The development of private health insurance in Malaysia: A case study analysis exploring its influence on financial risk protection

Since the 1980s, private health insurance (PHI) in Malaysia has undergone significant changes, closely linked to the increased healthcare privatisation driven by government policies. Given the rising number of insured individuals and ongoing government encouragement efforts, this study aims to assess how the development of PHI has influenced financial risk protection. This research adopts a case study approach, combining document analysis and key informant interviews to gain a comprehensive understanding of PHI development. A total of 210 documents detailing PHI development from 1980 to 2023 were analysed. Additionally, stakeholder mapping using the Mendelow matrix identified ten key informants, focusing on those within the high-power, high-interest quadrant. Framework analysis was applied, using an adapted model encompassing five key themes: public policy, demand, market structure, market conduct, and performance. Under "public policy", the study examined government plans, industry governance, and relevant legislation. Analysis of "demand" identified a complex interplay of factors driving PHI uptake. The "market structure" revealed characteristics of an oligopolistic market, with a small number of insurers dominating. Under "market conduct," the evolution of benefit designs largely strengthened financial risk protection. Finally, the "performance" analysis focused on PHI coverage, claims inflation, equity, and financial risk protection. This study revealed the dual effect of PHI development in Malaysia, with certain aspects enhancing financial risk protection while others undermine it. Assessing PHI’s financial protective effect is vital as Malaysia embarks on health system reforms and offers valuable insights for other countries exploring PHI as an alternative financing strategy.