Annual Conference of Feedback Groups

21 Jan 2006

By Mr Khaw Boon Wan, Minister for Health

Venue: Pan Pacific Hotel

Dr Wang Kai Yuen

Ladies and Gentlemen

My first involvement in large-scale public consultation was when I helped SM Goh, who was then Health Minister, to formulate and implement Medisave.  This was in the early 1980s.  The positive experience left a deep impression on me, and has shaped my approach on how public policies ought to be made and implemented.

Medisave was a simple idea but it was something new.  Breaking new ground is never easy and a good idea badly implemented can do more harm than good.  Translating an idea into practical rules therefore requires knowledge and the ability to anticipate as many scenarios as possible.

It is not possible for a person or a group of people to know all, hence the value of public consultation.  This way, we tap on the experiences and views of the people who will ultimately be impacted by the policies; good comments and suggestions can then be incorporated and implementation details can be refined.

For Medisave, many speeches were made over many months. I myself was personally involved in speaking to different audiences, big and small.  I recall speaking to audiences as large as 1,000.  And I can never forget speaking in one event where only a couple of participants turned up!  That was when we decided that enough public consultation had been done.  People were probably fed up and they were telling us: please get on with it!

But the extra efforts were worth the while.  By the time Medisave was formally implemented, it was readily accepted by Singaporeans without much fuss.  Medisave is now an integral part of our healthcare system.  Collectively, we have more than $32 billion in our Medisave Accounts, and this is growing at about $2 billion a year.  Outside Singapore, people have taken notice of our Medisave idea.  China has adapted it in some of its cities.  In the US, health saving accounts, a similar idea to Medisave, are being tried out in a smaller scale.

All schemes have to be regularly reviewed and refined.  Hence, public consultation is a continuous process even after implementation.  After twenty years, we should certainly re-visit Medisave to see if we can update it to make it work even better for Singaporeans.

I am therefore glad to read that the Health Feedback Group this year has made major recommendations on Medisave.  Specifically, they have suggested that we extend the use of Medisave for expensive outpatient treatments. 

In principle, I agree with this recommendation.  But we have to do it in a way which does not unwittingly undermine the original objectives of Medisave.  That requires careful study.

Let me use this opportunity to share with you my plans on how Medisave can be made to work even better.

First, we should raise the daily Medisave withdrawal limit.

Currently, all patients can withdraw from their Medisave up to $300 per day to help pay their hospital bills.  This has benefited the Class B2 and C patients.  At $300 per day, practically all Class B2 and C hospital bills can be covered by Medisave, without the patients having to dip into their pockets or other savings.

However, for Class B1 and Class A patients, this withdrawal limit fully covers less than half of their daily hospital bills (44% and 21% respectively for B1 and A patients).  Most of these patients would therefore have to top up the balance with a sizeable amount of cash.  Many of these patients have large Medisave balances.  They have been asking for their Medisave accounts to be used to cover more of their Class B1/A hospital bills.  We have studied this and feel it is a reasonable request.

From April 1 this year, we will raise the Medisave withdrawal limit from $300 to $400 per day.

At this higher rate, 69% and 40% of Class B1 and Class A patients (from 44% and 21% currently) will have their daily hospital bills fully covered by Medisave.  This will significantly reduce cash payments and, I think, will be welcomed by many such patients.

But even as we raise this Medisave withdrawal limit, I urge patients to remain prudent in their choice of hospitalization ward class.  Do not stretch beyond your means in hospitalisation.  Class B1 is much more expensive than Class B2.  So please choose with care.  Public hospitals will continue to provide financial counselling to patients at the point of admission.

Second, we will be allowing Medisave to be used for costly outpatient treatment.  In fact, we already allow some usage today.  This includes day surgery, chemotherapy, radiotherapy, renal dialysis and immunosuppressant drugs for organ transplants.  But we will see how we can allow Medisave to be used more widely, particularly for chronically-ill patients.  We are actively studying this idea and aim to announce the details in a few months' time.

I am taking some time on this.  We need to be careful because the risk of patients over-spending their Medisave on unnecessary outpatient care is real. 

Just this week, I read in the ST Forum page a call for Medisave to be used by female patients to "rejuvenate their faces".  Medisave balances are hard-earned savings for a future rainy day, particularly in old age.  It will be a disaster for the family if such precious savings are prematurely depleted for discretionary and cosmetic treatments.

We must find a balance between increased flexibility in coverage and appropriate use of medical services.  We must avoid Medisave accounts becoming insufficient at a time when Medisave is really needed for costly hospitalisation.  Then we will be creating a future problem.

To minimize this risk, one idea I am studying is to see if we can set maximum claim limits on outpatient expenses, say $X per year or $Y per chronic illness to cover a specified package of outpatient treatment.  What should X or Y be, and what these outpatient packages ought to be, are not easy questions to answer.  But we should try.

I have already scheduled a meeting with the Health Feedback Group to pick their brains on this.

But feedback is not just for my Ministry.  Feedback and public consultation are now part and parcel of all major policy formulation.  They are important parts of our political landscape.

Some public consultations are more successful than others.  My own experience suggests that there are 4 important ingredients for a successful public consultation exercise.

First, keep the idea focused and simple.  What is the problem and what is the policy objective?  Try not to complicate the idea with multiple objectives and secondary concerns.  Mass communication is never easy, and mass communication of a complicated idea is unlikely to succeed.

Second, the best policy option is often the simplest.  Resist complicated policy options, but also avoid a purist or academic approach.  Keep the policy simple, but allow the implementation to be flexible and responsive.

Third, do not brush off criticisms or suggestions.  Probe deeper for the motivation behind such feedback.  If the motive is sincere, try to understand why the person is making the comment.  If the concern is valid and the suggestion practical, incorporate it even if you did not originally think of it yourself.  Consultation is a mutual learning experience, and we must resist the "Not Invented Here" syndrome.

Fourth, spend time and be patient.  Public consultation is not a chore.  It is in fact an opportunity to build strong community bonds and enhance mutual understanding among people.  We will not always achieve consensus of opinions.  But even when we end up agreeing to disagree, a good public consultation exercise should still end up bonding us as one community, one people.

In closing, let me commend the eight Feedback Groups for your hard work and commitment.  Your diligent efforts will not go to waste.  They will be carefully considered by the relevant Ministries.  I am sure you will not be disappointed.  We hope that more Singaporeans will come forward to join you, to offer their views and suggestions, and help make Singapore a better place for all.