Provider Costs of Treating Dementia Among the Elderly in Government Hospitals of Malaysia

Last reviewed: March 2026

Background and Rationale

Dementia represents one of the most pressing public health challenges of the 21st century, and its impact is expected to be felt disproportionately in low- and middle-income countries where populations are ageing rapidly and healthcare resources are constrained. Malaysia achieved “aging nation” status in 2021 when its population aged 65 and above reached 7% of the total population, a proportion that continues to increase. With the number of dementia sufferers projected to reach 261,000 by 2030 and 590,000 by 2050, understanding the economic implications of dementia care is essential for health system planning.

Despite the growing recognition of dementia as a public health priority, evidence on the cost of dementia care in the Malaysian context has been limited. Most available cost data originated from high-income countries, and their applicability to the Malaysian healthcare system—with its dual public-private structure and different pricing models—was uncertain. This study aimed to fill this critical evidence gap by estimating the provider costs of treating dementia in government hospitals, which serve as the primary source of subsidised healthcare for the majority of the Malaysian population.

Study Design and Methodology

The study employed a step-down costing approach, a well-established methodology in health economics that allocates overhead and support service costs to clinical service units. Data were collected from selected government hospitals across Peninsular Malaysia and Sarawak, providing geographic diversity in the cost estimates. Patient-level data were obtained from medical record units to capture individual treatment patterns, lengths of stay, and clinical characteristics.

The analysis examined costs across different service categories, including ward services, pharmacy, diagnostic services, intensive care, and other clinical support functions. Multivariable analysis using multiple linear regression was conducted to identify factors that significantly influenced the treatment costs of dementia cases.

Principal Findings

The study estimated a mean treatment cost of RM 12,806 per episode of care for dementia hospitalisation. This figure encompasses the full range of services provided during the hospital stay, from admission through discharge. The cost distribution revealed that ward services accounted for the dominant share of expenditure at 62.78%, reflecting the high inpatient care costs associated with the often-prolonged hospital stays required by dementia patients. Pharmacy costs represented 10.25% of total expenditure, while Intensive Care Unit services accounted for 7.64%.

Factors Influencing Treatment Costs

Multivariable regression analysis identified four factors that significantly influenced dementia treatment costs. Length of hospital stay emerged as the most powerful predictor (p < 0.001), which is consistent with the finding that ward services constitute the largest cost component. Each additional day of hospitalisation added substantially to the total cost, underscoring the importance of efficient care pathways and appropriate discharge planning in controlling dementia-related expenditure.

Patient age was the second strongest predictor (p = 0.001), with older patients generally incurring higher costs. This likely reflects the greater complexity of care required by older dementia patients, who are more likely to have multiple comorbidities requiring additional medical attention. Case severity, specifically severe dementia cases, was also a significant cost driver (p = 0.005), as more advanced disease typically requires more intensive nursing care, pharmacological management, and clinical support. Finally, study location was significant (p = 0.032), suggesting that there are meaningful regional variations in the cost of dementia care across Malaysian government hospitals—possibly reflecting differences in staffing levels, resource availability, and local pricing structures.

Policy Implications

The cost estimates generated by this study have significant implications for Malaysian health policy planning. As the dementia population grows, the aggregate economic burden on the government healthcare system will increase substantially. Using these per-episode cost figures, policymakers can project future expenditure requirements and plan resource allocation accordingly. The finding that length of stay is the dominant cost driver supports investment in strategies that can safely reduce hospital length of stay for dementia patients, such as improved outpatient and community-based care services, early intervention programmes, and enhanced support for family caregivers.

The study also provides a baseline for cost-effectiveness analyses of dementia prevention and treatment interventions. By quantifying the costs averted through successful prevention or delayed onset of dementia, health economists can build the case for upstream investments in risk factor modification, early detection, and cognitive rehabilitation programmes.

More recent research has built upon these estimates. A 2024 study published in Scientific Reports found that the mean direct healthcare cost of Alzheimer’s disease specifically was RM 2,641.30 per patient per year from the healthcare payer’s perspective—a lower figure that reflects the difference between annual outpatient management costs and episodic hospitalisation costs. Together, these estimates provide a more complete picture of the economic burden of dementia across different care settings in Malaysia.

Limitations

The study focused exclusively on provider (hospital) costs and did not capture the substantial costs borne by patients and their families, including direct non-medical costs (transportation, dietary supplements, home modifications) and indirect costs (lost productivity of both patients and caregivers). The cost estimates reflect the pricing structure of government hospitals, which are heavily subsidised, and may not be applicable to private sector healthcare facilities where costs are typically much higher. The step-down costing methodology, while well-established, involves assumptions about cost allocation that may introduce some degree of imprecision.

Significance of This Research

This study represents a foundational contribution to the health economic evidence base for dementia care in Malaysia. It has been widely cited in subsequent research and policy documents, and its cost estimates have informed discussions about healthcare resource allocation for Malaysia’s ageing population. As the country confronts the growing challenge of dementia, evidence-based cost data of this nature will be essential for ensuring that health policy decisions are grounded in economic reality and responsive to the needs of affected individuals and their families.

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