News Highlights

Find speeches, press releases and forum replies. rss icon
Click here for E-Consultation.

18 Jun 2021

29th May 2021

1. It is a pleasure speaking to you at our annual Work Plan Seminar. There are two priorities – in the short term, win the COVID-19 battle. In the long term, ensure healthcare is affordable to families and also our country; and continue to deliver better healthcare. Let’s first talk about the long term issues.


2. Our current national healthcare expenditure has almost doubled from $10 billion in 2010 to $21 billion in 2018, and is expected to increase further in the next decade. This exponential rise is worrying.

3. In terms of public expenditure, by 2030, around 3% of GDP, will go to healthcare.

Love, Rationality and Time

4. Why is healthcare expenditure rising so rapidly? We can decipher the reasons if we look at our own experiences.

5. When we are young, our healthcare bills are lower. We only need to visit our regular GP usually for health screening, with most having no chronic illness. As we become old, we have more illnesses.

6. When illnesses strike, we may consult different doctors and specialists, even put ourselves through different treatments. Some are expensive, especially the newer options. We may still try them out, even if effectiveness is not so proven. Because our family members love us, and will want to do their best for us.

7. Fortunately, we are covered by MediShield Life. On top of that, many of us also bought Integrated Shield plans. With an as-charged Integrated Plan plus a rider, we may pay very little or no out-of-pocket expenses for private care.

8. But the problem is that while such a worry-free plan may work for us now, it creates problems for future generations.

9. It’s the classic buffet syndrome. Insurance companies over time will find it too expensive to sustain, and premiums will go up. When healthcare expenditure goes up, so too subsidies, and that adds pressure to Government’s fiscal position.

10. When we aggregate this experience across all households and individuals, it fuels a rise in our national healthcare bill that we will find increasingly hard to afford.

11. That is my simplified way of explaining escalating healthcare cost all over the world. It is driven by powerful forces – love, rationality and the march of time.

12. Our love for family members means we often spare no expenses on healthcare. With full insurance coverage, it becomes rational for us to spend without worry because someone else is paying. And with time, we inevitably get older and have more illnesses, and this is compounded by unhealthy lifestyles which often start from young and have irreversible consequences.

Beyond Quality to Value

13. Taming healthcare costs is therefore not about denying quality healthcare. It is about dealing with these powerful forces, so that we spend wisely, effectively, reduce wastage, and keep it affordable for families and our country. Our society is ageing, but we cannot let rising healthcare costs cripple our future.

14. The approach is captured in one of MOH’s vision of the Three Beyonds – from quality to value. There are concrete things that we must do.

15. One, containing the cost of drugs and treatments. We have to evaluate which are the most cost-effective. From there, maintain a list, align it to our subsidy framework and even insurance claim limits, and negotiate with suppliers to ensure that the prices charged are commensurate with the outcomes they deliver.

16. This is a tried and tested approach adopted by many countries. We have many treatments and drugs covered under the Standard Drug List, but we can expand to cover more under this framework.

17. Two, we need to rein in cost inflation fuelled by insurance. Healthcare insurance serves an important purpose, which is why MediShield Life is designed to cover all Singapore residents.

18. The key is to ensure that we do not inadvertently erode the spirit of co-payment. Once there is some skin in the game, consumers will exercise prudence in healthcare spending and doctors will exercise more discretion in recommending the appropriate treatments.

19. Three, we need to deliver better healthcare. Better does not necessarily means more expensive. Instead, it can be more efficient, patient-centric, and affordable. This is the next top