MOH1.            Healthcare systems all over the world struggle with rising healthcare costs.  In Singapore, the old adage “it is better to die than to fall sick” resonates with many Singaporeans, especially those from the lower and middle income families.  This leaves many Singaporeans worried and apprehensive about their current and future medical needs.


2.            This report is prepared by the Government Parliamentary Committee (GPC) for Health.  It aims to highlight the current healthcare financing system in Singapore and proposes various recommendations to improve healthcare affordability for Singaporeans.  It approaches the issue from a person-centric perspective.



3.            Minister for Health had highlighted the Healthcare 2020 vision in the MOH 2012 Committee of Supply (COS) speech, and promised to look into the affordability of healthcare for Singaporeans.  During this year’s COS, Minister for Health announced that the Ministry of Health would be undertaking a review of Singapore’s healthcare financing system.

4.            At the same time, there is also a growing concern among Singaporeans over rising healthcare costs, including feedback received through “Our Singapore Conversation” . It is within such context that the GPC for Health has embarked on a consultation process with various stakeholders in the healthcare sector, including the GPC (Health) resource panel and medical social workers, grassroots leaders and ordinary Singaporeans, to gather feedback on improving healthcare affordability for Singaporeans.


5.            The key recommendations proposed in this report are listed as follow:

a)            Right site care within the continuum of care
 i) Levelling the Medisave curbs across care options and ensuring that Eldershield payout is sufficient for social care options

b)            Managing the Rising Healthcare Costs
 i) Regular review and expansion of the standard drug list by including more essential drugs used in the treatment of common conditions

ii) To survey and make public information on professional and                                medical fees across the healthcare industry

 c)             Enhancing the 3M framework
i) Enhance the scope of Medisave usage and to review Medisave withdrawal limits regularly so as to ensure that the out of pocket expenditure for Singaporeans remains manageable

ii) Prevent premature depletion of Medisave through inter-generational use

iii) Ensure the continuity of Medishield premium payments and its affordability, especially for the elderly Singaporeans, through a possible reverse premium structure

iv) Consider strengthening and expanding the Medishield coverage to community and social care costs and removing the age ceiling on Medishield

 d)            Review and rationalise existing medical assistance schemes and frameworks
i) Remove the age criterion of CHAS, expand the CDMP and to raise Medisave limits on usage under CDMP

ii) Optimise utilisation of private resources and see CHAS GPs as part of the public healthcare node

iii) Review, rationalise and simplify existing medical financial support schemes and their application processes to ensure accessibility to those who genuinely need them


6.            Feedback gathered from medical professionals and medical social workers highlight that the current system encourages the utilisation of acute healthcare services. The GPC understands that this arises from the restrictions on the use of Medisave in the areas of community and social healthcare.  This discrepancy encourages hospital admissions and overuse of the acute care system.  Ground feedback from social workers indicate that they see regular cases of clients who would choose to voluntarily admit themselves or extend their stays in the hospitals, so that they could utilize their Medisave for treatment.  The GPC hopes to see more integration of both social and community care and acute healthcare for all ages.


7.            In this context, the GPC recommends that more could be done to see social care of the aged as part of a continuum of care options. There are several things that could be done to better integrate such care.   The GPC feels that the general principle should be to see healthcare within the entire continuum of care.  As such, Medisave curbs across the continuum of care that over encourages the use of the acute health care system should be reduced and minimised. This could be done by levelling restrictions evenly across the board. This will also encourage the right-siting of care.

8.            At the same time, with the integration of social care and health care under one Ministry, the GPC recommends that the current Eldershield payout be revised. Meant for severely disabled elderly Singaporeans, the current Eldershield payout is insufficient for Singaporeans to even cover nursing home fees.  Its coverage should therefore be strengthened to make it more relevant.


9.            In recent years, medical inflation has seen constant growth. The Consumer Price Index for healthcare services in particular rose by about 5.5%[1] in 2012. For many Singaporeans, healthcare costs have been perceived as spiralling out of control and it is becoming increasingly expensive to seek medical attention.

10.          The GPC recognises that there are currently efforts to mitigate such perceptions. For example, there is CHAS and polyclinics for the lower income group, and the 3Ms framework. However it feels that while these schemes are in existence, the perception of healthcare being expensive remains.  This is especially so for the lower income families and the elderly Singaporeans who may not have enough savings to provide the peace of mind in managing their healthcare expenditure.


11.          The GPC agrees that more could be done to make healthcare more affordable to Singaporeans. One key recommendation would be to expand the standard drug list such that more essential drugs are covered. This would benefit the public at large as the cost of medication would be lowered and out of pocket cost minimised.

12.          The GPC also feels that there should be better information available pertaining to professional and hospitalisation costs.  It notes that today, hospitals are required to publish their fees while GPs and private practitioners are not required to do so. The GPC feels that it is essential for such information on professional and hospitalisation fees be made available to the public. This would serve as a check and balance on medical costs, and allow the public to make better informed choices.  It recommends that the Ministry of Health or the Singapore Medical Council (through an agent or otherwise), take the lead and conduct regular annual surveys on professional fees and medical costs in Singapore and make public such information.


Scope of Diseases and Medisave Withdrawal Limit

13.          There are currently restrictions on the scope of conditions where Medisave can be used. Health screening, dental treatment and physiotherapy and occupational therapy in the outpatient setting are examples. In addition, there are withdrawal limits for the use of Medisave on hospitalisation and certain outpatient expenses. Medisave can only be claimed if the patient stays in the hospital for at least 8 hours, unless the patient is admitted for day surgery.[2]

14.          The GPC agrees that a balance must be struck between liberalising the use of Medisave, and maintaining sufficient sums for future use. However, in the context of rising medical costs, there is a need to ensure that out of pocket expenditure remains low for Singaporeans.  The GPC acknowledges that schemes that allow the use of Medisave are especially beneficial to Singaporeans. For instance, the Chronic Disease Management Programme (CDMP) allows for the use of up to $400 per year per account from Medisave.

15.          In consultation with medical social workers from the various hospitals, the GPC finds that there are patients who max out the use of their Medisave limits and have to resort to either paying out of pocket, or putting off essential treatment due to lack of capital. This is especially the case for older Singaporeans.


16.          The GPC has two recommendations on the liberalisation of Medisave usage. The first is to allow Medisave use in health screening, essential dental procedures, physiotherapy and occupational therapy up to a certain cap to prevent excessive utilisation.  This encourages Singaporeans to stay healthy and allow the detection of treatable medical conditions early.

17.          The second is that Medisave limits should be reviewed regularly to be in line with the higher medical costs and help to keep out of pocket costs manageable for Singaporeans.  The GPC also feels that Medisave limits should be tiered according to different age groups. The GPC recognizes that older Singaporeans generally have higher health care costs as most of them also suffer from multiple chronic diseases. The higher caps would technically assist them in paying their medical bills as they seek to control these chronic diseases.

Inter-Generational Use of Medisave

18.          We have always emphasised that the family is the basic unit in society and personal responsibility is essential. As such, Medisave use has also encouraged intra family dependence. Currently, Medisave can be used to cover medical costs of immediate family members.[3] The use of Medisave in such manner, allows the family unit to care for the medical needs of one other.

19.          However, in an era of increasing healthcare costs and smaller family units, this has led to the premature depletion of the Medisave of parents who use their Medisave for their children, or children who use their Medisave for their elderly parents. This is especially so when huge bills are incurred due to medical complications.


20.          The committee thus recommends that there be safeguards in place to prevent the premature depletion of Medisave of individuals who utilise it to support family members. Protection must be accorded to Singaporeans who have sacrificed their own savings to support their families. The committee recommends that the Ministry look to impose some form of limitations on the quantum used for Singaporeans for such usage, after which government support should be provided as a form of healthcare safety net.

Ensuring the relevance of Medishield

21.          Besides Medisave, Medishield forms another important component of the 3M framework in Singapore’s healthcare financing system.  First introduced in 1990, Medishield was meant as a low cost basic insurance scheme for members to meet hospitalisation bills that could not be sufficiently covered by their Medisave balance.[4]

22.          The policy intent of Medishield is clear. Used in tandem with Medisave, Medishield is meant to lower the out-of-pocket costs to Singaporeans for catastrophic illness (large bill sizes) covered under the scheme. However, on the ground, the realities pale in comparison with its actual intent.

23.          Feedback that the GPC has gathered showed that there is a portion of Singaporeans who have allowed their Medishield coverage to lapse. There are several reasons. The first of which is that Medishield premiums have risen so high during their old age, it has become impossible for Singaporeans to maintain their coverage. Even periodic top-ups by the government to the Medisave meant as payment for Medishield premiums, were in vain as these were utilised for hospital bill payments. The negligible Medisave accounts meant that the years of paying for Medishield have effectively been wiped out. Even medical professionals like doctors shared that they would deliberately advise elderly patients to allow their Medishield coverage to lapse as the premiums were too high (instead Medifund was recommended as the alternative to foot the bills).


24.          The GPC feels that the policy intent of Medishield encourages Singaporeans to risk-pool and copay their own medical expenses through insurance. As such, the GPC recommends several steps to be taken to prevent Medishield coverage from lapsing.  As a general principle, the GPC recommends that the government step in to guarantee the continuity of Medishield coverage for those Singaporeans who cannot afford to pay. This is especially when high premiums or low Medisave balances makes it unaffordable or unsustainable for Singaporeans to continue their Medishield coverage even after years of payment.  The GPC also recognises that there needs to be consistency across health touch points with regards to the usage of Medisave. It recommends that health touch points be educated with regards to the use of Medisave such that a minimum balance is kept aside for Medishield premium payments.

25.          The GPC also feels that a reversed premium structure, as suggested by MOS Amy Khor, could be a possible policy action. Such a system, where one pays more during one’s younger years and less during one’s old age, was amendable to the young and could reduce the burden on maintaining Medishield coverage for the future elderly.[5]  The GPC also recommends that safeguards be instituted such that future top-ups to Medisave meant for Medishield purposes be used for the correct purpose. This could be in the case of direct payment to Medishield or a separate account for Medishield. The government should also provide the necessary assistance to those needy Singaporeans who genuinely encounter financial hardship in maintaining their Medishield coverage.

26.          In line with its general principle of seeing healthcare within the spectrum of continuum of care, the GPC also recommends that Medishield coverage should also be enhanced and extended to cover social and community care costs. This is ever more pertinent with the ageing population and that more and more of the population would need to utilise such care options in future.  The co-payments and deductibles for basic plans, though essential, should be lowered to make it more affordable for Singaporeans.

27.          The GPC also feels that the Medishield age limit should be removed. With more Singaporeans living to an older age, there is a need to ensure that the 3M framework remains relevant to them. Furthermore these older Singaporeans have maintained their Medishield coverage despite the hefty premiums in their older age and deserve to have the insurance cover when they need it most.


Extension of CHAS / CDMP and re-define the role of General Practitioners (GPs)

28.          The GPC recognises that CHAS and CDMP serve important functions in the healthcare system today. CHAS has made primary healthcare more affordable and accessible by making available polyclinic prices at participating GP clinics. In the context of rising medical inflation and over usage of Polyclinic facilities, CHAS has done much to mitigate these. However, today CHAS applies only to low income household and persons above 40.

29.          The Chronic Disease Management Programme, was introduced in 2006, and now covers a total of 10 chronic diseases. Under the CDMP, patients can use their Medisave up to a cap of $400 per account per year, subject to a deductible of $30 and 15% co-payment.

30.          In the same vein, the GPC feels that the tapping of GPs as a resource with CHAS is a step in the right function. GPs serve an important function in the primary care sector. However, while GPs are seen as an important public resource, GPs are more often than not viewed as private resources. For instance, when referrals from GPs are made to the public healthcare system, these patients are considered private and full-fee paying clients. As such, these patients would have to be referred to the polyclinics before being referred as subsidised patients to hospitals.   This results in additional and unnecessary visits to the polyclinic, just for the purpose of a referral for subsidised care.


31.          The GPC feels that the first step to take would be to maximise the utility of all resources so as to better manage the health of Singaporeans. GPs should be seen as nodes in the primary care system, and GPs who are on CHAS should be seen as extension of the public primary healthcare system. More GPs should be encouraged to sign up for the scheme.  Referrals from GPs (even for non- CHAS patients) can be considered for subsidised care as long as patient requests and is willing to be under the subsidy scheme.

32.          At the same time, CHAS and the CDMP should be extended such that it covers  Singaporeans of all ages and all chronic diseases respectively. The rationale is simple – regardless of age, if one is poor or if one has a chronic illness, one should have access to affordable healthcare. Likewise the cap on Medisave limits should be reviewed regularly to stay relevant. The GPC also feels that in the long run, this would benefit Singapore as Singaporeans would likely be compliant with treatment, thereby minimising complications due to non-treatment.

Rationalise and simplify existing  government medical assistance schemes

33.          While the myriad of support schemes allow for adequate support for the person, the GPC recognises that many Singaporeans are appreciative of the schemes available. Many have also benefitted from these schemes. However, many Singaporeans do not really care or understand the different sources of such schemes.  Most Singaporeans will prefer a seamless and expedient application process. For the medical social worker, it has also increased the difficulty of obtaining funding for the patient as they normally have to write to numerous sources for funding.


34.   The GPC feels that from a more person-centric perspective, it would be useful to adopt a more simplified application process whereby the applicant need not undergo multiple means testing and financial assessment when applying for assistance from various agencies.  This will avoid unnecessary administrative work and expedite the approval process.


35.          Against the backdrop of rapid economic growth, high medical inflation and a demographic transition leading to issues of a rapidly ageing population, concerns over healthcare costs have surfaced with greater alarm in Singapore.  The government needs to constantly review the healthcare financing framework to ensure healthcare remains affordable and also to provide a peace of mind to Singaporeans, especially elderly Singaporeans and those from the low and middle families.

36.          This report is submitted for MOH’s consideration, please.