GE issues – Managing healthcare and problems with Medishield Life

Image - Wikipedia
Image – Wikipedia

By Howard Lee

That age-old fear of old age – that one would not be able to pass on in dignity – is as real as it can get in Singapore.

The government has acknowledged on many occasions that the cost of healthcare in Singapore is increasing and will continue to do so. Ironically, for a healthcare system that is touted to be highly cost-efficient, the public healthcare financing system, known as the 3M system (Medisave, Medishield, Medifund), operates mostly on a surplus.

This is a social concern that we simply cannot ignore, and all eyes were laid on the government, run by the ruling People’s Action Party, to turn the situation around. Such has been the grouse that bit at the PAP’s heels during the 2011 general elections, and had formed a critical part of its reform agenda since.

Capacity and cost

The government’s current revamp approach has been centred on two key thrusts – increasing capacity at public hospitals to meet demand, and reforming the 3M health financing system.

The healthcare discussion forum organised by The Online Citizen in November 2012, just before the Medishield Life Council released its recommendations, demonstrated that in spite of the government’s efforts to upgrade public hospitals, we are not looking at a sufficient increase in capacity. And the much publicised incident in January 2014  when patients had to endure makeshift beds in hospital corridors and carpark tents suggests that we are still a far cry from developing that capacity sufficiently.

Health Minister Gan Kim Yong
Health Minister Gan Kim Yong

More facilities are being built, and time will tell if it would be able to keep pace with our growing population. But with a growing and rapidly aging population, more in need then ever for healthcare, would it be a case of too little too late? This is a question that Singaporeans seriously need to ask the Health Minister when they think about whether the government is doing all it can to build our capacity to manage healthcare needs.

The other factor that could have helped with the capacity issue was increasing the availability of primary care. Early treatment at local clinics for developing illnesses and minor problems would help relieve demand for treatment further up the healthcare ladder in hospitals. However, primary care is subsidised only at government polyclinics, known for long queues, and treatment at private clinics are paid for by patients themselves or their employers. The Community Health Assistance Scheme (CHAS) was set up in 2012 to help the lower income groups gain access to primary care at private and specialised out-patient clinics, but anecdotal evidence suggests that the system is bogged down by administrative processes, such as how citizens can access subsidies.

Mediashiled Life – more of the same?

Capacity building aside, the issue of how Singaporeans can possibly afford to pay for using such capacity has not been ignored, although we need to question the effectiveness of the scheme that the government has conceptualised to address it. The proposed magic pill was the supposedly all-encompassing Medishiled Life Scheme, which according to the promotional slogan on the Ministry of Health’s website, offers all Singaporeans “better protection, for all, for life”.

Slated to be rolled out in November 2015, will Medishield Life be effective in solving the problem of rising healthcare costs? Opposition MPs from the Workers’ Party and the Singapore People’s Party have raised the issue of deductibles, and the fundamental issue here is that Singaporeans still need to pay for a substantial part of their hospital bill before Medishield Life can kick in to assist. It would then seem that the scheme falls short in terms of being able to help Singaporeans tide over the first level of payment for their treatments, and might still contribute to reluctance among the needy to early treatment of illnesses in time to come.

Medishield Life MOH scDeductables can, of course, be covered by private insurance schemes that ride on top of the Medishield Life scheme, but the additional cost could be a put-off to those who cannot afford it. In that sense, Medishield Life can hardly be seen as the comprehensive scheme it has been touted to be.

Also, the issue of covering pre-existing illnesses has been raised by a group of overseas Singaporeans, who are currently being covered in full, even for pre-existing illnesses, in their host country. However, the Medishield Life Scheme Act effectively forces overseas Singaporeans to pay for premiums they do not need and have no reason to use, hence marginalising them on the wrong side of the law by default. This sends worrying signs that the scheme suffers the burden of bureaucracy that could render it irrelevant to the specific needs of policy holders.

A measure of success, then, of Medishield Life is how well it stands up against schemes offered by other countries. If the scheme is losing “customers” – citizens of the nation that the scheme is supposed to comprehensively provide for – to another “competitor”, then serious questions need to be asked of its “product quality”.

Do we have alternatives?

A longer term look at Medishield Life would suggest that the scheme might only be placating certain grouses about our healthcare system, leaving broad swaths of other nagging issues unaddressed, and without doing much to address the underlying problem of rising healthcare costs.

SDP-Healthcare-Advisory-Panel-1-jpg_134156Are there alternatives the government can consider, to make Singapore’s national healthcare system truly universal? The Singapore Democratic Party launched its National Healthcare Plan in August 2012. The proposal “aims to foster a universal health-care system that is compassionate and fair”.

SDP had noted that the Medishield Life scheme was similar to its own National Healthcare Plan, with a few exceptions. The first is that Medishield Life will still mostly be a rework of the current 3M scheme in terms of actual healthcare expenditure, in that the government will take from premiums paid by citizens to pay for healthcare expenditure – in particular, money that is already in the 3M system – while the SDP proposes returning current monies in 3M to citizens and for the government to cover 84% of annual costs from taxes.

The second is that SDP’s plan drafts flat-free premiums based on income, rather than the formula used by Medishield Life that factors in subsidies based on things like household income and home type.

The third difference is that there is also no indication in the SDP’s plan for extra loading for pre-existing illnesses, as all claims seem to be standardised. The SDP also proposes doing away with ward classes, which makes the administration of services more unilateral.

Granted, SDP’s plan still prompts some questions, such as whether its calculations of premium is sustainable. But it is important to note that SDP’s proposal rests on two fundamental principles that has been lacking and much needed in Singapore’s current healthcare scheme, including Medishield Life: That premiums collected are meant to be used, not accumulated as surpluses as a result of prudent utilisation; and simplicity of administration that pays out to all by needs, with the assumption that people generally do not wahealthcare-1024x529nt to seek healthcare if they can avoid it.

More fundamentally, SDP’s proposal does suggests that the government’s insistence that the Singapore healthcare system is universal as a result of Medishield Life is highly questionable, and could be no more than an attempt at managing expenditure rather than outcomes in healthcare cost and standards.

The final verdict on whether bolstering healthcare facilities and implementing the Medishield Life scheme would really improve the healthcare system would be decided by citizens. Their views can only contribute a small, although significant, part in their voting decision. But what is clear is that both efforts are still found wanting, particularly in their professed long-term aim of a sustainable healthcare system that caters to the need of Singaporeans. We also need to be mindful that premium subsidies that the government has thrown out can only help so much, if the approach of the system itself is fundamentally unsound.

On the upside, there are currently more alternative proposals and views from opposition parties that citizens can consider for revamping our healthcare system. We owe it to ourselves to study these proposals and give them due credit if we feel they can achieve longer term objectives of managing costs and better care facilities.

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August 2015