Insurance industry veteran says all caps on medical expenses imposed by “messy” MediShield and MediSave should be removed

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Former NTUC Income chief executive Tan Kin Lian has slammed national healthcare insurance schemes MediSave and MediShield as being “confusing and messy” as he called on the Ministry of Health to eliminate caps on medical procedures and offer better support to members facing huge medical bills.

Tan – who ran the labour movement’s insurance co-operative for 30 years, from 1977-2007 – said that the authorities need to address the issue of Singaporeans being forced to pay large sums of money for medical bills out of pocket since the caps placed on MediSave do not adequately cover medical expenses that are “too high”.

Tan’s post comes a day after it was revealed that MediShield Life only paid out $4.50 of an elderly Singaporeans’s $4477 cash bill.

82-year-old Mr Seow Ban Yam underwent a cataract operation on both eyes at the Singapore National Eye Centre and received a bill that came to over $12,000. After government subsidies, Mr Seow needed to pay $4477.
Mr Seow paid $3000 of the remainder from his Medisave account and waited for MediShield Life to cover 90 per cent of the remaining $1477. MediShield Life, however, said that it imposes a $2,800 cap on the procedure Mr Seow underwent.
This means that the maximum reimbursable amount for such a procedure each year is $2800 + plus actual ward fees of $205. This amounts to $3,005.
Of this $3,005, $3000 has to be taken from the patient’s own CPF funds. This leaves only $5 that is claimable by insurance. Thus, MediShield Life paid 90 per cent of that $5 – amounting to $4.50.

Several Singaporeans, including award-winning cartoonist Sonny Liew, were left baffled by the measly sum the national health insurance scheme paid out to the elderly member.

Tan cited this case as he criticised the confusing “bits and pieces” payment system where patients have to pay parts of their medical expenses from different sources such as funds in their CPF accounts and insurance:

“This is a complicated arrangement. l call it the “bits and pieces” payment system – some part paid here, some paid there. No wonder the people are confused with this system.
“The govt thinks that this is necessary to make the patients responsible to help to control the medical expenses. In reality, most patients are so confused that they are not able to play a part to “control” the expenses. The actual expenses are outside their control.
“The only control that they have is to choose the medical facility to go to. After that, they have to face the charges and add-ons for various kinds of treatment. In the example of the cataract operation, the patient went to a govt facility to enjoy the subsidy.”

Criticising Health Minister Gan Kim Yong for not addressing this issue earlier, Tan added:

“The minister should, by now, realize the problem. Medisave and Medishield has been going on for almost four decades. He is not a new minister, as he has been in office since 2011. Anyway, it was a bad practice to appoint him as the minister for health when he had no prior experience in this complicated ministry (pardon me, if I am wrong on this matter).”

The insurance industry veteran proceeded to offer solutions the Government could tap on to tackle this issue. He recommended that the Government should:

  • set the charges for various types of treatment, if Medisave and Medishield are to be used;
  • mandate that public hospitals and clinics that have access to the subsidy must provide services based on these all-in approved rates;
  • mandate that the hospitals should absorb any variation in the all-in approved rates for treatment and not charge members for each item of service;
  • get non-profitable restructured hospitals to control their expenses and possibly cut down on infrastructure, management salaries and expensive systems;
  • Reduce the deductible under the MediShield scheme to $500 or even lower; and
  • Remove all caps on MediSave since patients are going to approved hospitals for approved treatments with approved rates.

Predicting that such a system “will still yield profit to the restructured hospitals, but not the big margins that they enjoy now,” Tan added that he believes many private hospitals will also join such a scheme and “should be able to operate profitably on these approved rates.”

He further encouraged the Government to carry out annual negotiations like what Japan does. He noted that “if the rates are too low, the public and private hospitals will not provide the service. This will give the signal for the govt to revise the rates.”

Tan also offered that “hospitals can be allowed to charge higher rates to local or foreign patients who do not wish to have access to Medisave or Medishield.” He concluded:

“It is naive for the govt to think that the patients can control the expenses. They are leaving the patients to the mercy of the mercenary medical system.
“My suggestion is to set the approved charges for various types of treatments. I do not claim that this will solve all the problems. I am sure that other problems have to be dealt with prior to the launch or within a few years after that. But I am sure that it will be a better basis to deal with the problem than the current confusing and messy system.”

Read his post in full here:

Medishield started in 1990 to provide insurance for catastrophic medical expenses. The co-payment was supposed to be…

Posted by Tan Kin Lian on Tuesday, 1 January 2019

MediShield Life paid just $4.50 of elderly Singaporean’s $4,477 surgery bill