Angry Doctor

Tuesday, March 04, 2008

Subsidy and Other Preoccupations 19

After a long period of speculation, we now know how means-testing for inpatients will take:

(emphasis mine)

Healthier coffers, rising costs
MOH gets 19% budget boost to meet subsidy and manpower needs
Tan Hui Leng

AS Singaporeans grapple with medical costs that shot up by 7.4 per cent last year on the back of imported inflation, the Ministry of Health (MOH) is getting a rare 19-per-cent boost to its budget this year — a necessary prescription to meet the need for more manpower, rising expectations and subsidies to help patients cope.

For one, $1.9 billion will be spent over the next five years to grow the pool of doctors, nurses, pharmacists and allied health professionals by 40 per cent.

"Our doctors and healthcare professionals are overworked and at some point, they need a life too," said Health Minister Khaw Boon Wan, noting how director of medical services K Satku was "sleeping less and less", juggling between surgeries and meetings, while younger doctors were "working day and night to meet the needs for increasingly more demanding patients and relatives".

Apart from overseas recruitment — last year, 438 doctors came from abroad, nearly twice the 230 who graduated locally — the bigger budget allows for twice the number of scholarships for allied health professionals this year, plus a new overseas degree-conversion scholarship for Nanyang Polytechnic graduates.

More competitive salaries, too, are needed to retain those enticed by competitive posts abroad and even from the booming local hospitality sector.

But the bulk of the $421-million increase in the MOH's coffers will go towards subsidised patients. Indeed, direct subsidies for class B2 and C ward patients will likely exceed $1.7 billion this year, said Mr Khaw, who unveiled the finalised details of the means-testing scheme to kick in next January at public hospitals.

Sporting "more generous" criteria following feedback from public dialogue sessions and Members of Parliament (MPs), the scheme will not affect 80 per cent of Singaporeans — including all housewives, retirees and children living in HDB flats as well as lower-annual value private properties.

Patients with a personal monthly income of $3,200 or less will continue to enjoy the full subsidy of 80 per cent in class C and 65 per cent in class B2 wards. The higher up the salary scale one is, the smaller the subsidy entitlement.

"We will be flexible at the margins to help those who may appear to be of high income, but who have exceptional financial liabilities," said Mr Khaw.

Similarly, at the other end of the income scale, many of the people in need "end up paying nothing" after some help from Medifund, he said to Nominated MP Siew Kum Hong's suggestion to give an even bigger subsidy to such patients.

And while the minister acknowledged that — as some MPs pointed out — per capita household income was a better gauge of financial ability than personal income, this would be costly to implement and "intrusive to every patient". Should one feel unfairly treated, a thorough means-test can be done upon appeal.

Rising costs will continue to be a worry as health spending goes up from 4 per cent of GDP to as much as 6 per cent in the medium term, said Mr Khaw.

"Last week, (MP) Dr Ahmad Magad related a personal experience during which his daughter was hospitalised in a private hospital. He said he almost fainted when he saw the bill of $2,300 for a two-day stay."

But what is contributing partly to cost increases are Singaporeans' higher expectations. Take the 11-per-cent jump in attendance at emergency departments last year, said Mr Khaw, which creates the need for prices to be adjusted to deter non-emergency patients.

Likewise for subsidised wards, the continual upgrading of services is drawing more higher-income patients — hence, the need for means-testing.

But while the MOH's bigger budget will result in improved clinical care and hopefully shorter waits for medical services, Mr Khaw had some words of caution. Don't expect "on-demand service" like that in five-star hotels. And beware that it does not lead to a vicious cycle of even higher expectations and more cost spikes.

Non-constituency MP Sylvia Lim asked if the MOH shouldn't in fact moderate such expectations. Mr Khaw responded that even as he would be "the last one to be fanning expectations", he could not ignore the growing demands for better public healthcare standards.

For instance, one such improvement will see the bed-to-patient ratio, which stands at 1.6 per 1,000 population now, improve to 1.8 by 2015.


The news article on the CNA site gives more details, and tells us that:


"Higher income earners will get subsidies on a sliding scale of one percentage point, depending on their income range. This is capped at 65 per cent for Class C wards and 50 per cent for Class B2 wards for those earning more than S$5,200.

Economically inactive patients will also receive full subsidies unless they live in a property with an Annual Value exceeding S$11,000.

...

As for those who feel the simplified approach has treated them unfairly, a thorough means-test will be conducted upon their appeal and will be based on the approach that is currently used by nursing homes."


angry doc must say that he is impressed by this new scheme. It leaves a large proportion of patients unaffected, and still gives those who earn more than $3200 a month a substantial amount of subsidy (essentially they may pay B2 prices for a C class bed, or B1 prices for a B2 bed).

There are still a quirk or two in the system, like say how a family with the father as the sole bread-winner earning more than $3200 may be better off if the mother or a child fell sick since they will enjoy full subsidy, than if the father fell sick, since he will not pass the means-test and it will at the same time leave the family without income.

The actual savings in terms of subsidy not given out will probably not amount to much, especially if those who find themselves faced with a large bill and failing the means test can appeal for a 'thorough means-test'. angry doc also notes that the actual amount of money the ministry expects to save is never mentioned in any of the news articles on the subject.

At the end of the day, angry doc suspects, this scheme is probably not aimed so much at reducing government healthcare expenditure by subsidy saved alone but - despite what the minister said - a way to 'moderate expectations'; if this step in introducing the concept that one's inpatient subsidy entitlement is tied to one's wealth is accepted, then it may in the future be easier to implement it in other levels of healthcare, as it has been for nursing homes.

Whether that is a good thing or not will depend on your point of view.

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11 Comments:

  • "(essentially they may pay B2 prices for a C class bed, or B1 prices for a B2 bed)"

    Just as expected.

    It's like saying airplane passengers will now pay business class prices for economy class seats and first class prices for business class seats.

    We can talk about subsidies being reduced but at the end of the day, the cash flow changes are about the same.

    And if this is a scheme to make this sort of thing "acceptable" to the public, well do you think it is a good or bad thing?

    By Anonymous Anonymous, At March 05, 2008 9:15 am  

  • Angrydoc you said :

    Whether that is a good thing or not will depend on your point of view.

    I think more depend on who you are. If you are patient then no good. But if you are doctor or healthcare businessman then good news liao.

    By Anonymous Anonymous, At March 05, 2008 10:30 am  

  • I think healthcare should be rationed by need and not means, so from a public policy point of view I think means-testing is not a fair way of doing things.

    On the personal front I pay for my own healthcare since so far I can afford to do so, but I will probably appreciate the option of subsidy if we are looking at a 5-figure sum.

    By Blogger angry doc, At March 05, 2008 4:53 pm  

  • GDoc suspects that the entire price resturcturing exercise has been a gradual effort by the government to nudge the general public to take on more responsibility for their healthcare costs, for better or for worse.

    It is GDoc's personal opinion that the government is obliged to provide NEEDY citizens with an acceptable level of subsidized healthcare. Nonetheless, GDoc also understands the government's position on an effective manner of "means testing" to screen for eligible candidates for subsidy. Health Ministers are in the unenviable position of attempting to deal with unlimited demand with limited resources.

    How does one define "needy"?

    GDoc believes that every individual possesses a metric by which they determine a person "in need". Your milage may vary.

    GDoc believes that everybody should take some form of responsibility for their healthcare costs. He never ceases to be amazed by the number of astute individuals who take personal financial planning seriously, and yet neglect "healthcare planning".

    GDoc's personal definition of those in need are individuals who genuinely are unable to afford the costs of health insurance.

    Mandatory health insurance legislature, anybody? The Americans are already toying with this idea in the wake of sky-rocketing healthcare costs.

    GDoc's 2 cents......maybe the Stout talking....

    By Blogger GuinnessDoc, At March 06, 2008 1:05 am  

  • "GDoc's personal definition of those in need are individuals who genuinely are unable to afford the costs of health insurance."

    This gets a bit more complicated. Who controls the costs of health insurance?

    The more people buy health insurance....do the costs go up or down?

    Remember that in the states health insurance was meant to reduce costs. Yet the effect has been to escalate costs by excessive consumption.

    In Singapore the govt already keeps costs very low by paying doctors relatively low wages compared to other first world counterparts, bulk buys drugs with huge discounts passed to the patients, runs public clinics and hospitals to compete with the private sector to keep costs low for even private patients!

    Singapore's govt is doing a darn good job for the people at the expense of course of the doctors.

    So the people should be happy but doctors, nurses and other health care professionals....poor things.

    By Anonymous Anonymous, At March 06, 2008 9:59 am  

  • "This gets a bit more complicated. Who controls the costs of health insurance?"

    GDoc feels that there are multiple answers to this question, all of which may be correct. He shall attempt to list some of the obvious ones. The list is by no means a complete one, as this question is a complex, albeit fair one.

    First, the insurance companies do. Singapore has encouraged, and at times orchestrated the inclusion of 3rd party private insurers (eg: AVIVA, NTUC, AIA, etc..) to the Medisave Insurance schemes. Anybody who has purchased term insurance will be familiar with actuaries and their tables.

    Second, economic reasons. Inflation, costs of medical supplies, cost of medications, personnel, etc..

    Third. Dermographics. Generally speaking, a population comprised of younger individuals by majority will be more economical to insure than one that is made up of older people. Young people tend to be healthier, so there are more non-claiming individuals supporting a smaller number older folks who may potentially consume more healthcare dollars. The reverse scenario will prove to be more challenging (read: expensive).

    Four. Patient expectations, and patients' ability to consume healthcare responsibly. This is a real can of worms, and where "unlimited demand" comes into play. Almost all medical personnel will have, at one point or another, met with the Cough & Cold patient that turns up at the Accident & Emergency department seeking (and thus tying up valuable resources) medical attention.

    Five. Doctors, of course. Different styles of management will incur varying degrees of cost. Aggressive, Defensive, Conservative, or even perhaps (GASP!) Profit Driven doctors will affect the cost of healthcare. GDoc remembers one wag of a doctor in the States telling him (in jest) "Here, in the ER, we do the patient's MRI before asking him for his name"....just an example of Defensive medicine driving up healthcare costs.

    Well, the list goes on....anybody care to add to it?



    "Cost of Healthcare" and "Subsidy of Healthcare" are 2 very different issues.

    "Cost of healthcare" will inevitably rise as the population ages. Inflation also does not help. How this rising cost will be distributed between the Government and the People is where the debate on "Subsidy of healthcare" comes in.

    GDoc has no idea how exactly subsidy of healthcare will evolve over time. However, he is almost certain that the Government will limit subsidy eventually, in the not too distant future.



    "In Singapore the govt already keeps costs very low by paying doctors relatively low wages compared to other first world counterparts, bulk buys drugs with huge discounts passed to the patients, runs public clinics and hospitals to compete with the private sector to keep costs low for even private patients!

    Singapore's govt is doing a darn good job for the people at the expense of course of the doctors.

    So the people should be happy but doctors, nurses and other health care professionals....poor things."


    GDoc finds it difficult to comment on this statement. Keeping healthcare costs low is laudable, as it reduces the burden that the People have to bear (both in terms of ad hoc payments, and insurance premiums). Nevertheless, GDoc would greatly appreciate a slightly larger paycheck :)

    Guess it depends on where one is coming from. One man's patriot is another's terrorist.

    Another round, please! GDoc is getting thirsty from all this typing!

    By Blogger GuinnessDoc, At March 06, 2008 10:27 pm  

  • I disagree with Angry Doctor that healthcare should be rationed by need. It does not take into account the financial cost of providing healthcare, which is a commodity or service like any other. Modern healthcare is expensive and will become increasingly so, because we can do so much more for patients. The government's role is to ensure that a very basic level of healthcare is available to all --- how basic depends on how much taxpayers are prepared to subsidize. Anything above that: patients are consumers who will have to pay for what they can afford. That's the real world

    By Anonymous Anonymous, At March 16, 2008 11:01 am  

  • "Modern healthcare is expensive and will become increasingly so, because we can do so much more for patients. The government's role is to ensure that a very basic level of healthcare is available to all --- how basic depends on how much taxpayers are prepared to subsidize. Anything above that: patients are consumers who will have to pay for what they can afford. That's the real world"



    It sure is. Nevertheless, this message is a tough sell for any government to the people.

    By Blogger GuinnessDoc, At March 16, 2008 3:56 pm  

  • "The government's role is to ensure that a very basic level of healthcare is available to all --- how basic depends on how much taxpayers are prepared to subsidize. Anything above that: patients are consumers who will have to pay for what they can afford. That's the real world"

    That is how it operates now, but it certainly isn't the only way it can be done.

    For that matter, there is certainly no reason why the current system can't be combined with rationing by need.

    The problem with not rationing by need is that we end up subsidising unnecessary consultations, treatment, and hospitalisations, which although may not amount to much separately, can add up to a sizeable sum in the long run.

    I personally think that it is fairer to subsidise a rich man a sum of $1000 for a treatment he needs, than it is to subsidise a poor man $10 for a treatment he does not need.

    By Blogger angry doc, At March 16, 2008 10:32 pm  

  • "The problem with not rationing by need is that we end up subsidising unnecessary consultations, treatment, and hospitalisations, which although may not amount to much separately, can add up to a sizeable sum in the long run."

    No, that is not the problem with rationing by need. The real problem is that the 'need' is a bottomless hole. With an aging population and rapid medical advances, the need can easily get out of hand. For the Ethiopian woman with early breast cancer, the need may be just a surgeon to do a mastectomy and axillary clearance, because she won't be able to get local radiotherapy and there won't be a pathologist to do a frozen section for sentinel lymph node sampling. For the patient in Malaysia, the need may extend to local excision, radiotherapy and sentinel lymph node sampling. For the woman in Singapore, the need may be testing for HER2 amplification and Herceptin. We are not talking about over-treating the patient here, for there is no doubt that Herceptin will improve survival in certain patients and you need expensive molecular assays to identify those who will benefit from it. This is about whether society is able to afford to meet the medical needs of its population.

    When the need goes beyond the ability of a society to pay for all its members, we can only afford to pay for a very basic level of medical needs, and ration on price for those who can afford to pay for more.

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