Angry Doctor

Saturday, April 14, 2007

Subsidy and other Preoccupations 7

One of the shortcomings of means testing which Mr Chang did not bring up in his letter featured yesterday is the fact that means testing, when it comes to subsidy for hospitalisation, is a crude tool.

Patients are admitted to the acute-care hospital for a variety of reasons, and the costs can therefore vary very much depending on the condition and treatment. Under the proposed means testing scheme a patient who passes the means test will enjoy an 80% subsidy, while a patient who fails the means test will receive something perhaps closer to the B2 class subsidy level of 65%.

At the lower end of the scale, say a 5-day admission for
chronic obstructive lung disease at Alexandra Hospital, this 15% difference translates to something in the region of $300.

At the higher end of the scale, say a 12-day admission for a
coronary bypass at National University Hospital, the difference is in the region of $2000.

So while the percentage differences are the same in both cases, angry doc believes that it is the absolute amount that patients are worried about.

Further, angry doc believes that the absolute amount needs to be seen as a percentage not just of the total hospital bill, or against the per capita household income, but as a percentage against the total hosehold income and what it means in terms of the reduction to the per capita household income.

Let me illustrate this with a couple of examples, using a threshold of $1000 per capita per month (see here for why I chose this value) and two patients whose incomes are $100 above and below this threshold respectively.

Mr A, who has a wife one child, earns $3300 a month. His per capita houshold income is $1100 and he fails the means test.

Mr B, who lives with his parents, wife, and two kids, earns $5400 a month. His per capita household income is $900 and he passes the means test.

Mr A and Mr B are both admitted for coronary bypass. Mr A's bill comes up to $4844, while Mr B's bill is $2768.

Mr A's bill translates to 12% of his total annual income, and Mr B's bill translates to 4.3% of his total annual income.

In other words, Mr A, whose absolute total annual income is lower than that of Mr B, pays a higher fee than Mr B, both in terms of absolute amount, as well as in percentage terms.

angry doc can easily see why Mr A will think means testing is an unfair system.



  • Personally I doubt the means test threshold will be $1000 per capita per month.

    It seems like this particular proposal is targeted at the folk who live in landed property but still wish to stay in C class...

    By Anonymous Anonymous, At April 14, 2007 6:42 pm  

  • We'll have to wait for further information, but as it stands I think a $1000 threshold is a fair prediction. I've added a link to the main post to explain where I got the estimate.

    Thank you.

    By Blogger angry doc, At April 14, 2007 8:00 pm  

  • Even if a person is rich, a citizen ought to be 'entitled' to free medical care, with caveats of course. If he/she is willing to queue and stay in a no frills ward, why should the govt discriminate against him. A rich man is a citizen too and should get a minimum level of care like everyone else.

    By Blogger huajern, At April 14, 2007 11:02 pm  

  • But you see, Singaporeans are NOT willing to queue for hours in a busy polyclinic. They want cheap healthcare but they do not want to wait either. The minister is trapped. If he brings in more doctors to cut the queue, costs will rise but he is not allowed to increase medical fees. So he tries to cut the demand by imposing discentives for wealthier Singaporeans to seek subsidized treatment.

    By Anonymous Anonymous, At April 16, 2007 1:53 pm  

  • something's gotta give. either waiting time, poorer quality of care or cost of healthcare. Singaporean's are not willing to part with their money so it has gotta be another way.

    By Anonymous Anonymous, At April 16, 2007 2:28 pm  

  • Indeed. Something, or someone's gotta give (the money). I suspect that for most Singaporeans, it's a matter of whether they thought they would be paying more through their taxes if the subsidy was kept unrestricted, or whether they would be saving more through a lowered tax if the subsidy was restricted.

    Of course, there is always the chance that the subsidy becomes restricted, but the tax level remains the same...

    By Blogger angry doc, At April 16, 2007 5:30 pm  

  • Can we have a sign pasted on all healthcare centres that can drive common sense into the other folks:

    "As for all things - you can either pay less with money or time but not both."

    By Anonymous Anonymous, At April 16, 2007 11:02 pm  

  • Only 40% of Singaporeans fall into the tax bracket. Raising taxes to fund healthcare in the face of an aging (and not working) population is not the solution. It will also dampen the economy for all.

    There are those who expect the state to provide 'free' healthcare but are not prepared to pay the sort of taxes the british pay. I suppose they will probably say, "Cut the ministers' pay to fund it."

    By Anonymous Anonymous, At April 17, 2007 1:43 pm  

  • Indeed. About 70% of 'economically active persons' in Singapore do not pay income tax, and the ministers' annual pay of $46 million is less than 1% of the total annual national health expenditure.

    But where then are the 'aging (and not working)' population going to get money to see a doctor?

    By Blogger angry doc, At April 17, 2007 4:45 pm  

  • "As for all things - you can either pay less with money or time but not both."

    My sign would say:

    "Better, Faster, Cheaper. Pick two."

    By Blogger angry doc, At April 17, 2007 5:04 pm  

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