Updates on Clusters

22 Feb 2010

Question No:  229   

Question

Name of the Person: Mr Viswa Sadasivan

To ask the Minister for Health (a) whether the creation of the SingHealth Group and the National Healthcare Group in 2000 has brought in the expected efficiency gains; (b) how have the citizens of Singapore benefited from this; and (c) whether the exercise has created real competition in the sector and, if so, whether this competition has driven costs lower and raised service standards.

Reply

Reply From MOH

1. In 2000, MOH reorganised its restructured hospitals and polyclinics into two clusters.  There were two objectives.

2. First, MOH wanted to better integrate the hospitals and polyclinics to facilitate the referral of patients from polyclinics to hospitals and to coordinate the care of the patients with chronic diseases after their discharge from hospitals.  There was also a desire for greater integration and coordination between hospitals and the national specialty centres.

3. Second, MOH wanted the two clusters to compete more actively to provide better care at lower cost to their patients.

4. The clustering experience has generally been positive.  The clusters compete in a friendly manner, to innovate and pilot new ideas, especially in the area of greater service integration, IT applications and chronic disease management.  Some ideas were started by one cluster and when confirmed useful, were adopted by the other cluster.  Patients gain along the way.

5. Where appropriate, the clusters also collaborate and synergise for mutual benefits.  For example, they combine their supply needs through bulk tenders and purchases, reaping substantial cost savings for our patients.  Other areas of efficiency gains include:

- cost savings through sharing centralised services, such as laboratory and imaging services; and

- sharing best clinical practices, such as the protocols to reduce hospital acquired infections. 

6. In the past three years, we have further reviewed the clustering experience and have progressively refined the healthcare delivery model to make it serve Singaporeans better.  We have taken several significant steps, after factoring in our new insights.   

7. First, integration has to be more comprehensive, going beyond the public sector, to also include the private and charity sectors.  This is particularly so for the care of the elderly with chronic diseases.  These patients will during the course of their sickness consult many healthcare professionals from any or all of the three sectors, including GPs and nursing homes, besides restructured hospitals and polyclinics.  The reason why we need to better integrate the care rendered by public hospitals and polyclinics applies similarly to the care rendered by the healthcare professionals from the private and charity sectors.  This does not mean that we should nationalise all healthcare services, but it does require a stronger level of coordination and sharing of information across the entire range of healthcare service providers.

8. Second, competition in healthcare has to be better understood and more skillfully managed in a way that is mindful of the unique characteristics of this sector.  Many economists have concluded that there is significant market failure in healthcare.  Hence, “real competition” as observed by Mr Viswa Sadasivan in presumably other economic sectors, is not as prevalent as in the healthcare sector.  One key obstacle to “real competition” is what economists refer to as “information asymmetry”: the providers know much more than the consumers.  But market does not inevitably fail in healthcare.  If conditions conducive for competition exist, serious competition can take place.  The generic principles of healthy competition, including greater information transparency, can be applied to healthcare.  So we need to discern what is applicable and implement those which are relevant.

9. Third, competition in healthcare is less intense between large systems, but is more likely to occur at the micro level, between individual doctors or the hospital clinical departments.  For example, when a pregnant woman is looking for an obstetrician, her decision is less about whether she would go to the SingHealth Cluster or the NHG Cluster.  If she has decided to use the public sector, she would more likely pick from among the KKH Obstetrics Department, NUH Obstetrics Department and SGH Obstetrics Department.  If she is familiar with the healthcare sector, she may even pick from among individual doctors by name, never mind where the obstetrician operates in.      

10.  With these insights, MOH has since brought the reorganisation further down the road. We have established regional clusters to build partnerships and seek synergies beyond the public healthcare sector.  With an ageing population and increased prevalence of chronic diseases, we are strengthening community-based prevention, management and rehabilitation services, most of which are delivered by the private and charity sectors.  There is a need for more proactive and coordinated joint management of patients by healthcare players from all three sectors.

11. These regional clusters will focus on providing integrated patient-centric care in partnership with other healthcare institutions within their respective geographical areas.  For instance, the Changi General Hospital will anchor the eastern cluster, in partnership with St Andrew’s Community Hospital next door, GPs, polyclinics, nursing homes and other healthcare providers in the east.  We are doing the same in the other parts of Singapore. 

12. Healthcare delivery will continue to evolve as medical science continues to make progress and better educated patients demand higher levels of service.  We have restructured the public healthcare sector since the 1980s and the enhancement in service level is visible to our patients.  But it is not perfect and we will continue to improve it in the light of experience.