Thursday, May 5, 2011

Healthcare: the SDP solution



A closer examination of Singapore's health-care system reveals gaping holes as far as financing goes. It is widely acknowledged that left unregulated, national health-care expenditure can escalate beyond a state's ability to fund it. With a subject as delicate as the health of loved ones, there is always the danger of medical costs becoming a secondary consideration in the pursuit of treatments, thereby saddling the state with an unworkable burden. Certainly, a judicious combination of public and private funding is essential.

Under the PAP-engineered system, however, health care costs have become a death-trap for many. To understand how this is possible, we must examine the three schemes of medical financing: Medisave, Medishield, and Medifund.

Medisave. Started in 1984, this scheme requires Singaporeans to contribute to an account managed by the government. For employees, this is partially taken from one's CPF contributions on a monthly basis until it reaches a ceiling. Presently, when one reaches the age of 55, he needs to maintain a minimum of S$28,000 in his account. The self-employed need to pay into the account. Contributors can then draw upon the savings as and when needed.

Medishield. This is effectively an insurance plan that Singaporeans have to opt out of if they don't want to be so covered. The premiums can be paid for using one's Medisave funds. Medishield is designed to help cover medical expenses arising from catastrophic or chronic illness.

Medifund. This pool of funds is a state endowment reserved for covering the costs of health-care for the destitute poor.

The SDP's Solutions

1. Increase cost subsidies, not market subsidies.

Given such a comprehensive strategy, one would assume that patients' health-care costs are well taken care of. However, as with many other things conjured up by the PAP the devil is in the details. A whole host of stipulations prevent patients from fully utilizing their savings. With a few exceptions, out-patient visits to the family doctor cannot be paid for by Medisave. And when one is hospitalized, the funds can only be used for partial payment of the bill as is payment for certain chronic illnesses (diabetes, stroke, hypertension, etc.)

Medishield covers only a few treatment regiments such as kidney dialysis, cancer radio- and chemotherapy, and drugs for organ transplants while excluding a whole host of other illnesses. It must be remembered that if one does not actively seek to opt out of the scheme, the government automatically deducts funds from one's CPF to pay for the premiums.

In 2002, less than 200,000 poor Singaporeans were helped by the Medifund which paid out S$26.62 million that year, or a measly S$149 per recipient.

Since 1970, the government's share of the country's total health expenditure has been steadily shrinking, and the average expenditure of households has increased dramatically. As a proportion of the GDP, public-health expenditure has remained relatively unchanged, at about 1 percent, in the last two decades or so. The pattern is in line with the PAP's aim of achieving "cost recovery and lower subsidies" in the health sector to reduce inefficiency and unnecessary medical demand. Academic Mukul Asher noted, however, that efficiency considerations:
need to be balanced with equity and social adequacy considerations. This is particularly important in Singapore due to the rapid rise in health care costs and the rapid rate of aging of the population. Moreover, increased cost recovery policy, in conjunction with the commercialisation of the health care industry, could result in other types of inefficiencies…[and] also lead to problems of access and to excessive and unhealthy competition which in turn could make it more difficult to control costs.

The Singapore Democrats have long called for the medical costs to be made affordable to Singaporeans. It must repeated that our people are our biggest asset and our health is the most valuable aspect of life.

Singaporeans contribute to the nation's economic well-being and when we fall ill, the state must in return discharge its responsibility of picking up a major portion of healthcare costs.
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With our reserves bursting at the seams and taken to foreign lands for "investment", the subject of unaffordable healthcare cost must continue to take centre stage in Singapore's social-political scene.

For a start, state expenditure should be tripled. When more state resources are channeled to healthcare, the people will enjoy a lifestyle that is more secure and less fraught with stress and misery.

2. Stop commercialisation of healthcare.

In 2000, it was reported that Singaporeans have resorted to buying their medications from neighbouring Malaysia because of the high prices of drugs in Singapore. A pharmacist in Johor Baru reported that as many as 95 percent of his clients are Singaporeans. Some are even travelling to Malacca for simple surgeries, such as appendectomies, and to fill prescriptions for chronic illnesses such as diabetes and hypertension.

Treatment and consultation fees in Singapore have also become prohibitively high, leading a medical practitioner to call on the government to "put an end to the commercialisation of medical practice in Singapore."

Rising health care costs remain one of the most serious concerns among Singaporeans, especially among senior citizens. A survey showed that more than half of Singaporeans felt that health-care costs remained unaffordable. Nearly 70 percent responded that it was too expensive to consult specialist doctors in government hospitals, prompting an observer to note that the survey "confirmed a long-known sentiment among ordinary Singaporeans that health-care costs here are simply too high for the average family to cope with.

While the free-market system must continue to be nurtured, the healthcare system cannot be left to the unbridled devices of profit-making companies. Healthcare cannot and must not be turned into a commodity where the notion of the highest bidder reigns supreme. The Singapore Democrats reiterates its position that medical costs must remain financially within easy reach of all Singaporeans.


The notion of co-payment between the healthcare user and the state is not a bad one. Patients and the healthcare provider, that is the state, must assume responsibility for the cost of treatment. At the moment, however, the Government has pushed the bulk of the financing on to the people. This must change.

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