Economic Evaluation of Type 2 Diabetes Management at the Malaysian Ministry of Health Primary Care Clinics, in Machang, Kelantan

Authors: Mohd Idris MN, Arifin MY, Syed Aljunid SM

Affiliation: Department of Community Health, Faculty of Medicine, Universiti Kebangsaan Malaysia, Kuala Lumpur, Malaysia

Published: Malaysian Journal of Public Health Medicine, 2007; Vol. 7(1): 5–13

Last reviewed: March 2026

Background and Context

Type 2 diabetes mellitus has long been recognised as one of the most pressing public health challenges facing Malaysia. By the mid-2000s, the National Health and Morbidity Survey (NHMS) had documented a steadily increasing prevalence of diabetes among Malaysian adults, with figures rising from approximately 8.3% in 1996 to an estimated 11.6% by the time of the 2006 survey. These trends placed Malaysia among the countries with the highest diabetes burden in the Asia-Pacific region, prompting urgent questions about the sustainability of diabetes care within the public healthcare system.

The Malaysian Ministry of Health (MOH) operates an extensive network of primary care clinics (known locally as klinik kesihatan) that serve as the first point of contact for the majority of the population, particularly in rural and semi-urban areas. In the state of Kelantan, located in northeastern Peninsular Malaysia, these clinics play an especially critical role because the population is predominantly rural, lower-income, and Malay-speaking, with limited access to private healthcare facilities. Machang district, situated approximately 40 kilometres south of the state capital Kota Bharu, exemplifies this pattern.

Prior to this study, relatively few economic evaluations had been conducted on diabetes management within the Malaysian public primary care setting. Most costing studies focused on hospital-based care or specialist endocrine clinics, which serve a different patient population and operate under different resource constraints. This gap in the evidence base made it difficult for health planners and policymakers to estimate the true economic burden of diabetes management at the community level or to compare the cost-effectiveness of different service delivery models.

Study Design and Methodology

This cross-sectional cost analysis was conducted at Ministry of Health primary care clinics in the Machang district of Kelantan. The study adopted a provider perspective, capturing costs borne by the public healthcare system rather than out-of-pocket expenses incurred by patients. Data were collected on patients with confirmed Type 2 diabetes mellitus who were receiving regular follow-up care at the selected clinics.

The investigators employed a combination of top-down and bottom-up costing approaches. Capital costs, including building infrastructure and major equipment, were annualised using standard economic depreciation methods. Recurrent costs — encompassing personnel salaries, medications, laboratory investigations, consumables, and utility expenses — were calculated using actual utilisation data from patient records and clinic inventories. Medication costs were valued using the MOH drug procurement catalogue prices, which reflect the government’s substantial purchasing power for pharmaceuticals.

The patient sample was drawn from the diabetes registries maintained at each clinic. Clinical data, including information on diabetes duration, current treatment regimen, HbA1c levels where available, and the presence of diabetes-related complications, were abstracted from medical records. Complications assessed included diabetic retinopathy, nephropathy, peripheral neuropathy, cardiovascular disease, and diabetic foot problems.

Principal Findings

The analysis revealed that the mean annual direct cost of managing a single Type 2 diabetes patient at primary care level in Machang was approximately RM 1,168. This figure encompassed all provider-side costs including staff time, medications, laboratory tests, and overhead. When broken down by component, medication costs emerged as the single largest cost driver, representing roughly 52% of the total direct costs. Laboratory investigations accounted for approximately 18–20% of costs, while staff costs and overheads made up the remainder.

A critically important finding was the substantial cost differential between patients with and without diabetes-related complications. Patients who had developed one or more complications incurred annual costs that were markedly higher — in some analyses, nearly double — compared with uncomplicated patients. This cost escalation was driven primarily by the need for more intensive pharmacotherapy (including insulin therapy), more frequent clinic visits, additional laboratory monitoring, and referrals to hospital-based specialist services.

Comparison with Hospital-Based and International Costs

When compared with cost estimates from hospital-based diabetes management in Malaysia, the primary care figures from Machang were substantially lower. Hospital-based outpatient diabetes care typically involves specialist consultations, more expensive medications, and advanced diagnostic procedures, all of which contribute to higher per-patient costs. The Machang findings suggested that primary care-based management represented a more cost-efficient approach for the majority of Type 2 diabetes patients, particularly those with uncomplicated disease.

International comparisons, while necessarily cautious due to differences in healthcare systems, purchasing power, and treatment protocols, showed that Malaysian primary care diabetes costs were relatively modest by regional standards. Studies from neighbouring countries such as Thailand and Indonesia, as well as from middle-income countries more broadly, reported similar patterns whereby medications dominated the cost structure of outpatient diabetes management.

Implications for Malaysian Health Policy

The findings carried several important policy implications. First, they provided empirical support for the Malaysian government’s strategy of strengthening primary care as the principal platform for chronic disease management. The cost data demonstrated that managing diabetes at the community level was economically feasible and considerably less expensive than hospital-based alternatives, without apparent compromise in quality of basic care delivery.

Second, the dominance of medication costs in the overall cost structure highlighted the importance of pharmaceutical procurement policies, generic drug utilisation, and formulary management. Even modest improvements in drug purchasing efficiency could translate into significant aggregate savings given the large and growing number of diabetes patients in the system.

Third, the marked cost escalation associated with complications reinforced the economic rationale for investing in complication prevention through improved glycaemic control, blood pressure management, and regular screening for early-stage retinopathy, nephropathy, and foot problems. Every complication prevented represents not only better patient outcomes but also substantial cost avoidance for the health system.

Relevance to Rural Health Services in Kelantan

Kelantan presents particular challenges for diabetes management that make this study especially relevant. The state has consistently recorded some of the highest diabetes prevalence figures in Malaysia, attributed in part to dietary patterns (high carbohydrate and sugar consumption), genetic predisposition, and lower levels of physical activity in certain population segments. Socioeconomic factors also play a role: Kelantan has one of the lowest median household incomes among Malaysian states, limiting patients’ ability to supplement public healthcare with private treatment or to adopt expensive dietary modifications.

The Machang district, as a predominantly rural area, relies heavily on the MOH primary care infrastructure. The economic evaluation provided local health administrators with context-specific data to support resource allocation decisions, staffing plans, and drug budget requests. It also highlighted the need for community-based health education programmes that could reduce modifiable risk factors and delay disease progression.

Limitations

The study acknowledged several important limitations. The analysis was confined to direct medical costs from the provider perspective and did not capture indirect costs such as patient productivity losses, transportation expenses, or caregiver burden, all of which can be substantial in a rural setting where patients may need to travel considerable distances to reach clinics. The cross-sectional design provided a snapshot of costs at a single time point and could not capture the longitudinal cost trajectory of diabetes management over the disease course. Additionally, clinical outcome data were limited, meaning that the study could estimate cost-efficiency but not full cost-effectiveness in terms of quality-adjusted life years or similar composite outcomes. The findings from Machang, while informative, may not be directly generalisable to urban primary care settings or to states with different resource profiles.