MOH 2008 Healthcare Dialogue at Changi General Hospital

07 Jan 2008

By Khaw Boon Wan

Venue: Changi General Hospital

Sharing Limited Resources Fairly

Changi General Hospital (CGH) replaced the old Toa Payoh Hospital which no longer exists.  During the transition, the commitment to excellent care with a high ethical standard continued, but otherwise the change from TPH to CGH was a major transformation.  It was more than “old wine in a new bottle”.  New and better physical facilities have enabled your patients to enjoy greater comfort and privacy.  New clinical services raise the medical standard and address patients’ rising expectations.  You now have new disease centres like the one-stop diabetic centre, the geriatric centre and the sports medicine centre, to serve your patients better and more effectively.

You have also gone beyond the hospital boundaries to serve the local community more comprehensively, by working with the GPs, nursing homes and St. Andrew’s Community Hospital as close partners. You have pioneered new programmes, for example the HomeCare Assist to provide bed-ridden patients with home care support after they are discharged from hospital.  This way, patient care continues seamlessly even as a patient is physically moved from one entity to another.  The result is better and often cheaper patient care.  It improves their outcome and also saves them money.

Over the years, we have brought about similar transformations across the island, when we rebuilt SGH, NUH, KKH, TTSH and IMH respectively.  Soon, another transformation will take place when AH becomes reincarnated in the new KTPH in Yishun.

This is how we have progressively raised the standard of healthcare in Singapore.  This is our commitment, to deliver good and affordable healthcare for all Singaporeans, and to continuously raise the standard in response to new demand and medical progress.  But this has been, and will remain, a delicate balancing act, as healthcare resources will always be short.

The healthcare challenge, for Singapore and the rest of the world, is a classic case of demand perpetually exceeding supply.  Indeed, healthcare demand is effectively bottomless.  This is because all patients will prefer the best senior consultant to look after them, even if their condition is routine and can be competently handled by others.  Given a choice, patients here in CGH will want Prof Low Cheng Ooi or Prof Fock Kwong Min to look after them.  But there is a limit to how many patients each senior doctor can serve.  Unfortunately we have not yet figured out a way to clone these doctors!

This phenomenon is not unique to healthcare.  For instance, the demand for subsidised public housing, whether for purchase or rental, also exceeds supply and we need to distribute it in a fair manner.

HDB Way

HDB provides a range of housing options from 1-room rental flats to 5-room home ownership flats.  While all are subsidised, there are different degrees of subsidy.  For example, 3-room flats are smaller than 5-room flats but are more heavily subsidised proportionally, as they aim to benefit the lower income group.  Lower-income flat buyers also receive additional housing subsidy through the Additional CPF Housing Grant.

To make sure that the smaller flats are allocated to those most in need, applicants are assessed carefully on their financial situation.  Specifically, those buying subsidised 3-room flats need to satisfy a more stringent income ceiling of $3,000 per month, compared to a higher income ceiling of $8,000 for subsidised 5-room flats.  This way, we ensure that lower-income Singaporeans do not get crowded out by those who can afford the larger HDB flats or private properties.  Occasionally, some 3-room flat owners also buy Mercedes-Benzes, and then we get complaints from their neighbours that we should not have allowed such luxury car owners access to 3-room flats.

The fact that there are such complaints shows that Singaporeans accept the HDB method of sharing limited public housing resources and consider it to be fair.  They are therefore upset when they see some people seemingly “getting around the system”.

MOH Way

For subsidised hospital services, MOH had taken a different approach.  Like HDB, public hospitals also provide a range of options, from Class C to Class A.  While clinical care in all wards is of a high standard, there are distinct differences between the classes.

First, the creature comforts of the ward accommodation are different.  Class C has no air-conditioning and offers a very basic level of privacy.

Second, competent doctors are assigned to treat the Class C patients through a roster system, while Class A patients can choose the doctor to treat them.

Third, while all emergency patients are immediately attended to regardless of ward class, non-emergency referrals of subsidised patients to specialists generally face a longer waiting time than private patients.

However, unlike HDB, patients are free to choose the class of ward accommodation, regardless of their financial status.  They are then charged according to their choice.  A patient earning say $10,000 per month can choose Class C and be warded next to another earning $1,000 per month, but both will be subsidised by 80%.

The MOH approach is not without merit.  Patients welcome the freedom to choose.  Hospital costs are high and patients who require prolonged hospitalisation, especially in ICUs (intensive care units), or the chronic sick who need frequent hospitalisation, do worry about their ability to pay.  Middle-income Singaporeans for example are concerned whether any kind of financial assessment may block their access to Class C wards and cause them severe financial hardship should they develop a major complication.  Their concerns are valid, and I am well aware of these concerns.

Not Sustainable

The MOH way is however not without problems.

First, there is a question of fairness.  Last year, health subsidies to Singaporeans exceeded $1.5 billion.  While this is not a small sum and we will continue to increase the quantum, it is not unlimited.  A high-income patient occupying a Class C bed does prevent another low-income patient from using that service.  When a Class C or B2 ward is full, the high-income patient can easily afford an alternative ward, but a low-income patient faced with such a situation does not have such a choice.  An unduly over-crowded Class C or B2 ward therefore comes at the expense of the low-income patients.

Second, there is rising expectation for better services from all patients, rich or poor.  The MOH approach is based on there being distinct differences in ward accommodation between the subsidised and private wards.  The differences used to be stark.  For example, Class C ward was 40-bedded with little privacy.

But as we rebuild public hospitals, we are significantly narrowing the differences between these wards.  Class C wards in CGH are 10-bedded and much more comfortable than those in the old TPH.

And we would like to continue to raise the standard of physical facilities in the subsidised wards.  For example, Class C and B2 patients share communal toilets, outside the ward.  This is a common complaint from the patients and their relatives. 

For the new KTPH, we have decided to move the toilets into the wards.  I am sure this will be greatly welcomed by the patients.  But in so doing, Class B2 and Class C wards in KTPH will be as comfortable as Class B1, except for the absence of air-conditioning.  Indeed, many elderly patients do not even regard air-conditioning as a plus.

With such marginal difference in ward facilities while fees in Class B1 are more than double those in Class B2 and four times those in Class C, we expect many patients who would normally choose Class B1 to now choose Class B2 or C.  This will further reduce the lower-income patients’ access to B2 and C facilities.

We have already observed this development in the polyclinics.  Over the years, we have significantly improved the polyclinics.  Modern polyclinics are much better equipped and organised than many neighbourhood GPs.  We have also increased the number of polyclinic doctors and nurses to cut down waiting times by patients.  But these improvements in service standard do not have lasting effect.  As soon as we reduce waiting times, even more patients who used to visit GPs are drawn into polyclinics, for better care at much reduced fees.  By improving facilities and service standards primarily for the benefit of lower-income patients, we have inadvertently driven up patient numbers all over again, and we are then back to the same problem of over-crowding and long waiting times.

Economists’ Way

Economists are familiar with this phenomenon of demand exceeding supply, and have studied options on how to solve the allocation problem.  There are two ways to distribute limited supply: either raise the price until supply equals demand, or let the queue mechanism sort out the distribution.  Those who can afford private treatment but cannot afford to wait will then leave the queue and go elsewhere.

We know some subsidised patients are unhappy with long waiting times.  Our priority is to make sure that the waiting times for the various conditions do not compromise patient care from a clinical point of view.  Patients who need to be seen fairly quickly will be seen early.  But beyond that, subsidised patients will need to endure some waiting.  MOH would very much like to improve care to the subsidised patients, whether in polyclinics or in hospitals.  But if significant improvement results in us drawing in patients who can well afford private treatment, our efforts will be nullified.

A Third Way

We need a third way to share the limited healthcare resources among competing demands.  The question is how to do so fairly.

The extreme cases are easily addressed.  All emergency cases should be treated immediately by the most competent doctors available.  A patient’s ability to pay should not be a barrier to such life-saving services.  On the other extreme, demand for frills and cosmetic services can be left to the market, leaving patients to choose the providers based on their preference and what they are prepared to pay.

Between these extremes lie a wide range of healthcare services to address differing needs and ability to pay.  For example, the use of generic medicine helps to keep healthcare costs low but without compromising on medical outcome.  This is the right thing to do, but in the private wards, we do allow brand-name drugs for patients who are prepared to pay for them.

With higher expectations, subsidised patients are increasingly demanding a higher level of care, including access to non-standard drugs based on their perceptions of what they need.  With economic growth and rising standards of living, we can afford better treatments.  We would like to extend such benefits to subsidised patients too.  But we must do so in a way which does not unwittingly draw in patients who would have chosen the private wards.

The most logical way to address this contradiction is to apply the principle that higher-income patients should co-pay more for the same treatment than lower-income patients, if they choose to be treated in the subsidised wards.  The former should get less subsidy than the latter.  That is a fair and practical way to share limited healthcare resources.

The lower-income patients will not be affected by this approach, but I know middle-income patients are particularly worried.  While the principle is easy to explain, the implementation details worry a lot of people.  We have studied this issue for quite some time and will continue to discuss the details with unionists, fellow MPs and the public.  I am confident that I can find a way of doing this which is fair to all and which does not impose unnecessary burden on patients. 

I think a fair way of doing this must fulfil five criteria:

First, patients must retain the freedom to choose.  Rich or poor, they must be able to choose say Class B2 ward, if they wish.  Anybody can choose to be admitted to a subsidised ward.

Second, all patients in Class C and B2 will be subsidised, but to different degrees.  Higher-income patients will be subsidised less than lower-income patients, but their bills will remain affordable.  For example, a better-off patient in Class B2 will still get higher subsidy than if he opts for Class B1, and should find his bill affordable. 

Third, given the acute nature of hospitalisation, we need a simple way to make an assessment.  The way it is done in nursing homes, whereby the entire family’s income is ascertained, cannot be applied.  We need a different approach.  For example, we may base it on the patient’s individual eligibility.  Further more, any assessment of the patient’s financial status should preferably be automated based on objective evidence, such as wages as declared to IRAS or CPF Board.

Fourth, we will be sensitive to the circumstances of the retirees and others who are not working.  Without any income, they are particularly fearful that any chronic disease may wipe out their past savings.  If we use their housing type to assess their eligibility, we may deliberately set the threshold at a sufficiently high level.

Fifth, no patient should be denied treatment because he cannot afford it.  We will be flexible in implementation so that at the margins, we will always give patients the benefit of doubt.  All needy citizens will remain protected by Medifund, the ultimate safety net for patients.

The implementation details will need to be fleshed out, but I feel confident that we can work out a way to allocate healthcare subsidy fairly to all segments of the population.  Currently the profile of patients in Class C and Class B2 largely reflect our intended target beneficiaries of these wards.  What this means is that a majority of Singaporeans should continue to receive the same level of subsidies as they do today and will not be affected.

Nevertheless, we need to put the system in place now, so that as we pump in more resources to upgrade the subsidised wards, we do not unwittingly cannibalise the private wards and services, at the expense of the low-income patients.  Our objective is to safeguard our current high standard of public hospitals and to ensure that all patients who need the care continue to receive it in a timely manner.

I hope to get your support for this proposal.