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Tan Lip Hong
I refer to the article titled Double standards when criticising PM’s MediShield Life policy by Mr Albert Lim published in Temasek Review Emeritus where he said that bloggers and readers practised double standards when they criticised the Government’s healthcare proposals but not the SDP’s.
Referring to the concept of national health insurance schemes, Mr Lim commented that:
It is plainly wrong to force people to buy or pay for health insurance or pay for other people’s healthcare, especially if the other is financially irresponsible, could not be bothered to look after his/her health or, abuses free or heavily subsidised healthcare by seeing the doctor just to “chao geng”, as what is happening in Scandinavian countries.
Mr Lim may note that the purpose of an insurance scheme is not to ‘pay for other people’s healthcare’, but to insure oneself against the uncertainty and risk of having to pay for a catastrophic illness that can easily bankrupt a person.
While it is true that abuses can happen in national health insurance schemes, it is also true that these abuses can be better controlled in a well-designed and well-run scheme, compared to the existing non-nationalised fee-for-service schemes.
Profit-based medical practice, especially when covered by insurance or the government, makes medical care so expensive that it cripples the system. Information asymmetry is a major reason for distortion of this practice. The doctor, knowing that some faceless insurance company will pay his bill, regards as “reasonable” whatever sum he can get away with.
Under an insurance scheme, medical practitioners may increase prices as out-of-pocket payments drop. To counter this, SMA Guideline on fees and prices must be re-issued with vigilant policing. Prices in public hospitals will also be fixed, and thereafter linked to inflation level and median wage.
The ‘Buffet Syndrome’
Patients often demand more detailed medical attention, sometimes including unnecessary tests and medications, if their healthcare is insured or prepaid. These increased patient demands will raise the cost of healthcare.
A few measures will be put in place, under the SDP plan to prevent such abuse:
The patient co-pays for the tests and treatments. This will discourage unnecessary demand.
Acute self-limiting illnesses (common cold or food-poisoning) where the patient feels physically unwell and tends to demand more treatment will not be compensated to the same extent as chronic non-symptomatic illnesses (hypertension or diabetes) where there is greater risk of non-compliance with treatment or medications.
All consultations and prescriptions will be logged into the MOH website to identify any abuse of the system e.g. cough mixture addict who doctor shops for cough mixtures or patients who seek third or fourth opinions for the same condition.
The Government will bid for the more expensive drugs to bring cost down, and provide the drug at bid-price to all healthcare sectors, not just to polyclinics and re-structured hospitals, but to all GPs and private specialists on the scheme. With the bargaining power available, drug cost can be reduced tremendously.
Practicing cost-effective medicine
Aggressive cost-containment measures will be established to control prescribing practices, interventional medicine and overly defensive medical practices.
In order to ensure that physicians don’t over-treat or overcharge, evidence-based clinical practice guidelines will be refined and reinforced. Treatment norms should be standardized and formalised in tariff tables which will be worked out by an independent panel of doctors and in consultation with the public.
Additional investment in health education, preventive healthcare and early detection will also reduce overall costs. Screening tests that have been economically evaluated to have a high cost-benefit ratio will be encouraged.
Audit and Compliance
Under the SDP proposal, MOH will conduct annual random audits, including field audits where necessary, of invoices in both the public and private sectors. Action will be taken against practitioners if they repeatedly over treat and overcharge patients.
Referring to the SDP Healthcare Plan premium, Mr Lim also stated:
And the “contribution” would have taken up at least 1/6 of the income of workers earning entry level salary, and at least 30% of the income of blue collared and some part time workers, who usually earn salaries between $800 and $1000. Lastly, there is no opting out, at least for the “contribution” aspect in the SDP’s healthcare plan.
This is inaccurate. Under the SDP plan, families whose incomes fall below $2,000 a month do not have to contribute to the scheme. Families with incomes more than $2,000 per month pay between $50 and $150 per month depending on the income level. The premium under the SDP Healthcare Plan will not exceed 4% of a family’s income.
Moreover, in our plan, Medisave contribution will be abolished, as everyone will be insured comprehensively, negating the need for huge one-time bills.
Although the details have not been worked out, the biggest clue that MediShield Life will not be a truly comprehensive national health insurance scheme is the fact that PM Lee Hsien Loong has announced that ‘contributions to Medisave will have to increase’.
Government vs SDP Plan
Graphically, the Government’s proposed scheme will look something like this:
Will this be the only ‘national insurance scheme’ in the world where the ‘co-payment’ component is 10 times the ‘insurance’ component? A true comprehensive health insurance scheme, like the SDP’s, should be the opposite, looking something like this:
Under the SDP plan, patients co-pay 10% of hospital bills and the government pays 90%.
Limitations of MediShield Life
It is also obvious that the Community Health Assistance Scheme (CHAS) will continue to operate where patients can receive subsidies for outpatient medical treatments for chronic and/or acute conditions at participating CHAS clinics. CHAS subsidies are, however, subject to a cap of $480 per year. This sum is totally inadequate for proper treatment of chronic conditions like hyperlipidaemia and diabetes.
This means that MediShield Life will not cover outpatient treatment for such illnesses where patients still have to pay out-of-pocket amounts beyond the $480-subsidy.
Also, allowing Medisave to be used for more outpatient treatment and health screening will not solve our healthcare financing problems, as this would only result in even less money left over in our Medisave account when a catastrophic illness strikes.
A truly comprehensive health insurance scheme would necessitate a larger ‘pooled’ contribution to the national healthcare insurance fund in place of contributions to a large ‘unpooled’ individual savings fund.
Until this imbalance is addressed, there can be no peace of mind for Singaporeans where healthcare costs are concerned.
To read the full paper of The SDP National Healthcare Plan: Caring For All Singaporeans, please click here.
Dr Tan Lip Hong is a member of SDP’s Healthcare Advisory Panel.