Healthcare Inflation Costs

21 Jan 2008

Question No:  477  

Question

Name of the Person: Mr Sam Tan Chin Siong

To ask the Minister for Health: (a) what has been the inflation in health care cost over the past one year; (b) what are the main factors driving this increase; and (c) what plans does the Ministry have to help the lower income Singaporeans deal with these increases.

Reply

Reply From MOH

1 Healthcare inflation rate was 6.2% over the past one year. This is higher than normal, as it has averaged 2.4% per annum during the preceding 5-year period.

2 The main factors driving the recent increase were: (a) the large increase in oil prices resulting in higher import prices for many medical supplies, (b) the increase in wages of healthcare workers, and (c) the GST increase in July 2007.

3 Healthcare inflation covers the price changes of a wide range of healthcare components.  Not all increased at similar rates.  The components which went up significantly last year were: (a) the fees in public and private hospitals, (b) the specialist outpatient fees at public institutions, and (c) Chinese herbs and Chinese physicians’ treatment fees.

4 The prices of these components have actually been fairly stable over the last 5 years. The only exception was the Traditional Chinese Medicine components which started moving since the second half of 2005 and have moved up by 33% over the last 2 years.

5 Some healthcare inflation is inevitable as we import most medical consumables and the wages of healthcare workers form a big part of healthcare cost.  For basic healthcare services in public institutions, we will ensure that they remain affordable to all Singaporeans.

6 First, we have fully absorbed the impact of GST increase for subsidized patients.

7 Second, we subsidise patients heavily, at 80% for Class C and 65% for Class B2.

8 Third, we are reviewing MediShield to increase its payout for large hospital bills but Singaporeans should do their part by subscribing to an appropriate medical insurance plan.

9 Fourth, the Government will provide Medisave Top-ups whenever the Budget allows, particularly to the elderly and those with low income.  In addition, the recent payment of the Workfare Income Supplement scheme will directly increase the Medisave Accounts of many low-income workers.

10 Fifth, we push our hospitals to reduce cost and cut out wastages wherever possible, and publish their bill sizes so that patients can make appropriate choices of which hospital or clinic to seek services from.

11 Finally, the best approach to cope with rising healthcare cost is ultimately for all to stay healthy.  We will get more Singaporeans to adopt a healthy lifestyle and help those with chronic diseases to manage them well so as to avoid future complications of their conditions.