Regional Conference on Cost-Effective Health Care

30 Oct 2006

By Mr Heng Chee How, Minister of State for Health

Venue: Grand Copthorne Waterfront Hotel, Singapore

Prof Tan Ser Kiat, CEO of Singhealth and SGH

Dr Peter Mack, Organising Chairman

Dr David Evans, Director, Department of Health Systems Financing, WHO

Colleagues, Ladies and Gentlemen

INTRODUCTION

Good morning.

I appreciate this opportunity to address you, and I warmly welcome all participants to this conference, especially friends from overseas.  I wish you a very pleasant stay in Singapore.

The theme for this year's conference " 'Cost-effective Health Systems' " homes in on a subject of importance to countries the world over.  Increasingly, the need to manage rising healthcare costs has moved up the agenda of governments everywhere, in both developed and developing nations.

The World Health Organisation also highlighted the significance of this subject when it published the 2000 World Health Report.  That report discussed the factors that underlie cost-effective health care system performance, and the translation to improvements in population health.

In Singapore, we are also actively learning from good practices around the world.  From the  integrated care model of Kaiser Permanente in the US, to step-down care delivery and manpower management in Australia, to eldercare policies in Japan and innovative policies and practices elsewhere, we try to understand the nexus and dynamic between the many  parameters in the health cost-outcome equation, and see how best to apply these lessons to our own situation.  At the same time, we share our experiences in health system delivery, financing mechanisms, and aspects of health care policy with others so as to spur one another to faster improvement.

KEY FEATURES OF SINGAPORE'S HEALTH SYSTEM

From the Singapore government's perspective, the health system here, though imperfect, has worked reasonably well over the years.  Our population enjoy health outcomes that are excellent by international comparison, at a cost lower than what developed countries typically spend on healthcare.  We believe that 3 key features of our system contribute to its relative cost-effectiveness.

First, our system emphasises co-responsibility and practises patient co-payment.  Our healthcare financing framework distributes the burden across major stakeholders groups, namely, patients and their families, employers, insurance and the state. 

The Government plays an important role as a major payer for, and provider of healthcare services.  Patients treated in public healthcare institutions receive direct state subsidies, and this can be as high as 80% of actual cost. 

Patients themselves co-pay part of the cost.  In this way, healthcare consumption and cost increases are better managed.  To help Singaporeans derive the resources to co-pay, we have the "3Ms' framework " comprising Medisave, MediShield and Medifund.  Working Singaporeans contribute regularly to their Medisave accounts, which is a form of personal healthcare savings account.  Money from the Medisave account can be used to pay their share of hospitalisation expenses.  This money can also be used to help co-pay for hospitalisation of family members.   Complementing the Medisave scheme is MediShield, which is a catastrophic medical insurance scheme.  This insurance programme helps pay for very large medical bills resulting from major illnesses.  And to ensure that poor households will have access to basic healthcare, there is the state-funded medical social safety net called Medifund.

Second, we encourage and support market competition and informed patient choice.  When properly structured, market forces and market signals encourage efficiency, innovation and cost-effectiveness in the use of resources and delivery of services.  Our public hospitals, currently organised into 2 clusters, enjoy operational flexibility even though they remain government-owned, so as to tap the benefits of market competition.  To facilitate informed patient choice, we have published bill sizes for major categories of treatments for the public hospitals.  Information on pricing for treatment in private hospitals will also be increasingly available. We will share more information with the public as we gain experience.

Third, supply-side management.  Our experience taught us that healthcare costs and affordability must be managed from both the demand and supply ends.  In Singapore's case, the Government's direct involvement in the provision of acute care is a big reason why we have been able to manage the costs of hospital and specialist treatment relatively well. Through such efforts as judiciously introducing new and expensive technology, and steering the supply and development of healthcare manpower and facilities, we have been able to directly deliver high standards of care, while containing costs. 

ENSURING HEALTH SYSTEM SUSTAINABILITY

Looking ahead, we anticipate more challenges.  An aging population, changing disease patterns, the globalisation of healthcare, rapid medical advancements, and rising incomes and expectations.  All these factors will lead to increases in healthcare spending, and push up national healthcare expenditure from the current 3.8% of our GDP.  We have to proactively adjust our policies so that the healthcare system will continue to operate in a sustainable way.

To do this, we will step up efforts to enable patients to become active architects and managers of their own health, and not mere passive recipients of treatment.  We have a much better educated population today, and one with higher expectations about process and outcomes.  Such a population also has the potential and capacity to consciously choose healthy lifestyles, pursue disease prevention and early detection and treatment, and to comply with disease management regimes.  We believe doing this could reduce the need for costly medical interventions.

Next, within the acute care institutions, the relentless drive for higher clinical quality, standards and patient safety will continue. From adopting best practice protocols in treatment and workflow, to accreditation under international quality standards, to analyzing and publishing clinical outcomes, every effort will be put into achieving the best health outcomes for patients, for the outlay incurred. 

Thirdly, we will manage health from a life-long holistic care perspective, rather than from an episodic viewpoint.  Recently, we started a Chronic Disease Management Programme to deal with four conditions, namely diabetes, hypertension, lipid disorders and stroke, at the primary care level.  We believe that managing such conditions through good primary care can achieve better outcomes for patients.  This would then reduce or delay the onset of complications, thus saving money for patients and improving their quality of life.

On the supply-side, we want to integrate care across institutions and providers, to provide seamless delivery of health services across primary care, hospital care and step-down care, including home-care.  We want to "right-site" care, so that patients will receive appropriate treatment at the right places in the system.  This will minimise premature or unnecessary use of expensive specialist or acute-care resources.  Patients benefit from the cost savings. 

Finally, the Government will review the financing framework and policies in tandem with evolving circumstances.  For instance, the 3Ms framework is being fine-tuned to reduce the cash co-payment proportion for patients.  The MediShield Reforms of 2005 expanded the relative of medical insurance in healthcare funding, while retaining the benefits of co-responsibility.  As a result, the patient's share of large hospital bills was reduced significantly by a third on the average, from around 60% of bills to 40% now. 

We will also train more healthcare manpower, manage the affordability of basic drugs, and facilitate the development of facilities to meet the growing and changing needs of an ageing population.  We will also ensure that our safety nets continue to give low-income households the confidence that they will have access to appropriate healthcare.

CONCLUSION

Much research on health system performance points to the benefits of a coherent, whole-system approach in achieving quality, access, efficiency, equity and most important of all, good health outcomes.  I have given you a glimpse of Singapore's efforts in this area, and hope that you would have the opportunity to discuss in depth this and other important topics in the course of this meeting.  I wish you a successful conference.

Thank you.