Managing Healthcare Cost Increases

Name and Constituency of Member of Parliament
Ms Ng Ling Ling
MP for Ang Mo Kio GRC

Question No. 264

To ask the Minister for Health what are the key drivers of cost increases in healthcare and what is the target to keep cost increases in the next five years to a publicly announced range

Answer

1.     Several factors contribute to healthcare cost increases. First, our population is ageing.  Older patients tend to have more co-morbidities and complications, requiring more medical attention, more medication, procedures and longer hospital stays. For example, in 2019, the average stay in our public hospitals for those aged 65 and above was 6.9 days, compared to 3.9 days for those below 65. It was almost double the number days of stay. Therefore, as we grow older, we are likely to spend more on healthcare. And collectively, as we have increasingly more older persons in our population, our overall expenditure on healthcare will also rise correspondingly.  For example, MOH’s expenditure on the Long Term Care (LTC) sector increased from $296 million to $723 million between 2013 and 2018, or  a 20% increase per annum¹.

2.     Second, with medical advancement, new treatments will become available. Previously untreated conditions may now become treatable. Older treatments that were less costly may be replaced by better but more costly new treatments. These advances can improve life spans and the quality of life, but they come at a price. For example, Total Knee Replacement (TKR) surgeries have become more prevalent among those aged 65 and above over the past 20 years, rising from 187 patients for every 100,000 people aged 65 and above in 1999 to 499 patients in 2019. That is a 2.7 times increase in the prevalence rate over the time period. Previously, when such procedureswere not widely available, elderly suffering from knee conditions would have to bear with poorer mobility, which can affect their quality of life. 

3.     Third, operating costs may increase over time. For example, manpower cost accounts for about 60% of healthcare costs. Healthcare workers do important work and we must ensure that they are appropriately recognised and remunerated. Eventually, increases in manpower cost will translate into higher overall healthcare cost.    

4.     While these factors are likely to put pressure on healthcare costs, we can work together to moderate the increases to ensure our healthcare system remains affordable and sustainable. Managing healthcare costs has been a key priority of MOH. The 3 Beyonds – Beyond Healthcare to Health, Beyond Hospital to Community, Beyond Quality to Value – are key strategic planks that guide the transformation of our healthcare system to one that is future-ready and sustainable. 

5.     By looking after our Health, we can avoid or delay the need for Healthcare, reduce our healthcare bill, and more importantly we can enjoy better quality of life. For example, we declared War on Diabetes, to get us all to not only better manage our chronic conditions, but to also choose healthier meals and lead more active live. We enhanced Screen for Life subsidies to encourage Singaporeans to go for regular health screenings to detect and manage health conditions early. These efforts will help us to live long and live well and avoid future complications that will require much more costly healthcare services.

6.     When we go Beyond Hospital to the Community, we ensure that we do not overuse expensive hospital care when we do not need it. We have therefore invested in raising capacity and capability in the primary care and the intermediate and long-term care sectors so as to provide care that better meet the needs of patients. CHAS Green card was introduced last year, and MSHL coverage to inpatient hospice care was also introduced in April this year, as part of this strategy.   

7.     Moving Beyond Quality to Value calls for us to be better informed and more discerning in how to consume healthcare.  Are we stretching our healthcare dollar by choosing therapies that are cost-effective and well supported by clinical evidence?  We established the Agency for Care Effectiveness (ACE) to evaluate healthcare technologies, and issue guidances on drugs and other technologies to share with both the public and private healthcare sectors.  The Agency for Logistics Procurement and Supply (ALPS) was set up to aggregate demand and secure better prices for drugs and other supplies, as well as streamline and reduce supply chain costs.  We continue to put emphasis on raising productivity and tapping on technology where suitable.   
 
8.     We introduced fee benchmarks for common surgical procedures in November 2018, to guide private sector doctors and healthcare providers in charging appropriately, and to enable patients in making better informed healthcare decisions. This complements MOH’s annual publication of hospital bill sizes. Both the bill size publication and fee benchmarks are available on MOH’s website.  

9.     Finally, we provide substantial subsidies to cushion the impact of healthcare costs on patients.  To help patients pay for the remaining share of their costs, we have MediShield Life and MediSave. For Singaporeans who still need extra help, there is MediFund.

10.     As I have laid out, though there are measures we can take to manage healthcare costs. While there are measures to manage healthcare costs, there is unfortunately no silver bullet. We will need a sustained effort over many years and for all stakeholders to play their part and do so together. We will ensure that Singaporeans will always have access to good quality healthcare that is appropriate and affordable.

¹ For reference, National Healthcare Expenditure increased from $12.9 billion in 2012 to $22.1 billion in 2017, or about 11% per annum. 2018 NHE figures are not yet publicly available.