IHH deploys strategies to tackle rising costs

KUALA LUMPUR: IHH Healthcare Bhd remains confident in its growth outlook despite rising medical cost pressures as the company implements efficiency-driven strategies and contingency measures to manage escalating medicine and operational costs.

Speaking after its 16th Annual General Meeting, IHH group chief executive officer Dr Prem Kumar Nair said healthcare inflation remains an industry-wide challenge, with medical costs increasing by approximately two to three per cent across certain areas of its operations due to cost pressures beyond general inflation.

He added that the company is actively mitigating these pressures through tighter cost management, procurement optimisation and operational efficiency improvements, while continuing to pursue long-term expansion plans.

Among its key strategies is the continued expansion of ambulatory and day-care care models, where patients are treated and discharged on the same day.

The model is expected to improve patient throughput, reduce inpatient congestion and lower operating costs while maintaining healthcare quality.

He added that ambulatory care also helps hospitals optimise resources more efficiently amid rising healthcare demand and increasing case intensity across its markets.

On capital expenditure, IHH said it is rationalising its spending without compromising growth, with planned capex for the year at around RM2 billion to RM2.5 billion, down from RM3.5 billion in the previous year.

The recalibration reflects a more disciplined investment approach while still supporting expansion projects and long-term capacity growth.

In response to rising medicine costs, the group is stepping up the use of generic drugs where appropriate.

“Generic drugs are medicines that are equivalent to branded proprietary drugs in formulation and effect, but are produced at a lower cost and therefore sold at more affordable prices,” said IHH group chief medical officer of Associate Professor Keith Lim Hsiu Chin.

Beyond procurement and clinical stewardship, the healthcare group is also strengthening supplier diversification, strategic sourcing and periodic pricing reviews to better manage supply chain risks and medicine cost volatility.

IHH’s broader transformation strategy further includes investments in digital infrastructure and artificial intelligence (AI) capabilities to enhance workflow efficiency, operational integration and patient experience across its regional network.

In the financial year ending December 31, 2025 (FY25), IHH reported a revenue growth of 18 per cent to RM26.2 billion and a 3 per cent rise in net profit to RM5.8 billion, alongside a higher dividend of 10.5 sen versus 10 sen in FY24, reflecting steady performance and improved shareholder returns.

Looking ahead, the group said its combination of capacity expansion, cost discipline, and geographical diversification positions it well to navigate ongoing healthcare inflation while capturing long-term demand growth across Asia.

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المصدر: New Straits Times