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MOH takes 13 years to discover zero co-payment policies encourage “buffet syndrome”

On Wed (7 Mar), Health Minister Gan Kim Yong told Parliament that co-payment in healthcare plays an important role in ensuring that the healthcare system is sustainable.

However, he noted that some private insurance policies had offered zero co-payment coverage. He said that this encourages a "buffet syndrome" in patients.

"They are called full riders," Gan explained. "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," he added.

Aviva was the first insurance company to offer zero co-payment or "as-charged" policies some 13 years ago in 2005. The other insurance companies quickly followed suit.

Since zero co-payment is undesirable and "dilutes the personal responsibility" to choose the appropriate healthcare services like what Gan said, it is a mystery that the government didn't stop those zero co-payment policies then and waited until after 13 years.

Later on the same day, Senior Minister of State for Health Chee Hong Tat immediately announced that patients must now bear a minimum 5 per cent co-payment for new Integrated Shield Plan riders. This will affect new policy holders but not the existing ones who have already bought the zero co-payment policies earlier.

Tan Kin Lian: Doing away zero co-payments would not stop escalation of healthcare cost

Writing on his Facebook page, former NTUC Insurance CEO and Presidential candidate Tan Kin Lian rebutted Gan.

Mr Tan thinks Gan is mistaken for blaming patients for the "buffet syndrome".

"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," Mr Tan wrote.

"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."

Speaking with more than 40 years of experience in the insurance business, Mr Tan said that he has not found any evidence of patients who "like to consume health care because it is free or largely subsidised". He blames the doctors and hospitals instead.

Patients rely on doctors to give healthcare advice

"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," he explained.

"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."

Hence, to overcome over consumption, he advocated to focus on doctors and hospitals, rather than the patients.

He further elaborated, "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."

Tan Kin Lian asks MOH to study the Japanese system of managing healthcare cost

He did not think that asking patients to make co-payments would stop the escalation of healthcare cost.

"To stop the over-consumption and explosion of healthcare 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," he said.

"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."

In Singapore, the government is only bearing 40% for every dollar spent by patients on healthcare services.

"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," he added.