Increasing Healthcare Costs In Singapore Leading to New Laws

Global medical costs are on the rise, and the situation seems to be worse in Singapore. According to a report by PriceWaterhouseCoopers Health Research Institute, medical costs will continue to rise in the next 15 years. The report predicts that elderly healthcare costs in Singapore will increase by $49 billion annually. By 2030, the average cost of healthcare for elderly people is expected to by $37, 427.

Singapore has been investing heavily in healthcare, and the budget is almost at par with that of defense. For instance, in 2017, the government allocated around $10.7 billion in healthcare. The figure will in the next three years rise significantly as the country’s population continues to age. By 2020 the cost will increase by an additional $3 billion from the current levels.

 

What is causing then rising healthcare costs?

1. Aging population

Singapore’s aging population has been increasing, and by 2015 it was standing at 5.5 million. Life expectancy has increased dramatically to around 84.4 years, which means the aging population will continue to expand. With population growth slowing the number of seniors has grown tremendously and will hit around 900,000 in the next ten years.

Seniors are susceptible to illness, and with an aging population, costs of healthcare will increase. Also, the increased in this age group means the labor force will shrink and dependents increase. With more dependents, even the healthcare budget will increase.

 

2. Enhancement of medical technology

Advances in the medical sector have transformed healthcare. Advancements have improved treatment procedures such as non-invasive heart surgeries. These innovations are very expensive. For instance, the country spent around $41 billion in medical research and investment.

The innovations have led to new treatment options that enable early diagnosis and reduce the possibility of errors. The treatment options are, nonetheless costly. Costly medicine using improved technology has increased the cost of healthcare.

 

3. Inappropriate and ineffective medical procedures

Sometimes there is inefficiencies and use of ineffective medical procedures and services. This normally results from administrative procedures for patients. This contributes to an increase in medical costs. In Singapore, the range of ineffective and inefficient savings from medicine, human resources, and hospitals can hit up to 40% of total healthcare provision.

 

Changing laws to cope with the rising cost of healthcare

With growing medical cost, the government of Singapore has reviewed healthcare safety nets to accommodate low and middle-income citizens. Around two-thirds of the population receive around 80% subsidy. In April there was a big change in how the health insurance plan works in Singapore.

 

1. Co-payment changes

The ministry of health directed insurers to devise an Integrated Shield Plan where policyholders co-pay 5% of the total cost of health. This is a shift from the traditional ‘full rider’ plan which requires patients to pay nothing.

Increasing healthcare cost is a big challenge in Singapore that affects everyone. An increase in the utilization of healthcare has led to a “buffet syndrome” where “full riders” enjoy overconsumption of healthcare services and over-servicing from some doctors. Upward pressure in premiums has increased costs.

In April, for instance, AIA insurance in compliance with the MOH’s directive introduced AIA Max VitalHealth. The policy requires a 55 co-payment if the rider receives treatment in a public hospital or AIA Quality Healthcare partners. The move is a way of ensuring customers receive affordable healthcare. AIA is the first insurance company in the country to partner directly with the medical community through its AQHP program.

 

2. Curbing overcharging

Another reason for the rising cost of healthcare is overcharging from outlier providers. To curb this, the MOH put in place national fee standards for procedure fees. This will be a guide to the private sector so that there is for charging of patients. AIA Singapore has indicated that it will follow the MOH benchmark if a charge is reasonable. In the case of overcharging, there will be negotiations to bring down the charges. This move aims at benefiting patients who co-pay.

Insurers have made changes to the Integrated Shield plan in compliance with the co-pay requirement. But others such as AIA have done more, and they offer mammograms for breast cancer and complementary Colonoscopy screening for colorectal cancer.

 

How to prevent rising costs of healthcare

The ministry of health in a bid to keep the cost of healthcare sustainable came up with a benchmark for medical fees for various clinical procedures. The benchmark was also to include procedures such as MRIs and X-rays in the long-term. Primary care and prevention should be encouraged to minimize hospital admission rate. However, more needs to be done through the public and private sector to alleviate the growing healthcare costs.

Patients are encouraged to seek medical treatment or diagnosis early. The MOH encourages senior Singaporeans to undergo cancer screening. Screening through colonoscopy can be expensive, and therefore, early diagnosis is vital. This can ultimately save lives and even reduce healthcare costs.

Being aware of the available healthcare schemes can help in minimizing healthcare costs. Provision of healthcare is multi-layered in Singapore. There are a host of subsidies that you can enjoy before you get to use Medisave then Medishield Life and then Medifund to pay for healthcare. Taking advantage of these schemes can significantly cut the cost of healthcare.

Medisave helps CPF members to save for their healthcare expenses, especially when they retire. On the other hand, Medishield Life is a good insurance plan that Singaporeans can take advantage of. It can help in settling large hospital bills as well as other costly outpatient procedures such as dialysis and chemotherapy. The government set up Medifund as a scheme aimed at helping an individual having financial challenges in settling their remaining medical bills. Medifund comes in after one has exhausted the government subsidies as well as drawing on other payment means such as Medishield Life and the Integrated Shield Plan, which is a private insurance plan.

It is important to ensure that patients are aware of the various available schemes as well as medical insurance options. This is vital and can help reduce healthcare inflation.

(By Neha Gupta)

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