Healthcare Cluster National Day Observance Ceremony

17 Aug 2004

By Mr Khaw Boon Wan , Minister for Health

Venue: Health Sciences Authority Auditorium

Speech By Mr Khaw Boon Wan, Minister For Health At The Healthcare Cluster National Day Observance Ceremony On 17th August 2004 At 7.20 Pm At Health Sciences Authority Auditorium

"FIXING OUR ROOF"

My Parliamentary Colleague Mdm Halimah Yacob

Comrade Diana Chia

Friends and Comrades

A Defining Moment

Let me first thank all of you for your sterling performance last year in the battle against SARS.  Your courage and dedication, going beyond the normal call of duty, has earned you respect and admiration from all Singaporeans.

I flipped through Chua Mui Hoong's book on SARS: A Defining Moment.  It brought back bitter sweet memories of our fight against SARS.  It was a defining moment for Singapore.  For us in the health care sector, it was our proudest moment. 

We will no doubt be tested again in the future.  H5N1 has returned in Vietnam.  Who knows when the next global flu epidemic will come?  But come what may, we will again rise to the occasion.  We will not disappoint our fellow Singaporeans. 

Exploiting Every Opportunity

Our important work of looking after the health of Singaporeans is a continuous one.  While SARS was a one-off high-profile event, our daily work is even more crucial and has more lasting impact.

Every day, about 1% of Singaporeans use our services, mostly at GP clinics, across pharmacy counters, and a few in the hospital wards.  Every such encounter is an opportunity to promote health, besides tackling the immediate medical needs.

The ultimate in healthcare delivery is to render health advice and bring about positive change in behaviour.  Pushing pills and moving the scalpel are, in a way, symptomatic treatment.  We should seek to avoid disease as the first priority.

We should therefore use every opportunity to engage Singaporeans to adopt a healthy lifestyle and to drop unhealthy habits.  Doctors and nurses play a particularly crucial role.  Do not underestimate your influence in the clinic and in the ward.  Many adults will listen more to you than to their spouses.

Remind them to exercise and eat more fruits.  Remind them to go for regular health screenings. 

Walk the Talk

To be effective, you have to be good role models yourself.  If your BMI is not perfect, your health advice is likely to be greeted with cynicism.  That is why I encourage my colleagues to join me in every healthy lifestyle event: Walk-a-jog, Army Marathon, Singapore Marathon, Second Link Run etc.  The healthcare family must be prominent participants in all such events.

Meanwhile, we cannot avoid some people falling sick.  Our best contribution to our patients is to ensure that they have the best chance of a speedy recovery, at the lowest possible cost.

Addressing Public Anxiety

There is public anxiety about healthcare cost.  While we cannot promise cheap and good healthcare services, we should moderate healthcare inflation.  Do more with less.  Cut out waste.  Cut out frills.  Focus on the essentials.  Share cost saving experiences.  Share good practices which raise productivity.  Re-engineer our work processes.  Standardise good practices.  Compete to deliver good services at the lowest cost.

On its part, my Ministry will continue to subsidise class B2/C services.  Each year, we spend more than $1000 million subsidizing healthcare.  At class C wards, patients pay only 20 cents of each dollar.  The Ministry picks up 80 cents.  That is why most class B2/C hospital bills are quite modest, a few hundred dollars, at most a couple of thousand dollars.  With Medisave, practically all Singaporeans can afford these hospital bills.

But a minority of hospital bills can be very large.  Despite high class B2/C subsidy, some patients, being very sick and requiring intensive treatment, end up with very large bills: $5,000, $10,000, $20,000.  They are the minority in our hospitals.  But their anecdotal stories frighten their friends and relatives and cause the general public anxiety among the people.

Build a Strong Roof

The best way to handle these uncommon, but very large hospital bills is through medical insurance.  It is an affordable way to pay for these very large hospital bills.  That is why we introduced MediShield 14 years ago to protect Singaporeans against these very large hospital bills. It is our protection, our roof against a heavy but infrequent thunderstorm.

Unfortunately, MediShield premiums and benefits have largely remained the same as when MediShield first started.  As a result, our roof is now leaking, with some holes.

If a patient is unlucky, requires an intensive treatment in a class C ward and ends up with a bill of $20,000, he would be disappointed to find out that his MediShield policy today only pays about 40% of his bill.  He will still have to pay about 60% of the bill.  Very few Medisave accounts have a balance of $12,000 to settle such a bill. 

We need to repair our MediShield roof and fix the leaks.  MediShield must return to its original purpose of only looking after the large hospital bills and do so adequately.  But fixing the leaks will need some money.  I need to adjust the MediShield premiums and deductible levels.  They have not been adjusted for 12 years and are outdated.  I will try to ensure the premium increases will remain affordable.  The larger the number of people participating in MediShield, or what the insurance industry calls the risk-pool, the lower the premiums will be.  I will see how best we can enlarge the MediShield risk-pool, for the benefits of all Singaporeans. 

Remove the Cherry-picking

Currently, the MediShield risk-pool is fragmented by private insurers, offering various insurance products, in direct competition with MediShield.  Unlike MediShield which accepts all risks, the private insurers cherry-pick and refuse coverage to those with higher health risks.  Naturally, they pick the young and healthy.  We must remove this cherry-picking and reverse the fragmentation of the MediShield risk-pool.

Over the next few months, I will discuss this idea with unions, employers, insurers and the public.  I am confident we can design a stronger MediShield roof and give Singaporeans greater peace of mind.

Keep the Roof Simple

But whatever we do, we must remember the many problems faced by national medical insurance schemes elsewhere.  From Australia to the US, national medical insurance schemes are fraught with over-consumption and over-servicing.  We call this the "buffet syndrome" of abuses.  The syndrome is real and we should not simply brush it aside.

The key is to keep our MediShield roof simple.  Let it stay focused on the very large hospital bills at class B2/C level.  Do not over-design the roof, adding frills and non-essential panels.  It certainly must NOT become a comprehensive medical insurance that also protects against minor showers and drizzles.  For minor showers and drizzles, Singaporeans are better off using their own umbrellas and self-insure through paying out of their pockets or their Medisave.

Conclusion

Comrades.  Anxiety over healthcare cost is not unique to Singapore.  All over the world, people are grappling with the challenge of delivering good and low-cost healthcare services.

Relative to others, Singapore has in fact done quite well in meeting this challenge.  This is because we have thought far ahead of the problems and put in place solutions long before the difficulties became obvious.  We introduced Medisave 20 years ago.  We started MediShield 14 years ago.  We began Medifund 11 years ago. 

Our 3M healthcare financing framework is a strong foundation from which we can continue to deliver good and affordable healthcare services to Singaporeans.  We just have to periodically refine it to make it even stronger.  In this respect, I welcome all views and suggestions on how we can make our framework even better.

In closing, let me wish all of you a Happy National Day.