromise timely patient care, noting that insurance processes should support rather than delay treatment decisions.
CIMB said the discussions underscored the need to strike an appropriate balance between affordability, quality healthcare and the long-term sustainability of healthcare providers.
KPJ remains preferred sector pick
Against this backdrop, CIMB maintained its Overweight recommendation on Malaysia’s healthcare sector, citing improving policy visibility and favourable long-term industry fundamentals.
The research house continues to favour KPJ Healthcare Berhad as its top sector pick, supported by its balanced growth strategy combining hospital capacity expansion with initiatives to enhance revenue intensity.
CIMB also highlighted KPJ’s predominantly domestic business model, which provides resilience against external geopolitical and policy uncertainties, as well as its strengthening balance sheet.
Looking ahead, the research house believes a more collaborative relationship between insurers and hospitals, coupled with ongoing healthcare reforms, will provide a stronger foundation for sustainable growth across Malaysia’s private healthcare industry.
