News >

Affordable health care remains a priority: Tharman

He outlines impact of Govt’s move to foot larger share of health bill

Image
JANICE HENG on 06 Mar 2014

Singapore Press Holdings Ltd

Share

Facebook Email


BUDGET 2014: HONOURING PIONEERS, AFFORDABLE HEALTH CARE


WHILE the Pioneer Generation Package has grabbed the headlines, the Government underlined yesterday that providing good, affordable health care for all Singaporeans remains a priority.


“That is a very important challenge that we have to meet – how we can provide quality care in an affordable way,” said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam in Parliament yesterday.


He noted that the Government has used recent Budgets to improve health care and keep it affordable.


He cited moves like increasing risk-pooling via MediShield Life, the Government raising its share of health-care spending, and the role of individual savings being retained as a key pillar in the system, in the form of Medisave.


To show the difference that the Government’s move to foot a larger share of the health-care bill was making, he cited an example of a middle-income couple in their early sixties.


Say their income is $1,700 per person per month – the median household income here – and the husband has day rehabilitation care weekly while the wife visits the polyclinic and specialist outpatient clinics twice or thrice a year.


“The policy shifts that we’ve made to increase subsidies for the middle-income group, particularly outside hospitals, have meant that this couple would receive a quadrupling of the benefits that were in place a decade ago,” Mr Tharman said.


“We’ve been making significant shifts, not just for the pioneer generation, but for all Singaporeans as they get older especially,” he said, adding: “But we have a larger challenge in future.”


There are 450,000 in the pioneer generation. The next generation, aged 45 to 64, is one million strong. These baby boomers will retire in the next 10 to 20 years.


In Budget 2012, the Government projected that its yearly total health-care spending would double from $4 billion to $8 billion by 2016. It is likely to hit the $8 billion figure a year earlier in 2015, and reach $12 billion by 2020.


Besides providing subsidies, it is also investing in infrastructure to boost hospital capacity and building more intermediate and long-term care facilities.


Outlining the challenge in financing health care for these groups, Mr Tharman said Singapore must keep two factors in mind.


First, spending more does not necessarily mean better health care.


He underscored this with a chart showing how much advanced countries spend on health per capita and how healthy they are, based on Bloomberg rankings. Singapore topped the Bloomberg ranking in terms of a healthy population and yet spends less than other countries. In contrast, the United States had poor health but high spending.


“People often refer to (the US) in articles and wonder why we’re not spending as much,” said Mr Tharman. “Well, they spend a lot of money but they’ve got very weak health-care outcomes.”


There are reasons some countries are not getting as much bang for their health buck as others, he said.


Prices could just be higher while health care might be over-prescribed and over-utilised – deemed “a very serious issue” by Mr Tharman.


In some systems, for instance, doctors are paid more for just prescribing extra treatments – giving them an incentive to do more than is needed.


He also noted that many systems have subsidies for everyone, including the rich. This makes health care look cheap, but leads to much higher usage.


“People don’t realise it, but they are actually paying for it in another way, through higher taxes,” he added.


That was the second fact to keep in mind – “that there is, in fact, no free or cheap health care anywhere in the world”.


It can look cheap or free at the general practitioner’s clinic or hospital because insurance is covering it or government subsidies are being provided.


“But the public is ultimately paying for it either through taxes or hefty insurance premiums,” said Mr Tharman, citing Germany, where co-payment at the point of treatment is “extremely low”.


Yet that is only because employers and employees jointly contribute a 15.5 per cent payroll tax – coming out of wages – to a “sickness fund”.
“When you finally go to the hospital or clinic, you think it’s very cheap but actually you paid for it (earlier),” he said.


Singapore will spend more on health care as society ages and more treatments that improve the quality of life become available. But because nothing is free, the costs must be controlled, said Mr Tharman.


“We have to do it in a cost- effective way and prevent the total health-care bill from spiralling upwards, because everyone will have to pay for that.”


HEALTHIEST NATION


Singapore’s per capita expenditure on health care is the lowest among these advanced countries, as shown by its position on the far left of the chart.


Yet, it comes out tops in Bloomberg’s 2012 ranking of the world’s healthiest nations, based on indicators like life expectancy, percentage of underweight children and proportion of people with high cholesterol.


The United States is the polar opposite. Among these countries, it spends the most on health care per person, yet lies at the bottom in the health ranking.


Furthermore, the countries in the middle – scattered as they are – show “very little correlation between how much you spend and your health-care outcomes”, said Deputy Prime Minister Tharman Shanmugaratnam.


Source: The Straits Times © Singapore Press Holdings Limited. Reproduced with permission.

The views, material and information presented by any third party are strictly the views of such third party. Without prejudice to any third party content or materials whatsoever are provided for information purposes and convenience only. Council For The Third Age shall not be responsible or liable for any loss or damage whatsoever arising directly or indirectly howsoever in connection with or as a result of any person accessing or acting on any information contained in such content or materials. The presentation of such information by third parties on this Council For The Third Age website does not imply and shall not be construed as any representation, warranty, endorsement or verification by Council For The Third Age in respect of such content or materials.