This article first appeared in Digital Edge, The Edge Malaysia Weekly on December 30, 2024 - January 12, 2025

The private healthcare system is under scrutiny as public outrage over rising costs pressures the government to consider implementing a diagnosis-related group (DRG) system to ensure fairer hospital charges. Yet, the pursuit of cutting-edge treatments and more efficient care delivery remains an expensive endeavour.

This scrutiny coincides with Malaysia grappling with a medical service inflation rate of about 12.5% — one of the highest in recent years — which has driven up medical insurance premiums significantly.

In response, private hospitals like KPJ Healthcare Bhd (KL:KPJ) and Subang Jaya Medical Centre (SJMC) are increasingly integrating emerging technologies, such as artificial intelligence (AI), to enhance care quality and allow healthcare professionals to focus more on meaningful, patient-centred interactions.

However, adopting advanced technologies, particularly AI solutions, presents its own set of challenges, including recurring costs, notes Chin Keat Chyuan, president and managing director of KPJ Healthcare.

“While cost is a consideration, KPJ prioritises solutions that demonstrate evidence-based outcomes and ethical use. As technology costs can be high, KPJ seeks to invest in technology that improves patient care or achieves efficiency improvements, so there are clear returns associated with our technology investment decisions,” says Chin.

Similarly, SJMC has acknowledged that implementing a fully tech-powered healthcare system in Malaysia is a challenging yet achievable goal, considering the existing infrastructure and ongoing advancements in digital health.

“[But] from a hospital’s perspective, the initial investment in advanced technologies can be significant, not only for purchasing the technology but also for the training required to equip healthcare professionals with the skills they need to use these systems effectively,” says Bryan Lin, CEO of SJMC.

Although challenges remain, the substantial investments in digital health infrastructure and the notable advancements achieved thus far suggest that Malaysia is well-positioned to realise its goal of a technologically advanced healthcare system, says Lin.

In a media statement on Dec 11, the Association of Private Hospitals Malaysia (APHM) president Datuk Dr Kuljit Singh stated that the country’s private healthcare sector has established itself as one of the best in the region, showcased by a notable increase in medical tourism.

“This achievement indicates the nation’s potential to lead in technological innovations, particularly in robotics and AI-assisted treatments and advanced oncology treatment.

“In 2023, private hospitals contributed approximately RM6 billion to the country’s gross domestic product (GDP). These hospitals facilitate collaborations with key sectors such as pharmaceuticals and healthcare tourism, fostering a synergistic healthcare ecosystem that promotes innovation and advances patient care,” he said.

Cutting-edge interventions like robotic surgery and personalised treatment plans are projected to add RM11 billion to Malaysia’s GDP, according to APHM. This contribution stems from early access to advanced medical technologies and increased productivity due to quicker recovery times and shorter hospital stays.

It is crucial to recognise that a robust and innovative private healthcare sector is vital not only for driving economic growth but also for delivering high-quality healthcare to the Malaysian population. As the private healthcare sector adjusts to regulated cost structures, maintaining this balance will be key to improving patient outcomes and supporting the nation’s overall health and economic well-being, he added.

In the coming weeks, key stakeholders — including private hospitals, insurers, pharmaceutical companies, Bank Negara Malaysia and the Ministry of Health — are expected to develop practical treatment cost models that deliver genuine value.

One potential solution is the adoption of the DRG system, which requires a comprehensive analysis of relevant data to evaluate its effectiveness. It is important to note, however, that significant reforms take time to implement.

The DRG system classifies patients by medical case complexity rather than itemising every charge, offering a more streamlined approach to healthcare financing.

This is no easy task, but Siow Ai Li, managing director of Siemens Healthineers for Singapore and Malaysia, emphasises that healthcare systems must prioritise technological transformation to meet consumer demands and tackle the challenges that come with it.

“When we talk about AI, it will not be a standalone solution. AI is part of the embedded solution that will transform the patient cycle,” says Siow.

For instance, she says integrating AI will change a patient’s cycle from the moment the patient steps into the hospital until they get their treatment and step out of the hospital.

Moreover, the growing accessibility of large language models has made AI a ubiquitous term, with its adoption becoming increasingly vital for organisations undergoing digital transformation. Those that fail to embrace AI risk falling behind in a rapidly evolving landscape.

Although implementing AI solutions in healthcare systems is no overnight task, experts highlight its immense potential. AI not only streamlines workflows for healthcare professionals and enhances patient care but also contributes to significant cost reductions, making its integration a critical step forward.

While the upfront investment in AI may be significant, the long-term savings can be substantial. According to The Potential Impact of Artificial Intelligence on Healthcare Spending, a 2022 paper published by the National Bureau of Economic Research, private payers could achieve annual savings of US$80 billion to US$110 billion over the next five years. Similarly, physician groups could reduce their costs by 3% to 8%, translating into additional savings of US$20 billion to US$60 billion.

“With the rapid emergence of new technologies, the key challenge is identifying digital health solutions that fit seamlessly into the existing care delivery environment. Once we have made that selection, the next critical step is ensuring that clinicians fully embrace and adopt these technologies for successful integration,” says SJMC’s Lin.

SJMC, for example, has incorporated advanced AI technology to deliver precise radiotherapy for cancer treatment. This AI system synchronises the movement of radiation beams with the tumour’s motion, allowing continuous radiation delivery in sync with the patient’s natural breathing patterns.

“This technology enables the accurate delivery of radiation doses while minimising exposure to healthy tissues. As a result, we have observed improvements for patients, such as a significantly shortened treatment duration, reducing the overall treatment time from seven to eight weeks to just one to two weeks,” he says.

With AI technology, the hospital can deliver precise dosages while minimising the treatment area and volume. For patients, this translates into fewer side effects from radiation as surrounding healthy tissues, such as the lungs, liver and other organs, are better protected.

While AI trained on medical databases can analyse symptoms and recommend specialists, Lin cautions that AI’s effectiveness depends on the quality of its training data and implementation environment. Flaws in either can lead to inaccurate responses, compromising care and exacerbating health inequities.

Beyond patient care, AI-tailored solutions streamline operations in hospitals and facilitate connections between doctors and pharmaceutical or medical device companies.

“For example, if a doctor requires a drug after reviewing pharmaceutical, biomedical and medical device companies scientific journals, the AI will recommend the most suitable pharmaceutical drugs or medical devices for the patient. This eliminates the need to contact third parties or sales representatives. A built-in QR scanner in the same app further helps doctors in identifying fake drugs with a simple scan,” says Francis Chung, CEO at QBeep Intelligent Sdn Bhd.

Companies like QBeep, offering all-in-one mobile apps, bridge the gap between healthcare providers and pharmaceutical companies for faster results.

Siemens’ Siow stresses that addressing concerns about escalating costs and infrastructure needs does not preclude healthcare stakeholders from exploring the potential of emerging technologies.

“I think the low-hanging fruit is digitalising all our systems. I think the first is to digitalise our operations and processes because there is still a lot of manual work in our healthcare system. So once we digitalise all the manual systems, the second is to digitalise all our documentation,” she says.

“This is the immediate action that we need to do for our healthcare system; I think then we can explore going into futuristic technology such as doing a digital twin of our body.”

The purpose of a digital patient twin is to help doctors better predict how a person ages, when illnesses appear and what the most effective treatment is.

According to the Siemens website, digital patient twins, powered by biophysiological data models and advanced algorithms, can process real-time health data from various sources.

By continuously comparing an individual’s health information with population-level data and clinical insights, these twins can support personalised and evidence-based healthcare decisions. This approach, considering clinical guidelines and economic factors, can optimise treatment plans and preventive measures.

Siow says there is still a long way to go before a digital patient twin can be fully realised in healthcare. But the technology itself is no longer science fiction.

“Just like the movie Avatar, instead of an avatar, there is a digital twin of you, your body and organs. But for that to happen, we first need to tackle the basics and digitalise most of our existing operations. Once we have reached that and have enough data pool, we can then do digital twins. It is not impossible.”

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