Angry Doctor

Thursday, August 02, 2007

Confidence Goods 11

The Health Minister continues his quest for the 'perfect' healthcare market...

(emphasis mine)

An injection of innovation
That's what health plans here need at the micro level, says Health Minister
Tan Hui Leng


WITH the three Ms — Medisave, MediShield and Medifund — in place and many Singaporeans covered by health insurance, the country's overall health care system is doing fine. But when it comes to issues at the micro level, such as providing more competitive health care, a lot more work needs to be done.

That was the assessment of Health Minister Khaw Boon Wan.

"Micro means, on the provider side, how do you make sure the market works well?" he said at the opening ceremony of the South-east Asia Health Insurance Conference yesterday. "That part is not easy at all. I would say we are 20 per cent of what I hope we can achieve."

For a start, the Health Ministry has, since 2003, been publishing hospital bill sizes for common conditions and procedures as part of its efforts to give patients more choice. But there is still much to be done to get hospitals to improve their services and address the current imbalance in the health system, such as the vast difference between a general practitioner's and a surgeon's fees.

"The conscientious GP who advises and nags at patients ... he gets maybe $20 per visit," said Mr Khaw. "Whereas with a dramatic surgery, I get $10,000, $15,000. So, in an ideal world, the big-time surgeon ought to be paid $1,000 and the GP should be paid $50 or $100 or at least $200 — but how do you bring that about?"

Insurers can help by coming up with more innovative health policies.

"Give doctors and hospitals the incentive to focus on the health outcomes of your policy-holders. Try piloting pay-for-performance measures that reward doctors based on the health of patients they care for, not the number of procedures performed," said Mr Khaw.

For example, a doctor looking after a diabetic patient could be paid by an insurer for ensuring that the patient controls his diet and exercises regularly.

Aviva's assistant general manager of employee benefits and healthcare Christopher Crowe said the company gives refunds in group policies and works with doctors to ensure effective outcomes for patients.

NTUC Income's group and health general manager Chan Tee Seng said it will see if the ideas can be implemented.

Mr Khaw believes the situation would be a win-win one.

"If my policy-holders all stay healthy or keep chronic illness in good management (resulting in fewer) complications, I save money (due to) less payouts," he said.

Agreeing with with Mr Khaw's analysis of the current situation, chairman of the Government Parliamentary Committee for health Halimah Yacob said: "Many people are comfortable that the big picture is in place but it is the micro issue, how to implement the policies, that is the challenge.

"There have been so many changes but the individual still feels concerned that when he falls ill, he can't take care of himself."

So, while Singapore's healthcare system has improved in the past five years, there is still a long way to go — especially when many patients tend not to be concerned about saving costs since they know they are being subsidised, either through insurance or government subsidies.

Mr Khaw told of how a hospital patient demanded the doctor prescribe two years' supply of a health supplement for him, as the bill would be paid by his employer.

"A pharmacist called the doctor to double-check the prescription, which was then amended. The patient left the pharmacy angry!"

While it may be difficult to achieve the perfect healthcare market, "we are so imperfect that even if you halve the gap, we will have brought about a lot of benefits to everybody", he said.


angry doc is still not convinced that making the healthcare market more 'perfect' is the solution to our problems.

Certainly at the one end of the spectrum when demand is totally divorced from cost to the patient/consumer by the presence of a third-party payer we get a situation where a patient will ask for two years' supply of a health supplement.

However, angry doc believes that the situation where the conscientious GP gets $20 per visit while the surgeon gets $10,000 to $15,000 per surgery is actually an example of where the market is closer to a 'perfect' market - each doctor is being paid for the perceived value of their service.

Or to be more precise, each doctor is being paid for the perceived value of the service which they have performed (i.e. 'fee for service'), as opposed to being paid for the perceived value of the results of the service which they have performed (i.e. 'pay for performance').

(Nevertheless, angry doc thinks it may be pushing it a bit to call for GPs being paid $200 per consult, or a surgeon $1000 for a 'dramatic' surgery.)

The common point in both cases (imperfect market and nearer-to-perfect market) is that healthcare providers and healthcare consumers/patients have very different perceptions on what constitutes value when it comes to healthcare: patients see value in tangible things like drugs, health supplements and surgery; healthcare providers see value in results, which may not be immediately apparent.

Can we put a value on the results of non-pharmacological, non-surgical intervention in the form of behavioural modification brought about by doctors' advice (aka 'nagging')? Certianly some people are trying to do so.

Will having a 'perfect' market make patients see the value of such non-pharmacological, non-surgical intervention when there is evidence to show their efficacy, or will they see it as 'talk only'?

angry doc is not too optimistic on that.

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3 Comments:

  • Our health minister sure has plenty of harebrained ideas... I still have not forgotten the problems that arise when the Chronic Disease Management Program was introduced. All because of that 1 stupid man.

    By Anonymous Yamosh, At August 04, 2007 12:31 pm  

  • yamosh,

    I think the minister is wrong about the 'perfect' market being what we need, but why do you think the CDMP is such a bad idea?

    By Blogger angry doc, At August 04, 2007 2:21 pm  

  • The healthcare market is always imperfect because there is a big discrepancy between the knowledge of the provider and that of the consumer. Many patients think that the surgeon makes the diagnosis of breast cancer. He does not. It is the pathologist who does that and performs the diagnostic procedures that tell the patient she has a breast cancer that shows amplification of the erb B2 gene. But the patient perception is that the surgeon deserves more money because he makes the diagnosis and conmplains that the lab charges are too high. 'How can the lab earn more than my surgeon?' they ask.

    Pay by performance only works if there is an independent and fair system to evaluate performance. And from a cost-effectiveness point of view, preventing tuberculosis is far better than treating it. As my brother (a fireman) told me: people don't pay you much to save their house from a fire. It's far better to let the house burn down and earn more as a builder. That's pay for performance for you and that's why the current system is an imperfect market.

    By Anonymous Anonymous, At August 05, 2007 2:44 pm  

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