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PM: We spend less on healthcare than other countries but achieve better outcomes

PM Lee officially opened Sengkang Hospital two weeks ago on 23 Mar. In his opening address, he said Singapore spends less on healthcare than most other developed countries, and yet able to achieve better outcomes than these countries.

“We have needed to spend less partly because our population was younger, and has only recently begun aging. But the main reason is because we have structured our system properly, and built in the right incentives to guard against over-consumption of healthcare services,” he said.

“We have to watch carefully how heavily the Government subsidises healthcare. Not just to save taxpayers’ money, but to avoid encouraging over-treatment by doctors and over-consumption of healthcare services.”

He added that in countries with very high subsidies or free healthcare, people worry less about their healthcare costs, and doctors also correspondingly prescribe more unnecessary and expensive tests and treatments.

Still, he said that Singapore’s healthcare expenditure is rising faster than the GDP. “Eventually, we cannot sustain this,” he said.

“So in the medium term, we have to find new ways to fund this healthcare spending… And we have to make hard choices and I hope we will have the support of Singaporeans when we make them.”

He did not say what sort of “hard choices” his government is going to make to fund future healthcare spending but in Feb this year, Finance Minister Heng Swee Keat has already told Parliament that the increase in GST (to 9%) is necessary in light of the needs in healthcare and other areas. It is slated to kick in some time between 2021 and 2025.

Singapore government spends less in healthcare because citizens spend more out from their own pockets

According to data from World Bank, the Singapore government actually subsidises the least among many countries when it comes to healthcare.

For example, among the 7 countries whose hospitals were ranked top 10 by Newsweek magazine recently, Singaporeans incurred the most out-of-pocket expenditure as a percentage of total health expenditure:

Out-of-pocket expenditure (% of total health expenditure)

  1. US 11.1%
  2. Germany 12.5%
  3. Japan 13.1%
  4. Canada 14.6%
  5. Israel 24.4%
  6. Switzerland 28.4%
  7. Singapore 36.7%

The out-of-pocket expenditure (percentage) was even higher than the average of the East Asia & Pacific countries. When the high income countries in this region were taken out leaving only the 3rd world countries in the calculation, Singapore’s out-of-pocket expenditure (percentage) was still higher than theirs:

  • East Asia & Pacific 26.1%
  • East Asia & Pacific (excluding high income) 33.5%

In other words, Singaporean patients paid more from their own pockets as percentage of total health expenditure than even other 3rd world countries in East Asia & Pacific region, on the average. This also meant that the Singapore government subsidised the least.

The World Bank defines out-of-pocket expenditures as any direct outlay by households, including gratuities and in-kind payments, to health practitioners and suppliers of pharmaceuticals, therapeutic appliances, and other goods and services the primary intent of which is to contribute to the restoration or enhancement of health status. This definition can include transport costs for accessing healthcare and over-the-counter medicines and supplies, but does not include pre-paid fees for health-related taxes or insurance.

With the threat of paying high medical costs out from own pockets, it’s not surprising that some Singaporeans has even tried to commit suicide from inside a hospital (‘Woman attempted suicide in Changi Hospital, allegedly from her fear of facing possible high medical costs‘).