Insurance not cost-effective for most outpatient settings

07 Jan 2011, The Straits Times

Question

Name of the Person: Mr Peter Chen

Give more emphasis to outpatient insurance

During my search for medical insurance, I discovered a glaring hole in our medical insurance scene.

Many people are aware of, and prepare for, the high cost of hospitalisation. However, the cost of outpatient treatments over a lifetime can be even higher for people with chronic diseases.

Medication for diabetes, high cholesterol and hypertension can cost a lot, even in the case of generic drugs. Some patients resort to buying medicine from Malaysia and Thailand to save money, but there are cases whereby drugs bought overseas are of dubious origin and may be harmful.

So why has there not been more emphasis on outpatient insurance?

A quick check with general insurers shows that these policies are not available as there is very low demand; insurers are more keen to focus on critical illnesses or life insurance.

Some policies with outpatient cover tend to be linked to various medical groups and cater more to companies than individuals. And policies available from overseas companies generally have very high premiums.

Perhaps the Health Ministry can look into this.

Reply

Reply from MOH

Mr Peter Chen suggested “more emphasis to outpatient insurance” to help cover the long-term costs of outpatient treatments for chronic diseases (ST, Jan 4).

Insurance works best in protecting against infrequent, unpredictable events or complications which result in large medical bills.  The financial risk can then be distributed amongst a large pool of subscribers for a relatively lower number of claims, at affordable premiums.

Most outpatient treatment for chronic diseases at the primary healthcare level incurs small payments, which are best paid out of pocket.  Pooling such risk will not be cost-effective, as most of the policy holders will make claims, leading to unattractive premiums.

However, we agree with Mr Chen that some costly outpatient treatment can benefit from insurance pooling if it is properly structured.  On this basis, we have extended MediShield to cover specific outpatient treatment, including kidney dialysis, chemotherapy treatment etc.

To assist those patients with chronic diseases seeking regular outpatient treatment, we have launched Medisave300 to allow them to claim from Medisave under the Chronic Diseases Management Programme. Many Singaporeans have taken advantage of this scheme.  

Over and above these schemes, any needy patients can seek additional financial assistance under Medifund.  They should alert our Medical Social Workers.