Why medical tourism threatens universal healthcare in Malaysia

Noor Khairil Azhar Mohammed Noor

People in Malaysia are being told that expanding medical tourism will “grow the economy” and “strengthen healthcare”.

But the truth is much simpler: medical tourism mainly benefits private hospital groups, investors and the wealthy – not ordinary people in Malaysia (MoH 2022–23; WHO 2022).

The revenue generated from foreign patients, which reached RM2.3bn in 2023, does not meaningfully return to public hospitals.

Instead, profits circulate among companies and shareholders while the public healthcare system remains underfunded and overstretched.

Public hospitals train most of the country’s doctors, nurses and specialists using taxpayers’ money. Yet many of these professionals migrate to the private sector, especially to hospitals that prioritise high-paying foreign clients. This creates a double burden on ordinary people in Malaysia.

First, they pay taxes to build and train the healthcare workforce. Later, they face rising insurance premiums, increasing fees and longer waiting times in public facilities because talent is drawn toward more lucrative private hospitals (CodeBlue 2019–24; Auditor General’s Reports).

The private sector enjoys the profits without bearing the cost of producing the very workforce it relies on.

This imbalance deepens because private hospitals involved in medical tourism often receive generous tax incentives, such as investment tax allowances and promotional tax deductions [Mida].

While these incentives vary across budget cycles, the direction is consistent: medical tourism is encouraged through generous tax treatment.

When companies receive large tax exemptions, government revenue declines. The people ultimately bear the burden through continued underinvestment in public hospitals, slower facility upgrades and persistent staff shortages (MoH 2022–23).

The private sector expands its profits, while the public sector struggles to serve millions.

Meanwhile, the medical tourism narrative distracts policymakers from Malaysia’s real structural issues: overcrowded wards, understaffed clinics, limited rural coverage, insufficient mental health services, and high out-of-pocket spending (WHO 2022; KRI 2023).

Instead of prioritising long-term investment in the public system, leaders chase ‘tourist dollars’. This represents a dangerous shift – one that widens the gap between those who can afford private care and those who cannot.

As medical tourism grows, Malaysia drifts toward a humiliating two-tier healthcare system. Foreigners and wealthy patients receive faster, more comfortable treatment, while ordinary people in Malaysia face longer delays and declining quality (CodeBlue 2019–24).

Healthcare shifts from a public service to a commodified industry. Patients are no longer people with equal rights but revenue sources to be optimised and marketed to. The people of Malaysia risk becoming second-class patients in their own country.

Proponents claim that medical tourism increases gross domestic product, as if GDP were an indicator of fairness or wellbeing. But GDP measures economic activity – not who benefits from it. GDP can rise even as inequality worsens.

When the profits from medical tourism stay concentrated within private hospital groups, shareholders and investment funds, GDP growth does not translate into better healthcare access for the people. It does not raise wages for healthcare workers, expand rural services or reduce household medical expenses.

GDP growth without redistribution is not progress. It is a statistical illusion.

At its core, the expansion of medical tourism reflects a deeper ideological shift: the belief that market solutions can fix public problems and that private profit can substitute for public responsibility.

But every weakness in the public system pushes more ordinary people into private care, strengthening the corporate networks that benefit most from medical tourism. This cycle intensifies inequality and erodes trust in the state’s ability to provide essential services.

Medical tourism will not solve Malaysia’s healthcare problems because the crisis is not about revenue – it is about priorities. A nation cannot outsource its moral duty to care for its people. A healthcare system built around foreign clients, market incentives and corporate profits will never serve the people with dignity or fairness.

Real progress requires the opposite approach:

Malaysia must decide whether it wants a healthcare system shaped by the logic of profit or by the principle of justice.

The measure of a moral nation is not how well it serves wealthy visitors – but how well it cares for its own people.

Medical tourism is not the path to a fairer healthcare system. Strengthening public healthcare is.

Noor Khairil Azhar Mohammed Noor is a member of the healthcare campaign committee of the socialist party PSM.