Fix rich-poor health spending imbalance

02 Feb 2006, Business Times

Question

Name of the Person: Leong Sze Hian Singapore

Fix rich-poor health spending imbalance

I REFER to recent media reports on Singapore's medical schemes.The feedback group on health matters has suggested that a new central charity fund be set up to raise and distribute funds to medical charities, to allow 'staff to focus on helping the needy and not be distracted by having to raise money, as in the case of the NKF'.The health minister said at the annual conference of feedback groups last month that Singapore has one of 'the best health-care financing in the world' which others are copying and that 'people in the lower-income group don't have to worry, although I know they worry'.According to the Department of Statistics, expenditure on healthcare had the highest increase among all items of household expenditure.The lowest 20 per cent of households by income spent 6.7 per cent in 2004 compared with 3.7 per cent in 1998. This is an increase of 81 per cent or 10.4 per cent per annum, compared with inflation of only 1.7 per cent.Meanwhile, the increase among the highest 20 per cent of households was smaller, 55 per cent or 7.6 per cent per annum. Healthcare's share of spending went up to 4.8 per cent from 3.1 per cent.Why is it that our healthcare policy and system have resulted in the poorest being burdened with paying 47 per cent (81 divided by 55) more relative to the rich?On a per annum increase basis, this means that the poor have been paying 37 per cent (10.4 divided by 7.6) more a year, relative to the rich. If this trend continues, the poor may be further stressed when they fall ill. According to the Ministry of Health's website (last updated April 2005), total government health expenditure per person declined by 16 per cent to $491 in 2004 from $584 in 2003, recurrent health expenditure fell 16 per cent to $1.6 billion from $1.9 billion, and development health expenditure slipped by 6 per cent to $97 million from $103 million.Healthcare's share of total government expenditure also decreased fell, to 5.9 per cent from 7 per cent.In this connection, the National Kidney Foundation report revealed that the health ministry asked NKF to raise funds for cancer. The more funds health charities raise may in effect mean less government spending on healthcare. Has the above declining healthcare spending contributed to the increased healthcare spending among the poor? As the rich would typically choose higher class hospital wards and more expensive outpatient treatment and medicine, this disparity is all the more glaring. According to the Feedback Unit's publication, Shaping Our Home: Turning Ideas Into Reality, released last month, the Health Feedback Group urged that we 'consider new ways of distributing subsidies to the needy; subsidies for Singaporeans should be made available to those who need it'.The above statistics clearly indicate that more may need to be done in this regard, to lessen the financial burden of healthcare on the needy relative to the rich.I would like to suggest that our healthcare policies be reviewed to address the increasing imbalance between the poor and the rich in healthcare financing.

Reply

Reply from MOH 

Healthcare resources focus on the needy 

In "Fix rich-poor health spending imbalance" (BT, February 2), Mr Leong Sze Hian used FY2003 and FY2004 statistics to conclude that the government is spending less on healthcare. But his comparison is incomplete and misleading. 

FY2003 was the year when Severe Acute Respiratory Syndrome (SARS) hit Singapore when the government had to invest additional funds on SARS-related items as well as post-SARS measures in order to be better prepared for possible re-emergence of SARS and similar threats. As a result, the total government health expenditure (GHE) in FY2003 was significantly higher than normal. 

The correct approach is to look at the government's spending over a longer timeframe. Actually, Singapore's GHE rose from $0.87 billion in FY1994 to $1.17 billion in FY1997, $1.21 billion in FY2000, $1.53 billion in FY2002 and $1.71 billion in FY2004. 

We share Mr Leong's wish to lessen the financial burden of healthcare on the needy. That is why we have particularly focused our healthcare resources on the needy. 

70% of Singapore's GHE goes to subsidies to help Singaporeans pay for their hospital and polyclinic treatments, nursing homes fees and so on. Healthcare subsidies had been increasing steadily from $560 million in FY1997, to $850 million in FY2000, and further to $1.28 billion in FY2004. 

In addition to direct healthcare subsidies, the government has spent $420 million in recent years to top up the Medisave accounts of Singaporeans, with larger top-ups for those in greater need, especially older Singaporeans. MediShield was also reformed to ensure it covers more adequately large hospital bills, while ensuring that the scheme remains affordable for lower-income Singaporeans. 

The government had also set up the Medifund as the medical safety net to help needy Singaporeans pay for their medical expenses. Last year, Medifund provided financial assistance to 16,400 applicants in financial difficulties to help pay for their Class B2/C hospital bills. They each received an average of $984, double the GHE per person of $491 in FY2004. 

We will continue to refine our healthcare policies, in particular to help the needy.