COMMENTARY: Singapore’s healthcare financing system is admired and reviled at the same time. But how can the system be “messed up” while Singapore is ranked as the “most efficient healthcare system” in the world?  

Public health expert Jeremy Lim and doctor Sophia Tan offer some reasons, and argue that more can also be done to help the average citizen.

• Our healthcare services have always been there, but availability does not equate to accessibility because some people fall through the cracks.
• Singapore's healthcare financing model is "Disneyland" for policy makers, but confusing for citizens.
• Complexity of the system breeds anxiety, so healthcare schemes and programmes should be simplified as far as possible.

By Jeremy Lim and Sophia Tan

One of the most vivid images of the 2011 General Election hustings besides the photos of the massive crowds at the Workers’ Party rallies was a speech by now-Singapore Democratic Party (SDP) chairman, Prof Paul Ananth Tambyah, saying in Mandarin words to the effect, “you know they say in Singapore, one can die but cannot fall sick”.

But the response of the audience, roaring in appreciation as his words resonated was the memory starkly etched in our minds.

Fast forward to 2020 and in the recent General Election, Prof Tambyah described Singapore’s healthcare financing system as “messed up”, whilst acknowledging the world-class quality of our doctors, nurses and other healthcare professionals.

At the same time, international experts have praised Singapore’s model, with then-Director General of the World Health Organization (WHO) Margaret Chan in 2015 saying, “Through foresighted and visionary planning, Singapore achieved first-rate health care, with outstanding health outcomes, at a cost lower than in any other high-income country in the world”.

In the same speech, Dr Chan noted Bloomberg had recognised Singapore as having the most efficient healthcare system in the world, and mentioned also that the WHO ranked Singapore “top for key health indicators, especially maternal and infant mortality”.

What is the truth then? How can Singapore’s healthcare financing system be totally “messed up” and a “disaster” whilst at the same time Singapore is ranked the “most efficient healthcare system” in the world, earning international plaudits.

The answer really lies in the lens through which one views the health system – whether through the macro-lens of economists and policy planners or through the lived experiences of a low-income Singaporean afflicted with sickness and clumsily navigating through the system.

More importantly, given the gales of disruption sweeping through the world, first from technological advances and now courtesy of a virus invisible to the naked eye, is Singapore’s model fit for purpose today and if not, what needs to change?

Why the Singapore financing model is admired and reviled, at the same time

Singapore appeals to especially the neo-liberal view of the world - a market approach, competition amongst providers and choice for patients, are best to drive efficiency and get the most value out of every dollar put into healthcare.

The theory goes like this: competition stimulates innovation, and this brings down prices and by treating patients like customers who vote with their feet, the system would meet citizens’ needs as consumers and also manage costs more effectively overall.

What about those who fall through the cracks? Policy makers can, in a highly targeted manner provide additional support for those most in need given Singapore’s rich data structures that allow for ‘means testing’ or allocation of government funding based on need.

The emphasis on shared responsibility in the pursuit of efficiency also “warms the cockles” of the neo-liberal’s heart.

Former health minister Khaw Boon Wan explained the importance of co-payments to reduce moral hazard, explaining that “without deductibles and co-payment, there will be a tendency for patients to unnecessarily and indiscriminately consume, or what we call the 'buffet syndrome'”.

This has now been built into the DNA of the healthcare system with co-payments and some measure of individual responsibility embedded into Medisave (the world’s first and only national health savings account) and MediShield Life (co-payments and deductibles).

Virtually every service offered by the public healthcare system require some degree of co-payment. For example, senior Singaporeans or children need to pay S$6.90 for each polyclinic consultation.

The macro-indicators are impressive: Singaporeans have the highest life expectancies in the world, and spend a fraction of what other high-income countries do on healthcare. The average bill size for a hospitalization in a C-class ward (dormitory style bed arrangements in an open-air ward) is just over S$1,000.

However, the heartlander, unschooled in public policy and uncaring of “moral hazard and adverse selection”, only knows that the doctors have told her she needs an operation, she has thousands in her Medisave account but only some of it can be used because of limits imposed on Medisave withdrawal.

She then learns that recovery in a community hospital will cost her more than in the hospital because she is ‘not poor enough’ and once she goes home, the medicines are more expensive because subsidies are different between inpatient and outpatient settings.

The net effect of all this? Confusion and concern, and a growing frustration at the complexity.

Complexity breeds anxiety

The challenge with the panoply of schemes, which the government reassures will ensure no one is left behind, is that complexity is a necessary consequence.

In 2013, then-Minister for Social and Family Development Chan Chun Sing who is also slated to be Deputy Prime Minister in the 4G leadership, proudly took journalists through an 18-layer framework of different support schemes, asserting that “multiple lines of assistance across the spectrum” rather than a single “line” or programme.

In healthcare, we likewise have a plethora of programmes.

On the Ministry of Health Singapore’s landing page for financial schemes, there are 17 listed including MediShield Life, HCG (Home Caregiving Grant), CTG (Caregivers Training Grant), CHAS (Community Health Assist Scheme) and IDAPE (Interim Disability Assistance Programme for the Elderly).

For all the criticisms of the English National Health Service or the Taiwanese National Health Insurance programme, their appeal lies in their simplicity and comprehensiveness.

The Taiwanese and English we speak to uniformly point to the “peace of mind” that this ease of understanding brings.

A remark made by an English patient to one of the authors (JL) is illustrative: “I don’t understand how the system works, but I know if I’m sick, I just show up and the doctors and nurses will look after me the best they can without ever asking me how much money I have”.

Averages versus outliers

The averages can mask many things.

And behind our shiny outcomes are the more uncomfortable nuggets of data like Singapore having one of the world’s highest rates of foot amputation for poorly controlled diabetes, or Singapore being one of the countries with the highest age-adjusted rates of kidney failure.

Looking at Infant Mortality Rates, which the WHO has described as one of the “most sensitive indicators of a well-functioning health system”, Malay infants have 2.4 times the death rates of Chinese infants.

The outliers are what make the news and the rounds on social media, and it seems everyone knows someone who is drawing on her life savings or selling her home to afford healthcare...

Will a single payer fix things?

For many years, the SDP has advocated for a single payer, universal model, even suggesting that Medisave be dismantled and the monies returned to individual CPF accounts.

What are the benefits of a single payer system?

In theory, purchasing power, the ability to simplify payments and the vested interest to look after patients over the entire life course.

But in some ways, Singapore does already have a single payer system – the government is the single largest funder of healthcare in the country, putting directly about 40 cents of every dollar spent in healthcare.

But through its setting of the rules for use of Medisave, MediShield Life and the Integrated Plans as well as riders, it has an effective multiplier to what it pays.

The government already uses its purchasing power to bulk procure medicines and other healthcare consumables for the public sector (extending this nationwide to include the private sector is a recommendation in the Workers' Party's GE2020 manifesto), and through its ownership of the largest hospitals and primary care facilities, influences greatly the prices of services.

The issue here is not the efficiency of the system but rather the other two aspects – keeping the system simple, at least from the citizens’ perspective, and ensuring comprehensive coverage.

The Singapore healthcare financing system may be Disneyland for the health policy maker, but it can result in a confusing maze of seemingly endless corridors and unfortunately many wrong turns for the unfamiliar citizen.

How about simplifying the myriad programmes and schemes into just two to three?

The SDP proposes a simple plan in which every Singaporean would contribute an average of S$50 a month to a National Health Insurance Fund, depending on income levels, through their CPF, pay 10 per cent of his hospital bill, with the amount capped at S$2,000 per year and the remainder would be paid by the Fund.

The key ideological differences between what the SDP proposes and the current reality in our view, are the bearing of risk and the relative importance of market forces.

On risk, healthcare is – despite our best efforts – fraught with uncertainty. None of us know whether we will drop dead one day and incur almost no healthcare bills, or spend a fortune on a cancer medicine which is not reimbursed by the state.

In the current model, MediShield Life, coupled with personal savings from Medisave provide funding sufficient for the vast majority of citizens but in the government’s efforts to keep the premiums low, caps and sub-caps are imposed on MediShield Life claims.

Hence the citizen is the ultimate bearer of financial risk, and has to trust, that if push comes to shove and he is saddled with a large bill, the government’s commitment and goodwill will prevail and a bespoke financial solution worked out from the many schemes cobbled together.

In the SDP model, the National Health Insurance Fund bears the financial risks of larger claims, unanticipated claims and overall financial sustainability.

This is not dissimilar to the Taiwanese system or most of the European models; citizens or enrolees pay a premium which might be adjusted based on income, some defined co-payments and the national or regional insurance scheme takes care of the rest.

On comprehensiveness, Singapore has made much progress.

The services have always been there but availability does not equate to accessibility and without financial help, many services cannot be affordably accessed by average citizens.

We now recognise the importance of primary care and have extended subsidies through CHAS to private GP clinics which dominate the primary care landscape.

Subsidies have also opened up to multiple segments in the “Intermediate and Long-Term Care” (“ILTC”) sector including palliative care and home care.

The challenge, however, is that the financing schemes are different across the healthcare continuum from primary to palliative care and these result in functional barriers to care across the different levels and a fragmented system.

Could transfers of the duty to navigate and the financial risk to the government from the citizen force rationalising, streamlining and the breaking down of financial silos?

Today, MediShield Life enrols every citizen from cradle to grave and hence, in theory, should have a clear interest in ensuring monies are well-spent. In practice, MediShield Life is administered by the CPF Board mainly for administrative purposes; it does not negotiate with providers and does not help enrolees navigate care.

Can more be done?

Three ideas for the next government to consider.

Firstly, give citizens “peace of mind” by simplifying the many healthcare financing schemes and taking on the lion’s share of financial risk.

The government is the largest payer and is the only entity that can most effectively pool risk. The individual most certainly is the least able to, the philosophy of ‘many helping hands’ notwithstanding.

Secondly, help citizens by breaking down the silos, financial and organisational, between the different levels of healthcare.

A dreaded diagnosis and a long healthcare journey are already stressful enough for patients; let’s help lift the burden from individual citizens and clear the fog of complexity.

Finally, track and report not just how the healthcare system is serving the average citizen. Specifically call out the outliers - low-income households, the unemployed, persons with disabilities, the “reverse 1 per cent”.

As Mahatma Gandhi has gently reminded us, “The true measure of any society can be found in how it treats its most vulnerable members.”

The General Election last week signalled a Singapore that is looking beyond bread and butter issues, and wants more government attention and addressing of “social inequality and social injustices that pervade our society” as political commentator Felix Tan reflected.

Let’s make healthcare better. For all.

About the authors: Jeremy Lim is an Associate Professor in the Saw Swee Hock School of Public Health, NUS. Sophia Tan, MBBS, MPH is a doctor working in the public sector. The commentary is submitted in their personal capacities.

Top image via SGH/FB.