Let's Combine Compassion with Efficiency and Effectiveness

17 Oct 2008

By Khaw Boon Wan

IES President Er Lee Bee Wah and MP for AMK GRC

Fellow Engineers

Ladies and Gentlemen

1. In my job, I get to meet many Health Ministers.  9 out of 10 are medical doctors by training.  I have yet to meet another one who is an engineer.  In Singapore, we are quite unusual in having non-doctors as Health Ministers.  This is of course not by design.  Doctors can and do make good health ministers.  Their medical training is a great asset in this job.  But the appointment of non-doctors to this job is a recognition that the health ministry has to grapple with issues which are often non-medical in nature.

Sleepless in Singapore

2. If I look back over the last 40 years, what were the key issues which had bothered our health ministers and caused them sleepless nights?  There were quite a few but let me just highlight two.  First, how to meet unlimited demand and expectations with limited resources.  Or to put it more bluntly: how to ration limited healthcare resources, without losing political support?  This is a classic political economics problem, not a medical issue per se.  Second, how to subsidise treatments for the sick without creating moral hazard.  In other words, how do we keep healthcare charges low without encouraging over-consumption and promoting abuses?  The answers to these issues require expertise that has traditionally laid in the domain of economists and behavioral scientists.

3. Consider the SARS crisis, which was a defining moment for the Ministry of Health, and we can see that the problem and the solutions were not merely medical in nature.  Our successful control strategy eventually called upon resources way beyond the Health Ministry and exercised skill sets from many disciplines, including security, diplomacy, public risk communications, psychology, science and engineering.

More sleepless nights 

4. Looking ahead, MOH will continue to face daunting challenges which require the expertise from multiple disciplines ranging from the hard sciences to the humanities.  As an illustration, let me highlight three future challenges.

5. First, the continued ageing of our population will further stress the already intractable economic problem of demand far exceeding supply.  US healthcare is already swallowing up 16% of their GDP every year and remains hungry for more.  It is a hot issue in their current Presidential Election.  In Singapore, we have done a better job.  We deliver comparable health outcomes at only 4% of our GDP.  When I discussed this with my US counterpart early this year, he was amazed.  But we know that this is unsustainable and an increasingly higher percentage of our GDP will have to be allocated to healthcare.  But is there a natural limit to healthcare consumption? How do we impose such a cap, if at all possible?

6. Second, the continued progress in medical science has often led many patients and their families to regard death as avoidable and hence a failure on the part of the doctors.  In times of grief, family members often do not accept the limits of medical science.  Many seem to forget that we are all mortals.  Even when death is not imminent and life is not threatened, many patients regard more treatment as better treatment and demand it.  But sometimes, less treatment is actually the more correct option.  Unrealistic expectation takes various forms.  Last week, I received an email from an elderly patient who was not happy to hear from her surgeon that her surgery had a small complication risk which may trigger a stroke.  Even though the risk is small, it is not zero.  Hence, it is the surgeon’s duty to inform the patient of such a risk while seeking her consent to operate.  But the patient found this unacceptable as she was expecting the surgeon to perform a risk-free operation.  “This is his duty” as she put it to me.     

7. Third, society will have to confront many ethical dilemmas which can be highly complicated, with no clear “yes” or “no” answers.  The recent public debate over kidney trading is a good example.  The issue is divisive, like abortion and is one where we can never achieve consensus.  But there will be many more such issues.  For example: should we allow surrogate pregnancy?  India has just legalised it.  Critics were upset, calling it an exploitation of the poor by the rich through renting a womb. Supporters, on the other hand, see this as a mere provision of a service, a normal commercial transaction that results in a win-win outcome for both parties. 

8. Some ethical issues can be highly emotional.  Do we allow euthanasia or assisted dying?  Last month over several weeks, Zaobao published many letters by its readers over this complicated but pertinent issue.  One reader photocopied the Zaobao forum page, brushed over his supporting message, in red ink, and sent it to me.  He wanted me to get it legislated as soon as possible.  By writing in red ink, he probably wanted to convey his message of anguish and pain.

Stick to basic principles

9. I have no doubt that the challenges confronting the MOH will grow in greater complexity.  As medical science makes further progress and as our population becomes better-informed and more diverse, we will be confronted with more dilemmas, requiring us to make difficult trade-offs.  Whatever solution we choose to take will not satisfy everyone.  But this is not new to MOH.  We often face such difficult situations.  My approach is to be grounded in certain basic principles when weighing the options and making the policy selection.  These principles have worked well for us in the past and I believe that they will remain applicable for the future.  Let me share them with you.

10. First, keep the healthcare market competitive.  In other sectors, market competition leads to more choices, higher standards and cheaper services.  Healthcare frustratingly defies such logic but we should not be discouraged.  Let’s continue to demystify healthcare and do not allow “market failure” as a convenient excuse for less than proper delivery.  The healthcare market is not destined to fail.  It fails only if we allow it to.  When information is blocked and unavailable to both consumers and providers, how can the market function properly?  Without timely and relevant information, how do we expect patients to shop around?

11. Before getting a cataract operation, surely the patient would want to know some key information about his doctor, including: what is his track record, how many similar cases has he done, what is the success rate, what is the complication rate, how much will it cost?  We ask and get such information before we buy a TV or book a tour package, because such information is freely available.  But few are able to do the same comparison when they are sick. We need greater information transparency.  We now regularly publish some information about our healthcare services.  We caused a buzz when we first did it.  Lasik operation and other surgeries dropped in prices as competition heated up as a result.  As it is no longer newsy, it does not excite the people as before.  But it is most important and we should do more, to stir up the market and benefit the patients.   

12. Second, keep the healthcare market undistorted.  Distortion takes place when we blunt the natural instincts of consumers to get value for money and providers to maximize welfare for themselves and their patients.  When we pay for our TV, we make sure we get the best value out of our budget.  These are our hard-earned savings and we want to make sure the dollars are well stretched.  Unfortunately, most patients around the world have their medical bills paid by a third party: their employers, private insurers or by their Government. Imagine that your TV is paid for by your Government or employer, as a gift.  Would you just settle for a 20-inch ordinary TV, or would you go for the top-end home cinema system, complete with kara-oke and flat screen LED monitor? Insulated from the true cost of care, patients consider healthcare as an entitlement and distort the healthcare market through sub-optimal and often wasteful consumption decisions.   We distort less in Singapore, as compared to other countries, because we require a significant co-payment by patients.  This is a big difference between our healthcare financing system and others.  It is a big advantage, though it incurs a political cost for the government.  But this is the right thing to do and we will have to repeatedly explain why this is in the best interest of Singaporeans.  Gross abuses and over-consumption will have to be paid for, by all citizens through higher taxes.  Free healthcare is only a myth created by irresponsible politicians.

13. Third, prevention is better than cure and our greater emphasis must be on keeping Singaporeans healthy rather than treating their illnesses.  The former is generally low-cost and the latter, largely high-cost and high-tech.  In practice, we will have to do both well.  Unfortunately, society and the media tend to focus too much on glamorous high-tech medicine and reward such treatment, while not appreciating the valuable work by family physicians and geriatricians who attend to the chronic diseases and the frail elderly day in and day out.

14. As engineers, we know the preventive strategy instinctively.  Regular servicing and maintenance of our car is simple and cheaper than visiting the workshop only when our car breaks down or cannot start.  The latter may require extensive engine overhaul, is expensive, disruptive and inconvenient.  We have been promoting healthy lifestyle and have started getting Singaporeans to treat their chronic diseases more systematically.  This should be common sense but the average car owner looks after his car better than his own body.  Many lavish tender loving care to their cars, and are selective what grade of petrol, lubricant they use. They would check the tyre pressure, oil and radiator water level whenever they top up their petrol tank.  But too many do not go for regular health check, eat junk rather than healthy food, and do not exercise enough to keep their bodies in good shape.  We must change this.  We need to empower people with more information and get them to take greater responsibility for their own health. If we can do this well and scale it up nation-wide, we can make a big difference to the health of Singaporeans in the future.

15. Fourth, embrace globalization and make it work for healthcare.  I know this is an awkward time to champion globalization, as the world suffers the financial contagion from Wall Street.  But the financial turmoil is not an indictment of globalization, but a reminder that we need to update global regulations to deal with innovations that are bound to emerge from time to time.  In the larger scheme of things, the free flow of capital, talent and ideas has brought about immense productivity gain and consumer welfare for many industries.  The electronics industry is a prime example of how the manufacturing value chain has been cleverly segmented and distributed to exploit comparative advantages of different locations.  The objective is to produce better products at lower cost to consumers.  The services sector has followed suit, by siting call-centres in lower-cost locations to lower the overall cost of service delivery.  The healthcare sector has been slow to emulate.  But there have been a couple of trail-blazers.  Our polyclinics now email their X-rays to India for routine reporting by US-board-certified radiologists there. This has resulted in faster readings at cheaper costs. Our patients benefit as a result.

16. We should push for more of such initiatives, beyond tele-radiology.  For example, our hospitals here with branches or formal relationship with reputable hospitals in the region, may find it sensible to outsource some of their routine inpatient or day surgery services to the foreign hospitals, through referring some of their patients there for lower-cost elective surgery.  Provided standard of care is comparable, should not the patients be offered such an option?  The choice will of course still rest with the patients.  We can facilitate this by allowing Medisave to be used for such treatment provided it comes under a formal arrangement with the local hospitals here.  This will give our patients more choices and also raise the competitive pressure on our hospitals here.  Both outcomes will benefit patients here.           

17. Fifth, embrace innovation to help us transform healthcare to do more for less. That is how other industries have transformed themselves to benefit their consumers.  In healthcare, there is much innovation and creativity, but largely at the micro level: in the laboratories, in research, in surgical techniques etc.  But at the system level, at the business model level, major innovation, particularly of the disruptive type as described by Harvard management guru, Prof Clayton Christenson is uncommon. I believe hospitals and polyclinics can learn from Borneo Motors and Cycle & Carriage, so that going to a clinic can be as smooth and as predictable as sending in our car for servicing.  All of you in this audience represent a significant pool of brain power and I would like to tap your computing power.  Some of you are probably familiar with healthcare as patients or visitors.  If you notice things that can be improved, I will welcome an email from you, especially if you can also suggest how the system, process or flow can be improved.

18. Old mindset, legacy system, self-interests and even well-intentioned regulatory requirements work to preserve the status quo.  Potentially disruptive innovations will have to confront colossal obstacles and resistance to change, let alone transformations which aim to destroy the status quo.  That is why the US has been talking about health reforms for decades but has achieved little. 

19. Hence my preference for diversity in healthcare providers, the more the better.  Let’s encourage different organizational and business models of running hospitals, clinics, nursing homes and home healthcare services, operated by all kinds of entities: Government, commercial for-profit, non-for-profit, charitable civic and religious organisations.  Besides giving patients greater choice at different pricing levels, diverse players in the industry will help create space for innovators and mavericks.  This is particularly important for an industry which has to change rapidly in order to cope with the huge future challenges.  The existing model will be inadequate to deal with the rapid ageing of our population, rising expectations and continuing cost escalation.  Not all innovations will succeed, but if there is no opportunity to even experiment, we will be stuck with the status quo.         

20. Sixth, uphold transparency.  SARS taught the world the value of transparency and public accountability.  Covering-up and hoping the problem to just go away will only bring more tragedies.  The current milk scandal in China is a further reminder.  Unfortunately, it will not be the last public health crisis.  We do not know what the next public health scare will be, but what we do know is that it will come.  Protecting public safety requires us to build a strong trust between the Government and the people.  The glue for sealing this trust is transparency, prompt and full disclosure of information, even if it entails some awkwardness. 

Using both sides of the brain

21. As you have heard, healthcare issues are diverse and wide-ranging.  Someone once commented that engineers are left brainers, who instinctively think in systems and processes.  Doctors are mainly right brainers who are the creative, feeling people, caring with their hearts and emotions.  I believe it is possible to have compassionate healthcare that is also effective and efficient.  We need both right and left brainers in the healthcare sector, to work towards the common purpose of helping people get well.  I am glad to have an opportunity to contribute my left brain to the Health Ministry and to improve Singaporeans’ health.   

22. In closing, let me thank the IES for welcoming me into your fold as an Honorary Fellow.  I hesitated to accept this honour as I have never practiced as an engineer, in the traditional sense, like what Er Lee Bee Wah and many in this audience, have done.  However, I took some comfort in thinking that by helping to re-engineer the healthcare delivery and financing system in Singapore, I have not wasted my engineering education.

23. Have an enjoyable evening. Eat, but not too much.  Do finish up your vegetables.  Tomorrow get out your exercise gear and work out some sweat.  Do this regularly, and you will not be our customer for a long, long time.  Good health.