KPJ Healthcare Berhad - Annual Report 2018

34 KPJ HEALTHCARE BERHAD December 2018, BPJS recorded a deficit of around RP11 trillion, mainly due to the value of claims exceeding the value of premiums paid. This has added pressure to healthcare providers in the country. MALAYSIA HEALTHCARE SECTOR In Malaysia, development within the healthcare sector was largely defined by the 2019 Budget. The Government is committed to raise public expenditure on healthcare from 4.4% previously to between 6% and 7% of the GDP, which is in line with healthcare spends of developed countries worldwide. According to Affin Hwang and Bloomberg, the healthcare and pharmaceutical sector in the country had a total market capitalisation of RM46.6 million. Healthcare expenditure will continue to be increased, driven by such variables as an ageing population, rising trend of OUR BUSINESS ENVIRONMENT non-communicable and infectious diseases, new technologies and increasing patient demands. This has led to an increase in out-of-pocket expenditure within the private healthcare sector, and is expected to continue. Considering that life expectancy in Malaysia have increased considerably, there is a greater need for a boost in healthcare services. The Ministry of Health’s (MOH) 2018 budget which had provided an allocation to the Malaysia Healthcare Travel Council (MHTC) as an incentive to boost Malaysia’s healthcare travel industry had a positive impact on medical tourism in the country. With the reduced value of the Ringgit, coupled with the high quality of private medical services in Malaysia, the country has proven to be an attractive destination for medical tourists. In 2018, Malaysia was recognised as the Medical Tourism “Destination of the Year” for the third time by the International Medical Travel Journal, an indication of the nation’s reputation in providing the best and competitively affordable world-class quality of healthcare services. During the year, over 920,000 medical tourists arrived in Malaysia for medical treatment. In the second half of 2018, the release of the 2019 Budget made a significant impact on the healthcare industry. Under the Budget, the Government had introduced Skim Peduli Sihat or the B40 National Health Protection Fund, which provides a RM500 assistance to the B40 class of households earning RM3,900 a month or less to provide them access to healthcare services at registered private medical institutions, where the cost of treatment is deemed to be more affordable for this particular group of Malaysia Healthcare Sector THE GOVERNMENT HAS COMMI TTED TO RA I SE PUBL IC EXPENDI TURE ON HEALTHCARE FROM 4 . 4% PREV IOUSLY TO BETWEEN 6% AND 7% OF GDP, WHICH I S IN L INE WI TH HEALTHCARE SPENDS OF DEVELOPED COUNTRI ES WORLDWIDE .