The Motion For The Adjournment On The Ministry Of Health's Priorities

16 Oct 2003

By Mr Khaw Boon Wan

Venue: Singapore Parliament

Mr Speaker

I thank Dr Lily Neo for her support and her comments on the health priorities. She has deep knowledge and experience, both as a clinician and as a parliamentarian specialising in healthcare policies. I therefore value her views on this subject. (Indeed, as part of my own preparation when the Prime Minister assigned to me the health portfolio, I read up all her comments in parliament in recent years on healthcare policies.)

Shortly after I re-joined the Ministry, I (also) had a working lunch with Dr Lily Neo and her GPC members. We had a good exchange of views and I was struck by how much we agreed than disagreed.

To be sure, healthcare policies are complex. At the core of the complexity is the fact that healthcare services are a public good, (and non-excludable, in economists' term). Unlike other goods and services which can be left to market to allocate through pricing and consumers' ability to pay, we cannot deny the sick and dying with basic health care, just because they cannot afford to pay.

So governments all over the world, Singapore included, subsidise to varying degrees, the provision of healthcare services. With subsidy, however, comes distortion of both supply and demand. So the challenge is to subsidise, with minimum distortions. This is the healthcare dilemma: how to ensure subsidy goes to the right person, without it being abused.

No government has a perfect solution to this healthcare dilemma. When I first joined MOH 25 years ago, I read about the many healthcare problems faced by UK, US and many others. As I re-started my reading of healthcare journals, I was struck by how little the problems had changed in these 25 years. Indeed, in some countries, the problems have worsened. For example, in the recent California Governor election, the issue of rising uninsured was a hot item. Ex-Governor Gray had to rush through a Bill, shortly before election, to require employers to insure their employees, based on an 80-20 co-funding formula. That was not sufficient for him to retain his seat. And last few days, the supermarket employees and transport workers there have gone on strike over rising health insurance premiums. (In the UK, complaints about long waiting time for elective surgery remain, though they seem to have eased somewhat with greater injection of funds into NHS and restructuring in the hospital sector.)

In comparison, the Singapore system has not done too badly. Compared to my first day in MOH in 1978, we have made significant progress.

First, we have more money set aside for healthcare. Singaporeans now have $28 bil in their Medisave Accounts. Medifund has built up to $900 mil, yielding interest income to help the poor pay for their hospital bills if their Medisave Accounts run out.

Second, we have rebuilt all our pre-war hospitals, with the exception of AH. Even AH has had a facelift and is no longer the same British Military Hospital that we inherited.

Third, we have many more doctors and nurses: 6000 doctors and 18000 nurses on the registers. These numbers are double or triple the numbers 25 years ago.

Mr Speaker

My job is to build on this strong foundation which I have inherited and to build on it, so that when it is my turn to pass on the responsibility, my successor will have something even better and stronger.

I have spent the first few weeks of my appointment to MOH talking and consulting a wide range of stakeholders in healthcare: doctors, nurses, pharmacists, administrators, public and private sectors, chinese medicine practitioners, politicians and journalists and the public at large.

My first task is to settle the priorities for my term. There are many things worth doing, but we need to focus our energy if we are to be effective. We have settled on the 8 priorities which I have made public.

They are all long term issues. They are not easy nuts to crack. There are no quick fixes or instant results. We need patience and perseverance. It will be a slow push up the hill, but worth doing.

For example, healthy lifestyle. Imagine if every Singaporean can be as disciplined as SM Lee is, whether it is in his diet or exercise routine, what a dramatic difference that will make to our total healthcare needs. I am not naive; it would not be possible to get 100% of Singaporeans to be like SM. But if every 5 years, we convert another 20% of Singaporeans to join the healthy lifestyle club, we can potentially reduce the healthcare need by 10-20%. That means hundreds of millions of dollars saved every year. That is not a trivial sum.

I agree with Dr Lily Neo that Singaporeans are worried about rising hospital bills. This is therefore one of my 8 priorities. We are getting our hospitals to pay close attention to this and to slow down the medical inflation rate. Medical inflation rate in recent years has exceeded general inflation rate. I hear the concerns and will do my best to strike a balance and address them. Let me explain.

We cannot over manipulate the prices of healthcare services. It is not possible for us to artificially induce deflation in medical fees, especially when the rest of the economy is doing well, by say, depressing or cutting the wages of our healthcare workers annually. Otherwise, our hospitals will suffer a brain drain, which will be detrimental to Singaporeans. Similarly, we should not allow medical inflation at an excessive rate, beyond what the economy as a whole and Singaporeans can bear. But what we can and should do, is to make sure that the medical inflation rate does not diverge too much from the general rate of increase in wages and other factor prices. I think this is a fair proposition.

So while I try to maintain current hospital charges when the economy is down, you know that I cannot do this forever. When the economy recovers, we must accept that general price levels willl go up. When other workers are enjoying wage increases again, we will also have to let our healthcare workers enjoy their fair increases. In order that hospital budgets can be balanced, you know that we will have to let some hospital charges adjust.

But the heavy subsidy that we provide to Class B2 and C will remain. In Class C wards, MOH picks up 80 % of the cost. In other words, for a $100 Class C bill, MOH picks up $80. Patient co-pays $20. With Medisave, almost all have no problem with payment. The few who have no Medisave or run out of Medisave, Medifund kicks in to pick up the tab.

Meanwhile, we will do our best to keep the cost low, by doing more with less, squeezing out productivity and sharing best practices. That is why I pushed through the publication of hospital bill sizes for the common illnesses. It has caused some stir in the hospitals, as it should. Along the way, the right questions will be asked and hopefully there will be useful lessons learnt and applied. We have published data for 28 medical conditions. In the next monthly update on Nov 1, we will increase the data to cover 45 medical conditions.

Another issue which I feel passionate about is the greater use of IT in healthcare. Relative to other economic sectors, the healthcare sector is a laggard in the exploitation of IT. There are many reasons for this. But we should really see how we can overcome the obstacles so that IT can be used to raise productivity, lower cost, and improve patient care.

For each priority, I have appointed a champion to drive the work . I will ask the champions to carefully consider what Dr Lily Neo has suggested and where practical, adopt them.

I am taking an inclusive approach, involving other Ministries, other agencies, other stakeholders. For example, in pushing healthy lifestyle, MOH cannot do it alone. We need MOE, MCDS, PA, MNCs, NTUC, SMEs, students, teachers, sports clubs etc to help champion the cause, if we are to make a significant difference. And Dr Lily Neo is absolutely correct that we need creativity and enthusiasm in healthy lifestyle promotion, involving all and sundry, young and old, men and women. And I was glad that when we launched the Healthy Lifestyle Campaign this year, with a run in Bishan Park led by DPM Lee, among the runners was a representative from the Health GPC. I hope to see the entire GPC at our next campaign.

And Mr Speaker, we will be honoured if you can also join us.

Last week, I read in the IHT how a US telco MNC, Sprint, is promoting fitness among its employees. It is targeting obesity and in its brand new global HQ at Kansas City, it bans cars, forcing its workers to park and walk from 1 km away. It chose slow hydraulic lifts, but wide, windowed staircases to encourage its workers to walk between floors. Sprint is not alone in taking more aggressive measures to get its workers to move more and eat less. The new measures are going beyond putting gymnasiums in office buildings or promoting the virtues of eating broccoli. These are useful tips for our companies here, including Parliament House.

Mr Speaker

I am cheered by Dr Lily Neo's support and advice. Like fighting SARS, we are in the same team. I intend to use the same SARS approach to fight obesity, diabetes, hypertension, rising healthcare cost, and the other priorities. That means you and I together, with many others outside of this House, united as one team, fighting one common enemy. That way, we increase our chance of achieving progress in all the 8 priority areas.