Ong Ye Kung assures healthcare cost control, citing slowdown in drug spending growth to 5% in FY2023

SINGAPORE: Health Minister Ong Ye Kung has reaffirmed the Government’s ongoing commitment to managing healthcare costs sustainably, while maintaining high-quality outcomes for patients. In a written reply to Parliamentary questions filed by Workers’ Party Members of Parliament Louis Chua and Dennis Tan on 8 April, Ong outlined the Ministry of Health’s (MOH) strategies aimed at cost containment and improving efficiency within the system.

WP MPs query Government on healthcare costs, overservicing, and co-payment mechanisms

Chua, MP for Sengkang GRC, had queried the Government’s long-term plans to manage healthcare costs, including the role of international best practices and the balance between medical innovation and affordability. Tan, MP for Hougang, focused on the contribution of unnecessary tests and procedures to rising hospital bills, asking what measures were in place to prevent overservicing and whether patient co-payment mechanisms could be enhanced. In his response, Ong noted that MOH had implemented several internationally recognised approaches, including Health Technology Assessments (HTAs), to determine the clinical and cost-effectiveness of new health technologies before adoption. This has contributed to a notable deceleration in public sector drug spending growth, which has declined from around 10% before FY2021 to 5% in FY2023. Another major initiative is the value-driven care programme across public healthcare clusters. This model benchmarks costs and health outcomes across common conditions, allowing the system to identify areas needing improvement. Ong emphasised that ensuring value for money in health spending is critical to long-term sustainability. As demand for healthcare rises with an ageing population, Singapore is investing in population health through initiatives like Healthier SG and Age Well SG. These programmes aim to improve health outcomes by focusing on preventive care and shifting care delivery into community settings, thereby reducing reliance on acute hospital services.

Strengthening price transparency and oversight to curb rising healthcare costs

In the private sector, MOH has developed and regularly updates fee benchmarks for approximately 2,200 common procedures and conditions. Hospital bill sizes across different institutions and ward types are also published to promote price transparency and allow patients to make informed choices. To further discourage inappropriate billing, the Claims Management Office established in 2022 actively monitors MediShield Life claims and takes enforcement actions where necessary. This oversight is part of a broader effort to curb the inflation of insurance premiums and manage system-wide healthcare costs. Ong also highlighted the importance of maintaining financial discipline. He cautioned against over-reliance on subsidies or insurance alone. Singapore’s healthcare financing framework combines subsidies, MediShield Life, MediSave, and co-payment to ensure that costs are shared responsibly. This balanced approach helps keep healthcare affordable while ensuring that patients retain a stake in the cost of their care. As a result, national healthcare spending remains under 5% of gross domestic product (GDP) as of 2022, according to Ong. This is markedly lower than the 10% to 12% healthcare expenditure seen in many developed economies, reducing the overall financial burden on Singaporean households.

During 7 March COS debate, Ong warns of rising healthcare costs, with spending to exceed S$30 billion by 2030

During the Budget 2025 Committee of Supply (COS) debate for the Ministry of Health on 7 March, Ong highlighted that government spending on healthcare is projected to rise significantly—from S$21 billion in 2025 to over S$30 billion by 2030. This increase is intended to meet the growing healthcare needs of an ageing population and manage rising costs. To help Singaporeans afford healthcare, the Government will enhance subsidies for dental and long-term care, and raise the MediSave withdrawal limits for outpatient treatments. Ong added that healthcare capacity will also be expanded, while preventive health initiatives such as Grow Well SG will be strengthened to promote healthier lifestyles among children and adolescents. Ong also defended the People’s Action Party Government’s decision to raise the Goods and Services Tax (GST), stating it was essential to sustaining long-term healthcare funding. “We need the additional GST revenue—paid mostly by those who are better off, foreigners, and tourists—to continue supporting universal and affordable healthcare for Singaporeans. The support provided is almost entirely structural, rather than through vouchers,” he said. “We can argue about the perfect timing for raising tax revenues. However, if we do not act in time as the population ages and healthcare expenditure escalates, there will be no debate on budget precision.” “There wouldn’t even be a balanced budget target board to aim for, as our fiscal position would be deep in the red.”