Prudent to make gradual refinements to health care

05 Feb 2008, The Straits Times

Question

Name of the Person: Salma Khalik

One subsidised class for all?

The introduction of means testing at public hospitals will bring with it a paradigm shift in the way poorer patients are funded.

When subsidised wards were created decades ago, not only were they far inferior to private wards, but there was also a distinction between subsidised classes B2 and C. They provided different levels of comfort. The thinking was spelt out in the 1993 White Paper on Affordable Health Care: 'The ambience in the more heavily subsidised wards should be kept simple, with only those creature comforts which are absolutely necessary.'  The difference in comfort level was meant to act as a natural selector. People who could afford it would opt for the less subsidised but more comfortable ward.

That was 15 years ago, when Singapore was a newly emerging economy.

Today, Singapore is a much richer country with more demanding citizens. Consequently, the general comfort level in hospitals has improved, although subsidised wards still have some 'discomforts', such as having the bathrooms and toilets located outside the wards.  Hospitals are continuously upgrading their facilities, replacing older beds with those that can be adjusted for height, for example. With the opening of the Khoo Teck Puat Hospital next year, even C-class wards will have their own 'private' toilets and showers within the wards. There are other differences, of course. Private patients can choose their doctors, though not many take advantage of this privilege. Most patients trust hospitals to provide them with well-qualified doctors. Also, they cannot easily check their doctors' level of qualifications.

A private patient, of course, will be looked after by a fully qualified consultant rather than a registrar or an even more junior medical officer. But is this so important?  Public hospitals work on a team concept. That is, all subsidised patients are attended to by junior doctors, with a senior doctor overseeing them. Patients with more serious problems that require a higher level of care might even get the personal attention of a senior consultant.

Today, subsidised patients are also not restricted to generic medicine. Where necessary, they will get brand- name medicine, like anti-clotting agent Plavix, at $4 a pill.  As the differences between private and subsidised care narrow, a different way of underwriting the hospital care of the poor is needed - hence the introduction of means testing.

Health Minister Khaw Boon Wan himself admitted to The Straits Times that subsidised wards will become 'as good, and for some patients, perhaps even better than B1, because many patients have told me they actually don't want the air-conditioning'.  He asked: 'What rational person would then choose B1 class, when the cost is more than double?'

In 2006, the average B2 bill was $1,284, against $3,193 for a B1 bill.

Patients here are already well aware of the improved care subsidised wards provide today, and have been gravitating towards them. The proportion of patients who opt for C- class wards, which provide an 80 per cent subsidy, went up from 27 per cent in 2001 to 40 per cent in 2006. This indicates that the 'natural selector' has failed.

Means testing will help solve this problem. But with means testing, we should ask: Is there still a need for two subsidised ward classes?

The Health Ministry has said that Singapore does not begrudge giving the poor better hospital comfort and care. That being so, why not give all subsidised patients B2 ward comfort, and vary the subsidies each will get?

After all, the differences are narrowing not only between private and subsidised wards, but also between B2 and C classes. The Khoo Teck Puat Hospital, for example, will have fewer beds per ward - five in a B2 class, down from the current six; and two sections of five beds in a C-class ward, down from the eight to 12 beds that C-class wards in most other hospitals now have.

Besides the number of beds, the only other difference between B2 and C-class wards is the height of the walls. The walls separating each section in a C class are only waist-high. It is time to do away with these artificial 'discomforts' and let means testing decide the subsidy each patient gets.  Mr Khaw suggests the Government picks up between 65 and 80 per cent of a C-class patient's bill; and between 50 and 65 per cent of a B2 patient's bill.

Merging the two ward classes could mean a wider subsidy band of between 50 and 80 per cent, based on a patient's ability to pay.

For the poor, this would be a good move, since it would allow them the full 80 per cent subsidy for the comforts now found only in a B2 ward. For the better off, the deal will not be so sweet. Instead of paying a maximum 35 per cent of the bill for a C-class bed, they may now face having to pay half the bill.

But that is precisely the idea behind means testing: Those who can afford to do so, should pay more.

Often, the better-off patients who opt for a subsidised ward class are not concerned so much about the cost of the hospital stay, but rather the costly follow-up treatments. If they suffer from chronic ailments, such treatment may be needed for the rest of their lives. A subsidised patient continues to enjoy subsidised rates as an outpatient, including cheaper medication.

The one who would be picking up the biggest share of increased cost would be the Government, since merging the two classes could mean many more people getting an 80 per cent subsidy.  But that, too, is in line with current government thinking - providing the less well-off with good health care at affordable prices.

Reply

Reply from MOH 

We thank Ms Salma Khalik for sharing her thoughts on hospital means-testing.  She asked if it was time to introduce "One subsidised class for all?" (ST Feb 5), by abolishing Class C ward (while retaining the full Class C subsidy rate of 80%) and setting Class B2 as the lowest ward class in public hospitals.  She felt that it was timely for such a development as "today, Singapore is a much richer country with more demanding citizens."

There are serious problems to her suggestion.

First, as she has noted herself, such a change will further push up cost for the middle class: "For the better off, the deal will not be so sweet."

Second, she also acknowledged that Government subsidies would be further stressed, "since merging the two classes could mean many more people getting an 80% subsidy". 

The reality is that such a suggestion will ultimately come at greater cost to all Singaporeans.  While we will continue to upgrade our healthcare facilities, we should always be mindful that the demand for healthcare services is potentially bottomless.  Every service enhancement has to be carefully and objectively assessed for its value and effectiveness, knowing that the additional costs have to be jointly borne by all the stakeholders: the patients, the employers, the insurers and the Government.

The US and some other countries' healthcare systems (with up to 16% of GDP being spent on healthcare) should be a warning to us.  If we are not careful, healthcare will absorb a disproportionately large part of Singapore's income, at the expense of sacrificing important needs including investments in education and defence, besides burdening our local industry and eroding its international competitiveness.

It is wiser and more prudent for us to make careful and gradual refinements to our healthcare system, which has provided Singaporeans with a high standard of healthcare at a rate (4% of GDP) affordable to all.  It is a daunting task just to maintain this current outcome amidst increasingly costly medical advances and the rapid ageing of our population.  The Health Ministry will do its best, but we need the participation of Singaporeans and their understanding that we need to temper expectations and manage demand within the limits of our resources.