Address by Minister for Health Gan Kim Yong at the 65th World Health Assembly, Geneva 21 May 2012

FINANCING HEALTHCARE: THE SINGAPORE EXPERIENCE

Professor Thérèse N’dri-Yoman, President of the 65^th World Health Assembly

Dr Margaret Chan, Director-General, World Health Organisation

Honourable Ministers

Distinguished Delegates

1.          Let me first congratulate Professor N’dri-Yoman on your election as President of the 65^th World Health Assembly.  

Developing a Comprehensive Healthcare Financing System

2.          This is my first World Health Assembly, having just taken on the Health Minister’s portfolio in Singapore last year. I am happy to have this opportunity to share Singapore’s experience in developing a healthcare system to meet the needs of the people, not only today, but also for the future.

The Singapore Experience

3.          Our aim is to provide good quality healthcare that is accessible and affordable to those who need it. We have achieved good outcomes on the back of a sound and sustainable healthcare financing system, supported by a multi-layer safety net. Our system is by no means perfect and will continue to evolve as our healthcare needs change over time.

4.          A key principle that we established right at the start was that there is no such thing as free healthcare; someone has to pay the bill eventually. It could be employers, the government or the individual, or a combination of the three. Yet, regardless of the combination, this burden is ultimately borne by the nation as a whole. It is therefore important to design a model that is affordable and sustainable.

5.          Allow me to elaborate how Singapore achieves this through our multi-tier financing framework.

6.          The first tier is Government subsidies, funded by taxes. Our public hospitals and polyclinics in Singapore provide heavily-subsidised healthcare services to keep basic healthcare affordable. The Government intends to double its healthcare funding over the next 5 years. However, patients are required to co-pay part of the bill, which is critical to encourage personal responsibility and avoid over-consumption.

7.          To ensure that patients can afford the co-payment, we have the second tier – Medisave. This is a compulsory personal medical savings scheme that enables all Singaporeans to put aside more savings during their healthy working years to fund their healthcare needs and reduce their burden in out-of-pocket costs in future.

8.          But savings alone may not be sufficient if one is hit by catastrophic illnesses that can result in large medical bills. This is where insurance plays an important role. The third tier, MediShield, is a national catastrophic insurance scheme that enables policyholders to pool their collective risk to cope with large hospital bills. Today, over 92% of Singaporeans are covered under MediShield.

9.          To help the low income families who may not have sufficient savings or their insurance is inadequate, we have Medifund - a medical endowment fund set up by the Government to act as the ultimate safety net for needy Singaporean patients who cannot afford to pay their medical bills even after heavy subsidies, Medisave and MediShield.

10.      Our commitment is no Singaporean is deprived of needed medical care for lack of means.

11.      Through heavy government subsidies and the “3Ms” financing framework of Medisave savings, MediShield the catastrophic insurance, and Medifund the safety net, we guard against over consumption and over-servicing, while ensuring that all Singaporeans can afford good quality basic healthcare. Through this approach, we reinforce the principle of personal responsibility.

12.      Singapore’s multi-tiered healthcare financing system has served us well, but it is very much a work-in-progress. We have taken a pragmatic approach, including adapting to the local context best practices from around the world. We have built a cost-effective and efficacious healthcare financing system that has given us world-class health outcomes. But we also have our challenges, one of which is our rapidly ageing population. The key challenge is to ensure that our healthcare system is adequate not only for today’s needs, but also ready for the future. Our financing framework will thus need to be regularly reviewed and fine-tuned to ensure that healthcare remains affordable and that every Singaporean can age with peace of mind.

Conclusion

13.      All of us in this hall have deployed different approaches in the quest to provide affordable and sustainable healthcare for our people. Unfortunately, there are no easy answers. I hope all of us could take advantage of the opportunity offered to us by the World Health Assembly to come together to share our experiences and ideas in developing and managing our healthcare systems. While our challenges may differ, I believe that there is still much we can learn from each other to do better for our people. I have gained many useful insights from the earlier speakers and look forward to hearing more from those of you who will speak after this.

14.      Thank you.