Health Minister is mistaken that patients overly consume healthcare services because its free: ex-NTUC insurance CEO

Former NTUC Income CEO Tan Kin Lian has sharply criticised Health Minister Gan Kim Yong for blaming patients for overly consuming healthcare services because it is free.

Gan had said in Parliament this week that co-payment in healthcare is important as it ensures the sustainability of the healthcare system. Noting that some private insurance policies offer zero co-payment coverage the Minister said that such coverage “dilutes the personal responsibility” of patients. He added that this prompts a “buffet syndrome” in patients, in which they overly consume services just because they are free:

“They are called full riders. Such riders encourage a buffet syndrome as patients do not need to pay anything for their treatments. It undermines the co-payment principle and dilutes the personal responsibility to choose appropriate and necessary care.

“This will encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us.”

That same day, Senior Minister of State for Health Chee Hong Tat announced that patients must bear a 5 per cent minimum co-payment for new Integrated Shield Plan riders with immediate effect. Only new policy holders will be affected by the policy, not those who have already bought zero co-payment insurance policies.

In a thorough explanation on why the government is wrong to blame patients for a “buffet syndrome”, Tan Kin Lian asserted:

“The health minister used the term “buffet syndrome” to describe the unnecessary and over-consumption of health care services. He blamed the patients for this behavior. He thinks that the patients like to consume the services because it is free, i.e. paid by insurance or largely subsidised by the government.

“The minister is mistaken. I am not referring only to the current minister, but to the previous ministers. This mistaken belief had been prevalent for three decades.

“I have not found any evidence of patients who like to consume health care because it is free or largely subsidised.

“The over consumption is largely due to doctors and hospitals. They are running a business. If they can get the patients to consume more, they earn a larger income or profit.

“Some doctors and hospitals will prescribe more treatment to generate the income and profit. I am not suggesting that all doctors and hospitals behave in this manner. But the anecdotal evidence does suggest that this is quite prevalent.

“To overcome the over consumption, attention should be focused on the doctors and hospitals, rather than the patients.

“The patients do not have a choice. They depend on the doctors for advice on what is necessary. Even if they ask for a second opinion, it does not help much in most situations.

“Asking patients to make a co-payment does not solve the problem. Most patients will buy insurance, known as a “rider” to cover the co-payments.

“Restricting the scope fo the rider will also not solve the problem. Most patients are not able to make the sensible choice.

“To stop the over-consumption and explosion of health care cost, the ministry of health has to step in. They have to set system to prevent the over consumption of services and the over charging for these services.

“We can study the system adopted in Japan. Each year, the ministry of health negotiates with the doctors and hospitals on the cost of providing each type of treatment. This negotiation produces charges that are adequate for doctors and hospitals to cover their expenses and earn an adequate income and prevent the over charging for these expenses. It also ensure that the charges are reasonable from the perspective of the patient and the government, which bears 70% of the cost.

“As there is sufficient demand for the services, there is no need for the doctors and hospitals to generate unnecessary demand to increase their income.

“I believe that there is a system for the ministry of health to audit the provision of the services. i do not know if this is the case. It should be possible for this kind of audit to be carried out.”

It is interesting that the Government is only now taking issue with zero co-payment or “as-charged” insurance policies – 13 years after such policies were first introduced in Singapore, back in 2005.