The JS-SEZ and Johor’s Private Healthcare Sector: Catalysts and Challenges

INTRODUCTION

The Johor-Singapore Special Economic Zone (JS-SEZ), formalised on 7 January 2025, will set a strong catalyst for economic growth by creating new opportunities for investments, employment, and business deals. Not only will the JS-SEZ improve the flow of goods and enable more unrestricted movement of people between Singapore and Johor, but it also offers investors the ability to leverage Johor and Singapore’s differing cost structures. Johor can leverage on Singapore’s strength as a financial centre and business hub, and on its research capabilities, while Singapore can tap into Johor’s land areas, lower wage costs, and its industrial muscle to bring in investments. The end result, according to Singapore’s Prime Minister Lawrence Wong, would be that both Singapore and Johor would be even more competitive, with an enhanced value proposition, and would thus jointly attract more investments.

The JS-SEZ is different in that there is a strong political will in both the Johor and Singapore governments to implement this special zone. The plan to set up the JS-SEZ dates back two years to the visit of the Malaysian Prime Minister Anwar Ibrahim to Singapore for the leaders’ retreat on October 2023. A memorandum of understanding (MoU) was then inked in January 2024. Both prime ministers then exchanged an agreement of the JS-SEZ in January 2025, a year after the MoU was signed.

The economic zone covers about 3,588 square kilometres across Johor’s east and west coasts, which is roughly four times the land area of Singapore. Attractive investment opportunities will be provided in many sectors, including healthcare and health-related industries like the medical devices industry and pharmaceuticals. The focus on private healthcare is warranted as Malaysia’s healthcare sector is one of the fastest-growing in the region. With the JS-SEZ now in place, the zone is set to attract more medical tourists into the country, especially with the forthcoming smoother movement of people across borders.

Johor is also poised for a significant expansion in both its private and public hospital facilities, driven by population growth, urbanisation, and migration. The state has also seen a growing demand for hospital beds, medical specialists and advanced treatment facilities. Its close ties with Singapore, economic diversification, continued industrialisation and enhanced cross-border connectivity will reinforce the urgency of “healthcare infrastructure development” and the need for additional hospitals in the years ahead.

CROSS-BORDER ECONOMIC POTENTIAL BETWEEN MALAYSIA (AND JOHOR) AND SINGAPORE

To harness the cross-border economic potential between Johor and Singapore, the Invest Malaysia Facilitation Centre–Johor was opened on 18 February 2025 in Forest City as a one-stop centre to facilitate businesses and investments in the JS-SEZ. For Singapore, a Joint Johor- Singapore SEZ Project Office comprising the Ministry of Trade and Industry, Enterprise Singapore, and the Economic Development Board was launched on 21 April 2025 to support Singapore businesses in exploring opportunities. Singapore and Malaysia will promote eleven economic sectors.

The JS-SEZ differs from the 2006 Iskandar Malaysia (IM) in that its planning has “long incorporated the Johor state government as well as Singapore into its planning (unlike Iskandar Malaysia, which was largely driven by the Malaysian federal government).” Also, the support of the Malaysian monarch, presently the Sultan of Johor, “should put it [JS-SEZ] in good stead in the coming years.” The Rapid Transit System, which is scheduled to be completed by December 2026, would enable consistent and predictable transit times between Singapore and Malaysia. In early October, it was reported that Singapore companies have committed US$4.23 billion in investments since January 2025.

Singapore and Malaysia share deep economic links. In 2023, Malaysia was Singapore’s third-largest trading partner, with total bilateral trade amounting to S$123.6 billion (US$96.46 billion). Singapore was, in turn, Malaysia’s second-largest trading partner. Singapore was Malaysia’s largest source of foreign investment (FDI), bringing in S$13.3 billion (RM 43.7 billion or US$10.38 billion) or 23.2 per cent of Malaysia’s total FDI. Out of the S$13.3 billion (RM 43.7 billion or US$10.39 billion), Johor received a sizeable S$9.43 billion (RM 31 billion or US$7.37 billion) of that FDI. Johor is the third-largest economy in Malaysia, with S$137.78 billion (RM 452.7 billion or US$107.6 billion), after W.P. Kuala Lumpur (RM 557.3 billion) and Selangor (RM 1,069 billion). The manufacturing sector is the largest contributor to Johor’s gross output, at about 69.9 per cent.

Malaysia’s medical tourism market was valued at US$508.44 million (RM 2.15 billion) in 2024, and this is expected to reach US$1,592.18 million (RM 6.72 billion) by 2032. An earlier study on private healthcare in Iskandar Malaysia had already identified the health sector as an important contributor to growth, particularly in medical tourism. Johor’s private healthcare sector grew by 60.7 per cent between 2010 and 2015. This was faster than for Melaka (49.8 per cent), Penang (43.5 per cent) and the Federal Territory of Kuala Lumpur (57.3 per cent) in the same period.

Investments into the JS-SEZ are already starting to flow in. Sunway Healthcare Group plans to build the Sunway Medical Centre Iskandar Puteri (300 beds) in JS-SEZ by 2030, in partnership with Khazanah Nasional. Singapore’s Thomson Medical also announced the launch of a mega project in Johor Bay (in the JS-SEZ) that includes a 500-bed capacity hospital (Thomson Hospital Iskandariah – with additional space to accommodate 1,000 beds), specialist suites, aged care facilities, a five-star hotel, commercial lifestyle precincts to cater to medical tourists, and a life sciences tower to house medical research. The project, welcomed by the Johor state government, is located just 1.2 km away from the RTS station at Bukit Chagar, and its cost is expected to amount to US$4.27 billion (RM 18 billion), built on 10.52 hectares of land. The hospital will occupy 1.5 hectares, and construction will begin in early 2027, with the first phase expected to open alongside the RTS in early 2027. Around 60 to 80 per cent of its patients are expected to be local, with the rest from Singapore and the region.

Southeast Asia is expected to see an increase in the proportion of people aged 60 and above, from 12.2 per cent in 2024 to 22.9 per cent in 2050. The demand for healthcare services is likely to increase correspondingly.

At the latest 12^th Singapore-Malaysia Leaders’ Retreat held recently on 4 December 2025, two decisions will directly impact medical tourism in Johor. The first are plans to enhance the cross-border taxi scheme, where taxis can now drop off passengers at any point instead of fixed locations, and the co-location of clearance facilities for the upcoming RTS, which would further improve the speed of clearance. The second is an MoU on healthcare collaboration which covers digital health, healthcare services delivery, public health and long-term care. Cooperation includes information exchange, expert visits and joint training.

Aside from hospitals, health-related industries in the JS-SEZ are also expanding. Johor is now emerging as a hub for pharmaceuticals, biopharmaceuticals, and life sciences. Oliver Healthcare Packaging, which provides sterile barrier packaging for medical instruments, has opened a 120,000 sq ft facility in the JS-SEZ with further plans to expand. Other established companies which are also planning to expand with the establishment of the JS-SEZ include Colorcon Inc. (pharmaceutical film coatings – USA), Biocon Biologics (insulin production – India), Insulet Corp. (insulin devices – USA) and HQ Pack B.V. (packaging for medical instruments – Netherlands).

JS-SEZ AND HEALTHCARE IN JOHOR

Private Hospitals in Johor

Currently, hospitals in Johor attract patients from Indonesia (79 per cent), Singapore (4 per cent), China (4 per cent), Vietnam (1 per cent) and India (1 per cent). A large proportion of medical tourists visit Johor for orthopaedic treatment, obstetrics and gynaecology, in vitro fertilisation, as well as the treatment of cancer. Health screening packages are very popular. Medical tourism contributed RM 143 million to Johor in 2023 out of the Malaysian total of RM 2 billion in the same year.

For Regency Specialist Hospital in Johor, 15 to 20 per cent of its patients are foreign. The hospital sees more Singaporeans and Indonesians in its patient mix. Regency Hospital is one of the two hospitals in Johor that allows Singaporeans and permanent residents to draw from their Medisave account in their Central Provident Fund for specific treatments and procedures. Gleneagles Hospital Medini Johor is the other Singapore Medisave-approved hospital. For Gleneagles Medini, 25 per cent of its patients are from Indonesia, China and Singapore. For Columbia Asia (Tebrau and Iskandar Puteri), foreign patients come from Indonesia, Singapore and China.

There are nine major private hospitals in the JS-SEZ that cater to medical tourists, with the largest three (in terms of beds) being the Columbia Asia Hospital (Iskandar Puteri) with 303 beds, Gleneagles Hospital Johor (Medini) with 300 beds, and KPJ Johor Specialist Hospital with 282 beds (see Appendix 1). Except for Kensington Green Specialist Hospital, all hospitals are accredited by the Malaysian Society for Quality in Health (MSQH). With MSQH accreditation, all hospitals meet the Malaysian standard of quality patient care.

The KPJ Johor Specialist Hospital also meets the international Joint Commission International (JCI) accreditation. JCI accreditation is one of the most widely recognised global benchmarks for healthcare quality and patient safety, and is US-based. Occupancy rates of private hospitals around Johor Bahru have been reported to be as high as 95 per cent at times. Hospitals in the state have a wide variety of specialisations and a sizeable number of resident and visiting specialists in each hospital (Appendix 1). Four of the hospitals are owned by the state arm KPJ Health Berhad.

CATALYSTS OF GROWTH

Better Connectivity from Singapore via RTS

The JS-SEZ will provide new opportunities for healthcare providers in Johor to cater to demand, from Singapore and the region, when the RTS is up and running by December 2026. Johor’s proximity, especially to Singapore and Indonesia, will give the state “an advantage in tapping the medical tourism sector”, Johor’s health and environment committee chairman Ling Tian Soon has pointed out.

Ling also shared that the two ferry terminals to Indonesia and the two land customs, immigration, and quarantine complexes connected to Singapore make the state a gateway for patients. Besides the above, Singapore’s advantageous position as a global and regional aviation hub will also drive international patient demand to Johor, especially those from China and the Middle East, when the RTS is running. Medical tourists can therefore come to Johor through Singapore’s Changi Airport (via the RTS), with a seamless passport-free QR clearance.

Malaysia Healthcare Travel Council and Johor

The Malaysia Healthcare Travel Council (MHTC) e-Newsletter (Q1, January to March 2024), reported that the council is now working on “Johor’s strategy” with government agencies and private hospitals, including Regency Specialist Hospital, KPJ Johor Specialist Hospital, KPJ Puteri Specialist Hospital, KPJ Pasir Gudang Specialist Hospital, Columbia Asia Hospital Iskandar Puteri and Gleneagles Hospital Medini Johor. Johor’s potential as a destination for medical tourism has now been given the recognition it deserves by the MHTC, as well as a state-specific medical tourism strategy incorporating major private hospitals in the JS-SEZ.

Demand from New Residents

The JS-SEZ is also projected to create about 20,000 new jobs in total. As such, there will be an influx of new residents, creating demand for residential properties, retail, and healthcare services. Land prices near the Johor Bahru-Singapore Rapid Transit System (RTS) Link Project have, in fact, more than doubled recently.

Potential migration, especially for workers with higher valued jobs in sectors like manufacturing, the digital economy and services, would not only increase demand for housing, but also demand for private healthcare and medical services. Johor’s population currently stands at 4.1 million and is projected to increase to 6.22 million (including migration) by 2030. Johor’s population surge in the last ten years was 11.1 per cent compared to 9 per cent for Malaysia’s overall population. The potential growth of the healthcare industry will be tied to increases in population in JS-SEZ.

Ageing Population

Not only is demand expected to be generated from new settlers, the ageing population in Malaysia, Singapore and Southeast Asia will also increase demand for healthcare and aged care facilities.

Southeast Asia is expected to see an increase in the proportion of people aged 60 and above, from 12.2 per cent in 2024 to 22.9 per cent in 2050. The demand for healthcare services is likely to increase correspondingly. Currently, 1 in 5 Singaporeans is aged 65 and above. By 2030, 1 in 4 Singaporeans will be 65 and above. In 2050, one in three Singaporeans could be aged 65 and above. There is potential for Johor hospitals to tap into demand from this segment, especially for non-elective care like health screening, dental care, and general health management. Not only can the Singapore market be tapped, but Johor’s own ageing population will also increase demand for healthcare. In Johor, the percentage of its population aged 60 and above was 11.5 per cent or 482,600 in 2024. This is expected to reach 17 per cent by 2040.

Cost Attractiveness of Medical Procedures in Malaysia (Johor)

The cost attractiveness of medical procedures in Malaysia (and Johor) is perhaps the most significant factor attracting medical tourists from neighbouring countries like Singapore, Indonesia, and Thailand (see Table 1). Figures presented are, however, not representative and should be used only for illustrative purposes. Cost savings range from 74 per cent for IVF, 24 per cent for heart bypass, and 37 per cent for knee replacement surgery when these procedures are performed in Malaysia instead of Singapore. Liver transplant and IVF procedures are also cheaper in Malaysia compared to Indonesia. IVF, knee replacement surgery and chemotherapy procedures are cheaper in Malaysia compared to Thailand. Internationally, between 80 to 90 per cent can be saved for a liver transplant, IVF, heart bypass, and knee replacement surgery when such procedures are undertaken in Malaysia instead of the US.

Table 1: Cost of Medical Procedures in Malaysia Compared to the United States, Singapore, Thailand and Indonesia for Private Hospitals

Procedure	Cost in Malaysia	Cost in Singapore	Cost in the United States	Cost in Thailand	Cost in Indonesia
Liver transplant	US$52,844 to 73,934	US$127,014 to 236,967	US$924,171	US$47,630 to 67,773	US$129,147 to 391,943
Savings		65% cheaper in Malaysia	93% cheaper in Malaysia	10% cheaper in Thailand	75% cheaper in Malaysia
In-vitro fertilisation (IVF)	US$3,081 to 4,028	US$13,773 to 15,892	US$15,877 to 21,090	US$6,351 to 12,725	US$4,028 to 4,739
Savings		74% cheaper in Malaysia	81% cheaper in Malaysia	63% cheaper in Malaysia	19% cheaper in Malaysia
Heart bypass	US$12,085 to 13,270	US$13,744 to 19,668)	US$58,293 to 137,678)	US$11,611	US$2,133 to 4,882
Savings		24% cheaper in Malaysia	87% cheaper in Malaysia	9% cheaper in Thailand	261% cheaper in Indonesia
Knee replacement surgery	US$7,938 to 9,005	US$12,701 to 14,312	US$40,284 to 44,550	US$10,592	US$947 to 5,308
Savings		37% cheaper in Malaysia	80% cheaper in Malaysia	20% cheaper in Malaysia	170% cheaper in Indonesia
Chemotherapy per cycle	US$948 to 1,422	US$1,018 to 2,607	US$50,947	US$640 to 7,417	US$140 to 1,825
Savings		35% cheaper in Malaysia	97% cheaper in Malaysia	71% cheaper in Malaysia	21% cheaper in Indonesia

Note: Currency conversion (1 US$ = RM 4.22) and savings percentages provided by the author. For cost savings, if a range of prices is given, the average price is used to compare costs. Data provided in the table is not intended for exact representation.

According to another report, basic health screening could cost 30 per cent less in Malaysia compared to Singapore, scaling and polishing 60 per cent less, knee replacement surgery 50 per cent less, and nursing home costs (basic care) 80 per cent less in Malaysia. However, as more than 70 per cent of Singapore residents are already covered by an integrated shield plan, where out-of-pocket expenses through co-payments could be as low as 5 per cent, there will be no “mass exodus of patients from Singapore to Johor.” In terms of treatment, health screening is highly sought by medical tourists in Malaysia (45 per cent), followed by gastroenterology at 10 per cent, cancer at 7 per cent and obstetrics and gynaecology at 7 per cent.

Chemotherapy treatments have been estimated to be lower in Malaysia than in Singapore because of the lower cost of drugs, according to an oncologist practising at Gleneagles Hospital in Medini Johor. Positive patient accounts have also helped to establish powerful branding and recognition for Johor’s private hospitals. One common thread running through these experiences was the perceived savings and value of the treatment.

CHALLENGES

Rapid Transit System and Traffic Bottlenecks: Double-edged Sword

Although the completion of the Rapid Transit System (RTS) link by the end of 2026 will make commuting between Singapore and Malaysia seamless, there are challenges ahead. The RTS will serve about 10,000 passengers per hour and will take about 6 minutes to travel from Woodlands North MRT to Bukit Chagar. The RTS is estimated to cost around RM 10 billion (US$2.36 billion). Parking issues and last-mile connectivity, currently in planning stages in Johor, are still in the process of being resolved. The RTS link in Bukit Chagar may suffer from movement and traffic bottlenecks, as Johor does not presently have “efficient means of public transport to support it”. Traffic jams were also becoming more regular, not only during peak hours. Furthermore, there are plans to build an RM2.6 billion mixed-use development – including a retail mall, hotel and apartments – adjacent to the future RTS Link station in Bukit Chaagar, which will add to congestion.

Plans have been in the works to either build a light rail transit (LRT) or a driverless tram-bus system, the Autonomous Rapid Transit (ART), to ease congestion at Bukit Chagar. The ART, if built, will disperse passengers along three routes: Iskandar Puteri, Jalan Skudai and Jalan Tebrau. The LRT, on the other hand, will be able to transport a higher volume of passengers but will cost more. In February 2025, it was reported that the Malaysian government had decided to build an ART; this was supported by the Johor state government to be more cost-effective and also faster to construct. The completion of the ART can, however, only take place after the RTS is completed. This is because of the need for separate viaducts and bridges for the ART to link to the RTS. As such, there will be teething issues that can cause traffic jams.

Constraints are also present at the Stulang Laut ferry terminal. It was suggested by Johor Tourist Guides Association Chairman, Jimmy Leong, that better facilities such as parking, transportation services and ambulances could improve the experience of medical tourists arriving here. A conducive and efficient entry experience is essential to draw medical tourists to the state.

Medisave-Approved Hospitals and Accreditation

Potentially, the number of patients from Singapore could increase if a greater number of private hospitals in Johor were to be Medisave-approved. Hospitals that are Medisave-approved will enhance their recognition and familiarity among Singapore patients, as such hospitals meet Singapore’s Ministry of Health and CPF Board’s criteria, and signal a link to Singapore’s regulatory framework. There will also be greater financial convenience as patients can use their CPF Medisave funds directly to pay for procedures in approved hospitals.

Presently, none of the state-owned KPJ private hospitals in JS-SEZ are Medisave-approved. This could be one area in which the Johor government could work with the Singapore government to increase the number of Medisave-approved hospitals in Johor.

Another important consideration is the need to align more private hospitals in Johor with JCI accreditation. At present, only KPJ Johor Specialist Hospital holds such accreditation. In Singapore, all public hospitals are JCI-accredited. Expanding such accreditation among Johor’s private hospitals would further enhance the recognition of Johor’s healthcare services, not only among Singaporean patients but also within the broader medical tourism market.

Shortage of Staff

Johor had 6,800 doctors and 10,800 nurses for its four million population in 2022; this has worked out to be roughly one doctor to 600 people. The Malaysia-wide ratio was one doctor to 412 people. Another issue that has affected Johor (and also Malaysia) as a destination for medical tourism is the shortage of nurses. Many nurses have chosen to work in Singapore, New Zealand, Australia, the United Kingdom, and the Middle East. Johor reportedly faced a shortage of 15,000 to 18,000 nurses to fill the staffing gap in public hospitals in May 2022. Presently, there are 12,533 nurses in Johor, with 8,777 at public hospitals and 3,756 at private hospitals. It was reported that a Malaysian nurse in Singapore would get the same salary as a specialist doctor in Malaysia.

In July 2025, the Johor government and the Ministry of Health pointed to the continuing shortage of nurses in three of its major public hospitals: Hospital Sultanah Aminah, Hospital Sultan Ismail and Hospital Kulai. There is also a shortage of nurses in private hospitals. This shortage pushed the Ministry of Health in Malaysia to grant special exemptions to foreign nurses to allow them to work in Malaysia. Private hospitals in Malaysia are forbidden to open up beds unless there are enough nurses to staff these additional beds.

Potentially, the number of patients from Singapore could increase if a greater number of private hospitals in Johor were to be Medisave-approved.

To boost Johor’s medical tourism offerings, there is therefore a need to ensure that there are enough nurses to staff private hospitals. Private hospitals in the state have been collaborating to establish a new nursing college in Johor to boost supply, and it has been pointed out that hospitals in Johor must “focus on boosting the supply of nurses before they can afford to take in more foreign patients and increase overall capacity.” However, shorter-term measures are needed to boost supply immediately, perhaps by salary adjustments.

The supply of doctors in private hospitals has been less dire. In Malaysia, doctors in the public sector often leave to join private hospitals. In 2022, 54 per cent of 1,700 medical officers in public hospitals resigned to join private hospitals in Malaysia. One reason is better-paying positions: one doctor’s salary has been reported to have increased more than three times when he joined a private hospital in Johor.

CONCLUSION

The healthcare sector in Johor has the potential to reap benefits following the formation of the JS-SEZ. The political will of both governments to ensure the success of this initiative, the formal signing of an agreement to set up this special zone, the cost advantage of medical procedures in Malaysia, the ageing population of Singapore, and proximity to Singapore are factors in favour of continuing the development of this sector.

However, there are constraints. First, infrastructure bottlenecks must be addressed to ensure that medical tourists do not experience delays in pursuing treatment in Malaysia. Second, increasing the number of Medisave-approved hospitals in Johor will help boost Johor’s medical tourism sector. Having JCI accreditation would also boost Johor’s medical tourism sector. Third, the shortage of healthcare staff may impede the expansion of private hospitals and thwart the development of new hospitals.

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This is an adapted version of ISEAS Perspective 2025/101 published on 11 December 2025. The paper and its references can be accessed at this link.