Finding Opportunities During Downturns

22 Nov 2008

By Khaw Boon Wan

Associate Professor Koh Tian Hai, Medical Director, NHC

Distinguished Guests

Ladies and Gentlemen

The current economic turmoil has impacted all countries.  Last week, I read an article in the IHT (Nov 18) which highlighted the financial woes of the US state governments as they cut deeper into their “bare-bones budgets”, trying to respond to an “astonishing decline in (State) revenues”.  The caption of the article summed up their plight: “Health and education programs at risk”.  And this is coming at a time when their rapidly ageing population will create what the US Institute of Medicine described as an impending “silver tsunami”.  The next US President has promised to reform healthcare.  Many now wonder how he is going to deliver on that promise.

A Different Approach: Save For Rainy Days

2. In Singapore, we take a different approach to funding public services.  We know that Government revenues are bound to fluctuate and we try to avoid essential public services from being held to ransom by the prevailing economic climate.  That is why we set aside budget surpluses during good times, so that if and when the rain comes, we will have enough umbrellas for all. 

3. In the case of healthcare funding, we build up reserves at several levels: Government builds up the safety net through Medifund and the Eldercare Fund, and Singaporeans build up their own Medisave balances to cover their share of healthcare costs. 

4. Our annual operating health expenditure is about $3 billion, but we have in Medisave, Medifund and Eldercare Fund a total reserve exceeding $42 billion.  This is 14 times our annual health expenditure.  The bulk of these savings are in Singaporeans’ own Medisave Accounts. 

5. Contrast this with the situation in the US where Medicare and Medicaid are projected to run out of money in a few years’ time.  Singaporeans can face the silver tsunami with greater confidence.  We must continue to grow these reserves and must not unwittingly deviate from this sound philosophy of saving for the rainy days.

Don’t Worry, But Please Don’t Waste It

6. Singaporeans worry about healthcare costs and are bound to worry even more during economic downturns.  But the reality is that most Singaporeans have sufficient savings in their Medisave.  There is currently $40 billion in Medisave and it is growing at $2 billion a year.  These are giant umbrellas for the rainy days.  And most of you have further reinforced your umbrellas with MediShield and ElderShield.  So, don’t worry.

7. But do remember that these are your hard-earned savings for your long term healthcare needs, especially in old age.  So, please do not waste it.  That is why I have to set prudent Medisave withdrawal limits, and have to say “no” to requests to allow Medisave to be used for non-essential needs.    

Downturn Can’t Stop Us; In Fact, We Will Speed Up

8. As mentioned, the NHC is rebuilding. It will complete in 2012. 

9. There are other projects taking shape to transform the Outram Campus. For instance, the Duke-NUS Graduate Medical School is taking shape and scheduled to open next year. The Pathology, Education and Research complex is currently being built and will open in 2011. 

10. These projects are our commitment to building capacity and raising capabilities.  These are long term commitments.  The economic downturn will not stop us.  In fact, we will take advantage of falling prices to accelerate investment.  We are speeding up the Jurong General Hospital project.  We are also recruiting more staff, ramping up skills training and using this period to build up resources for the long term care sector which has to grow to meet the silver tsunami. As part of our preparations for this silver tsunami, we will need to strength the long term care sector, to further deepen and sharpen it. We need to build up trust and confidence in customers using the services.

High Skills With Deep Compassion

11. Putting up a new building is easy once we get the money; developing human software is the more difficult challenge.  Technical skills can be acquired through staff training in the top medical centres in the world, but ensuring that our staff at all levels have empathy and compassion for their patients is the true mark of an outstanding medical institution. At the end of the day, that is our priority: our patients. 

12.  The NHC has done well in this respect.  Under the leadership of Prof Koh Tian Hai, we have a strong team of highly-skilled specialists whose hearts are in the right place.  They combine high skills with deep compassion.  They choose public service in order to serve their patients, rich or poor, and to train the next generation of doctors.  Many names come to mind: Prof Terrance Chua, Dr Chua Yeow Leng, Dr Kenny Sin, Dr Lim Soo Teik, just to mention a few.  

13. Your patients have written to me about their NHC experience.  Last month, a Mr Lee emailed me to say that NHC had saved his life.  This is what he wrote: “I am still alive today, thanks, and with deepest appreciation to the doctors, nurses and physiotherapists who had helped in my speedy recovery.  I am especially grateful to Dr Lim Chong Hee, Dr Guna, Dr Son, Dr Lim Soo Teik, Dr Hsu Li Fern, and all the nurses and physiotherapists at NHC.”

14.  Last week, another patient wrote to Lianhe Zaobao (Nov 14).  He is 61 and had a triple bypass at the NHC.  He had a good recovery and while at the NHC, he observed many caring staff who went about their work with compassion.  He said that the NHC had made him feel proud as a Singaporean.

15. I too am proud reading such letters from your patients.  Key is our ability to attract and retain medical specialists, skilled nurses and allied health professionals.  To sustain such achievements, we must be fair to our staff.  It is unrealistic to expect them to make significant financial sacrifices, though many of us in public service are prepared to work more for less.  We need to pay market rates and offer them challenging jobs, with opportunities to do leading-edge medical research.  That is the reason why we restructured our hospitals 15 years ago, to empower the hospital boards with the flexibility to respond promptly to market signals.  Staff retention is a key responsibility of the hospital board.

16. Retaining good staff is one reason why they have to regularly adjust the hospital fees.  While the Government will absorb most of the cost increases, patients’ co-payments will have to be adjusted too.  For specialities like cardiology, technology has also been a cause of medical inflation.  New drugs are getting very expensive, and many new implants are more expensive than those they replace. 

17. That is why we must do our very best to save money for our patients.  We must be on constant look-out for opportunities to innovate, to make healthcare better, safer and cheaper.  Often, this means keeping patients out of hospitals.  Last week, Intel launched a device that lets doctors make house calls on patients without being there.  It uses gadgetry and Internet connections to enable doctors to monitor the health of chronically ill patients from afar.  Doctors and nurses can keep tabs on heart functions, blood sugar levels and other health factors of at-home patients and then manage their care remotely.  . 

Getting out of business

18. NHC must be part of this global search for better and less costly treatment and roll them out to the lowest-cost venues, at the regional hospitals, in the community.  The best strategy is still prevention and elimination of heart diseases by getting Singaporeans to pay full attention to managing the four classic risk factors: smoking, high blood pressure, cholesterol and diabetes.  I am pushing workplace health promotion, with a view to get rid of workplace ill health.  I doubt we can achieve this stretch target in the foreseeable future.   

19. However, at the strategic level, the NHC must remember that its mission is to eliminate heart diseases and hence work itself out of business at a strategic level.  As a tertiary centre, technical sophistication characterises the NHC and hence NHC should concentrate on the very complicated cases.  Public should always see their GP first and come to NHC only if their GP think it is necessary.  Most of the time, discomfort around the chest area does not warrant sophisticated cardiac assessment.  Your mission therefore includes helping the primary and secondary level physicians upgrade their skills and become more effective in managing their patients while their heart diseases are still mild. 

20. On this note, let me congratulate NHC on its milestone 10th anniversary and the launch of the time capsule.