Easing the cost of healthcare for Singaporeans – NCMP Gerald Giam

By Non-Constituency MP Gerald Giam
[Delivered in Parliament on 12 Nov 2013]

Madam Speaker,

Thank you for the opportunity to speak on this adjournment motion.

Many Singaporeans are worried about falling ill and not being able to afford their medical expenses. A survey conducted last year by Mindshare, a global media and marketing services firm, found that 72% of Singaporeans felt they “cannot afford to get sick due to high medical costs.”

This echoes the sentiments of many Singaporeans I have spoken to, many of whom are elderly or have sick family members to care for. In particular, the high out-of-pocket payments at the point of treatment are a great source of worry for many.

It is not uncommon to hear accounts of older folks ignoring health problems and delaying visits to the doctor because they fear that medical expenses will be a financial burden to themselves and their families.

Medical inflation in Singapore was almost 9% in 2011 – much higher than general inflation. Our people should not have to face these increasing medical costs alone. The structure of our healthcare financing system is a critical factor in determining whether healthcare is truly affordable for all Singaporeans.

In Singapore, less than one-third of all healthcare costs are paid by the Government. More than 60% of costs are paid by patients out-of-pocket, which includes cash and Medisave. This is much higher than the average of 14% in high income countries, according to data from the World Health Organization.

Is it any wonder then, that Singaporeans are feeling the strain of healthcare costs? High out-of-pocket spending can create barriers to healthcare access and use, because people who have difficulties paying medical bills may delay or forgo treatment even though they need it.

It is a fundamental responsibility of the Government to ensure that all our citizens have access to high quality healthcare based on their medical needs, and regardless of their income.

The healthcare burden cannot continue to be borne so heavily by individuals and their families. Singapore’s population is ageing and healthcare costs are expected to continue rising.

The Government must be prepared to shoulder a much larger proportion of healthcare costs than it currently does. We need to shift away from seeing healthcare as primarily an individual responsibility, and emphasise more government intervention, risk sharing and fairness in financing.

We need to change the way healthcare is financed, so that Singaporeans who fall ill can focus on seeking the most appropriate medical treatment, without worrying about whether they will be able to afford it.


I would like to make a few proposals on healthcare financing to reduce the financial burden on Singaporeans when they fall ill, to improve the efficiency of the healthcare system and contain medical inflation.

MediShield premiums

First, on MediShield.

MediShield is an insurance scheme intended to help cover large hospital bills. However, it does not provide full coverage. Patients need to make hefty co-payments , in addition to other claim limits like caps on hospital ward charges, and annual and lifetime claim limits. As a result, MediShield claims covered only 2.1% of total healthcare expenditure in 2011.

In August this year, the Government announced plans to provide expanded insurance coverage under a new “MediShield Life” scheme. These changes to cover all Singapore residents, without exclusions for old age or pre-existing conditions, are certainly welcome. They are consistent with what many Singaporeans and the Workers’ Party have been calling for.

However, I remain concerned about the rising premiums. The Government has already warned that premiums will go up. While I accept that increased coverage will come at a cost, there are two questions we must consider: Should all of these cost increases be borne by policyholders? And will some groups of Singaporeans find the premiums unaffordable?

MediShield premiums rise with age. An 86-year old pays a premium rate that is more than 23 times that of a 20-year old. The elderly shoulder a disproportionate premium burden. Policyholders over age 60 contribute about 36% of total premiums, even though they make up just over 12% of policyholders.

Most of the elderly are retired with little or no income. It is unfortunate that many of those who are least able to afford the premiums are paying the most.

Many of our senior citizens have exhausted their Medisave accounts and have difficulty coming up with money to pay their premiums. Every year, an average of 650 elderly policyholders opt out of MediShield coverage completely. This leaves them vulnerable and without insurance protection, putting them at risk of financial catastrophe if they fall ill.

The Government does not directly subsidise MediShield premiums, although it does give ad hoc Medisave top-ups to the elderly and a Medisave grant to newborns.

I would like to propose that the Government introduce a MediShield premium subsidy programme for all vulnerable groups of Singaporeans. These would include elderly persons with no income and limited savings; people with disabilities; patients who have exhausted their Medisave; low income families; and those who already qualify for Medifund, Public Assistance, ComCare and the Community Health Assist Scheme (CHAS).

The appropriate level of premium subsidies should be automatically extended to them, without a need for them to apply separately. This could help many more Singaporeans to cope with the rising premiums, while ensuring that the MediShield Fund remains solvent.

Annual cap on out-of-pocket payments

While MediShield is intended to help cover the costs of large medical bills, policyholders still have to make co-payments in the form of deductibles and up to 20% in co-insurance. Last year, over 2,400 MediShield policyholders made co-payments of over $10,000 each.

These co-payments can be financially crippling on their own. Would MOH explore the introduction of an annual cap on out-of-pocket co-payments made by each patient. Any medical bills above the cap would be borne by the Government.

Such schemes are a feature in most developed countries, including Japan, South Korea and New Zealand. It is also one of the key consumer protections in the Affordable Care Act in the US.

An annual cap on out-of-pocket payments will limit the financial risk that individual patients are exposed to, and help allay the anxiety of many Singaporeans about uncertain medical expenses.


From the Government’s perspective, co-payments are necessary to discourage over-consumption. The Government’s fear is that “free” healthcare will escalate costs, and become fiscally unsustainable.

However, people do not consume healthcare like they do other goods and services. Most people visit doctors rather grudgingly – usually when they fall sick and have obvious symptoms. Demand for healthcare is therefore not unlimited.

A health insurance experiment conducted by the RAND Corporation, involving over 7,000 patients in the US, found that indeed, higher co-payments reduced the consumption of healthcare. However, the experiment also found that co-payments caused patients, especially the poorer ones, to reduce the use of medically necessary care. The experiment found that poor patients with hypertension tended to avoid treatment, leading to significantly higher mortality rates.

High co-payments have also been shown to have an effect on patients adhering to their prescriptions. In another experiment by researchers from Harvard Medical School, nearly 6,000 patients who had just suffered a heart attack were prescribed drugs that reduced the chance of another attack. Half of them had their co-payments for these drugs waived, while the other half paid the usual fee. The result showed that more patients in the zero co-pay group took their medication regularly. They saw their health improve, with lower incidences of stroke and repeat heart attacks than the patients who had to co-pay. Interestingly, the elimination of co-payments did not increase total spending by patients and insurers, and even reduced spending in some areas.

The lesson from these two experiments, is that if co-payments are too high, poorer patients may be deterred from seeking necessary treatment. Similarly, it is difficult enough to get patients to adhere to their prescriptions, and high co-payments could make it even harder. This could have knock on effects like higher rates of hospital re-admissions, which will cost both the patient and the system more in the long run.


The Government’s claim that no one will be denied healthcare because of inability to pay is cold comfort for some Singaporeans who regularly forego medical appointments or cut back on prescribed medication because of the high costs and the difficulty in obtaining financial assistance.

A few weeks ago, I met an elderly resident at his home in Bedok, who suffers from COPD , a chronic lung disease. He is unable to work and has no children to support him. When I asked him how he was coping with his medical expenses, he told me that he was using his Medisave but had almost exhausted it. I was disturbed to learn that he often skipped medical appointments and cut back on his medication just to save money. I told him that there was financial assistance available, and that he should not compromise on his health. But he told me that he had given up applying for assistance because of all the documents that he had to submit, and interviews he had to attend, for the purpose of means-testing.

Recently, a colleague sent me a photo of a large banner at the counter of a pharmacy at a government restructured hospital that read: “Please inform our staff if you do not want to take the full supply and/or if you need to know the total cost of your medication”.

These two situations illustrate how many Singaporeans find themselves making hard choices between getting the necessary treatment and saving money, and how the onerous process of means-testing may be deterring some needy patients from obtaining financial assistance, and therefore treatment.

I have spoken in this House before about how all means-testing should be done without the need for patients to physically submit income documents. The patients and their families should only need to give their consent for the provider to assess their income records with the relevant government agencies like CPF Board and IRAS.

This facility should be available at all institutions, whether private or public. The providers of all assistance schemes, including Medifund, hospital endowment funds and other charity schemes, should be able to access these records. This will better ensure that patients receive all the financial assistance that they qualify for.

Better still, can vulnerable groups of patients be pre-qualified so that they don’t even have to submit any applications before receiving financial assistance? Currently this is already being done for the CHAS cardholders receiving outpatient treatment. MOH should consider extending the same for inpatient financial assistance schemes.


Containing healthcare costs

As I call for an expansion of the role of the Government in easing the healthcare burden on Singaporeans, I am also aware of the many challenges that our healthcare system faces in containing ever-increasing costs. We need to look into ways to contain healthcare costs while still improving patient outcomes.

Integrated healthcare

Many of the current measures to contain healthcare costs focus on curbing consumption by patients. However, most patients do not have sufficient knowledge to decide on the type of treatment they need. These decisions are usually entrusted to healthcare providers, which include doctors and hospitals.

Providers therefore drive the bulk of healthcare spending through their decisions to admit patients to hospital, order medical tests, prescribe drugs and charge fees. Therefore, if we seek to control costs, we need to actively engage providers.

To achieve this, all providers – including GPs, hospitals and preventive care providers – must be made collectively responsible for providing a full spectrum of care for patients. These providers should cooperate and share patient information with each other, in order to make more accurate diagnoses and coordinate patient care.

They should focus on keeping patients healthy and ensuring they take their medication regularly. This will minimise hospital re-admissions, investigations and treatment, all of which are much more expensive. Providers should be paid based on their achievement of measured quality improvements, not simply the volume of patients they see or the level of fees their patients pay.

All this could lead to healthier patients and lower costs for both patients and the system.

Health technology

Technology should be used as a “force multiplier” in the face of limited manpower in our healthcare system. While Singapore is no laggard in healthcare technology, its potential is not being fully realised. Often, the problem lies not with the lack of technical expertise, but a lack of adoption.

One example of this is the National Electronic Health Records system (NEHR). The NEHR enables patient health records to be shared across the healthcare system. It can reduce medical errors, and improve productivity and coordination between providers. This will lead to better diagnoses and treatment, and reduced medical costs.

The NEHR has been rolled out to all public hospitals, polyclinics and long-term care providers. However, while over 5,000 clinical users have access to the system , what percentage of these users are fully utilising the functionality of the system? Is usage lower than it should be, due to usability issues or some providers still preferring to use handwritten clinical notes? How is MOH ironing out these issues to increase usage of the system?

The usage of NEHR in the primary care sector is lagging even further behind. As at March this year, it had been rolled out to only about 50 out of the 2,000 private GP and dental clinics.

The Government has already invested $172 million to develop Phase 1 of the NEHR, and is paying about $20 million each year in maintenance costs. The subsequent phases are expected to cost more. While the Government deems it important to recover the cost of developing and maintaining the NEHR, the goal of cost-recovery must not impose a roadblock to the full adoption of the system by all healthcare providers in Singapore. It is important to ensure that all providers, including GPs and specialist outpatient clinics, enter the necessary clinical data into the system, so that the full benefits of having electronic health records can be realised.


Madam, healthcare is an issue that is close to the heart of every Singaporean. While we are all at risk of falling ill, unaffordable medical costs are not inevitable. The Government must reform the way that healthcare is financed in Singapore, so as to ease the healthcare burden on all Singaporeans. This will give all our people peace of mind, knowing that they will be able to afford all necessary treatment if they fall ill.