The Ministry of Health (MOH) published benchmarks in November for professional fees for more than 200 common surgical procedures performed in the private sector, hoping that setting these costs would prevent private sector physicians from overcharging third parties, like insurers, or even patients themselves.
Moreover, all parties would be better equipped to make informed choices based on these benchmarks.
An Advisory Committee worked on the benchmark fees, based on how complicated the procedures are, inflation, and the prices of the procedures in the past.
Private insurers and patients can compare the fees given by doctors with the MOH’s benchmarks, in order to make sure that they are getting value for their money with their current physician, or if they need to take the option of asking around for better prices.
The MOH’s wide-ranging aim is to ultimately prevent runaway healthcare costs, lessen differences in pricing, and to make sure patients get good value.
Writing for Today, Dr. Eric Finkelstein takes a look at how effective setting benchmark fees will be. He is the Director, Lien Centre for Palliative Care and Professor, Health Services & Systems Research Programme at Duke NUS Medical School.
Dr. Finkelstein said that the Singapore Medical Association (SMA) once posted Fee Guidelines for more than 1,500 procedures, a practice that was stopped eight years ago, due to a decision from the then Competition Commission of Singapore (CCS), which said the guidelines were in violation of the Competition Act.
However, the costs for surgical fees have risen by a wide margin since the guidelines ceased to be published, with the average inpatient bill growing by 9 percent for Singapore citizens in the private sector, almost two times as fast as the rise in bills for public sector patients (4.9 percent), largely in part to fees for surgeries.
Other factors have also contributed to the ballooning of patients’ bills, including reduced copayments for more generous health insurance, putting the onus of health care on individual patients. At the same time, the number of insurance providers has also increased.
The MOH wants patients to do price shopping for health care, earlier this year requiring a minimum 5 percent copayment for new Integrated Shield Plan riders, which, while it encourages people to steward health services themselves, still requires easy access to information concerning healthcare fees.
This is where the new benchmarks come in. Studies from other nations show that providing fees does little to change patients’ choices. However, this is due to the fact that patients who need to count costs are mostly from the public sector.
Dr. Finkelstein also says, “Moreover, even with the 5 percent co-payment, out of pocket costs for those looking for care in the private sector are unlikely to be high enough to encourage significant price shopping, especially given that the fee for any particular surgeon is not known until after a diagnostic visit occurs.
High search costs, long wait times at the public sector, the potential for multiple diagnostic visits, and reputation of the doctor likely supersede marginal changes in out of pocket costs for these patients.”
The doctor suggests that transparency in the prices for costly tests (like an MRI) and expensive medications could more possibly affect patients’ choices.
He also feels that insurers will benefit the most from the new fee benchmarks, as they can be used in negotiating reimbursements. Additionally, the benchmarks may likely reduce fee variation, though these will only be moderately effective in preventing skyrocketing costs. Since doctors are presumably already setting their prices within the average range, only those on the high or low extremes will have a chance to make adjustments.
He does concede that for the long run, doctors who want to charge higher prices will have a more difficult time doing so, thus containing costs.
But he warns that overall, healthcare prices will most likely continue to rise, considering such factors as chronic diseases due to poor lifestyle choices (nutrition and exercise), an aging citizenry and higher insurance coverage.
Far better, he believes, to get to the root of some of these risk factors in order to prevent skyrocketing healthcare costs.