"The Best Healthcare that Singaporeans Can Afford"

With the limelight on the issue of healthcare subsidy, I post the link to the Minister's speech on the MOH Budget; it's worth a read.

Here's the bit on Block Budget which I mentioned earlier:

Block Budget

Likewise, if hospitals have the wrong incentives, they may pursue wrong objectives. That is why I am refining our hospital subvention model to include some elements of block budgeting. As Mdm Halimah has pointed out, if hospitals are given piece-rate incentives, they would tend to pursue volume, leading to over-servicing and higher healthcare cost. And as Dr Michael Lim noted, night polyclinics are a reflection of this. I agree with him that it is not a meaningful deployment of limited resources.

But subventing hospitals at a fixed block is also not the panacea. Hospitals may pocket the block budget and do the minimum, pushing patients to one another to shift their costs, resulting in longer queues and under-treatment. In my younger days, public hospitals were in fact on block budget. MOH subsequently switched to piece-rates, not without good reasons.

I am not completely discarding piece-rates for block budget. I am going for both. Where outcomes are well-defined, it would make sense to continue with piece-rate subvention. We have identified 70 medical conditions which form the bulk of our patient-load in the hospitals. We should now go more deeply into the costing of these medical conditions and subvent hospitals based on their volumes for these 70 medical conditions.

As for the rest of the medical conditions, the subvention will come under a block budget. This will be a better way to align our interests. The clusters will then seek to co-ordinate care more effectively. They will "right-site" their patients by treating them at the most appropriate and lowest cost setting.


I must admit I don't understand much of the speech (the bits about Medisave and Medishield), but I am at least encouraged by the fact that he didn't come across as being dogmatic, and had addressed most of the topics we discuss on this blog. Except for the issue of 'heart'.

To me, the system makes it or breaks depending on the heart of the men and women executing it. No system, be it block budget or piece-rates, can ensure that the people in the system put patient before profit. What we need is for the system to recognise people with heart, and if not incentivise them, at least keep them safe from disillusionment.