Modernising the health system, elevating service quality

This article first appeared in Forum, The Edge Malaysia Weekly on January 12, 2026 - January 18, 2026 Malaysia’s healthcare system, once lauded by the World Health Organization (WHO) particularly for its strong primary care foundation, has long since outlived its role as a benchmark for low- and middle-income countries (LMICs). Progress in key health and well-being indicators has largely stagnated in the 21st century.

The current system and models of care are no longer fit for purpose and must be decisively future-focused and future-proofed to confront the dual burden of non-communicable diseases (NCDs) and the rise in the reemergence of infectious diseases (IDs), notwithstanding the complex demand of a demographic shift to an ageing nation.

This decline was not immediate. The recent pandemic merely exposed what was already broken — workforce burnout, chronic underfunding that has resulted in the compounding effects, and the limits of a hospital-centric sick-care model. It became undeniably clear that business-as-usual was unsustainable. We require comprehensive health reform to survive these challenges.

After having laid down the pillars of reform in 2024-2025, my mission for 2026-2027 is deliberate and unequivocal: “Modernising the Health System, Elevating Service Quality” (Memodenkan Sistem Kesihatan, Melonjakkan Mutu Perkhidmatan). This is not just a slogan; it is a structural transformation driven by four strategic engines.

The efficiency engine: infrastructure and total digitalisation

We are ending the era of manual, paper-based and dilapidated healthcare. Efficiency requires modernising both our hardware and our software.

On the physical front, we have launched a radical upgrade of our facilities. We invested RM960 million to modernise 880 dilapidated clinics with a specific focus on Sabah, Sarawak and rural interiors. This shift towards primary care ensures that quality health services are brought closer to communities rather than relying solely on congested urban hospitals.

Simultaneously, digital health is no longer an optional enabler; it is the backbone of our modernisation. We have already brought more than 400 primary care facilities onto a cloud-based clinic management system (CCMS). The results of this pilot are undeniable: 70% of patients in these digitalised clinics are now attended to within 30 minutes. We are already managing 3.8 million patient health records and processing tens of thousands of daily transactions efficiently.

For 2026, we are scaling this aggressively. We will expand CCMS to 2,489 clinics nationwide and roll out the Total Hospital Information System (THIS) to 16 additional hospitals. This infrastructure lays the groundwork for our national Electronic Medical Records (EMR), hence realising our “One Patient, One Record” vision.

Subsequentially, it allows us to deploy Precision Public Health, leveraging clinical support models powered by artificial intelligence (AI) as well as Big Data to detect early signs of diseases like cancer at the primary care level, shifting our entire focus from reactive illness-centred treatment to proactive preventive, promotive and predictive patient-centred healthcare.

The sustainability engine: value-based healthcare

Transforming Malaysia’s health financing system is long overdue. Public health spending has remained at about 2.4% of gross domestic product (GDP) for years, out-of-pocket payments remain high by regional standards and medical inflation in the private sector continues to outpace income growth. These pressures are now amplified by rapid population ageing and the rising prevalence of NCDs.

First, we must spend efficiently and effectively. This means reducing leakage, strengthening purchasing and ensuring that every ringgit delivers measurable health outcomes by shifting from paying for volume to paying for value. By adopting the Diagnosis-Related Groups (DRG) payment model, we will reward health outcomes and efficiency rather than just the number of procedures performed.

Second, we must spend more, but responsibly, by broadening our funding base. As outlined in the 13th Malaysia Plan (13MP), the National Health Fund is designed to pool and diversify health financing and change how we pay for care. Universal health coverage must be protected without placing excessive strain on public finances or household budgets.

In the first quarter of 2026, we will receive our first RakanKKM patient. This “premium-economy” initiative allows us to capture the M40 market to cross-subsidise public care, creating a revenue stream to retain specialists and the wider healthcare workforce who might otherwise leave for the private sector.

Furthermore, to empower citizens, we are introducing voluntary, standardised base Medical and Health Insurance/Takaful (MHIT) products, offering better value without compromising quality. This initiative includes flexibility for the public to utilise their Employees Provident Fund Akaun Sejahtera for healthcare needs, ensuring that financial protection is accessible throughout the lifecycle, not just at the point of crisis.

The justice engine: human capital and well-being

A modern system requires a resilient workforce. Over the last 24 months, we have moved decisively to stabilise our human capital, resolving legacy grievances that have long plagued the profession.

First, we resolved the structural roadblocks. Most notably, we tackled the long-standing “parallel-pathway” crisis. We pushed through a historic amendment to the Medical Act 1971, ending a regulatory impasse that threatened to stifle our production of medical experts. By harmonising the recognition of both university-based master’s programmes and the Ministry of Health’s own Parallel Pathway, we have restored legal certainty for thousands of trainees and secured the pipeline for critical disciplines — from cardiothoracic surgeons to family medicine specialists.

Second, we delivered job security. We executed a historic 15,322 permanent appointments between 2024 and 2025 to do justice to our contract doctors and nurses. We are continuing this momentum; for 2026, we are targeting another 4,500 permanent appointments for medical officers and 935 for nurses. Graduates from Institut Latihan Kementerian Kesihatan Malaysia (ILKKM) are now receiving automatic permanent placement starting October 2025 to address the nurse shortage.

Third, we ensured financial fairness. We raised on-call allowances (ETAP) by up to 43% for the first time in 14 years. Just recently, we secured a major policy win from the Ministry of Finance: contract officers (2025 cohort) transitioning to permanent appointments are now eligible for transfer and relocation allowances. This resolves a critical gap, ensuring that those who relocate to serve the nation, particularly across the South China Sea, are finally provided with the support they deserve.

Fourth, we prioritised well-being and culture. We have firmly maintained the 42-hour work week for shift workers, covering over 82,000 personnel across five critical schemes to guarantee their physical, mental and emotional health. To further protect our workforce, we have launched comprehensive anti-bullying guidelines, enforcing a culture of dignity, safety and respect within our facilities.

Finally, we are modernising management to address legacy issues like maldistribution. We are deploying an Integrated Human Resource (HR) Dashboard to make granular, data-driven decisions on staffing, ensuring rural clinics are not left understaffed. We are also upgrading the “Suka Sama Suka” (P3S) transfer system — which already has nearly 3,000 registrants — with a “Rule-Based Algorithm” to replace ad-hoc decisions with a fair, transparent mechanism for staff mobility.

The morale engine: a war on unhealthy lifestyle

NCDs already cost the Malaysian economy RM64.2 billion annually. To mitigate this, I have declared a “War on Sugar, Smoke, Salt, Stigma, and Sedentary (5S)” lifestyles in 2024-2025.

However, winning this war requires a shift in strategy. We recognise that NCDs are not driven by ignorance alone, but by environments, defaults, social norms and cognitive bias. Therefore, we are deploying and integrating Behavioural Insights (BI) to pivot policy from merely “telling people what to do” to designing systems or campaigns that allow people to make healthy choices easier, normal and rewarding.

This structural approach underpins our regulatory actions, including the full enforcement of the Control of Smoking Products for Public Health Act 2024 (Act 852) and a planned complete ban on “open system” vape products. We will not compromise on the health of our next generation.

But morale is also about mental resilience. Our “War on Stigma” is backed by concrete support. We have established the National Centre of Excellence for Mental Health (NCEMH) and strengthened the HEAL 15555 crisis line, which has already provided psychological support to nearly 163,000 callers. We are mainstreaming mental health awareness to ensure no Malaysian suffers in silence.

Simultaneously, we are addressing the critical shortage of organ donors by restructuring the National Transplant Resource Centre (NTRC) and establishing a National Transplant Council. This body will have the regulatory authority to drive a new national agenda on donation, saving lives that are currently lost to waiting lists.

Shared responsibility

True transformation requires a whole-of-nation commitment beyond just political will. A resilient health system emerges only when citizens embrace prevention, communities act as architects of their own well-being, and healthcare workers — our nation-builders — are empowered with the dignity, security and tools to protect the rakyat.

Malaysia’s health reform is a relay race across generations, not a sprint. The baton we pass forward will be steadier, the path precisely charted, and the health system resilient, sustainable and equitable.