INTERVENTION BY MINISTER FOR HEALTH MR ONG YE KUNG AT THE HIGH-LEVEL MEETING ON HEALTH FINANCING FOR UNIVERSAL HEALTH COVERAGE IN SOUTH AFRICA

            Thank you Madam Chair, and thank you for letting Singapore share our case study for Universal Health Coverage (UHC) and responding to the series of very thought-provoking briefings that we just heard. Singapore will agree that UHC is a good thing. Singapore will agree that it is politically very beneficial. Singapore will agree that this needs to be publicly financed. But UHC needs to be affordable, especially when many of our societies are ageing and the healthcare bill is going up.

2            Let me state some facts. Healthcare spending as percentage of Gross Domestic Product is about 17% in the US, 10-13% in Germany, France, the United Kingdom, Japan, Canada, Australia and most developed countries. In Singapore, it is lower, just under 5%. This is despite Singapore having UHC, our population profile where over a fifth of our people are aged 65 and above, and our healthcare is known for reasonably good quality.

3            And our UHC needs to be publicly financed. Today, 90% of acute hospital treatments are done in public health institutions, and I think the key reason for Singapore’s relatively good position today is probably the way we structure healthcare financing. It is grounded, I would say, on the recognition of two truisms in healthcare financing.

4            First truism, however we publicly fund healthcare, the people always end up paying. There is just no free healthcare. The people will pay. You make it free, people will pay through taxes.  You implement a single payer system based on national health insurance, the people will pay through premiums.

5          Second truism is that, how we pay, determines how much we pay. This is where Singapore benefitted from a stroke of historical policy luck. When Singapore became independent in 1965, we did not have UHC, we did not have tax revenue to make healthcare subsidised. We did not have a national healthcare insurance scheme. But over the years, we implemented both. We also started a mandatory national individual healthcare savings programme. So, every month, part of your salary goes into mandatory healthcare spending, which we call MediSave, and this is set aside to co-pay for healthcare.

6            As a result, we never had a single payer system. Like Japan, it is a multi-payer system that we call S+3M. ‘S’ stands for healthcare subsidy through taxation; first ‘M’ stands for MediShield Life, our universal national healthcare insurance scheme; second ‘M’ is MediSave, what I have talked about, individual mandatory savings and co-payment and the final ‘M’ is a special medical social security fund, called MediFund, a final safety net to help the lower income who cannot afford any residual payment.

7            So by combining subsidy and insurance, we strike a balance between quality, accessibility, and affordability. And this is something you will realise once we have UHC. We have to start juggling between these three important objectives. And it is very important to recognise that you cannot achieve all three objectives. Try to achieve 70% of each, and you strike a good balance. If you try to achieve one of the objectives at all costs at 100%, it is very costly. Having a co-payment system through MediSave, we introduced discipline into the system and put a check on over-servicing and unnecessary treatment, even while healthcare is so close to all our hearts.

8            Today, we layer upon the S+3M system with more cost discipline tools. We reformed the way we funded public health institutions, shifting from fee-for-service to a capitation model, where public healthcare clusters are provided fixed payments per resident living in the geographical area assigned to the hospital clusters. This squeezes out inefficiencies and wastage from the system. 

9            We emphasise value-based care. We embarked on a national population health and preventive care programme to bend the healthcare cost curve for the future. 

10         I thought to share Singapore’s experience, because while UHC is something we all aspire for, in an era of rapid ageing, the fiscal burden is significant and rising. Universal quality healthcare is a good thing, but governments must ensure that the country can afford it. 

11         The starting point is to recognise the two truisms, which is the people always end up paying, and how much we pay depends on how we pay. Thank you.