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Name and Constituency of Member of Parliament
Dr Lim Wee Kiak
MP for Sembawang GRC
Question No. 1627
To ask the Minister for Health (a) what is the rate of medical inflation in Singapore over the past five years versus the global rate; (b) what is the projected rate of medical inflation for the next three years based on an expected increase in the goods and services tax in the near term; and (c) what is the Ministry doing to help bring down the rate of medical inflation.
Oral reply
1 Healthcare inflation measures the growth rate of prices for healthcare related goods and services paid by patients, after government subsidies. Between 2011 and 2016, Singapore’s average annual healthcare inflation rate was 2.4% compared to the OECD average of 1.6%. Recent policy measures such as the Pioneer Generation Package, MediShield Life subsidies and the Community Health Assist Scheme (CHAS) have helped to bring it down to about 1.2% between 2013 and 2016.
2 While it is important to monitor healthcare inflation, it is just as important to look at overall healthcare spending. This is because subsidies are funded from Government revenue, which comes from the people through taxes and duties, and the net investment returns contribution from our reserves. Hence, overall healthcare spending is a more complete indicator than healthcare inflation alone. In Singapore, our national healthcare spending has increased by more than 60% from $11.5b in 2011 to $18.8b in 2015, as we built more healthcare facilities and hired more healthcare workers to meet our growing healthcare needs. With an ageing population, it is inevitable that our total spending on healthcare will increase further. To keep our overall healthcare costs sustainable in the future, we have to focus on ways to transform our healthcare system and prevent healthcare costs from rising too quickly. This requires the collective effort of all stakeholders to work together in close partnership.
3 MOH had earlier announced three strategies to transform our healthcare system. Firstly, we are moving beyond healthcare to health by investing upstream in health promotion, disease prevention and health screening to help Singaporeans stay healthy. Secondly, we are shifting care beyond hospitals to the community, to enable more patients to receive effective care closer to home. Thirdly, we are moving beyond quality to value for patients, to deliver appropriate care to meet their needs. These include initiatives to improve productivity through innovation and process improvements, and working in collaboration with private sector and community providers. The above shifts are important to keep our increases in healthcare spending at a more sustainable level as we consider different options to fund our future healthcare and long-term care needs.
4 Sir, the best approach to managing healthcare cost is for all of us to do our part by keeping ourselves in good health and adopting an active and healthy lifestyle. MOH will continue to invest in this area, and work closely together with our industry and community partners.