Health Minister Datuk Seri Dr. Dzulkefly Ahmad announced that Malaysia will begin implementing Diagnosis-Related Groups (DRG) as a phased strategy to promote value-based healthcare. This initiative is tied to the rollout of a new base Medical and Health Insurance and Takaful (MHIT) product, developed in collaboration with the Ministry of Finance, Bank Negara Malaysia, and the Employees Provident Fund (EPF).
“DRGs will incentivise efficiency and drive innovation in ambulatory and day-case surgery,” Dr. Dzulkefly said at the 31st APHM International Healthcare Conference. “It will also support the adoption of cost-effective health technologies that improve outcomes while reducing total costs.”
The initiative is part of a broader healthcare financing reform that seeks to reduce out-of-pocket spending, currently around 36% of total health expenditure and expand access to affordable care.
At the same time, digitalisation of Malaysia’s healthcare system is accelerating, with early results showing improved efficiency and patient satisfaction. The Cloud-based Clinic Management System (CCMS) has already recorded over five million transactions and significantly reduced patient waiting times, with 70% of patients treated in under 30 minutes. CCMS is now live in 78 Klinik Kesihatan, with 90 more clinics scheduled for rollout this year.
Additionally, Electronic Medical Records (EMR) are now operational in 22 public hospitals and over 200 clinics, forming the backbone of a unified digital health architecture. The national app MySejahtera is also being transformed into a platform for preventive and personalised care, integrating pharmacy, dental, immunisation, and screening records.
These efforts, according to the Minister, signal Malaysia’s commitment to building a more equitable, efficient, and technologically advanced health system that meets the needs of a rapidly ageing population and rising chronic disease burden.
