By PN Balji
Editor, The Independent Singapore
MediShield Life is a step in the right direction offering the hope that all Singaporeans will enjoy some minimum level of health insurance to protect against financially catastrophic illnesses. When Medisave was introduced and the government hospitals corporatized in the 1980s, moving from a state-funded model to a larger share of private spending, there was too much emphasis on co-payments by patients to prevent the risk of abuse in healthcare spending. This has led to current concerns about the affordability of health care, says Dr Jeremy Lim, author of Myth or Magic: The Singapore Healthcare System. The Germans and the Swedes also impose co-payments, but these co-payments are pegged to the individual’s income rather than the pricing of services. Hence, patients feel the pinch but in proportion to their income, he adds.
Q. Are the steps that the Government announced recently enough? What else needs to be done?
A. The recent announcements are steps in the right direction. When health policy commentators discuss health systems, we speak of the balance among three critical factors; cost, quality and access. In Singapore, we have some of the world’s best doctors, nurses and hospitals. Physical access is not an issue because of our compactness, but the issue is cost or, more precisely, affordability.
MediShield Life, which is a major shift in policy thinking, offers the hope that all Singaporeans will enjoy some minimum level of health insurance to protect against financially-catastrophic illnesses.
MediShield Life will be mandatory and so all Singaporeans and Permanent Residents will be covered, but the questions still remain: What services will be covered and what out-of-pocket payments do people have to pay? For the last question, what weighs on people’s minds are not just the co-payments and deductibles but also the annual premiums. This is still rapidly evolving. Gerald Giam from the Workers’ Party asked Health Minister Gan Kim Yong about this. Minister Gan informed that MOH was still working out the details. All in, it is too early to say whether the changes will be enough.
Q. The government talked about “peace of mind” for Singaporeans when it comes to healthcare. Is that ever achievable?
A. Economist Robert Yates summed it up very nicely saying that the ambition is for “All people to receive the health services they need without suffering financial hardship”. Healthcare is characterized by finite resources and infinite demand and so it is not possible to satisfy every single person. What I think the government can achieve is an agreed ‘basket of services’ that the citizen is entitled to in the event of illness without suffering financial hardship (and what this term ‘financial hardship’ means also needs to be debated) and a deeper sense of fairness in the system that personal wealth is not the major determinant of access to quality healthcare. The outcome should be that citizens feel that ‘peace of mind’ both clinically and financially whilst knowing also that the government cannot provide everything and they too have a responsibility to do their part.
Q. Is there a system in any country that has an ideal healthcare system, or as close to an ideal system?
A. In my book, I describe the ideal health system as one where the tensions between costs, quality and access are balanced in ways that the country’s citizens are politically comfortable with or at least accepting of the system . In the Singapore context, I wrote recently:
“Firstly, the need for a healthcare financing system that provides “peace of mind” but is at the same time efficient, sustainable and congruent with the dominant political philosophy which is deeply concerned with ‘moral hazard’ and abuse of the system. Secondly, healthcare financing needs to be aligned to and support how healthcare is practised and not the other way around. Hence, the financing orientation may need to move away from the false dichotomies of “inpatient versus outpatient” and “specialists versus GPs” to instead look at episodes of care, regardless of the “where” and “who”. Thirdly, how about a health system that actually promotes health rather than disease treatment and rewards quality over quantity?”
There are no ideal healthcare systems but different countries have elements that I think are worthy of emulating. For example, the Germans and Swedish impose co-payments to address moral hazards like the fear of abuse, but these co-payments are pegged to the individual’s income rather than the pricing of services. Hence, patients feel the pinch but in proportion to their income.
The English have a National Institute for Health and Clinical Excellence (NICE) which is independent of the government and makes decisions on what treatments and services should be funded on the basis of cost-effectiveness. Whatever the mechanism, I think it is vital that all systems have a framework to limit the provision of healthcare services and the spending to what the system can avoid. One has to cut the coat according to the cloth. In healthcare; this is very difficult politically but it has to be done. The best ways are to strive to leave these ‘technical’ decisions to independent bodies which include patient and citizen voices.
Q. What does Singapore need to do to achieve this?
A. Singapore has the ingredients for a very good health system. When I speak to overseas counterparts, I describe Singapore as having the ‘least imperfect’ health system. Mr. Ngiam Tong Dow describes the Singapore model as very balanced, having co-payments, insurance and so on.
To me, the biggest issue is the balance between state and individual/ family responsibility and assumption of risk. In my book, I describe how Singapore has emphasized the primacy of the state and the almost absolute need for the government to be strong and in the driver’s seat. What this results in is the imposition of perhaps even onerous levels of co-payments and the unrealistic burden of risk placed on citizens. It is a bit of a zero-sum game. Because healthcare needs and utilization can be unpredictable, there is a very strong element of uncertainty. Someone needs to set aside monies for healthcare and someone needs to take the financial risks. If the government structures the health system to have substantial co-payments and deductibles, it means citizens have to assume the financial burden. If the government decides, as it has, that MediShield has to have annual caps and lifetime spending amounts, it means that citizens bear the financial risk of busting this cap and being on their own.
In fairness though, there have been tremendous strides made. When MediShield, for example, was first implemented, the age at which Singaporeans ‘fall off the cliff’ and are no longer eligible to enroll was 65 years. It was gradually ratcheted up over the years to 90 years and PM Lee at the recent National Day Rally announced that MediShield Life would have no age restrictions. So it is a journey where Singapore has made much progress, especially in recent years.Q
Q. What roadblocks ahead do you see?
A. I think the tensions will always be with us because of the inherent nature of healthcare being about finite resources and infinite demand. The balance between state and citizen is a mental model that is constantly being calibrated in the minds of policy makers, taking into their calculus what the government’s financial health is, what the political realities are and so on. Even within government as DPM Tharman has alluded to, there is a whole diversity of views and positions along the political spectrum. How the situation plays out will depend on how the mental models held by individual leaders evolve and how the consensus amongst the Cabinet shifts.
At least, Singapore is moving from a position of strength in reforming the health system. There are substantial monies in Medisave accounts collectively (to the tune of over S$60 billion) and with the government being in a strong financial position, can do more and has articulated it wants to do more. The technical decision then is how and to what extent.
Q. Are you a pro-euthanasia or anti-euthanasia man?
A.‘Anti’. I am a firm supporter of palliative care and hope the palliative care sector will flourish and be able to provide support for all patients towards the end of life.
Q. If you were put in a time tunnel and sent back to the 1980s, what would you have done to avoid the difficulties that Singapore healthcare faces in the 21st century?
A. This is a very interesting question. I devoted many pages in the book to the political situation in the 1980s as that was when Medisave was introduced and government hospitals corporatized. Moving from a state-funded model like the NHS with little constraining mechanisms in spending to a larger share of private spending was the right thing to do but Singapore overdid it and emphasized too much on co-payments as a primary mechanism to tackle moral hazard and the risk of abuse. This has led to the current concerns about ‘peace of mind’ and the affordability of healthcare.
On the healthcare delivery side, with the benefit of 20/20 hindsight, I think Singapore should have maintained its strengths in primary care. The thinking that primary care was ‘simple’ and amenable to market models of competition and consumer choice was unfortunate and resulted in the fragmentation and focus on minor ailments and wellness which are the most financially prudent areas private general practitioners can pay attention to. If we had maintained our strengths as a system in primary care and preventive health, the challenges we face now in aging and the ‘epidemic’ of chronic diseases would have been easier to manage.
Another related issue would be addressing the health needs of a rapidly-ageing population. Singapore decided strategically the government would concentrate on acute care and leave the so-called ‘Intermediate and Long Term Care’ (ILTC) sectors to the voluntary welfare organizations. This was a mistake that is now haunting us. What needs to be a tightly coordinated enterprise between tertiary care and ILTC is now terribly fragmented and unbalanced in scale. We have far too few ILTC resources, both in manpower and physical infrastructure.
Dr Jeremy Lim is the Principal Consultant of Insights Health Associates, a healthcare strategy advisory firm and the author of ‘Myth or Magic: The Singapore Healthcare System’ which is available at all major bookstores.
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