Good health care remains affordable

01 Jun 2007, The Straits Times

Question

Name of the Person: Salma Khalik, Health Correspondent

Demand for C-class beds at hospitals up sharply

Cost of subsidised care may go up again if trend continues

MORE and more patients are opting for highly-subsidised care at public hospitals, resulting in a huge jump in demand for C-class beds over the past five years.

In 2001, only 27 per cent of all patients chose C-class beds, where the Government foots 80 per cent of the bill.

Last year, 40 per cent did so, and this has put a strain on hospital finances. The demand for B2 class, where the Government pays about 65 per cent of the bill, remained at about 35 per cent. But demand for the private A class fell by 8 per cent, while that for the B1 class dropped 25 per cent. Of the 5,000 public hospital beds, 29 per cent are C class and 41 per cent, B2.

The reason higher demand for C-class beds puts a strain on hospital finances has to do with the way Government subsidies are given out. In the past, the money was given out based on the number of subsidised patients served. But now, hospitals get a fixed sum and have to divide it among a greater number of patients. The strain that has resulted is likely a major reason prices for both inpatient and outpatient subsidised care were increased recently. If the trend towards C-class beds continues, more price increases could result.

Industry watchers say the increased demand for highly-subsidised beds can be attributed to an ageing population requiring long- term care and the growing realisation that health care is expensive. Health economist Phua Kai Hong says people are becoming more aware that their Medisave money may not be enough for their lifetime hospital needs. Dr Lim Suet Wun, who heads the National Healthcare Group of hospitals and polyclinics, said better quality C-class care is another reason for demand - more people consider it 'value for money'. In fact, some of the patients who opt for C-class wards can afford better quality beds, but choose otherwise because of the value for money factor.

Madam Halimah Yacob, head of the Government Parliamentary Committee for Health, said people with chronic illnesses who need long-term care are more likely to pick subsidised wards so they do not deplete their Medisave and personal savings. She added: 'This, coupled with the general sense that it is difficult to downgrade once you are in a higher class ward, could lead many more people to opt for the C class.' But she said this does not mean that these patients are 'abusing' the system. Both Dr Lim and Madam Halimah also pointed out that many older people do not have much in their Medisave accounts. Only a third of those over 60 years old have Central Provident Fund accounts, Madam Halimah said.

Health Minister Khaw Boon Wan told The Straits Times that many factors are at play. 'It is partly caused by ageing of population as the elderly stay longer in hospitals and tend to opt for C or B2 classes to save on cost,' he said. But Mr Khaw said that the shift towards C class is not the trigger for means testing, which is a 'standalone policy option'. The minister had said in April that means testing - to ensure that subsidies go to those who need it most - is necessary to prevent abuse of public health services by the well-off.

Once means testing is introduced, possibly by next year, demand for C-class beds will likely ease. Details are not out yet, but it is likely to start with patients who stay five days or more. Many of the older patients with multiple problems will fall into this category.

Reply

Reply from MOH 

ST's Salma Khalik ("Demand for C-class beds at hospitals up sharply", 1 Jun) observed that Class C patients now formed 40% of public hospital admissions when it was 27% five years ago. Perhaps alarmed by this observation, she concluded that this has "put a strain on hospital finances" and speculated that this was the reason for (a) hospitals raising fees, and (b) MOH contemplating means-testing in hospitals. 

Between 2001 and 2006, total admissions to public acute hospitals have gone up by 2.9% because of two main reasons: our population has gone up by 8.5%, and the elderly population (over 65) has increased by 25.8%.

MOH has been actively managing the increased demand, by maximising our resources, cutting wastage and avoiding unnecessary hospitalisation.

The results are significant. Over the same period, our age-specific admission rates (i.e. number of admissions per 1,000 population) have gone down, bucking overseas trends, except for two age groups: those who are below 5 and those who are above 65. For all other age groups, admission rates have dropped, saving patients and our society unnecessary spending.

But there is a limit to such intensification efforts. Hence, we have been adding hospital beds and will continue to do so. As all beds added are in the subsidised wards, not surprisingly the proportion of our patients in subsidised wards went up "sharply", as observed by Salma.

Meanwhile, MOH's funding to hospitals to subsidise patients has kept up with the rising demand. Over the same period, it has gone up from $1.1 billion to $1.4 billion, and the Government has committed to increase its healthcare budget from the current $2 billion a year to $3 billion a year in 5 years' time (Budget Statement 2007).

Our hospital subsidy policy has not changed. Class B2 and C remain subsidised at 65% and 80% of our cost, respectively.   

But as costs inevitably go up with rising wages and more costly medications and other supplies, fees have to be regularly adjusted. Hospitals have been mindful of the need to ensure that the increases do not pose undue burden on our patients. Hence they go for small incremental adjustments, rather than less frequent but large changes.

Singaporeans are naturally worried about healthcare cost. We have taken many active steps to ensure that Singaporeans can afford good healthcare. With substantial government subsidies and the 3Ms framework (Medisave, MediShield, Medifund), medical fees are affordable to Singaporeans.

We hope that ST can do its part to help educate, inform and reassure Singaporeans. It is not helpful to alarm the public unnecessarily.