The evolution of healthcare digitalisation policies in Malaysia: A four-decade narrative review (1985–2025)

Abstract

This study examines Malaysia's healthcare digitalisation policies from 1985 to 2025 and their impact on the country's dual public–private healthcare system. Through a narrative review of policy documents, reports, and statistics from authorities and verified industry news as well as peer-reviewed publications, the study compares Malaysia's experience with selected developed nations (Sweden, Denmark, United Kingdom, and Estonia). Despite initialising its digitalisation agenda in the 1990s alongside these nations, the Malaysian public healthcare sector shows limited implementation with only 24% of public hospitals equipped with hospital information system (HIS) and only 7% of health clinics were equipped with clinical information system by 2019. In contrast, the private sector, which is driven by market forces, demonstrates a higher capacity of digital solution adoption. The growth of health technology companies providing various digital services such as virtual services, e-prescription, and medication delivery is fundamentally reimagining and transforming healthcare delivery models by providing disruptive digital healthcare services. However, regulatory uncertainty remains as a significant barrier to comprehensive digital transformation. Though regulatory sandboxes may provide an innovative solution to these regulatory challenges, the need for a more comprehensive and permanent regulatory framework remains. This study reveals how government policies and healthcare system structure influence digitalisation outcome and demonstrates the importance of policy and governance in shaping the digital health ecosystem, offering valuable insights for countries with a similar dual healthcare system.

Introduction

The rapid advancement of digital technologies has transformed healthcare delivery globally, with many countries adopting comprehensive digital health strategies to improve healthcare accessibility, efficiency, and quality. Malaysia's healthcare system, characterised by its dual public–private structure, has undergone significant transformation since the 1980s.

Malaysia, classified as an upper middle-income country by the World Bank Group, operates its public healthcare sector through the Ministry of Health (MoH), funded by general taxation, providing universal access at nominal charges to all Malaysians regardless of income, with free services for maternal and child health as well as infectious diseases. The private sector, in contrast, operates on funding through out-of-pocket payments (OOPs), private insurance, or insurance coverage provided by private corporations to their employees. ¹ This dual system creates distinct pathways for digital health implementation and adoption.

The scale and scope of these two sectors are significantly different. As of December 2022, the public sector operates 148 hospitals and special medical institutions (45,167 beds) and over 3000 clinics, while the private sector comprises 207 hospitals (17,781 beds) and 9830 registered medical clinics. Public facilities handle the majority of healthcare utilisation, with MoH institutions accounting for 69.23% of total hospital admissions and 74% of outpatient attendance in the hospitals. ² While a total of 39,141,568 attendances were recorded at the MoH primary care facilities, no comparative data is available for the attendance at the general private clinics. ²

Healthcare financing in Malaysia reflects this dual structure. In 2021, total health expenditure reached RM78.22 billion (5.06% of GDP), with the public sector accounting for 57.85% of this expenditure, 49.33% of which was by the MoH.^2,3 OOPs represent the second-largest source of financing at 31.51%. ³ Despite high OOP rates, Malaysia maintains relatively low catastrophic healthcare expenditure at 2.8%, compared to the global estimate of 11.7%, suggesting effective financial protection mechanisms. ⁴ The National Health Accounts report indicates that OOP spending primarily covers outpatient services (40.5%), inpatient services (24.6%), and ‘health education and training’ (6.0%). ³

The private healthcare sector shows distinct characteristics in terms of distribution and digital readiness. Private facilities are predominantly concentrated in urban areas, influenced by factors such as education levels, health awareness, and financial capabilities.^5,6

Recent studies indicate growing digital health engagement among urban populations, with a PricewaterhouseCoopers survey in Klang Valley reporting that 63% of respondents invest in physical and mental wellbeing, while 45% use health monitoring devices or apps. 45% of respondents also self-diagnose symptoms and treatments online prior to seeking consultation. ⁷

This unique healthcare landscape presents both opportunities and challenges for advancing digital health initiatives. The willingness of Malaysians to pay for healthcare services, particularly in health education and training, coupled with increasing digital health adoption in urban areas, suggests potential for growth in digital health initiatives. However, the dual system structure necessitates careful consideration of how digitalisation policies can be effectively implemented across both public and private sectors while maintaining equity in healthcare access and quality.

Research objectives

This study aims to analyse the evolution of healthcare digitalisation policies in Malaysia over four decades (1985–2025), examining how these policies have shaped the digital health landscape within Malaysia's dual healthcare system. Through a narrative review of policy documents and comparative analysis with selected developed nations (Sweden, Denmark, UK, and Estonia), the research seeks to identify key challenges and opportunities, particularly focusing on the divergence between public and private sector implementation. By reviewing this policy evolution and its differential impact, the study aims to provide insights and recommendations for more effective integration and implementation of digital health initiatives within Malaysia's healthcare system.

Methodology

This study employs a narrative review methodology to examine the evolution of healthcare digitalisation policies in Malaysia from 1985 to 2025. The research design incorporates both chronological and comparative analyses to provide a comprehensive understanding of policy development and implementation within Malaysia's dual healthcare system.

Data collection and sources

Three categories of documents were analysed.

• Official government documents: Malaysia Plans (Fifth through Twelfth Malaysia Plans), MoH policies and reports, and other government policy documents related to national digitalisation strategies.

• Statistical data: MoH reports and international country statistics and healthcare indicators.

• Supporting literature: Peer-reviewed publications, industry reports, verified media sources, and international policy analyses.

Documents in both Bahasa Malaysia and English were included, utilising official translations where available. Media reports were selectively included to document recent developments, particularly in the private healthcare sector where peer-reviewed publications often lag behind.

Analytical framework

The analysis developed iteratively with each section guiding the direction and depth of subsequent discussion. This flexible approach was taken to accommodate emerging themes and connections that might have been overlooked in a more structured methodology. It evolved through three main perspectives:

Chronological analysis

The natural progression of policy development through Malaysia's 5-year plans was studied and key transitions and implementation outcomes were identified. Fifth through Twelfth Malaysia Plans were the main documents being analysed. Cross-referencing with other policy documents that were mentioned in subsequent Malaysia Plans or other publications were carried out to provide a more detailed perspective on the achievement and challenges faced during the specific term.

International context

To provide a broader context, the study includes the digital health journeys in four selected countries. This perspective is exploratory rather than systemic, offering illustrative examples rather than a structured comparative analysis. These countries were selected based on their distinctive digital health experiences and readily available English-language documentations. Sweden and Denmark were selected as they were early adopters of a nationwide digitalisation agenda, the United Kingdom was selected due to its historical influence and similarities with the Malaysia healthcare system, and Estonia was selected as it is generally considered as a global pioneer in digital health. A subjective comparison was done based on the respective countries’ general digitalisation policies to provide an overview on global healthcare digitalisation trajectories. In order to provide context for the different countries being compared and their current healthcare systems, various statistical data from the World Bank Open Data platform (https://data.worldbank.org) were compiled for each of these countries. These include the GDP, population size, land area, population density, health expenditure, life expectancy at birth and the number of physicians per 10,000 population. ‘The Application of information and communication technologies for health systems in Belgium, Denmark, Spain, the United Kingdom and Sweden’ published by the United Nations Publication and the ‘eHealth Strategies Country Brief: Estonia’ published by the European Commission acted as the base documents for this section.

Systems thinking perspective

A systems thinking perspective approach was taken to examine how different components of the healthcare system interact and influence each other. This approach helps to understand the parallel development of the public and private healthcare sectors which operate independently from one another and how government policy decisions influence the stakeholders in the ecosystem differently. Based on the summary report in the subsequent Malaysia Plans, industry reports and verified media sources were referred to in providing a more detailed narrative on the implementation of initiatives related to the Malaysia Plans.

Results and discussions

Evolution of digital health policies in Malaysia

Strategic development plans have guided Malaysia's national development since prior to gaining independence in 1957. The Fifth Malaysia Plan (1985–1990) marked a significant shift towards infrastructure development, particularly in telecommunications and utilities as heavy industrialisation and privatisation became key strategies for economic development. ⁸ The Seventh Malaysia Plan (1996–2000) saw a major focus being placed on information and communication technology (ICT) development agenda. ⁸ The subsequent Malaysia Plans had evolved to incorporate ICT as key enablers in economic activities in various sectors before becoming a targeted economic activity by itself.

A similar trajectory can be observed in the healthcare sector. The earlier Malaysia Plans were only focused on improving and expanding basic healthcare services through public healthcare facilities to improve population health outcomes. Subsequently it began to incorporate digitalisation initiatives before eventually recognising the private healthcare industry and digital health services as an economic contributor.

The early computerisation phase began under the Fifth Malaysia Plan (1985–1990) with the introduction of computerised billing systems in selected government hospitals. ⁹ The Sixth Malaysia Plan (1991–1995) expanded this administrative computerisation, implementing systems for quality assurance and budget performance monitoring.^9,10

Under the Seventh Malaysia Plan (1996–2000), Malaysia launched a nationwide ICT agenda to support the sector and its related industries. This period saw several landmark developments including the establishment of the Multimedia Super Corridor, enactment of the Telemedicine Act 1997, and release of the comprehensive Telemedicine Blueprint.^11,12 The Blueprint outlined several ambitious projects such as the ‘Mass Customised/Personalised Health Information and Education’ project, the ‘Continuing Medical Education’ project, teleconsultation services, and the ‘Lifetime Health Plan’ project. ¹² This era also witnessed the establishment of Malaysia's first paperless hospital with the implementation of Total Hospital Information System at Hospital Selayang in 1999, followed by Hospital Putrajaya in 2000, both of which were MoH hospitals. ¹³

However, the Asian Financial Crisis caused Malaysia Plans to shift into more short- and medium-term issues related to economic stabilisation rather than long-term plans for growth, reflecting the nation's priority on economic recovery. ⁸ While various plans continued to take place to position Malaysia as a major global ICT hub under the Eight Malaysia Plan (2001–2005), healthcare digitalisation was noticeably absent from the healthcare services section of the document. ¹⁴

The Ninth Malaysia Plan (2006–2010) emphasised macroeconomic stability and positioned ICT as a driver for new sources of growth and enhanced productivity and competitiveness. ¹⁵ This was reflected in the National Strategic ICT Roadmap which highlighted three technology focus areas: wireless sensor networks, predictive analytics, and three-dimensional internet. ¹⁶ The National Health Informatics Centre was established under the MoH to centralise health and health-related data management at the federal level. However, no new Hospital Information System (HIS) projects were announced during this period while medical tourism began to emerge as a new economic sector. ¹⁵

The Tenth Malaysia Plan (2011–2015) streamlined the role of the government as a regulator and catalyst while upholding effective delivery of services. While ICT was identified as one of the 12 National Key Economic Areas (NKEA) identified under this plan, the public healthcare sector was more focused on services expansion rather than digitalisation agenda. At the same time, the private healthcare sector was introduced as one of the NKEA. ¹⁷

The Eleventh Malaysia Plan (2016–2020) emphasised ICT infrastructure and talent development as key enablers for economic growth. ¹⁸ The Malaysian Health Data Warehouse (MyHDW), conceptualised in 2011, was finally launched in 2018, integrating data from various government agencies as well as both public and private healthcare facilities.^19,20 MyHDW was established with the aim to facilitate disease surveillance and research activities, thus allowing better evidence-based health system management. ²¹ This system's successful integration with Geographic Information System proved to be a useful tool for an effective control of the outbreak. ²²

Following the COVID-19 pandemic in 2020, the Twelfth Malaysia Plan (2021–2025) was prepared with post-pandemic economic recovery in mind. It marked a significant push towards digital transformation which would serve as an important enabler across three key themes: resetting the economy; strengthening security, wellbeing and inclusivity; and advancing sustainability. The plan integrates several initiatives such as the National Fourth Industrial Revolution (4IR) Policy, Digital Economy Blueprint and National e-Commerce Strategic Roadmap 2.0. The National Internet of Things (IoT) Strategic Roadmap will also be reinvigorated. ²³

In the healthcare sector, the plan focuses on health system reform and services redesign. Key digital health initiatives include the revival of lifetime health record which was first proposed in the 1997 Telemedicine Blueprint, expansion of virtual clinic services, development of mobile application for appointment and medical record access and implementation of e-hailing home-based healthcare services. The plan also addresses Malaysia's ageing population through IoT-enabled home-care monitoring and virtual consultations. ²³

MyHDW would be enhanced with a virtual platform to facilitate cross-agency data sharing and the National Institutes of Health will have a new digital health research centre. ²³ This is further supported by the MoH's digitalisation strategic plan which outlines four strategic thrusts, 13 strategies, and 30 digitalisation programmes to be implemented throughout the ministry and its healthcare facilities. The plan highlights the aim to establish robust end-to-end digital health services by adapting emerging 4IR technologies. ²⁴

International context

The evolution of Malaysia's healthcare digitalisation policies can be better understood through comparison with international experiences, particularly those of countries that have successfully implemented comprehensive digital health systems.

Sweden and Denmark were chosen because they were early adopters to a national digitalisation agenda. The United Kingdom was chosen due to its historical influence and similarities with the Malaysian healthcare system while Estonia was selected as it is generally considered a pioneer in digital health. All these countries have a similar funding model to Malaysia except for Estonia as the public funding is generated through an insurance system. Compared to all these countries, Malaysia has the lowest healthcare expenditure (% to GDP) and doctor to population ratio. Table 1 summarises the key features of the countries compared in this study.^1,25–33

Table 1.

Features of the healthcare systems studied.

	Malaysia	Sweden	Denmark	United Kingdom	Estonia
GDP (million USD) (2023)	399,648.83	593,267.70	404,198.76	3,340,032.38	40,744.85
Demography
Population size (2023)	34,308,530	10,536,630	5,946,950	68,350,000	1,366,190
Land area (sq km) (2021)	328,550.0	407,283.5	40,000	241,930.0	42,750
Population density (people per sq km of land area) (2021)	102	26	146	277	31
Healthcare system
Coverage	Universal	Universal	Universal	Universal	Universal
Funding model	Public	Public	Public	Public	Public
Main source of funding	Tax	Tax	Tax	Tax	Insurance
Healthcare expenditure (% of GDP) (2022)	4.38 (2021)	10.67	9.5	11.34	6.94
Life expectancy at birth (2022)	76	83	81	82	78
Doctors per 10,000 population (2020)	22.3	43.1	44	30.4	34.8

Sweden

Sweden, which is one of the earliest countries in the world to have a national digitalisation agenda, began to develop parallel information systems for use by physicians and telemedicine applications in 1989 which subsequently in the 1990s, progressed into the creation of regional networks for sharing clinical information and developing e-prescription as well as home-care systems.^32,34 The Patient Data Act that was enacted in 2008 allowed individuals to have direct access to their medical records online. ³⁴ Despite having a healthcare system that is financed by public funds, Sweden's healthcare system is decentralised, thus allowing regional decisions.^34,35 In 2000, the ‘An Information Society for All’ became the country's first national ICT policy with the objective to make Sweden the first country in the world to have an all-inclusive information society.^35,36

In 2006, the government of Sweden published the National Strategy for eHealth which identified six action areas which focused on establishing better basic conditions for ICT in health and elderly care as well as to improve e-health solutions and adapt these to patient needs.^32,35 In 2016, the government then launched the Vision for eHealth 2025 which aims to make Sweden a world leader in e-health by 2025. ³⁷

Denmark

Denmark began to embark on e-health projects in the late 1980s with several projects aiming to interchange clinical data in electronic form. ³² MedCom, which was first introduced in 1994, was a non-profit cooperation between Danish authorities, organisations, and private firms linked to the Danish healthcare sector.^32,38,39 The government then launched the Danish Action Plan for EHR in 1996, followed by the National Strategy for IT in the Danish Hospital System 2000–2002 followed by the National IT Strategy for the Danish Health Care System 2003–2007. ³⁸

In 2003, ‘Sundhed.dk’, a public health portal was established by the Danish Regions, MoH and Prevention, Local Government Denmark, and the Association of Danish Pharmacies. It facilitates communication between healthcare practitioners and patients by allowing a single point of access to information. Individuals are able to view their medical records as well as manage their appointments with the general practitioner and renew their prescriptions. On the other hand, healthcare practitioners are also able to view the records of their own patients.^38,39 In 2004, the general practitioners in Denmark were mandated to use computers and EMR systems that are compliant with the standards set by MedCom for the purposes of managing patients’ clinical notes, prescription lists, diagnostic images and laboratory test results as well as sending reminders to patients. ³⁹

Rather than focusing on operational goals, the National Strategy for Digitalisation of the Danish Healthcare Service 2008–2012 was aimed more on strategic goals with focus on consolidation of IT systems and facilitation of data sharing and exchange. ⁴⁰ ‘Making eHealth Work – National Strategy for Digitalisation of the Danish Healthcare Sector 2013–2017’ was aimed to accelerate digitalisation, utilising digital tools as a more cost-effective health solution.^40,41 The most recent policy, the ‘A Coherent and Trustworthy Health Network for All – Digital Health Strategy 2018–2022’ has a dual focus that is to prioritise the individuals’ healthcare needs and to improve the work burden for the healthcare staff.^40,42

The United Kingdom

The United Kingdom's healthcare system, upon which the Malaysian healthcare system was modelled after, had its first national health information technology strategy published in 1992 called ‘Getting Better with Information’. The objective was to provide a patient-centred approach by using information technology to support care and communications through an integrated operational clinical system. ⁴³ However, healthcare services have been devolved as powers were transferred to the Scottish parliament, Welsh Senedd and the Northern Ireland assembly respectively in 1999, thus causing the healthcare policies, to evolve differently from one another. ⁴⁴

‘Information for Health’ provided a health information corporate strategy proposal for NHS England for the 1998–2005 period, setting out plans for EHR, electronic prescribing and online information services for patients.^32,43,45 However, the National Health Service Reform, introduced in 2004, included a funding package, thus resulting in separate plans being developed for Scotland, Wales, and Northern Ireland, based on their local needs.^45–48

While there is no common or central policy that dictates the direction of each of the NHS digital health policies, there is a common theme to leverage on technology to enhance the delivery of healthcare services throughout the nations. This includes the aim to have comprehensive and integrated digital health records which will allow each individual to have a single health record as well as to increase the adoption of e-prescription and telemedicine services.^45–48

Estonia

Estonia, which is widely known as a highly digitalised and innovative country, began their healthcare system reforms after regaining independence in 1991. The reform started with the establishment of a social health insurance model where funds were collected through a special tax specifically meant for healthcare services. The electronic data management was also launched in the 1990s and healthcare providers were required to submit billing data electronically to receive funding. ⁴⁹

Generally considered to be the first country in the world to have a nationwide implementation of EHR, the Estonian Electronic Health Record System which virtually registers all residents’ medical history from birth to death was launched in 2008. ⁵⁰ In 2013, The Estonian Health Insurance Fund began to allow payments for e-consultations, in which the patients would not have to go to the specialist care provider as the system allows the family doctors to consult with the specialists through the health information system. ³³ In 2016, Estonia became the first country in the world to use blockchain technology on a national scale to secure the health records in the country. ⁵¹

Implementation progress: a comparative discussion

The divergent paths of digital health implementation between Malaysia and the studied countries are evident in both policy execution and outcomes. Malaysia has embarked on the digital health agenda relatively early compared to global trends, with nationwide ICT policies being introduced in the 1990s, implementation of paperless hospitals by the end of 1990s, and early planning for integrated lifetime medical records in 1997.^12,13

By 2008, Estonia had achieved nationwide EHR implementation, and Denmark had mandated EMR use for all general practitioners by 2004. Despite Malaysia initiating its digital health agenda in the 1990s, around the same time as these countries, the progress of Malaysia's digital health adoption remains limited. In 2019, only 24% of MoH hospitals (35 out of 145) equipped with a HIS and 7% of health clinics (118 of 1703) using a clinical information system. ⁵²

The implementation approaches of digital health initiatives appear to be linked to the structure of each country's healthcare system structure and governance. Denmark and Estonia demonstrate strong centralised implementation, with their governments providing clear vision and coordinated national policies. For example, Denmark's mandate for EMR adoption by general practitioners and Estonia's nationwide EHR implementation show the effectiveness of centralised direction. Sweden, despite having a decentralised healthcare delivery system, maintains strong central policy direction through national strategies like Vision for eHealth 2025. The United Kingdom presents a contrasting model where healthcare devolution to Scotland, Wales, and Northern Ireland has led to distinct regional digitalisation strategies, though sharing common objectives. It has been shown that being part of the government agenda plays a role in ensuring a successful implementation of the ICT projects but this is also dependent on the government's budget allocation and restrictions.^9,13,32

Systems thinking perspective: comparing the effects of Malaysia national policies on public and private healthcare sectors

Malaysia's implementation journey is distinctly shaped by its dual public–private healthcare system. While the MoH provides policy direction, the implementation of digital health initiatives has progressed at different rates between the public and private sectors. The public sector's digitalisation efforts, constrained by government financial allocation, have shown slower progress. Conversely, the private sector, operating independently and driven by market forces, has demonstrated greater agility in adopting digital solutions.

Following the launch of the Privatisation Master Plan which included the healthcare sector in 1991, Malaysia began to attempt to shift the role of the MoH from a healthcare provider towards a role more focused on policymaking and regulatory matters. The privatisation policy led to a boom in the private healthcare industry with more people opting to pay for the services in the private healthcare sector, thus causing a shift in balance in the national expenditure in healthcare between the public and private sector (Figure 1). ⁵³ The rapid growth of the private healthcare industry also saw the promotion of healthcare tourism as an important economic activity in the country. This led to the establishment of the Malaysia Healthcare Travel Council (MHTC) in 2009 which would take the leading role in facilitating further growth in health tourism activities in the country.^53,54

Figure 1.

Public and private healthcare expenditure, Malaysia (2009–2022). Data source: Ministry of Health Malaysia's annual publication of ‘Health Facts’ for years 2009–2022.

The divergent digitalisation trajectories between public and private healthcare sectors in Malaysia have created a striking contrast in technological adoption. While the MoH hospitals show limited digital implementation, private healthcare providers have embraced comprehensive digitalisation, extending beyond basic electronic medical records to encompass innovative smart hospital initiatives. This advanced digital adoption by private healthcare providers appears driven by the competitive imperatives of international healthcare tourism and the need to maintain global service standards.

Private healthcare institutions’ commitment to digital transformation is evidenced by their recognition in international healthcare excellence awards. For instance, at the Healthcare Asia Awards 2024, Sunway Home Healthcare, which is part of the private healthcare group Sunway Healthcare, received the Home-care Initiative of the Year award for their digitally enabled home-based medical services while ParkCity Medical Centre was acknowledged with the Smart Hospital Initiative of the Year award.^55,56 These accolades reflect not only technological advancement but also the private sector's strategic alignment of digital capabilities with service delivery excellence.

A growing presence of the digital health industry in the private healthcare sector in Malaysia

While traditional healthcare delivery models continue to evolve through government initiatives, Malaysia has witnessed the emergence of disruptive digital health innovations, primarily driven by private sector entrepreneurship. These innovations, operating parallel to established healthcare frameworks, are fundamentally reshaping service delivery patterns and patient engagement models.

The Malaysia Digital Economy Blueprint, which was launched under the Twelfth Malaysia Plan (2021–2025) had identified healthcare as one of the sectoral initiatives that would become a focus under the blueprint. While the blueprint itself does not outline any specific project that is related to the private healthcare industry, the coverage of the blueprint itself as a national document is very comprehensive. It covers all the aspects needed to set up a conducive ecosystem for the implementation of digital and communication technology, especially in terms of infrastructure development that would facilitate growth in any digitalisation agenda, regardless of sector. ⁵⁷ The Malaysia National Artificial Intelligence Roadmap (2021–2025) also identified healthcare to be one of the priority areas with four projects, including a project on personalised healthcare, outlined under the sector. ⁵⁸

The healthcare technology startup ecosystem has emerged as a significant force in transforming traditional healthcare delivery models. These enterprises have identified and exploited gaps in conventional healthcare services, introducing novel solutions that challenge established practices. Digital wellness platforms and virtual healthcare services have gained particular traction, demonstrating the market's readiness for alternative healthcare delivery models. ⁷

BookDoc exemplifies this disruptive transformation. Launched in 2015 as a digital platform connecting patients with healthcare professionals, it has evolved into a comprehensive health technology company operating across five countries. The platform's success in reimagining healthcare delivery through virtual services and innovative public health interventions for lifestyle-related diseases has garnered international recognition, validating the viability of disruptive healthcare models. ⁵⁹

Similarly, DoctorOnCall has disrupted traditional healthcare delivery by creating an integrated digital ecosystem encompassing virtual consultations, e-prescriptions, and medication delivery. Its strategic alliance with the MHTC represents a significant convergence of disruptive technology with established healthcare institutions, demonstrating how digital innovations can enhance and complement traditional healthcare services. ⁶⁰

These disruptive healthcare services are not merely digitising existing processes but are fundamentally reimagining healthcare delivery models. By leveraging technology to address accessibility, convenience, and efficiency challenges, these platforms are creating new value propositions in Malaysia's healthcare ecosystem, potentially bridging the service gaps between public and private healthcare sectors.

Regulatory challenges to innovative solutions

Despite the dynamic growth of digital health services in Malaysia's private sector, regulatory uncertainty emerges as a significant barrier to innovation. The absence of clear regulatory frameworks has been consistently identified as a primary obstacle to technological advancement in healthcare, potentially constraining the sector's transformative potential.^6,61

The Malaysian government has responded to these regulatory challenges through innovative regulatory mechanisms. The Ministry of Finance's launch of the National Regulatory Sandbox in 2018 represented a significant step toward addressing regulatory uncertainties surrounding emerging technologies. ⁶¹ This was followed by the Ministry of Science, Technology and Innovation's introduction of the National Technology and Innovation Sandbox (NTIS) in 2020. ⁶¹ While distinct in their focus, these regulatory sandboxes share a common objective: creating protected environments where innovations can be tested and refined. These initiatives facilitate collaboration between innovators, researchers, and entrepreneurs, enabling them to navigate technical, regulatory, and financial challenges while accelerating the commercialisation of their solutions.^61–63

The evolution of Malaysia's sandbox ecosystem demonstrates increasing sophistication in regulatory innovation. The recent announcement of a strategic collaboration between the Malaysian Research Accelerator for Technology and Innovation and NVIDIA to establish an AI Sandbox Pilot Programme under NTIS in April 2024 exemplifies this progression. ⁶⁴ However, despite these positive developments, significant gaps remain, particularly in securing active participation from regulatory bodies and agencies. ⁶³ This limited engagement from regulatory stakeholders potentially hampers the effectiveness of these sandbox initiatives in facilitating meaningful regulatory reform.

The contrast between rapid technological innovation and evolving regulatory frameworks highlights a critical challenge in Malaysia's digital health transformation journey. While regulatory sandboxes provide temporary solutions, the development of comprehensive, permanent regulatory frameworks remains essential for sustainable growth in digital health services.

Policy and practice implications

The evolution of Malaysia's digital health policies underscores the necessity for a more cohesive and future-proof governance framework. The digitalisation gap between the public and private sectors, if left unaddressed, may lead to a fragmented and inequitable healthcare landscape. Lessons from Denmark and Estonia highlight the value of centralised strategic leadership in driving successful digital health transformation. Future policymaking should prioritise building a sustainable, adaptive regulatory ecosystem that anticipates emerging technologies rather than retroactively responding to them. These insights are relevant not only for Malaysia, but also for other countries grappling with mixed healthcare systems and digitalisation challenges.

Limitations

The study acknowledges the following limitations to this approach:

• The country selection for international context was done selectively rather than comprehensively. It was done based on a subjective assessment of the countries’ digitalisation agenda and the availability of English-language sources.

• Although care was taken to consult key policy documents and peer-reviewed sources, there remains a possibility of overlooking pertinent sources. The grey literature search, in particular, may have missed government documents, policy updates, or academic studies which are not readily accessible through mainstream databases or official websites.

• As a narrative review, the synthesis and interpretation of the findings inherently involve a degree of subjectivity. While efforts were made to maintain objectivity and consistency, the narrative development reflects the authors’ analytical judgement in framing themes and drawing connections between various policy initiatives.

• The unstructured approach provides varying depths of analysis across different aspects of the study, depending on the availability and richness of source material. Some initiatives are discussed in greater detail due to more comprehensive documentation, whereas others are covered more briefly, potentially leading to uneven emphasis across the study.

These limitations were balanced against the benefit of allowing the narrative to develop naturally to provide a clearer understanding of Malaysia's healthcare digitalisation journey. The international comparisons serve to provide contextual reference points and illustrate different approaches taken in other countries rather than serve as definitive benchmarks.

Conclusion

This comparative analysis reveals a complex landscape in the implementation of healthcare digitalisation policies, influenced by governance structures, regulatory frameworks and implementation mechanisms. While countries like Estonia and Denmark have demonstrated achievements through centralised approaches to digitalisation efforts, Malaysia's journey reflects a unique dual-track public–private approach.

The Malaysian experience demonstrates both the challenges and opportunities inherent in a mixed healthcare system. While public sector digitalisation has progressed gradually due to financial limitations, the private sector has emerged as a dynamic force in healthcare innovation. Private healthcare providers, driven by market forces and industrial competitiveness, have demonstrated successful adoption of advanced digital solutions. At the same time, health technology startups have introduced disruptive innovations, potentially reshaping traditional healthcare delivery models through digital platforms and virtual services.

Thus, government's role in digital transformation is not limited only to direct implementation of digitalisation agenda but also to create an enabling and supportive ecosystem. However, the regulatory landscape remains a critical challenge, particularly in addressing innovations that challenge the traditional healthcare system. While regulatory sandboxes provide an innovative approach to managing technological advancement, the need for more comprehensive and permanent regulatory frameworks remains.

The emergence of disruptive healthcare services which may offer potential solutions to the nation's healthcare needs also highlights the importance of an adaptive and dynamic regulatory framework that will support innovation while maintaining healthcare quality and safety standards.

The success of Malaysia's digitalisation journey will depend on its ability to address several key challenges: bridging the digital divide between the public and private healthcare sectors, development a comprehensive regulatory framework that support innovation while protecting patients’ rights and maintaining the trajectory and momentum of digital transformation across both sectors. While the landscape may be complex, the interaction between the public and private healthcare sectors must be taken into consideration for a meaningful nationwide digital health transformation to take place.