Achieving more with less - Singapore's healthcare expenditure

19 Jun 2024

Unlike some countries, Singapore adopts a modified national insurance scheme, “'Insurance Plus Plus' in which healthcare is funded jointly by insurance through MediShield, plus revenue from taxes, plus savings from Medisave, a system unique in the world. Singapore is achieving similar outcomes with less: spending about 4% of our GDP annually on healthcare, compared to 8% in the UK and 16% in the USA. Yet our health outcomes are comparable with many developed countries.

Pitfalls to avoid

This system is functional and serves us well. A pure national insurance scheme where healthcare is provided for free will create moral hazards and over consumption and over-servicing like the case with some developed nations. Spending more to achieve the same outcome is not a smart use of taxpayers’ money.

Our system is not perfect. There is always room for improvement and the system undergoes regular reviews to ensure that it stays relevant.

Caring for the needy and elderly

Caring for the needy and elderly

It is important to make primary care accessible and affordable to the needy elderly. As such, MOH has started the Primary Care Partnership Scheme (PCPS) to allow needy elderly to visit their GPs paying polyclinic prices. Better than having mini-polyclinics at void decks, riding on the PCPS to also include not just needy elderly, but low income patients across all age groups is also an option. This will be a more efficient use of resources by tapping on the over 700 GPs all over Singapore.

Eldershield reform

Eldershield reform

Long term care is a concern for many. Since the last reform in 2007, Eldershield payout has increased from $300 - $400 per month. However, this amount may no longer be sufficient and MOH is studying the feasibility of increasing the payout sum. This amount can be used to defray cost of nursing homes.

Ramping up healthcare manpower

While there are some communication problems associated with foreign doctors and nurses, the hospitals will try to overcome this by assigning accompanying staff who speaks the patients’ dialect. However, non-dialect speaking staff applies not just to foreigners; many young local doctors/nurses nowadays also do not speak their own dialects. There is no choice, especially with the aging population, but to increase the recruitment of foreign doctors and nurses, especially the latter, a job which not many Singaporeans take. However, compared to the past, the proportion of foreign nurses has improved over the years from 25% to 20%. 

No magic bullet in healthcare solutions

While there is no “magic cure” to rising healthcare cost, Singaporean’s worry on this issue is understandable. The reality is global healthcare cost will continue to rise and the bulk of it will go to manpower cost.

The only way to manage this is to ensure that resources are put to good use such as optimizing the usage in hospitals. If hospitals are kept at sub-optimal operating level (e.g. 50% bed occupancy rate), that would only mean that the per-patient cost will have to go up. A system with no or little waiting time will inevitably translate into higher cost. Our bed occupancy level of 85% is just about right.