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Story of elderly’s minuscule MediShield Life payout raise questions about Singapore’s healthcare system

82-year-old Seow Ban Yam was in for a shock when he discovered that MediShield Life had only paid $4.50 out of his hospital bill after an optical-related surgery last year.

The Straits Times reported on Monday (31 Dec) that Mr Seow had gone to the Singapore National Eye Centre (SNEC), which is a SingHealth cluster, to undergo cataracts removal on both of his eyes. Prior to that, he was informed that a blockage to the flow of his tears needed to be cleared first.

Mr Seow, a retiree and a former entrepreneur who ran a business selling books to schools, could have been paying over $12,000 for his surgery fees without a subsidy from the government. His bill amounted to $4,477 as a result of the subsidy.

Prior to the payout, Mr Seow had to fork out the first $3000 from his Medisave account as a part of the annual amount deductible for seniors above 80 years of age.

While MediShield Life’s policy stipulates that the insurance will cover 90 per cent for the first $5000 of such subsidised fees, and 97 per cent for bills above $10,000 in total in a single insurance year, MediShield Life reportedly only paid $4.50 in Mr Seow’s case.

A Ministry of Health (MOH) spokesperson – in commenting on the seemingly disproportionate reimbursement, in relation to what Mr Seow had initially paid – said: “MediShield Life claim limits have been sized to cover nine in 10 of subsidised bills to balance between providing assurance to patients and ensuring affordability of premiums.”

“As the national referral and tertiary eye centre, SNEC’s cost and fee structures are higher than those at other public healthcare institutions,” the spokesperson added.

SNEC has “cost and fee structures (that) are higher than those at other public healthcare institutions”: SNEC CFO

While SNEC billed Mr Seow $4,272 for the operation, MediShield Life’s coverage of the specific procedure has a cap of $2,800.

In addition to the surgery, the insurance also covered the cost of his one-night stay and “consumables” which amounted to $205.

Considering MediShield Life only paid $4.50, Mr Seow had to foot the remaining amount of $1,472.

The maximum reimbursable amount, according to the Central Provident Fund, was $3,005.

“The whole idea of MediShield Life is to meet heavy bills. I don’t understand why it is limited to $2,800 when the bill is more than $4,000.

“This defeats the purpose of insurance,” lamented Mr Seow.

However, the MOH spokesperson said: “The amount not covered under MediShield Life can be paid using Medisave. Patients who face difficulties affording their bills can apply for Medifund.”

Medifund could not be applicable to Mr Seow, as he was able to pay the bill with his Medisave money.

Chief financial officer of the SNEC Ms Irene Png explained told ST that SNEC has “cost and fee structures (that) are higher than those at other public healthcare institutions”. 

“The three-hour operation was done in the major operating theatre and was followed by post-operative monitoring and care. The higher fees charged were for the complex tertiary care that Mr Seow received,” she added.

Earlier, the MOH spokesperson said: “MOH will continue to work with SNEC on funding and review its costs and charges to improve patient affordability”.

Head of the Government Parliamentary Committee for Health Dr Chia Shi-Lu told ST: “Either the reimbursement limits for various procedures need to be raised, or the MediShield Life cover needs to be raised to reflect the increased cost of these procedures.”

“We should not lose focus on the principle of first trying to keep costs down to ensure we are getting value for money,” added Dr Chia.

Mr Seow’s case with MediShield Life “exemplifies the complex nature” of Singapore’s healthcare financing system: Senior health practitioner

Meanwhile, a senior medical doctor told TOC on Tuesday (2 Jan) that Mr Seow’s “unfortunate case exemplifies the complex nature of our healthcare financing system.”

“We do have a catastrophic health insurance scheme which will help with major and very serious illnesses but the high deductibles mean that more routine but expensive and complex procedures are often not covered adequately.

“The system is badly in need of reform and not more complexity,” he added.

Separately, award-winning comic artist Sonny Liew, in an attempt to provide a clearer picture of MediShield Life’s reimbursement of Mr Seow, published a flow chart on Tuesday (2 Jan).

Mr Liew had previously highlighted several things he found confusing regarding MediShield Life’s reimbursement of Mr Seow’s hospital bills in a separate post, among which were what was meant by MediShield Life’s coverage of “90 per cent for the first $5,000 of subsidised bills” and the discrepancy between the surgical costs limits set by MOH and the amount actually paid by MediShield Life.

“MediShield Life is supposed to cover 90% of “the rest of the bill” (or according to the info box “90 per cent for the first $5,000 of subsidised bills”). This presumably should have meant 90% of the $1447 post-subsidy (more accurately, post-subsidy and post-Medisave) bill, ie: $1329.30,” he pointed out.

He continued, “The MediShield Life Scheme “set[s] limits for different types of procedures, based on a table of surgical costs set by the MOH (Ministry of Health)”, and the one that Mr. Yam had has a $2800 cap. That suggests the $1329.30 would have been within the cap. CPF says the “maximum reimbursable amount” is $3005.”

For Mr Liew, the S$3,005 mentioned by CPF seems to be the key to this rather perplexing story since this is the figure that determined the amount paid by the insurance company.

“$3,005 minus what Mr Yam paid via MediSave ($3000) is $5, so 90% of $5 is the $4.50 mentioned in the headline,” he wrote.

Puzzled over where the amount S$3, 005 came from, Mr Liew questioned: “Why would this figure minus the amount paid by MediSave be the basis of the MediShield Life payout, rather than the S1, 447 post-subsidy-plus-MediSave bill?

MediShield Life reimbursement policy “a complicated arrangement”: Former NTUC chief

Former NTUC chief executive officer Tan Kin Lian also chimed in on the issue, stating that “this is a complicated arrangement” and that the “bits and pieces” payment system is bound to confuse policyholders.

Mr Tan wrote in a Facebook post on Tuesday (2 Jan) that despite the government’s belief that “this is necessary to make the patients responsible to help to control the medical expenses,” he said that “in reality, most patients are so confused that they are not able to play a part to “control” the expenses”.

“The only control that they have is to choose the medical facility to go to. After that, they have to face the charges and add-ons for various kinds of treatment,” he added.

He suggested that the government “should take the responsibility to set the charges for various types of treatment, if Medisave and Medishield are to be used.”

“The public hospitals and clinics, which also have access to the subsidy, should be the expected to take the lead to provide services based on these approved rates. These rates will still yield profit to the restructured hospitals, but not the big margins that they enjoy now.

“The approved rates should be an all-in rate for the treatment. The hospitals should be expected to absorb any variation in the treatment, and not allowed to charge for every item of service.

“The restructured hospitals that are not profitable should look into the control of their expenses. We are currently spending too much for infrastructure, management salaries and expensive systems,” warned Mr Tan.

He also argued that “the deductible under Medishield scheme is too high,” and that “it should be reduced to $500 or even lower”.

“All the caps on Medisave should be removed. After all, the patient is going to an approved hospital for an approved treatment,” said Mr Tan.

“It is naive for the govt to think that the patients can control the expenses. They are leaving the patients to the mercy of the mercenary medical system,” he lamented.

Netizens continue to opine that the system is rife with complexity, and suggested that said complexity might be deliberate as a way to obscure the profit-driven objective behind the insurance policy:

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