Higher earnings seen for private healthcare
PETALING JAYA: Malaysian private healthcare operators are set to see higher earnings in 2019, on the back of rising demand for their services from medical tourists.
Fitch Solutions Macro Research said healthcare players would also benefit from the impact of new government policies encouraging health protection.
“Furthermore, with the abolishment of the GST in 2018, we expect the profit margin for private healthcare service providers to be enhanced going forward given that they have been absorbing the 6% GST input tax on medicines under the exempt supply.
“The healthcare sector will benefit from recovery in private consumption which will lead to higher spending on private healthcare,” it said in a statement.
The research house added that the implementation of the ‘Skim Peduli Sihat’ programme, which provides RM 500 in financial assistance per year for B40 (bottom 40%) families to visit private clinics, will also provide a boost for the sector.
This scheme, which aims to make healthcare services more accessible to the B40 income group, will increase the number of patients seeking treatment in private hospitals.
The research house noted that private healthcare players IHH Healthcare Bhd and KPJ Healthcare Bhd had both seen revenue growth per inpatient for their Malaysian operations in the third quarter of financial year 2018 (Q3’18).
IHH’s revenue per inpatient grew 2.6% year-on-year (y-o-y) to RM6,678 (US$1,613) while for KPJ, it grew 1.78% to RM7,501 (US$1,812).
Fitch Solutions noted that the government currently provides tax rebates for setting up new private hospitals, refurbishing existing establishments, purchasing new equipment and applying for international accreditation.
“Government efforts to encourage the development of the private sector have been helped in recent years by rising incomes, the expansion of health insurance and the opening of specialist facilities,” it said.
In 2017, healthcare expenditure in Malaysia was valued at RM56.33bil, and is expected to experience a five-year compound annual growth rate (CAGR) of 9%, reaching RM87.17bil by 2022.