Thursday, October 20, 2011

Myth Of The Three Ms

Both Dr Fatimah Lateef (Marine Parade GRC) and Non-Constituency MP Gerald Giam of the Workers' Party made mention of elderly parents' heavy reliance on their children's Medisave accounts to settle medical bills. Despite the announcements of more hospital beds in the pipeline, such as the extra 200 beds for Kwong Wai Shiu Hospital, the affordability of healthcare remain a thorny problem to be addressed.

According to the World Health Report 2000, Singapore is ranked 6th for Overall Performance. However, if you look at Annex Table 7, "Fairness of financial contribution to health systems", Singapore is ranked 101th, sharing the dubious honor with Lebanon, in a list of 191 countries. The measurement of achievement in fairness of financial contribution has reference to a household's payment towards the health system through income taxes, value added tax (GST), social security contributions (CPF), private insurance and out-of-pocket payments. Singapore spends only 3% of the national GDP for healthcare, the balance of the burden rests on co-payment. No wonder the system has been described as potentially a "very difficult system to replicate in many other countries."

Singaporeans contribute 6.5 - 9% (up from 6 - 8% before September 2010) of their earnings to Medisave, a significant chunk of the CPF cut. According to the Ministry of Health (MOH), the average out-of-pocket hospital bill for C Class hospitalisation, after the 80 per cent subsidy, is about $ 1,097. The level of savings in MediSave as at end 2006, is $ 9,300 at the 50th percentile, but what is the MediSave account balance for the 20th percentile ? How many have less than $ 1,097 in their MediSave accounts?

Even for the better off, big bills are always a threat. To ensure that Singaporeans can afford catastrophic bills - and have to depend on a caring Government to help out - they are strongly encouraged to 'risk- pool' by taking up MediShield. The brochure says MediShield will pay up to 80% of the actual expenditure, always subject to the claimable limit. You need cash for the co-insurance and deductible, a deductible that starts at $1,000 and goes up to $3,000 for the aged who really need the financial cover. Although Medishield was conceived for longer hospital stays, the daily charges - $450 (normal ward), $900 (ICU) - are not exactly peanuts.

Medisave will not be enough for wards higher than Class B2 and private hospitals, is the explicit warning on the CPF website. For stronger protection, private medical insurance plans are recommended under the Private Medical Insurance Scheme (PMIS). From October 2005, the Central Provident Fund (CPFB) privatised its MediShield Plus plans through a Tender Evaluation Committee (TEC) chaired by Mr Gerard Ee, same guy taking his time evaluating the bloated ministerial salaries. Funny how his name pops up in all the right places.

Medifund is an endowment fund set up by the Government to help needy Singaporeans who are unable to pay for their medical expenses. SGH makes it clear Medifund help is for patients who are facing financial hardship. It is not an entitlement. Patients have to fulfil certain income criteria before the applications can be approved. In most cases, the program will only assist with 60 percent of the expense. In 2006, $39.6 million from Medifund was given to 20,000 to 30,000 patients for a record 301,126 successful applications - average payout of $132 per application. Be prepared to beg.

So has Singapore’s Healthcare policies met the needs of the people? If they have, the Government would not have bothered to announce plans to boost healthcare infrastructure and manpower in the next 5 years. The Ministry of Health is also re-looking means testing, introduced in 2009, "While continuing to target subsidies, we will rationalise and streamline the means-testing approaches." One last word on means testing in Singapore: People with no income, such as retirees or housewives, have their subsidy rate pegged to the Annual Value of their homes. The IRAS in its infinite wisdom has determined that AV is the estimated annual rent of your property if it were to be rented out. Even if you are using it as a basic roof over your head. Rationalise that.


  1. I believe that Singapore should practice the type of healthcare model that is being practised in Taiwan.

    The essential idea is that every Singaporean will by default pay a premium. The premium rate is same for everyone. It is subject to change every year according to actual healthcare expenditure. For lower-income Singaporeans, the government will subsidise them to fulfill the contribution.

    The obligation of the state is then to provide all healthcare for free (or at a very low fixed cost, or something similar). The justification is that fundamentally, everyone wants to be healthy and no one wants to be sick. Chance can play a huge role in deciding the health of individuals. It is thus unfair to subject individuals to financial hardship. Harping on "individual responsibility" is just shoving away responsibility and the rejection that health is a gift of nature, not an entitlement.

    The scheme will capitalize on the potentials of insurance coverage. While it is very hard to tell who will be struck with a long term illness, it is actually very easy to predict the number of cases within a population. Larger is always better in insurance modelling.

    Thus, while details can be debated later, I believe that a National Insurance Policy will be a right direction forward.

  2. Mr Gerard Ee is more or less the saint in Singapore. There is only one and one person can do those morally right stuff and this person is Mr Gerard Ee. No doubt.

    Taiwan's system is a fair and sensible system based on rationale, humanity and collective spirit. It will never be adopted in a society that promotes individual's glory and weighs economy (money) above anything. USA and Singapore are too classic examples.

    The true spirit of insurance is good to help shield out the uncontrollable incident like sickness, accident, etc. The questions are right: Who know if they will be sick one day? Who do not want to be healthy? Unfortunately, economists view real human being as "Econs" so that such right questions are not modeled in today's mainstream economic theory.

  3. But we can't be a medical hub where foreigners come to seek treatment without depriving local scums of healthcare as there is insufficient medical personnel, beds, etc.

  4. Many retirees and jobless who stay in condos and landed property beat the "subsidise according to house status" by declaring themselves as "self-employed" e.g. tuition teacher or odd-job worker, and declaring annual income of a few thousand dollars to IRAS. Too low to have any income tax, but qualify as low-income person for max C and B2 subsidies.

  5. "While continuing to target subsidies, we will rationalise and streamline the means-testing approaches."

    I just wonder what is the use of a 50% subsidy if the waiting time for your next appointment could be as long as 3 or 4 months and could be a matter of life or death for some patients ?

    In law, they say justice delayed is justice denied. But in our public hospitals, the minute you tell them that you rather pay as a private patient, is it any surprise that they could suddenly fix your next appointment in the matter of days ?

    No wonder LKY says our public hospitals fare much better than those in UK. But it is a fact that he didn't exactly clarify whether this also applies to our subsidised patients as well.

  6. For senior citizen folks like me, just don't understand why colonial ruler can gave their CONQUERED Subjects free medical treatment and education.

    What will happen if there is a fatal and very contagious outbreak one day???


  7. Gerard Ee supposed to review and let the public know how much should a minister be paid. Months after elections, not even a word from him or government. What happen?

  8. Me sees no rationale, logic and reason for Ministers' Remunerations to be reviewed by person or people below their(Ministers) standings or calibres.


  9. Read this

    As to retirees and housewives, if they sitting on bungalow or other landed property or condos, why shouldn't they downgrade?

  10. Just feel of this worrying trend of the government cutting down on the essential services of education, healthcare by making people foot more of this out of our pocket. On the other hand, they steadily increase the GST every few years. Makes me wonder, with so many collect from the GST, what are they keeping this for? Collect more taxes to squander on those wasteful and misguided foreign investments? In healthcare, the government has failed us by not providing enough as can be seen in the not enough of hospital beds, not enough doctors. The trend of the aging population has been so evident more than 10 years ago, yet the government seems so ill-prepared for this. Now, we also need to provide more healthcare for the aged. Just feel sad that people for the selfish interests over the concern of their properties' values, oppose the building of healthcare facilities for the aged in residential areas. This is a short-sighted move that can only hurt of us in the long run. We can't afford to face the situation 10 years later, finding ourselves, not enough healthcare support for the aged.

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