Review of healthcare financing will involve fundamental shifts: Health Minister

Review of healthcare financing will involve fundamental shifts: Health Minister

Singapore's Health Minister Gan Kim Yong said the review of the country's healthcare financing system will be extensive, involve fundamental shifts, and will take more than a year to complete.

SINGAPORE: Singapore's Health Minister Gan Kim Yong said the review of the country's healthcare financing system will be extensive, involve fundamental shifts, and will take more than a year to complete.

Speaking in Parliament during the Health Ministry's Budget debate on Tuesday, he said while managing costs and ensuring that Singapore is effective in the way it delivers care, there is also the need to enable patients to pay for their portion of the cost.

Thus, the first major shift is to increase the government's share of national spending -- so as to provide Singaporeans with greater assurance that care will remain affordable and accessible.

The government will take on a greater share of national spending, from the current one-third to about 40 per cent and possibly even further, depending on various factors such as demographics, and the ability to manage healthcare costs and target the subsidies, Mr Gan said.

He believes this will help to reduce the impact of rising healthcare costs on Singaporeans, especially for those in the lower- and middle-income bracket.

During the review, the ministry will explore how it can provide more financial support in a targeted way for specialist outpatient care, primary care, preventive healthcare, dialysis and long-term care, so as to reduce the share that patients have to pay.

Mr Gan said: "How we spend the additional money is crucial. Today, the bulk of our subsidies go towards hospitals, where the cost per episode is high. As our population ages, delivery of healthcare will increasingly extend beyond hospitals."

The second major shift is on Medisave. Mr Gan said the ministry has been expanding Medisave use progressively since 2006, so as to include outpatient treatments for chronic diseases, as well as selected vaccinations and medical screenings.

Now Singaporeans can use up to S$400 per Medisave account to pay for these treatments each year.

"Medisave has been sized primarily to pay for subsidised care in the inpatient setting. As we grow old, we are more likely to require hospitalisation, and each hospital stay is longer," said Mr Gan.

"If we allow unrestricted use of Medisave, many of our elderly may not have sufficient Medisave for their needs in the future. However, we do exercise flexibility for cases with exceptional circumstances," he added.

Mr Gan is confident that if the government calibrates carefully and puts in place some safeguards, a greater flexibility can be allowed in the use of Medisave to reduce out-of-pocket costs without jeopardising the future.

So the ministry will review Medisave policies to see how to have greater flexibility in its use.

Mr Gan said: "We raised the cap on the use of Medisave for chronic diseases from S$300 to S$400 last year. Can we raise it further? Should we expand the Chronic Disease Management Programme (CDMP) to include more diseases? Should we allow Medisave to be used for outpatient treatments beyond the CDMP?

"How do we prioritise the different needs, to ensure that Medisave will not be depleted? How do we ensure that providers focus on necessary and cost-effective treatments, so that each Medisave dollar is well spent? These are issues that need to be addressed in the review."

Mr Gan said the third shift is on the role of insurance. He explained that to stretch the health dollar and to give Singaporeans greater peace of mind, there is a need to enhance the role of insurance schemes like MediShield and ElderShield.

But there is a need to do this carefully to guard against over-servicing and over-consumption, both of which will lead to rising costs and higher premiums for all.

So the ministry will study how it can shift the balance towards greater insurance coverage, without driving up demand and consumption, and allow insurance to carry a larger share of healthcare funding.

Mr Gan said: "MediShield is designed to be a catastrophic insurance primarily for larger inpatient bills. As we review how we can strengthen insurance coverage, we will also examine whether it should remain so, or if we can expand it so that it can offset a higher proportion of costs while keeping premiums affordable.

"We will also have to address Singaporeans' concerns about exceptionally large bills that go beyond the current cap on MediShield claims."

He stressed that the subsidy and 3M framework -- involving Medisave, MediShield and Medifund -- has served the people well so far. But there is a need to further strengthen this as the healthcare needs of the population evolve over time.

Mr Gan said the major review of the health financing framework, which was initiated in 2012, will take some time.

However, a few immediate changes to keep healthcare affordable will be made. Mr Gan said the Ministry of Finance will be topping up the Medifund capital sum by S$1 billion.

This will increase the annual Medifund assistance by at least 20 per cent to S$120 million, to help more needy patients with their healthcare bills.

Mr Gan said: "From April 1, 2013, we will extend Medifund assistance to patients at the National Dental Centre. In addition, Singaporean mothers who face difficulty paying for their antenatal care and delivery can also be assisted by Medifund.

"By June 2013, we will also extend Medifund to the polyclinics, including dental services there. This will provide some relief for needy patients with recurring bills for their chronic conditions."

From April 1, the ministry will add 17 new drugs onto the Standard Drug List and the Medication Assistance Fund. These drugs include second generation insulin products and insulin penfills to help lower the cost for diabetic patients. This is expected to cost the government S$5 million a year.

The Health Ministry said it will also absorb the fee of about S$3 that is charged to institutions for each Medisave claim that patients make.

Healthcare costs a concern among Singaporeans: MOH

The Health Ministry held two sessions of the "Our Singapore Conversation", engaging many Singaporeans -- including patients -- to hear their views. From this, four main concerns emerged.

Firstly, Singaporeans are concerned over rising healthcare costs, said Mr Gan.

Currently, the country spends about four per cent of the GDP on healthcare -- around US$1,700 per person -- which is similar to what Hong Kong spends. Over time, Singaporeans can expect national healthcare spending to continue to rise as the country's population ages.

"So what drives healthcare costs? First, cost of the same treatment goes up over time, due to rising cost of manpower, supplies, and so on. This is the usual inflation," said Mr Gan.

"Next, as we age and our health deteriorates, we will spend more on healthcare. On average, annual expenditure on hospitalisation, after subsidy, for a 65-year-old is three times that of a 45-year-old.

"The third reason -- and a key one -- is that healthcare is getting significantly better and more accessible. We have adopted more advanced medical treatments and technologies that achieve better outcomes for patients, and these have become more common over time."

The second concern of Singaporeans is how much out-of-pocket cash they have to pay. Thirdly, the concern of incurring exceptionally large healthcare bills.

Thus, Mr Gan said the ministry will carefully explore how it can provide Singaporeans with greater assurance against very large out-of-pocket payments.

The fourth feedback received was that many Singaporeans have said that while there are many help schemes, they do not know how to get the help they need.

Mr Gan said that the starting point is for every Singaporean to take ownership of his health, to live healthily, seek treatment early, and make informed choices in seeking treatment. For this reason, it is important to preserve the principle of co-payment, but at the same time ensuring that it remains affordable.

Government to ramp up infrastructure on healthcare

By 2020, there will be 4,100 more acute and community hospital beds, 400 more than what was announced in 2012.

Beyond 2020, the ministry is also planning to build four new acute hospitals in areas where demand is likely to grow.

Mr Gan said: "We are currently studying regional demographic profiles to identify the likely locations of these new hospitals, and we will reveal our infrastructure plans closer to 2020."

There are currently seven public acute hospitals in Singapore. They include Singapore General Hospital, Tan Tock Seng Hospital and KK Women's & Children's Hospital.

In the short-term, two new facilities will open this year. One of them is the new Medical Centre at the National University Hospital (NUH), which will open by July 2013.

Mr Gan said this will allow NUH to expand its specialist outpatient clinics and day surgery operating theatres. The building will also house the National University Cancer Institute.

The other new facility is the National Heart Centre, which will allow for expansion in cardiac services.

In the medium-term, several hospitals will start operations. The Ng Teng Fong General Hospital will begin to serve patients from end-2014, while community hospitals in areas like Jurong and Sengkang will also be ready between 2015 and 2020.

Mr Gan also announced plans for new polyclinics. By 2017, polyclinics will be opened in two new towns -- Jurong West and Punggol.

He added that there will be four new polyclinics by 2020, and another six to eight more by 2030.

To provide more patients with convenient access to support services, the government will set up three more Community Health Centres this year. They will be located in Bedok, Jurong East and Tiong Bahru.

As for the healthcare workforce, the ministry is increasing the training capacity of health institutions with a S$50 million boost this year.

It has also launched a new branding campaign for nursing and allied health jobs.

Mr Gan said: "In the past year, our healthcare professional workforce grew by 3,700, or about eight per cent. We are on track to growing our professional workforce to meet the healthcare needs of our population, as outlined in Healthcare 2020. Our priority continues to be to grow our local healthcare manpower supply."

He added that the workforce will also be supplemented with training by overseas professionals.

Source: CNA/ac