Rethinking healthcare financing in Singapore: Part 2

Leong Yan Hoi, Tan Lip Hong and Toh Beng Chye

Part 1 of this article, we made suggestions for establishing a system where every single citizen is covered by a basic health care policy into which the Government and the people contribute, and which must remain genuinely affordable.

To achieve this we further suggest a single-payer universal health care system in which the Government manages a central healthcare fund.

The annual government healthcare expenditure is currently $4 billion, or about 3.5% of GDP. Based on a total annual health care spending of $12 billion in 2009, the Government’s portion is only one-quarter.

This amount should be increased to $10 billion annually and be paid into the central healthcare fund. Singaporeans will contribute $2 billion (or $500 per person) yearly, making the government to private ratio of healthcare spending 83:17.

This fund will be used to operate both public and private health care institutions as well as pay for all health care services.

Singaporeans’ contributions will be taken from a $500 flat tax that will be deducted annually from every resident’s CPF account. The Government will make up the difference if the CPF funds are inadequate to pay the tax in full. For those without CPF (students, housewives, part-time workers, pensioners) and who cannot afford to pay the tax, the Government will pay the tax for them in full.

In addition, we must legislate compulsory nationwide basic health, accident and pregnancy (for women) coverage for all citizens and permanent residents residing here for more than 3 months. No one may be rejected or excluded from this basic plan on the basis of age, gender, state of health. The usual exclusion clauses will apply: non-essential surgery, dental, alternative medicine, etc.

Private insurance and riders may be purchased from private insurers to cover for conditions not covered under the basic plan (e.g. dental care) and for a higher level of service (e.g. private ward hospitalization).

A table of standardized tariffs will be drawn up for all consultation charges, diagnostics and therapeutics, and ward charges. These charges will be reviewed on a regular basis with consultation with the public. The current means testing for medical subsidies will be abolished.

We propose that a co-payment fee of 10% be charged for medical services at the point of utilization to discourage over-consumption, up to a cap of $3,000 per year. This co-payment fee will be paid out-of-pocket by the healthcare user or by private insurance.

Where health care services are provided by private hospitals, the medical bill will be paid for by the plan at the rates specified for public hospitals. The difference will be topped up out-of-pocket or by private insurance.

Such measures will make redundant the Medisave and MediShield schemes which do not aid in the running of an efficient and economical healthcare system.

We continue to hear of Singaporeans being unable to afford treatment especially when their health concerns are major and require long-term assistance. For a country that boasts of such high GDP, such a situation is unacceptable. Much of the problem that exists stem from the fact that the current system is very much a profit-making scheme.

These ideas that we have put forth will help make our system more transparent, and return medical care in Singapore back to one that is health-centered rather than profit-oriented.

Drs Leong Yan Hoi, Tan Lip Hong and Toh Beng Chye are medical doctors. They are also members of the SDP’s Healthcare Advisory Panel.

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