Financing 

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Healthcare Financing Philosophy
Singapore offers universal healthcare coverage to our citizens, with a financing system anchored on the twin philosophies of individual responsibility and affordable healthcare for all. Through a mixed financing system, use of market-based mechanisms to promote competition and transparency and the adoption of technology to improve the delivery of healthcare services, we have secured good healthcare outcomes for our population. We have done so with a national healthcare expenditure of about 4% of our GDP, which is low among developed countries (although this is expected to grow with an ageing population).

These features of the Singapore system have been recognised in various international assessments.  We intend to continually evolve and improve our policies over time.

Universal coverage, multiple layers of protection
We have evolved a mixed financing system, with multiple tiers of protection to ensure that no Singaporean is denied access to basic healthcare because of affordability issues.

The first tier of protection is provided by heavy Government subsidies of up to 80% of the total bill in acute public hospital wards, which all Singaporeans can access.

The second tier of protection is provided by Medisave, a compulsory individual medical savings account scheme which allows practically all Singaporeans to pay for their share of medical treatment without financial difficulty. Working Singaporeans and their employers contribute a part of the monthly wages into the account to save up for their future medical needs and this is portable across jobs and after retirement.

The third level of protection is provided by MediShield Life which has replaced MediShield from 1 Nov 2015. MediShield Life is a basic health insurance plan which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. It is basic because it is sized for subsidised treatment in public hospitals. MediShield Life will provide protection for all Singapore Citizens and Permanent Residents, for life, including for any serious pre-existing conditions. Individual responsibility for one’s healthcare needs is promoted through the co-payment features of MediShield Life. The Government has also committed to keep MediShield Life premiums affordable with a range of Government subsidies.

Many Singaporeans also choose to supplement their MediShield Life coverage with Integrated Shield plans (IPs). IPs are made up of two components – MediShield Life and additional private insurance coverage providing additional benefits and coverage (e.g. to cover the costs of private hospitals or Class A/B1 wards in the public hospitals). As they provide additional benefits and coverage, premiums for such plans are also higher than MediShield Life.

ElderShield, a severe disability insurance, is offered to all 40 year old Singaporeans with Central Provident Fund Board accounts, to risk-pool against the financial risks of suffering a severe disability. Similarly, ElderShield Supplements allow policyholders to purchase additional disability benefits coverage beyond the basic ElderShield product.

Finally, Medifund is a medical endowment fund set up by the Government to act as the ultimate safety net for needy Singaporean patients who face financial difficulties with their remaining medical bills after receiving Government subsidies and drawing on other means of payments including MediShield Life, private Integrated Plans (IPs), Medisave and cash.

Organisation of service delivery
Singapore today has a mixed delivery model. The public sector dominates the acute care sector, delivering 80% of the care in this sector. The primary care sector is dominated by private sector providers, which account for about 80% of the market. In the step-down care sector (e.g. nursing homes, community hospitals and hospices), service provision is mainly provided by voluntary welfare organisations, most of which are funded by the Government for their services rendered to patients.

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Promoting competition and transparency
In 2004, the Ministry of Health began to publish hospital bill sizes to show the variation in costs among our hospitals, with a view to push our hospitals on this effort to “do more with less”.  There have been some successes since then in spurring improvements, e.g. LASIK prices dropped by more than S$1,000 per eye and the competitive price wars continue to this day, at great benefit to consumers. The Ministry has also progressively published health outcomes on the website to encourage further improvements and help patients make more informed choices.

1 Includes all CPF members (Singaporeans and PRs) with positive balances in their Medisave Account as at 31 December of the year.