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Inflation is a measure of the rate of rising prices of goods and services in an economy. Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages. A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product.

In Malawi the National Statistics Office comes up with average monthly and yearly inflation figures. The inflation figure is an average of both food and non-food items. The annual inflation rate in Malawi accelerated to 26.7% in October 2022, from 25.9% in the previous month. It was the highest inflation rate since June of 2013.


The figure below shows the average inflation in Malawi for the year 2022. Is shows average inflation figures from the month of November 2021 to October 2022.

The term Medical Inflation describes average healthcare services' per-unit costs increase over time. This includes the price of new treatments, drugs and procedures and their widespread availability and services. In developed countries the medical inflation average figure is provided separate and is used in making decision on pricing of services and this also determines premiums for health insurance schemes.  In Malawi, the medical inflation is expected to be even higher because almost all medical supplies are imported from other countries.

The level of the general and medical inflation are very important factors having a significant influence on the functioning of the medical aid scheme industry. The general inflation directly influences the expected price inflation (healthcare tariffs movement from one year to the next) of healthcare providers. Medical inflation consists of price inflation, ageing of scheme members and utilization of medical services.

The following are the factors that have led to high medical inflation in the past years.

Treatment is getting more expensive

Worldwide, there are new drugs, new treatments, new technology - these lifesaving innovations are great news and help to make healthcare more effective. It means that we’ve never had a better chance of surviving serious illness, such as heart disease and cancer; however, it all comes at a cost.

We are living longer

The global population is ageing. With age, often comes illnesses. With such a large proportion of the global population over the age of 65, we expect to see more people with chronic medical conditions taking on more recurring medicines and also going for newer forms of treatment.

We are getting busier

Life is busier than ever and even though we know what is and isn’t good for us we are forced by circumstances, as a result people are taking a lot of junk foods. This in turn is increasing incidences of obesity, diabetes, hypertension, and cancer. These conditions are very expensive to manage.

Sedentary life and lack of physical activity

Lack of physical activity is commonplace in many countries around the world, but it also adds extra pressure to healthcare systems, costing them more and more each year. 

The increased cases of Epidemics which are expensive to treat

As has been the case with Covid 19 which cost a lot of money to treat the emerging cases.

The factors above are the ones that have been responsible for gradual rises in prices over the years.


The impact of the Covid 19 and the war in Ukraine have caused a situation of high inflation in many African countries including Malawi. Medical inflation in particular went up during the Covid 19 peak period because all our medical supplies are imported. In addition there was a time when there was a surge in prices when as a result of the lock down there was scarcity of medical supplies. Unfortunately the prices were not revised downwards after the situation returned to normal. (typical of prices once they go up, they are gone).

The situation is worse in the case of countries like Malawi where all drugs, medical supplies and equipment are ordered from other countries. Majority of our drugs, equipment and medical consumables are ordered from India, South Africa, UK, German and other countries. The 25% devaluation that took place in May 2022 and the scarcity of the forex is another factor that impacted negatively on the prices of medical supplies. Another problem that pushed the prices up was lack of raw materials for drugs and consumables during the Covid peak periods.


The situation above have led to adjustment of prices for various drugs and services by healthcare providers putting pressure on the medical schemes. Actualists are guided by the inflationary values to advise on premiums and average adjustments on prices of services.

When the devaluation took place, MASM had already made its budgets such that it could not go back to its membership to ask for more contributions in the face of the devaluation without affecting the membership retention. We belong to the same ecosystem. Raising contribution rates has its limits and is not the only way of mitigating against medical inflation. There are tips and roles described in this article on how to contain the problem. Another tip is on the choice of drugs whether branded or generic is addressed in a separate article.  

What is MASM doing about the current medical inflation?

The rising cost of new medicines, treatments and technology is unavoidable and MASM must take these changes into account to make sure we can always offer our esteemed members access to quality services. However, the following are being done by MASM:

1. Encouraging members to access treatment from reasonable providers e.g., accessing primary care from their Panel doctors and only go to specialists when referred. Make sure to be discharged from the specialist back to the primary care practitioner when the condition had been stabilized

2. Monitor the cost of treatment from various providers to ensure it falls within acceptable limits.

3. Negotiatting on costs with some service providers to the benefit of our patients., which is good news.

4. Limiting the impact of these increasing costs by having a global network of medical providers which helps patients to have cheaper options at same quality. This promotes price competition to the benefit of the members.

5. Putting members in charge of their benefits and

6. Monitor invoices to make sure that we are only paying for treatment that is medically necessary and correct.

What should members do to safeguard their benefits and prevent frequent adjustment of contributions?

On their part members have got a responsibility to ensure that all claims paid on their behalf are genuine by reporting any suspicious activities observed as they receive treatment.

Members should also take interest to look at their bills after they have been settled to ensure that they correspond with the treatment that was rendered.

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