Impact of population increase on our healthcare system

January 22, 2014
Singapore Democrats

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Ansari Abudeen & Leong Yan Hoi

In January 2013, the government published a population white paper, A Sustainable Population for a Dynamic Singapore, detailing a plan to raise the country’s population from 5.3 million to 6.9 million by 2030; the non-resident population is expected to grow from the current 2 million to 2.7 million, or just under 40% of the total population.

Amid the ensuing impassioned public debates and demonstrations on the social, economic and political impact of the proposed plan, there are a few pertinent points on the healthcare front that remain to be addressed by the government: what are the implications of a rapidly expanding population for our already over-burdened healthcare system, both in terms of financing and infrastructure? And in particular, what is the impact of large numbers of foreigners on our healthcare system?

The SDP has proposed replacing the current inadequate 3M system with a single-payer healthcare insurance system (The SDP National Healthcare Plan) that provides affordable and universal healthcare for all Singaporean citizens and permanent residents. Foreign residents are at present not compelled to join the plan; nevertheless it is anticipated that a fast-growing non-resident population would place increasing strain on our healthcare resources in the future.

Population growth increases healthcare costs through increased healthcare utilisation and the need for healthcare expansion. At present, foreign residents contribute to the 3Ms, which defray only utilisation but not expansion costs.  Although they also pay income taxes (which help finance healthcare infrastructure) and are not entitled to subsidies, it can be argued that at the point of entry into our job market, they are going to enjoy healthcare services for which Singaporeans have earlier paid.

Moreover, with the entry of a large number of foreigners, there will be a need to increase healthcare expenditure to meet the demand for more physicians, allied health professionals and healthcare facilities.

Initially there will be a higher demand for primary healthcare, emergency room services, and obstetric and paediatric care.

In about 20 years, the huge inflow of foreigners will shift the healthcare demand to tertiary care and intermediate and long-term care services, such as community and chronic sick hospitals, hospices, and home nursing. Healthcare expenditure will rise exponentially even as the tax base shrinks proportionally.

As it stands, the government is already investing $1 billion in two new hospitals, Ng Teng Fong General Hospital and Jurong Community Hospital, to be completed in 2014 and 2015 respectively.[1]

As it is only fair that foreign residents should pay for the privilege of joining a healthcare system already established and maintained by Singaporean taxpayers’ money, as well as bear a major portion of the cost of healthcare expansion, we could make it a requirement for a foreigner entering our healthcare system to pay a:

1.  Healthcare entry levy, a one-time fee or paid in instalments; and a

2.  Healthcare expansion levy, charged on a per-visit basis.

These principles are already worked into the healthcare systems of many OECD nations, where foreigners have to pay higher medical insurance premiums as well as higher co-payment fees per visit.

An independent review panel should be formed to review existing levels of healthcare capacity, quantify the estimated increase in capacity needed to cope with increased population targets, and recommend target milestones on how capacity needs to be expanded progressively over time. This evidence-based policy approach will avoid the PAP’s mistake of leaving healthcare planning to politicians and Ministry of Health administrators who have failed to adequately restructure the healthcare system in tandem with the liberalisation of immigration.

At the same time, an independent epidemiology and public health expert panel should be convened to study the demand-side impact issues: estimate how disease burden will change over the longer term with the dramatic population increase, and recommend the shifts required in health promotion and disease prevention and management.

No time should be lost in implementing these policies if we are to prevent a catastrophic breakdown in the healthcare system in a decade or two, a foretaste of which was seen in the recent reported bed crunch in our hospitals. [2]

Insofar as Singapore is facing the dire consequences of a declining birth rate, it is telling that the population paper makes no mention of how the government intends to raise our total fertility rate (TFR) of 1.2 – one of the developed world’s lowest – to replacement level.

One cannot over-emphasise the perils of expanding the population through immigration without recourse to increasing fertility rate. As the population ages, large numbers of  immigrants will eventually cause the population pyramid to widen at the top and narrow at the base, resulting in an ageing crisis where there are insufficient tax revenues to meet the health needs of the elderly.

Unless the population grows organically through raising the TFR, and adequate evidence-based healthcare policies are implemented to cope with the population increase, the combination in an ageing population of burgeoning healthcare cost and shrinking tax base is a prime recipe for bankrupting the nation’s healthcare coffers.

Read Also: Fail to understand burden of diseases, fail to understand healthcare reform, Part 1, Part 2, Part 3


Ansari Abudeen is a Singaporean health economist based in the University of New South Wales. His policy research and consultancy work focuses largely on evaluation of services, programmes and government measures in Australia, Thailand, Malaysia and India. He contributed to this article in an independent consultative capacity, with the hope that it will aid in improving and maturing healthcare policy dialogue in Singapore and promote greater priority for evidence-based policies.


Dr

Leong Yan Hoi
is a general practitioner and a member of the SDP’s Healthcare Advisory Panel.


[1] Ramachandani, Nisha. “Government investing $1 billion in two new hospitals in Jurong.” Business Times 10 Nov 2010. Retrieved 20 Jan 2014. http://www.juronghealth.com.sg/uploadedImages/News/Media_Coverage/20101110-BT-SingaporeNews-11-24×25.jpg

 

[2] Khalik, Salma. “Hospitals facing severe bed crunch take unusual steps.” Straits Times 8 Jan 2014. Retrieved 20 Jan 2014. http://www.straitstimes.com/breaking-news/singapore/story/hospitals-facing-severe-bed-crunch-take-unusual-steps-20140108