The Government should take a “stronger regulatory role” over the health insurance market to ensure optimal outcomes for the benefit of patients in Singapore, said the Workers’ Party (WP) Member of Parliament (MP) for Aljunied GRC Gerald Giam on Monday (10 May).
Speaking in Parliament, Mr Giam called on the Monetary Authority of Singapore (MAS) to take a “more proactive role” to ensure that patients’ interests are protected within the healthcare system.
“It is notable that the MAS had two committee members on the Health Insurance Task Force in 2016, but has only observer status on the Multilateral Healthcare Insurance Committee (MHIC) that was just set up last month,” he noted.
Mr Giam then questioned, “Why not make them committee members so that their inputs in the committee’s deliberations will carry greater weight?”
He went on to propose policy changes in three areas which he believes will benefit patients over the long term. These areas include medical fee benchmarks, health insurance coverage, and overservicing of healthcare.
Gerald Giam questions why MOH requires 10 years to replace SMA’s Guideline of Fees
Mr Giam highlighted that the rising healthcare costs in Singapore could have been avoided if the Ministry of Health (MOH) had replaced the Singapore Medical Association’s (SMA) Guideline on Fees (GOF) with its fee benchmarks sooner.
He pointed out that the MOH took 10 years to replace the GOF – which was introduced by SMA in 1987 – and appointed the Fee Benchmarks Advisory Committee (FBAC) to set fee benchmarks for surgical procedures and services.
The GOF was withdrawn in 2007 after being flagged as potentially anti-competitive.
According to the Competition and Consumer Commission of Singapore’s (CCCS) website, it was stated that the SMA has received advice from several of its legal advisors that the GOF may contravene Section 34 of the Competition Act.
“While acknowledging that the GOF was an attempt to address information asymmetry in the medical sector, the CCS said at that time that there were ‘other more effective measures’ in place.
“However, with nothing to immediately supersede the GOF, the longer-term impact of its revocation on medical costs may have been even worse than the initial problem the CCS was trying to correct,” said Mr Giam.
He pointed out that there were other factors beyond the removal of the GOF that led to the increase in healthcare costs.
“The removal of the GOF coincided with the expansion of zero co-payment ‘full riders’ for MediShield Integrated Shield Plans (IPs) and a rapid increase in rents in private hospitals.
“This trio of changes could have created a perfect storm which accounts for much of the rapid growth of healthcare costs in the private sector,” Mr Giam explained.
The MOH subsequently introduced the FBAC in January 2018 to set reasonable fee benchmarks for surgical procedures and services, but it only came up with its first set of benchmarks in November 2018, he stated.
“Why did it take MOH more than 10 years to replace the Guideline on Fees with its own fee benchmarks?
“Had the fee benchmarks been introduced soon after the revocation of the GOF, we might not have seen such steep healthcare cost inflation over that decade,” Mr Giam argued.
He also suggested providing fee benchmarks for all the procedures listed in the Table of Surgical Procedures (TOSP) by using the data of MediSave and MediShield claims from private hospitals.
The fee benchmarks were developed based on actual fee data derived from cases of Singaporean patients submitted by private healthcare providers in a single year which align with the TOSP.
Although there are over 2,300 procedures categorised by their complexity in the TOSP, only about 220 of these procedures are listed in the fee benchmarks, said Mr Giam.
“This works out to only about 9% of procedures in the TOSP. The remaining 2,000-plus procedures do not yet have fee benchmarks. In comparison, the 2006 version of SMA’s Guideline on Fees contained over 1,500 surgical fee recommendations,” he added.
Mr Giam asserted that the MOH ought to consult specialists, insurers, and patients, before independently deciding on a reasonable range of fees for procedures with insufficient transacted data.
Govt to expand insurers’ panels to all doctors, allow insurers to use fee benchmarks to determine their payouts
Moving on, Mr Giam proposed expanding the insurers’ panels to all doctors, so that patients will be able to choose the doctors they are familiar with.
The SMA had earlier claimed that many Integrated Shield Plans (IP) insurers have “highly exclusive panels” which does not only affect doctors who are not made part of the panels, but also policyholders who seek to choose their doctors more freely.
However, the Life Insurance Association (LIA) responded earlier in April saying that premiums could “rise significantly” if insurers decide to “recklessly increase” the number of doctors on IP panels.
Mr Giam, on the other hand, agrees that the IP panels should be expanded to admit all doctors.
“To provide patients with a wider choice of doctors, insurers’ panels should be expanded to admit all doctors, so that patients will not feel a need to switch away from the doctor they are familiar with, and who is familiar with their case history, just because that doctor is not on the panel.
“Doctors with an adverse track record with the Singapore Medical Council can still be excluded from the panels,” he said.
Mr Giam also believes that insurers should be able to use the fee benchmarks to determine their payouts.
“They should not use their own panel doctors’ fee schedules, which may tend towards the lower end of the fee benchmarks. If a doctor charges more than the upper end of the fee benchmarks for a procedure, he or she will need to provide written justification or inform their patient beforehand of potential out-of-pocket expenses.
“The Government has to take the lead in introducing these changes across the board for all doctors and insurers. No insurer will be willing to be the first mover on this because of competitive pressures,” he said.
Mr Giam further noted that insurers’ requirement for pre-authorisation could be reduced should there be more certainty of fees provided.
“The main reason why insurers require pre-authorisation is to mitigate the risk of overservicing and overcharging by non-panel doctors. However, insurance companies are not in a position to decide on the medical necessity of a treatment, since they would not have personally examined the patient and understood their case history.
“These are professional decisions best made by the doctor. Even a doctor from a different specialty acting on behalf of insurers may not be sufficiently well-paced to determine if a particular treatment is appropriate for the patient,” he explained.
Govt to institute “greater price transparency” in billing
In addition, Mr Giam highlighted the need to address the issues of overcharging and overservicing by doctors as these are also contributing to the increasing healthcare costs.
“The vast majority of doctors are committed to patients’ best interests. They don’t view their practice of medicine as simply a trade but a labour of care and responsibility to their patients.
“For every doctor that overcharges, there are many more who routinely waive charges for patients who cannot afford their fees,” he asserted.
To address the issues, Mr Giam proposed instituting “greater price transparency” in billing, which will require doctors and hospitals to provide a detailed itemisation of charges on their bills by default.
“For example, surgeon’s fees could state the TOSP code and fee benchmark range for that procedure. Hospitals should list their base costs and mark-ups on drugs and consumables.
“This itemisation should be made consistent across all hospitals, based on a transparent, prescriptive template set by MOH,” he noted.
Mr Giam also applauded the MOH’s plans to set up an independent arbitration unit for patients, doctors, and insurers, as this would help to resolve disputes about fees and the necessity of medical procedures.
“The arbitrators should be empowered to call upon specialists in the same field as the doctor in question to give their professional opinions on the case. They can then decide whether to allow the charge or require it to be reversed,” he added.
Senior Minister Koh Poh Koon’s response to Gerald Giam
In response to Mr Giam’s suggestions and remarks, Senior Minister of State for Health Koh Poh Koon said that there was a process that proceeded after the GOF removal, but it was “enhanced and strengthened” even after fee benchmarks was promulgated.
“Mr Giam asked why it took MOH more than 10 years to replace the GOF with the fee benchmarks. It is understandable that Mr Giam is not a practising doctor, so he may not be fully aware,” said Dr Koh.
The Minister pointed out that the MOH has started publishing total hospital sizes for both public and private healthcare institutions in 2003, five years before the GOF was even withdrawn in 2007.
According to Dr Koh, the total hospital bill sizes include 28 common conditions for the public sector and five surgery conditions for the private sector using actual transacted charges.
“It was then progressively expanded to include more conditions and information. For instance, the total operation fees for common surgeries was published by the year 2014 for the public sector and in 2016 for the private sector,” he added.
Dr Koh also noted that the actual bill sizes for close to 300 procedures and medical conditions have been made available on the MOH website.
“While publications and bill sizes provided a form of benchmarks on charges, we decided to further reduce the information asymmetry between healthcare providers and consumers.
“Therefore in 2017, MOH appointed an independent multi-stakeholder committee to develop and recommend fee benchmarks for the private sector,” he said.
Dr Koh continued, “So it is not as if when we withdraw the GOF, there was a huge vacuum. There was actually a process that really proceeded [the removal] but it was enhanced and strengthened even after the GOF was removed and the fee benchmarks being promulgated.”
Although the fee benchmarks only covered about 8 per cent of the 2,300 procedures listed in the TOSP, he argued that the procedures were selected as they accounted “for more than 85 per cent of the cases involving procedures and 75 per cent of professional fees for procedures in the private sector”.
Dr Koh went on to say that pre-authorisation “is the way to go” to provide access to care by all doctors.
“And in fact, panel sizes have increased by 40 per cent in the last six months to a year, up to 70 per cent of private specialists are already on at least one panel,” he added.
According to Dr Koh, providing an itemised hospital bill is “already required” under the existing Private Hospitals and Medical Clinics Act which will be further enhanced under the new Healthcare Services Act to cover all licensable healthcare services.
“MOH will prescribe the minimum level of granularity that must be reflected in patient’s bills, which include categories such as consultation, medication, and investigations,” he stated.
Licensed clinics and hospitals are also required to display common charges “prominently” at their premises or websites, or provide financial counselling for services that “tend to generate significant bills” before the service is provided, said Dr Koh.