Khaw Boon Wan
Singapore
“Motor vehicle dealerships and showrooms have been closed since the start of the circuit breaker. As COE bidding is done mostly by the motor vehicle dealers on behalf of prospective owners, the Land Transport Authority (LTA) suspended COE bidding for the months of April and May.”
“Though stressed by the financial pain, they press on with the immediate priority of fighting the virus and supporting essential services. Post-pandemic, we will see how public transport evolves. Will demand for public transport services simply return to the pre-pandemic level?”
“Under our rail financing framework, the Government fully pays for the cost of building new rail lines. In other words, we do not recover the cost of building the Cross Island Line (CRL) from commuters through fares. The CRL project is being implemented and the final costs will depend on tender bids.”
“There are around 5,000 private bus operators with a combined fleet of 13,500 private buses. As we do not track the number of private bus trips and passengers, we do not have data on their carbon emissions.”
“There are nursing rooms at 50% of our bus interchanges. We will provide nursing rooms at all new bus interchanges and integrated transport hubs. For the MRT network, we will provide nursing rooms at all new interchange stations. We will also explore providing such facilities when MRT stations undergo upgrading.”
“Over the last three years, Singapore carriers have reported a total of 20 incidents of food allergies on board their flights. None required the use of epinephrine or emergency flight diversions.”
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“Then you have meetings involving thousands and not just a few hundreds. They will also share and consolidate their databases of conference participants so that we can market our meetings more effectively. They will also try to leverage on the many world-renowned scientists, Nobel Prize Laureates, that A*STAR brought into Singapore, to help project Singapore as a thought leader for all things medical. I am very cheered by this development. Last year, one of my grassroots leaders had a mild heart attack. He was a former patient of SGH Heart Centre. He had a heart attack at home, called the ambulance and because he lived very near to Tan Tock Seng Hospital, the ambulance brought him there. After stabilising him and discovering that he was a former patient of SGH, Tan Tock Seng Hospital, different cluster, called up SGH, informed them that they were sending him over. They put him into an ambulance and sent him to SGH. SGH was ready to receive and admit the patient. He stayed in hospital for seven days, recovered, he came out. Then only he told me about his experience of a very pleasant encounter with the two hospitals. Mind you, he was a subsidised patient. I was very happy to hear his experience. Obviously, the rivalry between the two clusters must have eased. I dare not say that it has disappeared, but it has eased, at least in this instance, and SGH and TTSH have been able to cooperate for the welfare of their patients. In short, it is not about how many clusters we have. The key is focus and leadership. What counts is how we take care of our patients at the front line, in the clinics and the wards. If our clusters compete to have the latest equipment, inflating pay to poach staff from each other, and shifting costs to each other, then we are headed for disaster.”
“I do not think that will be fair to the students. I am not saying that the students are finding no jobs. I do not know enough about the industry yet. But I would urge the community to publish more such information into the public domain. Let me now move west to our hospital clusters. Mr Alex Chan and Dr Chong asked whether cluster formation has achieved the purpose and whether excellence can be better achieved through a third cluster. Frankly speaking, the key to medical excellence is seldom due to organisational structure. I have seen various kinds of organisational structures among the top institutions, from Cleveland to Stanford. Top performance comes from leadership. Are the leaders serious? Are they clear of their goals? Are they able to attract like-minded people to join their cause? Are they ready to drop team members who are distracting or are distracted? So whether it is one cluster, two clusters, three, or five, the more important question is whether we are clear about our mission and do we have good people who are passionate about our vision. Do we know when to cooperate, and when to compete? This is increasingly the key to winning the global competition. As I see it, the only way SingaporeMedicine can stay ahead of competition, is for all hospitals, public and private, to work together as Singapore Inc. when it comes to professional matters. We fight as one team. Last year, I advised the two clusters to stop organising competing annual scientific meetings but jointly organise much bigger annual scientific meetings with far greater impact on the region. I am glad that they are taking up my suggestion. They are now planning to upsize the many small local professional meetings to include the professionals from the region.”
“They offer 6-year part-time course or a 3-year full-time course. And I am quite glad both have tied up separately with TCM universities in China. Last year, about 100 graduated from both schools. Currently, about 800 are at various stages of studying, another 200 are doing the 3-year full-time course. So there is a total of about 1,000 stretched over several years. I just read today's newspaper that NTU is starting a double degree course with Beijing TCM University. So there will be a few students from there too. I welcome that development. Dr Tan asked about the impact of TCM training on western primary healthcare. But TCM has always co-existed with western medicine, playing a very useful complementary role. Their market share is about 12%, and I have been looking at those data for several years. It has remained quite stable at 12%. Dr Chong Weng Chiew expressed a concern that we may be over training. We have now about 1,800 on the TCM register and, as I said, there are 1,000 still in the pipeline. It seems like a very large number. I have no idea whether the market will be able to absorb 1,000. As always, as I said so yesterday, let the market work. But the market can only work if you provide useful information. What we would do and what the TCM community ought to do is to publish information, how many are you training, what is the job prospect of graduates. Like NUS and NTU, every year, they systematically publish within so many weeks or months, their graduates get jobs, their starting pay, etc. And I think the students need to know. My fear is that if you have two competing TCM schools and they start competing to produce as many as possible, it is troublesome, you get over-training and the students come out, they cannot find jobs.”
“They should invite the best TCM physicians to come here regularly to conduct clinics, treat patients, teach and give lectures. They can come as experts on temporary registration. To achieve best results, we must not be protectionist or fear that such foreign talent would take away our lunches. They can already do so, operating from China. I think it is far better that they are with us here, even if it is temporary. At the same time, as Dr Chong pointed out, the local TCM community must upgrade and professionalise. That is why I am not sure if I can accept Mr Ong Ah Heng's approach of allowing “die-da�? practitioners to continue with their traditional way of training, often from father to son. "Die-da" is a branch in TCM dealing with injuries to bones and soft tissues. The correct practice of "die-da", like the practice of any specialty in TCM, requires full knowledge of TCM. That is why we require those who wish to practise "die-da" to undergo the complete training in TCM and be registered as TCM practitioners. This is also the regulatory regime in China and Hong Kong. You know at the hospital end, we have seen some of the damages done by some of these so-called "die-da" practitioners. However, we are sympathetic to the incumbents who had no opportunity for such training in the past. And that is why we have special provisions allowing them various chances to try to study and pass examinations, and quite a few do. A few dropped out for various reasons. But I think, from now on, for all new practitioners, we have to require them to be fully-trained and fully registered as TCM practitioners. I think let us not compromise on standards here. Dr Tan Sze Wee asked about the enrolment in our local TCM schools. We have two schools.”
“Consumers all over the world always have problems differentiating real herbs from fakes - and there are many. Often, we get conned. I had been conned before too. I bought some cordyceps from somewhere, and once you started boiling it, it became something else! Can we develop the standards and the tests to help certify authentic TCM products? Can we aim to be the certifying body for the world market? Singapore is a trusted brand. I think if it comes with the Singapore chop, most people will trust that and say, "Aw, done by Singapore, certified by SISIR (or now called SPRING), should be reasonable." That will create a whole new industry in Singapore. Ten years ago, Minister George Yeo planted a seed in Ang Mo Kio Hospital when he started acupuncture there as a pilot. There have been some developments since. Even our Zoo finds application for TCM. Last week, I read Ah Meng somehow benefited from acupuncture! 12.30 pm I am giving TCM a booster shot. That is why I said “yes�? to Dr Chong Weng Chiew's request to bring the full range of TCM services into Ang Mo Kio Hospital which he runs. My hope is that the local TCM practitioners take this opportunity to climb up the ladder. Success is likely to come if they actively partner with the best in China. We must acknowledge that our TCM is not as developed as in China, and see how we can bring the best in TCM here, to help us evolve a model which can bridge east and west. We should jointly conduct scientific studies and clinical trials of TCM practices and TCM herbs and then publish the results in international scientific journals, actively contribute to a better understanding of this ancient art of healing.”
“Can we make it? I know it is a tall order. But we have proven our abilities in other areas before. Yesterday, I spoke about our SMs model of funding healthcare, totally made in Singapore. Our response to SARS was world-class, and again made in Singapore. With some of our best students in medicine, and some of our best talent in healthcare, we must put these top brains to work. Dr Michael Lim spoke obliquely about “bureaucratic hurdles, turf protection and harassment through Government agencies�?, all of which could turn his dream into a nightmare. He spoke, presumably, from his own experience. I listened carefully; I got his “coded�? message. Let me encourage him not to lose his passion. Changing mindsets overnight is not possible. But there are people within the Ministry who share his dream. Count me as one. Together, let us make it happen. The medical leadership is keen to work towards this vision, but acknowledging the challenges. If we stay focused and we are prepared to be bold in our approach, with determination, I think, after five to 10 years, we should be able to produce significant results. But we must be prepared to change, re-engineer our processes, and work with the best. Since Dr Chong Weng Chiew mentioned traditional Chinese medicine (TCM), let me use that as an illustration. It is a very difficult subject, given our lack of domain knowledge. There is a certain mystique about it because we do not know what we do not know. Take the regulatory regime for TCM herbs as an example. We have two options: do nothing, keep them largely unregulated and hope that no accidents happen. Or we can proactively engage the TCM experts and the industry to see whether we can develop a regulatory and certification system which can, in fact, be a global model.”
“Moreover, with a larger patient base, we can train our own doctors better and faster. Look at India and China, which Dr Michael Lim described. The number of organ transplants, coronary artery bypasses and joint replacements that their doctors get to work on is mind-boggling. What our trainees get in one year, they can get in one month; sometimes two weeks! Coupled with their vast pool of talent and hungry ambition, it is a matter of time their skills will surpass ours. We should not be afraid that we are training our competitors. The strength of Singapore is our ability to get things to work and maintain operational efficiency over time. We are good at operating complex systems. Just look at Changi Airport and PSA. Others can buy the same hardware, the same cranes, the same IT equipment and so on. But we stay ahead of competition by operating what we have, effectively and efficiently. Likewise, our regional healthcare competitors can buy the same technology that we have. But I am confident that our hospitals have what it takes to stay ahead of competition. Dr Michael Lim has painted his dream. Let me share with Members my vision. It is that our hospitals can be the best in Asia and be acknowledged as such by our peers. But let me quickly clarify what “the best�? means. To be the best does not mean the tallest, shiniest buildings or the most expensive equipment. "The best�? means we have the best clinical outcomes, the lowest morbidity and mortality, the lowest complication rates, the fastest recovery, the lowest usage of resources. And we come up with new productive devices, new effective techniques, and new processes. Not all specialties can achieve this. But, hopefully, a handful can produce results within a few years, which will then encourage the other specialties.”
“For some time now, we control the supply of specialists as a policy, on the premise that this would moderate healthcare demand. But from an economic point of view, this logic may not be entirely correct. As I said just now, it is wishful thinking to hope that with fewer specialists, demand for their services will go down. This is particularly so when demand is largely driven by exogenous factors, like in our case, by our ageing population and our aspirations to be a regional medical hub. Over-restricting supply in the face of independently-rising demand will simply drive up healthcare costs, as prices will adjust to the excess demand. This is Economics 101. That is why I favour taking a more market-based approach to manpower planning. We must be responsive to market demand and we must be flexible in adjusting supply. Yes, there are valid concerns about supply-induced demand. We will watch the situation carefully. But, at the same time, we must take care not to rigidly control numbers and overly-choke supply, creating a severe excess-demand situation. After all, if SingaporeMedicine makes progress and we still restrict the training of specialists, queues will simply lengthen, and prices just go up. We must also step up training, but not just for ourselves. We must help train our neighbours, particularly Malaysia, Indonesia, Thailand, Vietnam and China. Many are very keen to learn from us. Every year, our hospitals play host to thousands of such doctor visitors. We should welcome such trainees, even from countries which we may not have traditionally recruited from. The best amongst them, we hope, will eventually settle down here, and become Singaporeans; the rest will go back and they become very important links for us to their region.”
“For example, where sellers know more than the buyers, what economists call information asymmetry, an irresponsible seller can creatively induce spurious demand. Look at motor repair workshops. Most of us know how to drive, but I think very few of us know exactly how engines work, let alone how to fix a car problem. So this is a classic case of information asymmetry between the mechanic and the car owner. So, bad luck, you go to a mechanic who is irresponsible, he will say: fix this or fix that, this is the bill. I think very few of us will be able to argue with him or to even know whether we have been taken for a ride. And if insurance is going to pick up the tab, most car owners may not even care. They are more interested in how soon they can get the car back in good shape. There are many examples of such market failures. When you go to a strange city where you are not familiar with the roads, you hop into a taxi - information asymmetry - and you say, "I'm here. I want to go there," and the taxi driver took you on a long way, you may not even realise it; hence, the expression "taken for a ride". The way to address such market failures is not to restrict supply and expect demand to go down. The correct response is to make as much information as available to consumers, reduce the information asymmetry so that consumers can make better informed choices. If they cannot digest the information, they can seek third party advice, for instance, from their family physicians or their insurers. That is why it is so important for every Singaporean to have a good family physician. It is crucial - very important. Equally important, we need to put in place a framework which generates incentives for hospitals to provide good basic healthcare with minimum resources.”
“Mr Chairman, I thank Dr Michael Lim for his comments on our ambition to become the regional medical hub, an initiative which we have codenamed SingaporeMedicine. I share his dream, not every single detail, but at least the larger plot. The Economic Review Committee felt that we could succeed in SingaporeMedicine. Years ago, we were a clear leader in the region. But as Dr Lim pointed out, our competitors have quietly narrowed the gap with us. It is not just Parkway in Malaysia, or Bumrungrad in Bangkok. It is now also Apollo, Escorts, Max Healthcare and Fortis in India. If we are not careful, it will soon be Shanghai, Beijing and Dubai. Dr Lim asked if MOH is ready to make his dream come true. SingaporeMedicine is not strictly an MOH portfolio. But from MTI where I was for seven years, I knew that without MOH's support, SingaporeMedicine will be so much harder to achieve. To secure our lead, we have many things to do: increase supply, step up training, let in more foreign talent, make our cost more competitive and work more actively with world-class partners. Ministry of Health's past ambivalence on SingaporeMedicine is not without good reasons. As increased demand would have to be supported by more specialists, there were concerns that more specialists, in turn, would lead to higher demand. The assumption is, as what Dr Tan Sze Wee has just noted, that supply could induce demand in healthcare. The end result is higher healthcare cost. Supply-induced demand is real but is not unique to healthcare. Wherever there is market failure and unequal power between provider and consumer, the potential for supply to induce demand exists.”
“Sir, the choice of ward is a decision that the patient has to make, but payout from MediShield will only be at "B2" or "C" level. In fact, the same patient could have gone to a private hospital but, of course, the claim rates would have to be at "B2" or "C" class.”
“Even on paper-based, how do you ensure? I cannot guarantee there will be zero human error, although we should try. As a provider of whatever service, healthcare, public or whatever, our job is to make sure we do a proper job. There is always the supervisory system and so on. If anything, with computers, it is easier for me to surface some errors, at least on a system-wide basis. There is a possibility. With paper-based, it is stuck there in the file, somewhere. If there is an error, who knows? Nobody knows. But with the approach I am taking, we want to share out as much information as possible, among the healthcare providers. For sensitive information like HIV, yes, people will be alerted, "Are you sure it is HIV?" Because for HIV, we have to do a few other things. For example, if one is HIV-positive, we have to do counselling. If it is electronic, and for some healthcare worker who happens to see this patient in front of him or her, at least that would alert him to say, "It was recorded as HIV-positive. Have you gone through CDC counselling?" At least the patient will have the chance to say, "Who said I am HIV-positive?" Then we could discover the error. But, if it is paper-based, stuck somewhere in another hospital, which is not shared, this error may never surface.”
“I learned how to use the computer many, many years ago as a student. At that time we already heard this expression, "garbage in, garbage out", GIGO. As I said, there is no excuse for human error. We apologise for that, but I do not know what exactly caused it, who was the one who made the error. But once you record it wrongly then, of course, it is stuck there. But the computer has nothing to do with this. The poor computer is just an innocent inanimate thing.”
“On the second point on counselling, I certainly think that it is a good standard operating procedure that before one starts any treatment on a patient, it is wise, fair and courteous to inform the patient and the relatives that, "I am not sure of the precise hospital bill, but roughly it will cost $500, $1,000 or $2,000." It is absolutely important, whether it is a subsidised ward, class "C" ward or private hospital. I think this is necessary. Unfortunately, I have occasionally found anecdotes of patients who have complained that they have no idea. In fact, one of our Members here, who is still present, told me just not too long ago that she went for some expensive dental treatment which requires a series of sessions and she was clueless about how much the total expenditure would be. I was pretty upset when I heard about that. So a few emails followed and we hope to rectify that error. But it is always good practice for all doctors, public or private, to be fair to the patients. Let them have some expectation of how much the bill will likely be.”
“For standard drugs, the level of subsidy will depend on the class of ward. So, of course, class "C" has higher subsidy, class "B2" less, outpatients, a certain subsidy versus in-patients. For non-standard drugs, unfortunately, there is no subsidy, because it is non-standard. Who determines standard drugs versus non-standard drugs? Not me, because I am no doctor. But we have a panel of experts, depending on their specialty. They have to decide among the peers themselves. For example, cardiology, "this list of drugs is needed and they are standard. But the other list, they are frills." One could not say that they have no benefits, but the cost is so high that it may not be cost beneficial. I think that kind of judgment is needed. Part of the problem in the US today is that they do not have a standard drug list. They do not have the concept of a standard drug list. They should learn from us. Actually, they know, but politically they could not do it. So one sees President Bush's prescription drug measures which probably helped him win some election votes last year. It was to expand the prescription drug list so that the elderly will vote for him. But it would further compound the financial and upcoming insolvency of Medicare and Medicaid. I just read an article before coming here in the latest issue of the Economist, about how Medicaid is going to bankrupt them in a few years' time. When Medicare and Medicaid started in the United States, I think in 1965, the percentage of healthcare expenditure contributed by the government was only 25% - one in four dollars. Today, after so many years of politicisation, Medicare and Medicaid now amounted to half of their huge total healthcare expenditure. That is the sort of system we should not walk into.”
“We have done not too badly, but whether we are able to consistently buck the trend, I do not know; it is untested. So the need for huge savings to look after expensive hospitalisation is real. I just read one article in New York Times a few days ago. They were talking about how they were trying to reform employer's medical benefits. So they quoted one huge MNC company. They were very proud. They said that after changing the system, what they do is they employed doctors - in-house doctors, in-house hospitals. Could you imagine that? The company is now forced by the huge expensive healthcare system in the US to take on healthcare responsibilities by employing their own doctors, run their own clinics, in order to keep the healthcare cost down. But, apparently, it was successful, relative to those who do not, and they quoted a figure which shocked me. They said, having done all these, they congratulated themselves, and they have brought down the average cost to US$500 per month per employee. That is the cost for a system that has been reformed, let alone those that have not been reformed, and that is how expensive healthcare has become in the US. 6.30 pm Thinking people in the US knew that they could not afford it. If Uncle Sam could not afford it, we could not afford it, definitely. Better not to march and walk into that trap.”
“When demand is there, we will meet it. The fact of the matter is, today, if you look at the hospital beds, overall in the whole country, there is a surplus. In fact, occupancy rate is, on a nation-wide basis, rather low. We should not be piling onto the surplus by building more beds, whether it is "B2" or "C". I take a certain approach whereby in the public hospitals, if at any particular point in time, there is a mismatch of supply and demand, where there are more class "B2" and "C" patients than the beds available in that hospital, what we do is, based on the idea of cooperation amongst the hospitals, we would channel the patients to where there are empty beds. If necessary, and we have done it quite often, admit the patients to higher classes but charge them at the lower rates. That, to me, is still cheaper than having to go and spend money again and create class "B2" and "C" beds. Then, we are stuck in that kind of rigidity in the wards. On allowing the use of Medisave, the distinction is not between chronic or non-chronic cases. As I have said just now, the distinction is not between dental or medical. The distinction is between inpatient or outpatient. Medisave, when we designed it, was meant for inpatient care. Therefore, that must be the primary emphasis. For many chronic patients, who occasionally require hospitalisation, of course, they can use Medisave. But where they do not require hospitalisation, ie, as an outpatient, then Medisave does not cover. My worry about Medisave is this. Yes, we are building up quite a sizeable fund. Although we will try very hard to control medical inflation, the global experience is not a very optimistic one. Practically, in every country, medical inflation is exceeding general CPI index, and that is very worrisome.”
“There are three queries. Let me go to the last one first. On audit, one of our duties as regulator is to audit our hospitals and all clinics, both public and private. That is our professional job. We audit them, share those data with the providers and, where appropriate, we publish them. My attitude is to publish as much as is comprehensible to the public. Because if you put out too much, after a while, people may get put off too, then, it is not effective. If you understood my message just now, the best auditing system and the best auditor, eventually, are patients themselves. What I wanted to work towards is a system whereby we can have more and more informed patients - people who know. Just like when we want to buy shampoo, a car, rice, petrol or whatever, we try to shop around. For healthcare, we are far from that outcome. The vision is, let us move as much as possible towards that kind of a marketplace. "Informed" does not necessarily mean the patient himself being able to handle that kind of information; in fact, most cannot. And that is why it is so crucial that every Singaporean has a good family physician, whether it is from the public or private sector. It pays off. It is very important. Make sure every family has a good family GP who knows you and your family well, who can then advise you, and he is in a better position to assimilate all these data which I will be churning out, and which I will be continuing churning out to the public domain. He can then advise the patient accordingly. On the availability of class "B2" and "C" wards, the bulk of our beds are class "B2" and "C". That dominates the whole public sector. The class "A" and "B1" are minority beds. What is the correct number? I take a totally flexible attitude. It depends on demand.”
“Some of these kidney dialysis patients who continue to be on dialysis and if they have been on MediShield, they would be able to benefit from this raising of limits. But I cannot not have a limit. There must be some limit to it. If you want a higher limit, fine, then something has to give way, and that something would have to be premiums. For this round, the adjustments I have made are as much as I can do at this stage.”
“There is always an upperbound, so that they know what is the maximum risk exposure for the insurance. I think that is fair. In the case of medical insurance, claim limits come in various forms. One is an annual claim limit. So each year, so many thousand dollars. Currently, for basic MediShield, I think it is about $30,000. But I am raising it almost double, to $50,000. So that would help a lot. MediShield is for class "B2" and "C" - I think we should bear that point in mind. We are talking about class "B2" and "C" bills. When I looked at the feedback survey results, amongst those people who expressed concern were the self-employed. This is one major group where I have given the reasons. If they do not have Medisave, they ought to be concerned. I do notice that over-represented in that group are also the middle class, people who have fairly high income, and I suspect part of the reason is because these are the people who are more likely to go to the class "A" or private hospitals. If they are not adequately insured, and they cannot treat MediShield as adequate insurance, because basic MediShield is just for class "B2" and "C", they better make sure that they are properly insured with higher insurance plans. Come July 1st, with the MediShield reform, everybody would be assured of this basic coverage. But those who are more likely to use higher classes - the middle class, higher income group - they ought to insure themselves with better plans. To answer the Member's point about claim limits, I have raised the annual limit from $30,000 to $50,000, and there is also a lifetime limit. A lifetime limit is very useful for chronic cases, eg, kidney dialysis. I cannot remember what is the current lifetime limit, but I would be raising this limit.”
“There are four queries. Let me take them through. On premiums and pay-outs of MediShield after reform, those are data that we would publish in due course. I do not carry those data with me. I have explained probably in this House or some other occasions that part of the reason for the MediShield reform, is that for basic MediShield it is operationally in deficit. In fact, the revenue collected, ie, the premium contributions, are not sufficient to cover the pay-outs. So it is negative. But with the reform, we would restore it to the black again. There are standard indicators in the industry - what is called loss ratio. Loss ratio is a ratio of your premiums compared to your pay-outs. That will measure how much profit margin or efficiency of the market. When I talk about greater transparency in the industry, my intent is to begin to publish those loss ratio figures, not just for MediShield, but also for other "Shields" in due course. I do not carry all those data on my head but, at some stage, they would all be made public. There was another point about whether there are services which class "C" patients do not get and which other classes get. For basic hospitalisation, no. What we have to ensure is that all Singaporeans, irregardless of classes, basic hospital needs would always be provided. If you talk about non-basic items, which would involve things like non-standard drugs - I spent a few minutes talking about why the need for standard versus non-standard drugs - clearly, I cannot offer Rolls Royce services, for example, to all classes of patients. That is not possible. On the claim limits, that is prudence. If you buy a motorcar insurance, no insurer will sell you an insurance policy that says irregardless of your claims, we would pay up.”
“Mr Zainudin Nordin asked the Minister for Education with the recent announcement concerning university fees hike will (a) the local universities lose their competitive edge against equivalent foreign universities; and (b) the increases in the fees run counter to the efforts to make Singapore an education hub.”
“Sir, I thank Dr Tan for his support of means testing. I heard his first speech in this Parliament and I noticed he spent some time talking and supporting this particular idea. He has now suggested that we use means testing to induce Singaporeans to join MediShield. Actually, I am not in a hurry to introduce means testing. My priority this year is to implement the MediShield reformand to ensure that it meets its objective of easing the financial burden of Singaporeans with large hospital bills. Implementation is scheduled for 1st July and I would like to see how the scheme meets the objective before contemplating the next move on means testing. At that point, I would assess the need for Dr Tan'ssuggestion. As for MediShield, I am confident that given sufficient explanation, Singaporeans would see its value and would not opt out of it. Currently, 9 out of 10 working adults are covered by MediShield or its private sector equivalent. Those who are not covered are minors, children, non-working spouses and employees with generous company sponsored medical benefits. We would, nevertheless, try to encourage them to be insured. For almost all Singaporeans, affordability of MediShield is not a problem. For the small minority who finds it difficult, the Government would help them adjust to the higher premiums. One way is for the Government to top up the Medisave accounts with higher amounts given to older citizens. This could be done when theBudget position allows it, as it was done this year. UNIVERSITY FEES HIKE 5.”
“The increase of $500 is very affordable. As I said,most accounts have more than $10,000. You have to look at affordability from the viewpoint of whether you have enough in Medisave. I know where so much of the criticisms that it is unaffordablecome from. It is actually from the self-employed and I worry a lot about the self-employed. When you are young and healthy and still able to drive a taxi or cookchar kway teow, if you do not save, you and your children would get into trouble. Even a small bill of $500, if you have no savings,is huge, but with savings, even if you earn $1,000 a month, you would be saving $7,200 every 10 years, and that is not a small sum. MEDISHIELD SCHEME (Means testing) 4. Dr Tan Sze Wee asked the Minister for Health, in relation to the recent MediShield changes, whether his Ministry (a) will consider using the means test as an inducement to Singaporeans not to opt out of the MediShield scheme and (b) plans to use the budgetary savings brought about, in future, by the 'means testing' scheme, to offset the increase in MediShield premiums especially for the older people.”
“Mr Speaker, Sir, I track the health of Medisave regularly. I look at the statistics. Of course, we could not attend to individual accounts because there are so many but, at the macro-level, I look at the various statistics associated with it - median, percentile, and other data. As I said just now, Medisave is a crucial part of our hospitalisation financing system and, without Medisave, one could not even start to begin to solve this problem. That makes Singapore quite unique. I helped to flesh out Medisave 20 years ago, and so I may be a bit biased, but I think Medisave is a very important part of this whole scheme. We have often heard our colleagues saying that this is a 3M system - Medisave, MediShield and Medifund. I think it is not quite a good label because it shortchanges us. It is not just 3Ms. I prefer to describe it as an SMs financing system. A very big "S" for subsidy, because we are talking about B2/C class patients here and subsidy is the first line of defence. We subsidise a lot, with Class C up to 80%. So this big "S" followed by several "Ms". I dare not pronounce it as "SMs" in case it gets confused with the other "SMs". So I shall pronounce it as "SMs" and the "Ms" mean Medisave, MediShield and Medifund and, I think, in due course, means testing too, although that is the next question we would be talking about later. This whole financing model makes us unique from the rest of the world and is a great asset which we should preserve, and making sure that Medisave collectively, and individually, remains healthy, is one of the key objectives. Yes, with MediShield reform, deductibles go up, but I have been very careful when I set the deductible increases. I have long sessions with NTUC unionists, got their feedback and supported by statistical data.”
“Sir, our system of financing hospitalisation cost, comprising large Government subsidy and some co-payment by patients, supplemented by insurance and employer medical benefits, has served us well. It has helped us deliver a high standard of public hospital services which the vast majority of Singaporeans can afford. The system has evolved over the years. We constantly enhance it in the light of experience, so that it remains effective and relevant to our circumstances. The current reform of MediShield is part of that evolution. After 1st July, we will have a more robust system of leveraging on insurance to help ease the financial burden on Singaporeans. Medisave is a key piece in this healthcare financing system. When every Singaporean regularly saves a portion of his income in his Medisave Account, he will over time build up a considerable balance to pay for the hospitalisation needs of himself and his family. After 20 years, Singaporeans have collectively accumulated a total of $30 billion in their Medisave accounts. The average Medisave balance exceeds $10,000. This is not a small achievement. In another 20 years, when the scheme matures,ie, when every Singaporean would have started contributing to Medisave from the first day he starts working, we would collectively and individually build up sizeable savings for a rainy day. For the current MediShield reform, almost all patients would have enough Medisave to pay for the increased MediShield deductibles. For the small minority who are unable to afford their hospital bills, we have Medifund to provide the safety net. As Members are aware, the Government is doubling Medifund to $2 billion, with an immediate injection of $100 million.”
“As for non-working Singaporeans, like spouses, parents and children, we hope their working family members will insure for them, using their Medisave to pay for the premiums. We will use all opportunities to remind them to do so, for example, when couples register for marriage, or when parents register the birth of their babies. MEDISAVE AND MEDIFUND 3. Dr Tan Sze Wee asked the Minister for Health, in light of the recent announcement to revamp the MediShield system, (a) whether the Medisave and Medifund policies can also be revised in tandem; (b) will there be enough Medisave to cover the increase of deductibles for poorer Singaporeans; and, if not, (c) what will his Ministry do to ensure that the Medifund or Medisave schemes 'kick in' sooner to tide these groups of Singaporeans over.”
“Sir, MediShield and all the Medisave-approved private medical insurance schemes are individual insurance plans, with the insurance benefits tied to the individuals. For as long as premiums are paid, the policyholders will remain covered by the insurance. But I suppose Mdm Ho Geok Choo is probably referring to employees on corporate group medical insurance plans. Such plans are linked to the employer and not to the individual workers. Their medical insurance benefits will cease upon termination of employment, either through resignation, retirement or retrenchment. This is a real problem and for years, NTUC has been advocating a solution with the aim to ensure the portability of medical insurance. Sir, with the reform of MediShield, there is scope for unions, employers and insurers to build upon the MediShield to achieve the portability objective. For example, some employers may decide to help their employees subscribe to MediShield for the basic medical benefits, and top up any enhanced medical benefits with their corporate insurance plans. In this way, the employees will have their individual medical insurance plans, at least at the basic MediShield level, which can survive any sudden change in their employment status, for as long as premiums are paid. As MediShield premiums can be paid from Medisave, most Singaporeans should find continuing insurance coverage affordable, even if they should be temporarily out of work. That is why it is so important for all Singaporeans, including the self-employed, to contribute regularly to Medisave while they are young, healthy and economically active. It is really saving for a rainy day.”
“5 million were disbursed to the patients and their families; (b) $650,000 were spent on the welfare of Tan Tock Seng Hospital's healthcare workers and SARS patients during the SARS crisis; (c) $6 million were disbursed as Courage Awards to 5,500 healthcare workers who made commendable contributions in the fight against SARS; (d) $2 million were set aside as education grants for the children of SARS victims; (e) $3 million were set aside for bursary awards to help nurses and other health science professionals pursue degrees, masters and other postgraduate qualifications in the health sciences; (f) $3 million were granted to NUS and CDC to set up a visiting professorship/fellowship scheme to engage international experts in epidemiology and infectious disease control; (g) $16 million were set aside as an endowment to fund the annual Healthcare Humanity Awards, to recognise exemplary healthcare workers. WRITTEN ANSWERS TO QUESTIONS FALSE STATEMENTS BY DIRECTORS OF LISTED COMPANIES 1. Prof. Ivan Png Paak Liang asked the Senior Minister what actions have MAS and SGX taken against directors of listed companies who make false statements of their experience and educational qualifications as in the recent case of Panpac Media with regard to Chief Executive Officer Chen Xiaotao and the earlier case of Media Ring with regard to director Richard Li.”
“The Courage Fund was jointly set up by the two public health clusters (National Healthcare Group and SingHealth), Singapore Medical Association, Singapore Nurses' Association and Singapore Press Holdings during the SARS crisis. It struck a chord with Singaporeans and collected a total of $32 million: half from the public, half from the Government. It is administered by a Board of Trustees, chaired by Mr Michael Lim (of National Healthcare Group), with the President as the Patron-in-Chief. The trustees set three objectives for the Fund: (a) First, to provide relief to SARS victims and healthcare workers and their dependents, and any persons placed under quarantine orders as a result of SARS. (b) Second, to support any charitable purposes for the benefit of healthcare workers, especially in relation to the advancement of education; and (c) Finally, to support any charitable purposes for the benefit of the general Singapore community who may be affected by widespread infectious diseases. The Fund has granted or allocated all the $32 million collected for SARS relief and specific projects supporting these objectives. The breakdown is as follows: (a) $1.”
“We do review the maximum cut-off age every now and then. I think it used to be 70, then raised to 75 and, a few years ago, to 80. As life expectancy increases, we will take that into account. But in the market place, there are insurance policies which cover beyond 80. NTUC Income is one of them, and I would rather let the elderly people decide. At that age, they should be quite wise to decide for themselves whether they want to pay extra high premiums, because some of these products are not cheap. 3.00 pm”
“Sir, when designing the MediShield scheme, one key consideration is to ensure that the premiums will be affordable to the vast majority of Singaporeans. As benefits have to be funded by premiums, we have to manage the desire for maximum benefits against the need to keep premiums low. The final package that I announced last month is what I believe to be the most optimal, taking into account the need for such trade-offs. That is why I have to resist the demands for MediShield to kick in at lower deductibles, or to offer loyalty discounts to younger policyholders. Nevertheless, there may be some elderly Singaporeans who find the premiums unaffordable, especially if they had not contributed regularly to their Medisave Accounts in the past. To help these people, the Government has, from time to time, topped up the Medisave balances of Singaporeans, with higher amounts to the older citizens. We will continue to do so if the budget position allows. In fact, this is one of my budget wishes for this year. I hope I will be lucky!”
“The Health Promotion Board (HPB) is the lead agency for national health promotion, health education and disease prevention. It carries out health education and promotes healthy lifestyles to the general population. HPB conceptualises, develops and implements health promotion programmes that reach out to specific sectors of the population. Programmes for children include health education, myopia prevention, health screening and immunisation and provision of basic dental services in schools. Programmes for the adults and elderly include the National Healthy Lifestyle Programme, National Smoking Control Programme, Nutrition Programme, Workplace Health Promotion Programme, Mental Health Education Programme, Community Health Screening and Breast and Cervical Cancer Screening Programmes. Details of these programmes can be found at the HPB website (www.hpb.gov.sg). Many of these programmes are expanded to target specific high risk groups to improve their effectiveness and health outcomes. HPB cannot do this alone. It collaborates with many partners in the public, private and people sectors as well as grassroots organisations to effectively reach out to the target groups. HPB also works closely with the media to provide the public with the necessary information and skills to adopt healthy practices and be more aware of matters related to their health. ENHANCED SKILLS DEVELOPMENT FUND 4. Mdm Ho Geok Choo asked the Minister for Manpower (a) what is the rationale for the revision in the current Enhanced Skills Development Fund (SDF) funding; (b) what are the consequences, if any, arising from this revision; and (c) how best can continuous training for employability on the part of employers and employees be ensured.”
“We have a choice of model. We can have very tight criteria and then we leave the hospital or nursing home committees very little leeway. But my preferred approach is we keep the guidelines loose, and then we let maximum flexibility on the ground. That is my preferred arrangement. Of course, there are some simple rules. One, only citizens need apply. So, if you are a non-citizen, sorry, you are out. Two, it is very hard to judge who is poor and who is rich. If you earn $10,000 a month, please do not bother to apply. But whether you stay in a private property or a 3-room HDB flat, that depends. In my constituency - I just did a house-to-house visit - we have quite a number of old walk-up apartments. Look at their conditions - furnishing and so on - I think many of my constituents in 3-room flats fare much better. So, obviously, deciding on who deserves help and who does not is quite an art. It can never be strictly mathematical. And I think the best is to make sure we have good sensible people who are able to decide on each application both with the heart as well as the head. CENTRALISATION OF PODIATRY SERVICES FOR DIABETICS (Impact on the elderly) 10. Mdm Halimah Yacob asked the Minister for Health whether centralising the provision of podiatry services for diabetics under one centre will affect convenience, accessibility and affordability for the elderly who frequently use the services.”
“Sir, the trend is indeed a rising one, because, firstly, the population is expanding and, secondly, aging. So, the number of admissions goes up and the number of applicants who require assistance also goes up. As to whether we have dipped into reserve fund, we have not. It is an endowment fund. So the Committees have been quite prudent. But we do not really put an upper bound to the number of applications. It is all subject to the market. And, so far, I am quite satisfied. I look at the data periodically. The applicants who applied are not 100% approved. I would be troubled if every application is simply approved. Then it becomes like a cash grant. There have been some rejects, but not that many. And I think the Medifund Committees have been quite responsible. As for growth of the Medifund itself, that depends on the economic growth. As and when there is strong economic growth, my Ministry will certainly try to make a bid for an increase in the Medifund. And I succeeded this year. So there is an increase of 10%, by $100 million, to now $1 billion.”
“Sir, Medifund is to help needy Singaporeans pay for their medical care. It is an important component of our medical safety net. The main operating principle is to ensure that financial assistance goes to the deserving cases. Patients in need are assessed locally at the hospitals or nursing homes by the respective Medifund Committees. These committees comprise experienced individuals drawn from the community. While there are general guidelines, each patient is assessed on his own merit. Typically, the Medifund Committee will take into account factors such as the patient's financial background, the size of the medical bill, and whether the treatment is likely to be prolonged. Each committee has considerable leeway to decide if a patient warrants the assistance, and, if so, the extent of the assistance. My Ministry consults periodically with the Medifund Committees, and will adjust the guidelines when necessary. Whether the proposed MediShield reform will require a revision of the Medifund guidelines will depend on the nature of the MediShield reform. We will only know this later when the reform is finalised.”
“I thank Dr Neo for her commitment to healthcare issues and her continuing support of my Ministry’s work. We will consider all her inputs and and her points made just now. Time does not permit me to respond to them, and we will continue this discussion elsewhere. In fact, I have started discussions with the labour unions and with the insurance industry and I will continue to do so over the next few months. Let us strive to tap the benefits of medical insurance, but let us avoid the adverse effects that we see in countries like in the United States. Let us have the roses but, hopefully, we can avoid the thorns. ADJOURNMENT Resolved, "That Parliament do now adjourn." Adjourned accordingly at Twenty-Six Minutes past Six o'clock pm to a date to be fixed. WRITTEN ANSWER TO QUESTION FOR ORAL ANSWER NOT ANSWERED BY 3.00 PM DESIGN OF NEW MRT STATIONS (Facilities for disabled and elderly) 18. Ms Indranee Rajah asked the Minister for Transport whether the designs for all new MRT stations, including those to be built along the Circle Line, will include in-built effective facilities for the disabled and elderly.”
“It is against this backdrop thatI began this inquiry into the role of medical insurance. Dr Neo has argued on many occasions in this House for an expanded role. I agree with her. But when we broaden the role of medical insurance, let us be aware of the perverse effects. Medical insurance is not all roses. There are thorns here and there. The abuses of over-consumption and over-servicing are real and prevalent, and that is why my recommendation isthat we should never go for comprehensive medical insurance; in other words, insurance from first dollar up. The Government will continue to subsidise medical treatments heavily in Classes B2 and C. So, for subsidised patients,this will be the first source of funding and, in fact, the largest source of funding. After Government subsidy, the balance of the bill should be paid with Medisave and out-of-pocket. For most hospital bills, there would be enough in Medisave. So, not to worry. But there are some very large hospital bills when medical insurance must kick in after a certain threshold in bill size has been crossed. This threshold is what the insurance industry calls a "deductible". To minimise the abuse of medical insurance and to keep premiums affordable, the deductible should not be too low. When MediShield was first introduced, the deductible at $1,000 then was an appropriate threshold. But as the deductible has not been adjusted over the last 12 years, the MediShield threshold is now too low relative to the current medical bill sizes. We should therefore raise the threshold to reflect current costs, and return MediShield to its original purpose of only looking after the very large bills but look after them adequately.”
“And as hospitals are largely reimbursed based on procedures and volumes, they have every incentive to service the patients to the hilt. This is particularly so since any under servicing which leads to mis-diagnosis might lead to a legal suit for medical negligence. So, as a result, the average American spends nearly US$5,000 in medical resources each year, more than the combined total spent on cars, TVs and computers. Consequently, insurance premiums are so high that over 40 million Americans are reportedly priced out and suffer the risk of having no insurance coverage and is now one of the issues in the American Presidential election. In Singapore, we took a different path. Rather than relying on one single source of funding for healthcare, we tap on multiple sources - Government subsidy, personal savings in cash, personal savings in Medisave, insurance, employer medical benefits, charity dollars. In this way, we do not put all our eggs in one basket and we reduce the adverse impact, if any, of a particular source of funding. Likewise, in the provision of healthcare, we tap on multiple operators - public hospitals, private hospitals, community hospitals run by voluntary welfare organisations, and each one offering multiple levels of care - Class A,B1, B2, C wards. So Singaporeans have a range of services to choose from, depending on their means. But at the most basic level, we will ensure that our ClassB2 and Class C wards are of good standard and affordable. Affordable does not mean cheap. Affordable means leveraging on Medisave and MediShield, and ensuring that they are generally adequate to cover medical expenses, and those who run out of Medisave and MediShield cover will get support from Medifund as a last resort.”
“Mr Deputy Speaker, Sir, I thank Dr Lily Neo for her adjournment motion on medical insurance. Her deep concern for Singaporeans' ability to pay for good medical treatment is well known. She has, in this House, expressed her concern on various occasions. And just earlier today, we had a fairly good discussionabout it.I too share Dr Neo's deep concern. How I wish it were possible to provide good medical careand to do it cheaply. But, alas, we all know that this is not possible. I have seen Class C wards in a neighbouring country charging patients only a few dollars a day. But at what standard of care? On the other hand, I have seen in the United States a very high standard of medical care, but also very expensive. Just last month, one of my hospital colleagues sent me an email about her recent experience in a US hospital in Illinois. She was there on a study trip when she had a bout of abdominal pain and was admitted. The hospital kept her under observation forfive hours, gave her three bags of intravenous saline, a painkiller injection and two CAT scans to exclude appendicitis and cystitis. Her total bill was US$5,600 for five hours of observation, and that is almostS$10,000. Her two CAT scans cost her US$3,700, about S$6,400. Whereas our Class A rate in Singapore for the same scans would only be S$850, eight times cheaper. Knowing the business, her first instinct was to question the hospital on the outrageous bill size. Then she decided not to bother as she had bought a medical insurance policy upon arrival in the United States, andthe whole bill would be settled by the insurer. This is the perverse outcome of a system that is fuelled by medical insurance. Having paid for the premium, you no longer worry about how big the hospital bills are.”
“Mr Speaker, Sir, the purpose of Medisave is to enable Singaporeans to help pay for their hospitalisation expenses, especially at old age. In order to keep the monthly contributions low, withdrawals from Medisave are capped at Class B2 rates. Hospitals and doctors are accredited, if their bills are to be eligible for Medisave withdrawals. My Ministry regularly audits them to ensure clinical standards are met and that the Medisave claims are in order. As it will not be practical to subject foreign hospitals and doctors to our Medisave regulations, we do not allow Medisave withdrawals for elective hospitalisation treatment overseas. However, on a case by case basis, we have allowed Medisave to be used for overseas hospitalisation treatment when the treatment is an emergency and any delay may cause the condition to worsen. CENTRAL PROVIDENT FUND (Topping-up of parents' accounts) 9. Mr Low Thia Khiang asked the Minister for Manpower whether he will consider allowing Central Provident Fund members who have healthy CPF savings to top-up the CPF accounts of their parents who have exhausted their Minimum Sum savings.”
“Mr Speaker, Sir, I always keep my options open. So, I consider all options. But let me just be candid upfront. "羊 毛 出 在 羊 身 上 (Yang mao chu zai yang shen shang)" - the English translation is "there is no free lunch". If you want more benefits, your premiums will also be larger. If you want less benefits, your premiums will be less. So, if you want to load your insurance policy with unemployment benefits because you are out of job so you need income support, then you are talking about a differentkettle of fish now. Should we have unemployment benefits nation-wide available? That is something I am sure my colleague, Dr Ng Eng Hen, would be most happy to engage with you. I stay focused on healthcare. MEDISAVE (Use for hospitalisation treatment overseas) 8. Mr Zainudin Nordin asked the Minister for Health in line with the Government’s call to Singaporeans to look at the region within a six-hour flight radius as their hinterland where they should be prepared to work, will the Minister consider allowing (a) Singaporeans to use their Medisave to pay for medical expenses should they fall ill while working in the said region; and (b) Medisave to be used by an account holder to enjoy the savings from seeking treatment from an internationally recognised medical specialist overseas.”
“I think a lot depends on whatyou mean by "opting out". If you have opted out of MediShield but into one of the 15 MediShield-like insurance, eg, IncomeShield, etc, I do not consider you as having opted out. You are still in the system. My worry is the small percentage of Singaporeans who completely opt out, who are not in any kind of scheme, then it is a bit troublesome, because I need to know what is your motivation for opting out. Again, using an analogy, it is like house fire insurance policies. All of us with properties buy some form of fire insurance. Insurers are most happy to insure you, but not while your house is actually burning. It cannot be that onlywhen you are sick and down thatyou start opting in. Then it is not fair to those who have not opted out,becauseyou suddenlydiscover you have cancer andthen onlystart subscribing to MediShield. We can take him but, surely, the premiums will need to be adjusted, to be fair to the majority who have stayed loyal to the scheme.”
“Self-employed,taxi drivers, hawkers, etc, please contribute regularly while you are young and healthy. Step 3: Support me in my MediShield reform.”
“Step No. 2, yes, sometimes we do fall sick,make sure you have a good family physician who will adviseyou on how best to look after your sickness. As primary healthcare in Singapore ismodest and inexpensive,pay for it out-of-pocket. Step No. 3,bad luck, you are a little bit sicker, and you need to be hospitalised. Again, your family physician will be able to advise youtogo to thisor that hospital, see that particular doctor orspecialist.Most of the time, with heavy subsidy in Class B2/C, the hospital bills are very modest, a few hundred dollars, or couple of thousand dollars. With Medisave, there is no problem paying for it. If you are young and have not started building up your Medisave yet, Medisave gives you an overdraft. You can pay for it later when you work. So, Medisave is enough to cover most hospitalisation bills. Step No. 4, bad luck cases,when your bills are very large, that is when MediShieldought to come in, and that is why I have been focusing my mind on today's lack of effectiveness of MediShield, not by design, but because of lack of adjustments over the last 14 years. But better late than never.Let us reform MediShield and make sure it serves its original purpose well. Step No. 5,really bad luck cases, ie, despite Medisave, MediShield, the bill is still too huge to cope. Do not worry, Medifund is thereto take care of this very small number of very unfortunate Singaporeans who are very sick. Medisave is completely wiped out, but Medifund is there to protect them. With these five steps, Singaporeans can have peace of mind. But I need Singaporeans to do three things: Step 1: Healthy lifestyle. Step 2: Contribute regularly to Medisave. Employees have no problem.”
“Because if you misapply it and try to cover all and sundry, you willface great difficulties like in the UnitedStates, and I am not making all these up. It is true. There are abusesin the American insurance system likeover-consumption, in other words, frivolous claims. Having boughtan insurance, the insurer will pay and youdo not care. Any slightest sickness,you walk into the hospital, demand a bed, or whatever, because it does not costyou anything. Insurance will pay for it. Moreover,you get a medical certificate, andyou do not have to work. So this is one aspect of abuse. The other abuse is at the other end - over-servicing by the hospitals. It is what I call the "motor repair shop syndrome". You all know this. When you seea cargoing intoa repair shop, the first thinghe asks you is, "Are you insured?" If you are insured, you will likely see therepair shop put in anew bumper, repaint the whole car, and so on, because somebody is paying for it, and the consumer is not complaining. He gets thecar back almost brand new andrepainted. So this problem of over-consumption and over-servicing is real. Let usnot brush this aside. So, yes, I agree with Dr Lily Neo that we should begin to expand the role of MediShield, but let us do it with our eyes open and try to see how best to do it. My prescription for Singaporeans about high healthcare costsis this: take a five-step approach. Step No. 1, avoid falling sick. How? Healthy lifestyle. So this Sunday, Prime Minister Lee is going to launch our National Healthy Lifestyle in a big way in Sentosa.This year, we are scaling it up, going extensively beyond the Ministry of Health to all public and private sectors, all Ministries, and I am glad the GPC, led by Dr Lily Neo, will also be there to be role models of healthy lifestyle.”
“Mr Speaker,let me simplify the argument this way. What are we trying to do? Insurance is to really protect against financial disaster. Most of us buy life insurance because we worry that we may have a premature death. Ifyou buy insurance,at leastthe family will be taken care of, and likewise with medical insurance. So we buy medical insurance, not hoping to fall sick, but just in casewe are very sick, the bill is very large, at least financiallywe do not have this burden to worry about.Therefore, medical insurance can take various forms.We can look after all and sundry - large bills, small bills, outpatient, inpatient - and this is what we call in our tradecomprehensive medical insurance. And many countries do that. America is a typical example. Or we decide that, no,just focus on what we are most worried about. And if you ask me, I thinkwhatwe are most worried aboutare very large bills.With Medisave, in fact, for most bills, Medisave can cover. So if your bill is a few hundred dollars, or a couple of thousanddollars, do not worry,so long as you regularly contribute to Medisave. The fact is thatyou do not fall sickevery year and need to be hospitalised every year. In fact, statistically, every year, only 10% of Singaporeans need to be hospitalised. So, on average, most ofus, over 10 years, we are hospitalised once. I am 52. I was hospitalised twice. So I am belowthe average, meaning that I am healthier, and I am sure most of you are like me too. But yes, there are people who are more sickly for various reasons,and therefore hospitalisation frequency may be higher. So the value of risk-pooling, which I totally agree with Dr Lily Neo. But itshouldbe appliedproperly.”
“Not surprisingly, instead of competing to render better benefits at lower premiums, private insurers find it more profitable to pick and choose and draw away the healthy lives from the MediShield pool into their smaller pools. This is a phenomenon known as "cherry-picking" in the insurance industry. This must ultimately lead to the demise of MediShield, as its risk-pool becomes progressively older and sicker. MediShield has not yet reached this critical stage. But we must remove this cherry-picking and reverse the fragmentation of the MediShield risk-pool as soon as possible. Over the next few months, my Ministry will conduct extensive discussions with the public, the insurers, the unions, the employers and all interested parties, to see how best to reform MediShield for the benefit of the majority.”
“Since its introduction 14 years ago, MediShield has largely remained unchanged. As a result, when a patient has a catastrophic illness and, let us say, incursa class C hospitalisation cost of $100,000, his bill, after subsidy, is about $20,000. As a policyholder of MediShield, he expectsMediShieldto foot the bulk of this bill. But MediShield today only covers about 40%, or $8,000. Many such class C patients do not have $12,000 in Medisave to settle their share of the bill.Hence, there is this public anxiety about large hospital bills. Part of the reason for this reduced effectiveness of MediShield is that its deductible level has not been adjusted. So instead of covering only the very large bills and covering them adequately, MediShield today covers too many bills, big and small, and covers them poorly. That is why we must return MediShield to its original purpose of only looking after very large hospital billsbut cover themadequately. To fund the additional benefits, premiums would have to be raised, especially since they have not been adjusted for over 12 years. Sixth, while maximising the effectiveness of MediShield, we must also try to keep its premiums as low as possible. Ideally, MediShield should be compulsory for all Singaporeans. This will then ensure maximum participation with minimum distribution cost. Unfortunately, we have inadvertently compromised this principle by having private medical insurers compete with MediShield and, in so doing,fragment the risk-pool. Instead of one large MediShield risk-pool, we have today 15 smaller risk-pools, with correspondingly higher premiums than necessary.”
“This is of course the benefit of "risk-pooling", noted by Dr Lily Neo. Second, national medical insurance plans are however not without problems. Experience elsewhere shows huge problems of over-consumption by patients and over-servicing by providers. And this is what we have referred to as the "buffet syndrome" of medical insurance. With the premiums being paid for, the financial burden has shifted to the insurer, resulting in both patients and hospitals losing any incentive to be prudent. Third, the challenge is to maximise the benefits of risk-pooling while minimising the buffet syndrome. And one effective way is to exclude small payments from insurance coverage. Hence, outpatient treatment should be self-insured, paid out-of-pocket. Hospitalisation for most illnesses should also be self-insured and paid largely out of Medisave. We have had 20 years now of Medisave and most Medisave accounts are sufficient to cover such common hospitalisations, especially in class B2 and C where my Ministry will continue to subsidise heavily, up to 80% of the cost. Fourth, the benefits of risk-pooling are greatest for coverage against catastrophic illnesses, like cancer, organ failure, which require prolonged hospitalisation and intensive treatment. These hospital bills, despite heavy B2/C subsidy, would be unaffordable to many families. Fortunately, the probability of falling very sick is low. And this is where a catastrophic medical insurance plan like MediShield comes in very useful. That is why we allow Medisave to be used to buy catastrophic medical insurance plans. Fifth, MediShield has, however, been losing its effectiveness as a catastrophic insurance plan. All medical insurance plans have to be periodically reviewed and their parameters like premiums and benefits adjusted.”