NOT-FOR-PROFIT PRIVATE ACUTE HOSPITAL MODEL

NOTICE PAPER NO. 2516

NOTICE OF QUESTION FOR ORAL ANSWER

FOR THE SITTING OF PARLIAMENT ON 5 FEBRUARY 2024

Name and Constituency of Member of Parliament

Dr Tan Wu Meng

MP for Jurong GRC

Question No. 5603

To ask the Minister for Health (a) what is the Ministry’s comparative assessment on the existing not-for-profit private acute hospital model in Singapore and those in other advanced economies in terms of (i) patient care (ii) talent development and (iii) alignment of institutional culture with the not-for-profit mission; (b) whether additional diversity in acute hospital models will complement Singapore’s existing care landscape; and (c) what factors might constrain the viability of entrants to this new industry locally and how can these be mitigated.

Answer 

1               Mr Speaker, let me first give some background on not-for-profit hospitals.

2               Not-for-profit hospitals are common around the world – such as in the US, Netherlands, Japan, Korea.  It does not mean that they operate at a loss.  In fact, all hospitals need to be financially viable, or they will have to close at some point.  A well-run not-for-profit hospital is sustainable in its operations but does not distribute dividends to shareholders. Instead, it ploughs back its profit to improve hospital services and facilities, and other activities such as charity.  

3               There are various reasons why hospitals would run as not-for-profit organisations. The key ones are that it is more in line with the public health mission of hospitals, and it helps them access philanthropic funds. Apart from that, there are no major inherent differences in the way good for-profit and not-for-profit hospitals are run, in terms of quality of care, attention to value-based care, talent recruitment and development, etc.  We see many of those qualities in Mount Alvernia Hospital, our only private, not-for-profit hospital in Singapore.

4               MOH is consulting the industry to establish a next private hospital.  Much attention has been given to the proposed not-for-profit feature, but actually that is not the key feature.  Instead, the more important features are: First, the hospital is required to serve primarily Singaporeans.  Second, there will be stronger governance – it will be singularly licensed, which means it will only have one healthcare licence, which means that the hospital operator needs to have strong oversight and control of its doctors’ clinical practices. The various professionals – specialists, surgeons, general physicians, pharmacists, rehabilitation professionals – will have to work closely as a team to serve the patients.  Third, cost-effective care – we intend to impose bill size restrictions on the private hospital as we do not want a high-cost care model. 

5               We intend to specify all these as conditions that potential hospital operators who are bidding will have to meet and will be evaluated on.  This means that land price will not be the sole criterion in determining the hospital operator. 

6               Why do we want to establish a new private hospital model with these key features?  The main reason is that it provides a better range of options in our healthcare landscape.  Today, we have public healthcare which is heavily subsidised by the Government, and which we are trying to make as affordable to Singaporeans as possible.  But the nature of subsidised care is there is a wait time, which can be quite lengthy for non-urgent electives.    

7               The public healthcare system is complemented by a private healthcare system, where we have a range of hospitals.  Most are quite high in cost, and you will either need to be able to afford or be well-insured to access them, with little or no wait time.  There are a few private hospitals that are lower in cost, such as Mount Alvernia or Raffles Hospital.  MOH’s view is that we can increase options for lower-cost private hospitals so that private healthcare better complements public healthcare and we have a more adequate range of options for Singaporeans.  

8               About ten years ago, the share between public and private hospital workload was 85:15. 85 for public, 15 for private. Today, it has shifted to 90:10 and the ratio continues to move towards the public hospitals.  This is good in a sense that it is a demonstration of the public’s confidence in public hospitals, but it is not so positive because it adds considerable load to the public healthcare system.  We are better off with a variegated system, where residents who are well-insured with private policies, have less need for subsidies, can opt for a lower-cost private hospital care if they wish to.  Private hospitals will also bring new insights and ideas to the management and delivery of healthcare. The additional diversity will enrich and improve the quality of our healthcare system.

9               MOH has received good responses from various professionals and the industry to offer their inputs after our invitation for consultation.  I prefer not to make any pre-judgements on the constraints or success factors that the member asked for on this new private hospital model.   I am sure we will receive many useful inputs and suggestions on how to help us improve and refine our model and make it a success.