Why charge admin fee on Medisave use?

30 Aug 2006, Today

Question

Name of the Person: Leong Sze Hian 

Why charge admin fee on Medisave use?

Today - 30 August 2006 

I refer to the article, "A shot in the arm for diabetics" (Aug 29). 

Medisave will be extended to cover the general practitioner bills of those with chronic illnesses. Those suffering from diabetes, high blood pressure, high cholesterol and stroke will be able to use Medisave, "bringing the total number of people allowed to dip into their Medisave to one million". 

With the resident population at 3.6 million, does it mean that 28 per cent of the population has diabetes, high blood pressure, high cholesterol or stroke? 

If we include other illnesses, how many unhealthy Singaporeans are there? 

This statistic is quite alarming, and I would like to suggest that the Health Promotion Board step up its efforts to help Singaporeans to stay healthy. 

The report notes that a patient will have to pay $30 out of his pocket for each visit, plus 15 per cent of the rest of the bill. So, if the medical fee is $80, the amount that can be deducted from Medisave is $42.50. 

Also, each transaction has an administrative fee of $3.05. In the above example, it works out to 7.2 per cent of the amount deducted from Medisave - more than the interest the Central Provident Fund (CPF) pays out on the Ordinary (2.5 per cent) and Special accounts (4 per cent). 

In short, some Singaporeans may pay more to CPF by way of the Medisave administrative fee than the CPF interest they earn. 

How much does the CPF Board collect in a year from Medisave administrative fees now, and how much more will it collect when Medisave is extended to out-patient treatment for people with diabetes, high blood pressure, high cholesterol and stroke?

Also, why do we have to pay a fee to CPF to use our own Medisave funds? 

The article "Healthcare reports: Health Ministry publishes data on affordability" (Aug 23) says that most people are able to pay health costs using Medisave and that the data "assures Singaporeans that health care here has remained affordable".

Do the hospital bills statistics include pre-hospitalisation consultation, diagnostic tests, in-hospital doctors' visits, post-hospitalisation treatment and medicines? 

I understand that the trend has been to discharge patients earlier from hospital. This may have contributed to the declining share of hospitalisation costs in total costs. 

Also, why not consider waiving the goods and services tax on healthcare bills?

A healthcare focus group of five Members of Parliament has been formed to examine the current healthcare system (MPs focus on health, Aug 15). 

Perhaps it could look into some of the above issues?

Business Times - 30 Aug 2006 

Issues healthcare panel should explore I REFER to the article 'MOH publishes patients' average hospital bill data' (BT, Aug 23) and media reports that Medisave will be extended to cover general medical practitioner bills for those with chronic illnesses, such as diabetes. 

Those suffering from diabetes, high blood pressure, high cholesterol and stroke will be able to use Medisave, 'bringing the total number of people allowed to dip into their Medisave to one million'.

With the resident population at 3.6 million, does it mean that 28 per cent of the population has diabetes, high blood pressure, high cholesterol and stroke? If we include other illnesses, how many unhealthy Singaporeans are there? What percentage of the population are not in good health?

This statistic is quite alarming, and I would like to suggest that the Health Promotion Board step up its efforts to help Singaporeans stay healthy.'A patient will have to pay $30 out of pocket for each visit, and 15 per cent of the rest of the bill.'

For example, if the medical fee is $80, the amount that can be deducted from Medisave is $42.50. 'Each transaction will carry an administrative fee of $3.05.' In this example, the administrative fee works out to be 7.2 per cent of the amount deducted from Medisave. The CPF pays 2.5 and 4 per cent respectively on the ordinary (OA) and special accounts (SA).

For this example, in percentage terms, the administrative fee is 4.7 and 3.2 per cent more than the interest that CPF pays us for OA and SA.At this rate, some Singaporeans may be paying more to CPF by way of the Medisave administrative fee, than the CPF interest they earn. Thus, those with health problems may see their Medisave depleted quite quickly as they grow older and generally require more medical services.

If each of the one million residents with the four chronic illnesses use their Medisave just twice a year, the CPF Board will collect additional revenue of $6.1 million from the administrative fees.How much does the CPF Board collect in a year now from Medisave administrative fees, and how much more will it collect when Medisave can be used for out-patient treatment from October for the 275,000 people with diabetes, and from January 1, 2007 for those with high blood pressure, high cholesterol and stroke?

Why do we have to pay a fee to CPF to use our own Medisave?In a recent Lianhe Zaobao study, a survey of more than 500 Singaporeans revealed that 64 per cent of the respondents are not confident of coping with medical costs.

As to media reports that most people are able to pay health costs using Medisave and that the 'released data' 'assure Singaporeans that healthcare here has remained affordable', do the hospital bills size statistics include pre-hospitalisation consultation, diagnostic tests, in-hospital doctors' visits, post-hospitalisation treatment and medicines?

I understand that the trend has been to discharge patients earlier from hospital. This may have contributed to the declining share of hospitalisation costs to total costs.The statistics speaks for themselves: An estimated 400,000 Singaporeans do not have any form of medical insurance.

According to the Credit Counselling Service, 17.6 per cent of Malays who got into debt was due to medical costs.

According to the World Health Organisation's World Health Report 2006, Singapore at 36.1 and 7.7 per cent for 'general government expenditure on health as a percentage of total expenditure on health' and 'general government expenditure on health as a percentage of total government expenditure', was ranked 164 and 140 respectively out of 192 countries.

According to the Ministry of Health's website which was last updated in June 2006, government health expenditure over GDP (gross domestic product) (%) was only 1.2, 0.9 and 'na' for 2003, 2004 and 2005 respectively. In contrast, the OECD median is 8.6 per cent. Why not consider waiving GST for health costs?

A healthcare focus group of five members of parliament has been formed to examine the current healthcare system (High-level panel to explore healthcare options; Led by Minister of State for Health, it will tackle issues of quality and cost, BT, Aug 15). Perhaps, the healthcare focus group could look into some of the above.

Reply

Reply from MOH

Medisave fee was levied from the start 

Mr Leong Sze Hian asked "Why charge admin fee for Medisave use?" (TODAY and Business Times, 30 August ). 

As with all billing, credit card or banking transactions, it costs money to process each Medisave transaction. CPFB has recovered such cost through an administrative fee ever since Medisave was introduced in 1984. This is levied on all institutions which may choose to absorb them as part of their running costs. If they are charged out immediately to patients, CPFB requires that it be itemised clearly in the bill. 

This will similarly apply to the new Medisave for chronic diseases scheme. 

Mr Leong expressed "alarm" at the numbers of Singaporeans who suffer from the four major chronic diseases. Actually, our numbers are not particularly alarming. Our incidence rate for diabetes, for example, is similar to the US. 

But we should continue to work with Singaporeans to bring the rate down through active health promotion and disease prevention programmes. That is why it is so important for all Singaporeans to adopt a healthy lifestyle: eat well, exercise regularly, avoid being over-weight and do not smoke. 

Mr Leong also asked that the Government waive the GST for medical bills. Public hospitals are already absorbing this cost for subsidized patients; they do not pay GST on their hospital bills.