This study explores the intricate relationship between the growth of medical tourism in Malaysia and its impacts on the local community, particularly focusing on residents’ quality of life. Malaysia’s status as a competitive destination for affordable, high-quality healthcare services has led to significant economic growth, including increased healthcare revenue, job creation, and infrastructure improvements. However, the influx of foreign patients has raised concerns regarding healthcare accessibility for locals and the strain on local resources. Data from 361 respondents were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results indicate that medical tourism positively affects economic performance, with a significant path coefficient (β = 0.434, p < 0.01), showing a strong correlation between economic benefits and perceived improvement from medical tourism development. Similarly, personal benefits from the industry have a positive influence on quality of life (β = 0.202, p < 0.05). However, this study also reveals that attitudes towards medical tourism do not significantly impact residents’ perceptions of quality of life (β = 0.057, p > 0.05), highlighting social disparities in how different groups experience the effects of this industry. The findings suggest that while medical tourism offers economic advantages, challenges such as reduced healthcare access for locals and the growing commercialization of healthcare must be addressed. This study concludes with recommendations for sustainable policy interventions to balance the economic growth of medical tourism with the well-being of local communities.
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