Debate on MediShield Life Scheme Bill

During the debate during the second reading of the MediShield Life Scheme Bill, I raised several concerns and questions regarding the disclosure of confidential information and the approach to the recovery of outstanding premiums. I pointed out that some people may have genuine privacy concerns and they should not be automatically penalised for it in the form of higher premiums. Instead they should be allowed to make statutory declarations about their health status.

During the debate during the second reading of the MediShield Life Scheme Bill, I raised several concerns and questions regarding the disclosure of confidential information and the approach to the recovery of outstanding premiums. I pointed out that some people may have genuine privacy concerns and they should not be automatically penalised for it in the form of higher premiums. Instead they should be allowed to make statutory declarations about their health status.

Speech delivered in Parliament on 29 January 2015

Mdm Speaker,

This Bill gives effect to the MediShield Life Scheme, which was debated in this House in July 2014. It spells out the framework for the disclosure of an individual’s confidential health and financial information, recovering outstanding premiums, and the offences and penalties for false declarations and claims.

I have several concerns to raise regarding the disclosure of information and the recovery of outstanding premiums.

DISCLOSURE OF INFORMATION

First, on the disclosure of information described in Part 5 of the Bill.

The Bill authorises certain “authorised persons”, including public servants from the Central Provident Fund Board (CPF), the Ministry of Health (MOH) and public hospitals, to tap into various government databases to extract an individual’s confidential health information for two purposes: One, to assess whether a person has pre-existing medical conditions for which premium loading may apply; and two, to assess the person’s benefit claims under MediShield Life.

The Bill also permits these authorised persons to request for, access, use or disclose to other authorised persons the “means information” of an individual, which could include monthly income, income tax data, information on assets, residential address and household composition.

My queries and concerns on this Part of the Bill fall into four categories:

1. The means testing process;
2. The extent of access, disclosure and use of confidential data;
3. The process and consequences of opting out; and
4. Safeguards to prevent illegal disclosure.

Means testing process

First on means testing. I understand the rationale for authorising this disclosure of health and means information is to facilitate a smoother and more seamless execution of the MediShield Life Scheme.

I raised the matter of means-tested premium subsidies in both my adjournment motion on healthcare affordability in November 2013 and during the MediShield Life White Paper debate in July 2014. I had asked for premium subsidies to be provided automatically to households that have already undergone means-testing for other government assistance schemes like CHAS (Community Health Assist Scheme). I also asked for the appropriate level of premium subsidies to be automatically extended to all vulnerable groups of Singaporeans, without requiring them to apply separately. This is so that all individuals who are eligible for premium subsidies will receive them with minimal paperwork.

Can the Minister confirm if the provisions in this Bill will enable means testing to be automated, such that individuals do not have to submit additional forms to receive the premium subsidies?

If not, what would be the procedure for individuals to apply for premium subsidies, and how will MOH ensure that the process is simple and convenient, especially for the elderly, people with disabilities or those with lower levels of literacy?

Given the very tough premium recovery measures in Part 3 of this Bill, it is ever more important no one misses out on their premium subsidies, if they are eligible to receive them.

Extent of use of confidential information

Next, the use of confidential information.

Will the Government and its functionaries be allowed to use any of the confidential information authorised under this Bill for purposes other than means testing, premium calculations and benefit claims assessments? I note there are provisions under the Bill, including in Clause 30, for the Minister to approve the access or disclosure of such information as he “considers appropriate”. This is gives very broad powers to the Minister and could potentially negate the protections spelled out in other parts of the Bill.

Can the Minister give some examples of what he may “consider appropriate” for access or disclosure of confidential information that is not already provided for in this Bill? Can these not be spelled out in the Bill instead of giving the Minister so much discretion?

Opting out

Next, on opting out.

For those who do not consent to access to their confidential information, how will they opt out? Will the process be made simple and explained clearly to all persons, including those who have not yet expressed a desire to opt out? The Bill does not explain the procedure for opting out, but simply that it should be in “the manner determined by the Minister”.

If individuals opt out, will they automatically have a 30% premium load for 10 years imposed on them?

It is easy to assume that people all fall into one of only two groups: First, those who are willing to allow the Government to access their health and means information; and second, those who have some medical conditions that they are trying to hide so as not to attract higher premiums.

But there is a third group of individuals: Those who have no medical conditions that warrant higher premiums but still do not wish to give the State such wide ranging access to their personal information. People in this group should not be penalised for wishing to maintain their privacy, neither should they be forced to make a Hobson’s choice: Either permit access to your data, or pay higher premiums.

For individuals who are concerned about privacy, can the Government allow them to opt out from the provision of health information, and instead make a statutory declaration about their health status? If they declare that they have no relevant medical conditions, they would not be required to pay higher premiums. If they are untruthful in their declarations, then there are already penalties in this Bill and other laws that can be used to punish them and deter such behaviour.

I believe this would strike a fair balance between individuals’ desire for privacy and the need to ascertain their health status for premium calculations.

Safeguards to prevent illegal disclosure

Next, on safeguards.

This Bill greatly increases the potential number of people who will be authorised to access confidential information of individuals. We have seen examples in other countries where public officers who were given wide-ranging access to confidential information misused that information and even disclosed it publicly. We have also seen large organisations have their computer systems breached by hackers and suffer massive losses of confidential information, including health information of their employees or credit card numbers of their customers.

I note that there are penalties in the Bill for unauthorised disclosure. But it is not always easy to track down the source of a leak, and in any case, once confidential information is leaked, the damage would have already been done.

With the introduction in this Bill of such extensive authorisation to access confidential data, do the relevant agencies plan to significantly beef up the security of their computer systems to prevent unauthorised data access, either by external hackers or by disgruntled insiders?

Can the Minister assure us that authorised persons will be given access only on a strictly “need-to-know” basis, regardless of their seniority, and that the data in their possession is removed as soon as it is no longer needed?

I note that a new Cyber Security Agency (CSA) has been set up under the PMO. Will the security of confidential information covered in this Bill come under the purview of the CSA?

RECOVERY OF OUTSTANDING PREMIUMS

I now move on to Part 3 of the Bill: The recovery of outstanding premiums.

Under the Bill, those who do not pay their premiums could also be slapped with penalties of up to 17% of outstanding premiums and interest on late payments. Can the Minister elaborate on how the penalties will be computed and how soon after a default will they take effect?

The Bill empowers a “recovery body” to use methods of recovery of outstanding premiums similar to that used by the Inland Revenue Authority of Singapore (IRAS) to recover outstanding taxes. These include declaring any person or entity to be a “defaulter’s agent”, who could be one’s employer, bank or tenant. The defaulter’s agent will then be obliged to pay the premiums due from any salary, pensions or rent that he owes to the defaulter. Defaulters could also be sued.

I agree that those who have the means to pay their premiums but fail to should be firmly compelled to do so. This is only fair to other policyholders who are contributing their fair share to ensure that the Scheme is sustainable and viable in the long term. However, can the Minister assure the House that the Government will not aggressively pursue individuals who default due to their genuine inability to pay?

I am not referring to the destitute, who can be helped by premium subsidies, but those who may not qualify for premium subsidies but still cannot pay. For example, individuals who have lost their jobs or cannot work due to illness. Can the Government allow for premium deferment for such individuals who may have temporarily run into hard times financially?

And lastly, if an individual continues to default on premium payments, will he ever lose his MediShield Life cover? I hope this will not be the case, because it will call into question the universality of MediShield Life.

CONCLUSION

In conclusion, Madam, I support this Bill but have expressed a number of concerns about the disclosure of health and financial information, and the enforcement of the measures to recover outstanding premiums. I hope the Minister will address my queries in round up speech.

MediShield can afford to provide better protection

The changes to MediShield announced yesterday are a step in the right direction. However the enhanced coverage will come at a cost — almost all of which will be borne not by the government, but by policyholders themselves. I believe MediShield can take on greater risks on behalf of Singaporeans, while still maintaining healthy margins to build up its reserves, if it can be operated more like a national social health insurance scheme, than a commercial, profit-oriented one.

The changes to MediShield announced yesterday are a step in the right direction. However the enhanced coverage will come at a cost — almost all of which will be borne not by the government, but by policyholders themselves.

Among the changes announced are an increase in the lifetime claim limit from $200,000 to $300,000, upping the annual claim limit from $50,000 to $70,000, raising the maximum coverage age from 85 to 90 years, and removing the maximum entry age (currently at 75 years). Newly diagnosed patients who require inpatient psychiatric treatment will be covered at $100 per day up to 35 days per year. The decision on whether to cover babies with congenital conditions has been deferred pending the outcome of the ‘National Conversation’.

The actuaries from the Ministry of Health (MOH) have done their calculations and concluded that to fund this enhanced coverage without the need for government subsidies, policyholders will have to pay between $17 and $251 more in premiums per year. Deductibles (the out-of-pocket expense payable before receiving any benefits) will go up from the current $1,000 in C-class wards to $1,500, and from $1,500 to $2,000 for B2 wards or higher. To pay for the higher premiums, Medisave withdrawal limits for premiums will be raised from $800 to $1,200, depending on the policyholder’s age.

This change will amount to a 50% hike in deductibles for C-class ward patients, most of whom are from the lower income groups. They will have to fork out more in cash or dig into their Medisave to pay the increased deductibles and premiums. The elderly will see a bigger premium hike than the young, since MediShield is not cross-subsidised across age groups. Hence, the elderly will see a premium hike just at a time when they are approaching, or have reached, retirement age, when their income and Medisave contributions have declined.

To assuage the concerns over the higher premiums and deductibles, the government will provide a one-time top-up of $400 to Medisave, announced in Budget 2012. However, this does not even cover the $500 hike in deductible for one hospital visit, and for subsequent years, policyholders will be left to themselves to fund the increased premiums and deductibles.

I do not believe their is a need for such steep increases in costs for policyholders. Between 2001 and 2010, MediShield collected $2.11 billion in premiums and paid out $1.26 billion in claims (these figures were provided to me in Parliament by the Health Minister). This amounted to $850 million more collected than disbursed over the past decade. [Correction (17/10/12): I had earlier written “2006 to 2010”. It should be “2001 to 2010”.]

The MediShield scheme benefits from a huge base of policyholders (92% of Singaporeans) most of whom pay their premiums out of their forced medical savings (Medisave). It has huge economies of scale and faces little competition for customers. I believe MediShield can take on greater risks on behalf of Singaporeans, while still maintaining healthy margins to build up its reserves, if it can be operated more like a national social health insurance scheme, than a commercial, profit-oriented one.

Committee of Supply debate with Health Minister

During the Committee of Supply debate in Parliament on 6 and 7 March 2012, I presented a number of proposals on improving affordability and service quality in our healthcare system. These are a summary of my points, the Health Minister’s responses and my follow up clarifications.

Ministry of Health

During the Committee of Supply debate in Parliament on 6 and 7 March 2012, I presented a number of proposals on improving affordability and service quality in our healthcare system. Here is a summary of my points:

Managing hospital resource constraints
1. With the current high bed occupancy rates, can we be sure our hospital system will be able to cope in the event of a major outbreak or a national disaster, without resulting in preventable deaths?
2. If restructured hospitals converted some of their private wards to subsidised wards, can more bed space be created?
3. Regarding the Fee Scheme component of doctors’ remuneration, under which a doctor who sees non-subsidised patients earns more under this scheme than one who treats more subsidised patients, would it have an effect of incentivising doctors to see private and foreign patients, over subsidised local patients?
4. Is it possible that some senior doctors are seeing a higher proportion of private patients and leaving the subsidised patients to the more junior doctors?
5. If so, would the subsidised patients be losing out because the more senior doctors spend less time seeing them, or will the junior doctors get burnt out by the high patient load, contributing to their departure for private practice?
6. May I suggest adjustments to the Fee Scheme, to reward doctors based on the number of patients they see and the complexity of the cases, regardless of whether these are subsidised or non-subsidised patients?
Increasing MediShield coverage
1. What is the Ministry’s targeted level of coverage of MediShield, and what is the Ministry is doing to achieve this target?
2. Will the Ministry consider providing pregnant women an option to buy a MediShield rider to cover for any congenital problems or prematurity-related complications? This should naturally be done before any problems are diagnosed. It would be a one-off payment for the rider, and it could be actuarially adjusted upwards for older women, as they are at a higher risk of having babies with congenital problems or prematurity-related complications. This will provide the insurance coverage if the baby is later diagnosed with a problem, yet it would ensure a large enough risk pool to cover the potential pay outs. Overall, this change should not require any increases in premiums.
3. Will the the Ministry consider doing away with the age cap of 90 years old for MediShield altogether? There are only about 9,000 Singaporeans aged above 90. Some of them may have outlived their own children or siblings, and have no direct relatives to support them.
4. I note that some enhancements to MediShield coverage may require premium increases. However, based on the Minister’s reply to my Parliamentary Question last November, each year between 2006 and 2010, MediShield collected an average of $131 million more in premiums than it paid out in claims. While I appreciate the need to set aside a portion of the premiums as reserves, can the Ministry re-look at whether the premiums collected can be used to cover at least part of the increased coverage, instead of passing the additional cost entirely to policy holders?
5. Currently, MediShield premiums vary widely according to members age, from $30 per year for those aged below 30, to $1,123 for those in their 80s. This imposes a heavy burden on older members, many of whom may be retired or have exhausted their Medisave. If premiums need to be increased to cover the additional claims, can they be increased for working adults instead of for the elderly?

Managing hospital resource constraints

1. Bed crunch. With the current high bed occupancy rates, can we be sure our hospital system will be able to cope in the event of a major outbreak or a national disaster, without resulting in preventable deaths?

2. Suggested that restructured hospitals could convert some of their private wards to subsidised wards, so that more bed space can be created.

3. Doctors’ Professional Fee Scheme. Regarding the Fee Scheme component of doctors’ remuneration, under which a doctor who sees non-subsidised patients earns more under this scheme than one who treats more subsidised patients, I asked if it would have an effect of incentivising doctors to see private and foreign patients, over subsidised local patients? Is it possible that some senior doctors are seeing a higher proportion of private patients and leaving the subsidised patients to the more junior doctors? If so, would the subsidised patients be losing out because the more senior doctors spend less time seeing them, or will the junior doctors get burnt out by the high patient load, contributing to their departure for private practice?

4. Suggested adjustments to the Fee Scheme, to reward doctors based on the number of patients they see and the complexity of the cases, regardless of whether these are subsidised or non-subsidised patients.

Increasing MediShield coverage

1. Babies with congenital problems. Suggested providing pregnant women an option to buy a MediShield rider to cover for any congenital problems or prematurity-related complications. This should be done before any problems are diagnosed. It would be a one-off payment for the rider, and it could be actuarially adjusted upwards for older women, as they are at a higher risk of having babies with congenital problems or prematurity-related complications. This will provide the insurance coverage if the baby is later diagnosed with a problem, yet it would ensure a large enough risk pool to cover the potential pay outs. Overall, this change should not require any increases in premiums.

2. Age cap. Suggested doing away with the age cap of 90 years old for MediShield altogether. There are only about 11,000 Singaporeans aged above 90. Some of them may have outlived their own children or siblings, and have no direct relatives to support them.

4. Premium increases. I noted that some enhancements to MediShield coverage may require premium increases. However, based on the Minister’s reply to my Parliamentary Question last November, each year between 2006 and 2010, MediShield collected an average of $131 million more in premiums than it paid out in claims. While I appreciate the need to set aside a portion of the premiums as reserves, suggested the Ministry re-look at whether the premiums collected can be used to cover at least part of the increased coverage, instead of passing the additional cost entirely to policy holders.

5. Cross subsidy across ages. Currently, MediShield premiums vary widely according to members age, from $30 per year for those aged below 30, to $1,123 for those in their 80s. This imposes a heavy burden on older members, many of whom may be retired or have exhausted their Medisave. If premiums need to be increased to cover the additional claims, can they be increased for working adults instead of for the elderly?

[My full speeches can be found here and here.]

—————————-

These are segments of Health Minister Gan Kim Yong’s responses on 6 and 7 March 2012:

6 March 2012

Assoc Prof Muhammad Faishal, Ms. Lina Chiam and Mr Gerald Giam highlighted the shortage of hospital beds and asked how we are going to address it.

Let me share with this House our long- and short-term plans to expand capacity across our healthcare sector. To tackle the short term demand, our hospitals have over the years improved their processes to reduce admissions and facilitate discharges. Mrs Lina Chiam would be glad to know that innovative initiatives such as discharge lounges have been introduced for discharged patients to wait for their family members to pick them up, enabling beds to be turned over more quickly for incoming patients. Where possible, our hospitals have also added more beds in an incremental way, by optimising space and converting administrative areas into medical facilities and bed space. For example, the Singapore General Hospital (SGH) moved more than 800 non-frontline staff offsite to commercial buildings over the years, and converted the administrative and office space to add over 50 beds and 20 outpatient consultation rooms. We will continue to explore ways to optimise the available bed capacity and space wherever possible. We also make use of private wards for subsidised patients when necessary, as suggested by Mr Gerald Giam.

*    *    *    *    *

Mr Patrick Tay, Assoc Prof Dr Muhammad Faishal Ibrahim and Mr Gerald Giam asked how we were going to address our healthcare manpower needs. First, we will train more healthcare professionals locally by expanding the intake of our schools. The Lee Kong Chian School of Medicine will open next year with an initial intake of 50 students and this will grow to 150 eventually. With the third medical school, we expect to boost our locally-trained doctors to 500 a year, across the three medical schools. We will also be expanding the dentistry intake from 48 to 80. To train more nurses and pharmacists, we intend to expand the annual intakes for nursing from 1,700 to 2,700 as well as for pharmacy from 160 to 240.

Second, even with the increase in local training pipelines, we will still need to supplement our workforce with foreign-trained professionals, both Singaporeans and foreigners. We have stepped up efforts to attract back overseas-trained Singaporeans through the pre-employment grant for medical students studying overseas. The response has been encouraging thus far, with 89 grants given out since 2010.

*    *    *    *    *

As we build greater capabilities, we have to ensure that the recognition and rewards are commensurate. While pay is not everything, it is still an important factor to retain and attract high calibre individuals to pursue careers in the public healthcare sector. For this reason, my Ministry embarked on a review of the healthcare professionals’ pay.

Over the past year, we gathered feedback from public sector doctors on how we could improve recognition and rewards. Besides more competitive pay, many of them told us that they wanted a pay system that reinforced a greater sense of public sector ethos and values and that recognised and rewarded doctors for looking after all patients, regardless of whether they are subsidised or full-paying. Individual doctors also wanted greater clarity around their diverse roles – in clinical service, education, leadership and research – and wanted recognition for excellence in these areas.

We will therefore introduce a new and more competitive pay framework for doctors that is aligned with our public healthcare ethos and values. The framework will better recognise public sector doctors for the complexity of their clinical work, quality outcomes and workload regardless of patient class – a point made by Mr Gerald Giam earlier. We will also strengthen the recognition for doctors who play crucial roles in education, administration, leadership and research.

*    *    *    *    *

7 March 2012

Mr Gerald Giam asked if some of the MediShield reserves can help to offset these premium increases. Sir, these reserves are crucial in ensuring the long-term sustainability and viability of the MediShield Fund. Their main purpose is to provide an adequate capital buffer in accordance with MAS’s guidelines, and to fund other liabilities, such as future treatment costs and premium rebates for policyholders when they age. I will talk about the premium rebates shortly. Ultimately, MediShield operates on a not-for-profit basis, with premiums actuarially are calculated to cover expected payouts and meet the MAS risk and reserve requirements. The reserves ensure that MediShield will be able to honour policyholders’ future claims. We have instead addressed potential affordability concerns through targeted Medisave top-ups.

Several Members highlighted the challenges faced by the elderly and vulnerable in particular in paying for their healthcare expenses. We have paid special attention to ensuring that the elderly can afford healthcare services. First, to strengthen protection for the elderly, we will be extending MediShield coverage from 85 to 90, given the longer life expectancy today. This will ensure that Singaporeans will be covered by MediShield for most, if not all, of their lives.

Some MPs have asked whether we can extend beyond 90 and maybe provide lifetime coverage. Sir, it is something that is very attractive, but we must be very cautious about doing so, as there is really limited risk-pooling at ages far beyond the life expectancy, which currently stands at 82. Although Prof Lateef mentioned that she had met quite a number of elderly above 90 in her clinics but the total number in Singapore remains rather small. With the small number of people with a higher risk profile, the premiums can be very expensive and they may become unaffordable for some and they will drop out of the scheme. Nonetheless, we will study how we can help those above 90 in other ways.

Mr. Gerald Giam asked if MediShield premiums can be increased for working adults to offset the increases for the elderly. I hope I understand what he meant. I presume that he is talking about, as a person when you are younger, you accumulate more, you pay more and when you get older you pay less. In fact, MediShield was designed to have an element of this, where policyholders “pre-pay” a bit more when they are young, and this amount is then held within the MediShield Fund to support premium rebates in their old-age. This is the premium rebate that I talked about earlier. This forms part of the reserves. By paying more today, younger policyholders will pay less in premiums when they are no longer working, when they are older.

If Mr Giam is suggesting that we ask the younger generation to support the older generation, I think that could be problematic. Increasing premiums for the younger generation to cross-subsidise claims by the elderly, if this is what Mr Giam suggests, may not be viable in the long-term. With an ageing population, each young policyholder will face increasingly higher premiums in order to support the growing number of elderly policyholders. This may not be acceptable to the younger generation and the younger people may choose to opt out, affecting not only the older generation but also their own insurance. With the GST Voucher for Medisave and the one-off top up just announced in this Budget, the Government is stepping in in a big way to help older Singaporeans afford healthcare costs, without adversely affecting the younger ones.

Through the MediShield review, we hope to address the needs of a few vulnerable groups, be it the elderly, those with congenital conditions, or those who require inpatient psychiatric care.

*    *    *    *    *

Mr Gerald Giam also asked us how we intend to be more efficient and better optimise our existing manpower resources. Underlying all these questions is this – how do we make sure that we make the best use of the resources that we have, and that whatever we spend now is sustainable in the long term?

A key driver for the increase in healthcare costs is improvements in medical care – technology, new and improved drugs, better treatments, breakthroughs in surgical techniques – that improve quality of life and extend life. This is good for patients and their families. However, as a society, we cannot afford to support and subsidise all new treatments “at all costs”. New does not necessarily mean better. We need to consider what appropriate and cost-effective treatment is.

As a system, we need to do our best to bend the cost curve – to reduce inefficiencies and discourage over-consumption. Let me share two key fundamental principles that will serve us well. First, we must always strive to innovate, increase productivity and develop new and more cost-effective models of care. Wherever we can, do more with less. One of the ways we achieve this is through technology. Take tele-ophthalmology, for example, which allows ophthalmologists, located in the hospitals, to “look into” the eyes and the retina of patients in the polyclinics. The optometrists in the polyclinic prepare the images which are transmitted to the hospital ophthalmologists for assessment. Those with minor conditions such as dry eyes can receive the medication that they need at the polyclinic, and only those with more serious conditions will need to be referred to the eye specialist clinic for further assessment. This brings care to the community level, and cuts down unnecessary visits to specialists, saving costs for patients and freeing up resources of the hospitals.

To improve efficiency and productivity in our healthcare system, we will set aside $20 million for a fund called Healthcare Productivity in Acute Services Scheme (Health-PASS). The hospitals can make use of this fund to pilot and implement projects that improve productivity and efficiency. A similar scheme will be introduced in the ILTC sector.

Co-payment by patients is another fundamental principle to prevent unnecessary over-consumption of healthcare services which will drive up costs. Through co-payment, the patient shares part of the responsibility of spending his healthcare dollar smartly. He is more likely to weigh the treatment options or choices of drugs and choose a more cost-effective option. It will also ensure that healthcare providers are more cautious in prescribing treatment to ensure patients can afford the co-payment. We want to avoid the pitfall of countries where healthcare is virtually free, resulting in an insatiable demand from patients for healthcare services, runaway healthcare spending and an increased fiscal burden that is eventually borne by all taxpayers.

—————————

Following these Minister’s responses, I sought further clarifications from Minister:

Mr Gerald Giam Yean Song: I thank the Minister for his responses and I look forward to working with him to make this Healthcare 2020 Plan work. I have two clarifications, Sir.

I was not asking to draw down from MediShield reserves as I know that would not be sustainable. Instead, what I suggested was that given the very healthy financial position of MediShield, perhaps not all the annual costs increases from the enhanced coverage for the elderly have to be automatically passed to policy holders through premium increases.

My second clarification is the point about the cross-subsidy of MediShield premiums across ages. My main concern is actually the high premiums payable by the elderly who have no other source of income. I am not saying that premiums must be equal across all ages but that the enhanced coverage that I proposed in my cut could come from small premium increases for the many working adults. I do not think many working adults will begrudge paying a bit higher premiums to cover the 11,000 seniors above age 90.

And, Sir, I have three questions: is the Minister saying that MediShield currently has no cross-subsidy across ages? Is this a key principle of our healthcare financing approach, or is it only for MediShield? And, thirdly, how does this gel with the expectation for adult children to use their Medisave to pay for their parents’ medical treatment before Medifund assistance is provided? Is this not a subsidy across generations of an even worse kind since many of these are low-income children paying for retired parents who have exhausted their Medisave accounts.?

Mr Gan Kim Yong: Sir, I have explained the need for MediShield reserves. And even as we look into the future when we review the MediShield this year, we also need to look at the adequacy of the reserves. As we enhance the benefits and look at the claim experiences of previous years, we will have to decide how much of reserves need to be put aside for the coming five-year period. And therefore for every revision to the premium, we will have to take into account what proportion of it needs to be put aside for reserves, partly for the capital adequacy required by MAS and also partly for the loyalty rebate in future which I explained.

As an individual when you are younger, when you are able to earn a regular income, there is a loading on your premium. This loading is not for other people but for yourself, so that when you are older, your premium would be lower than what it would have been. As you get older, you would appreciate that the number of people shrinks and the claims go up. And so as you get older, for the older cohorts, their premiums are going to be very high and that is why we have this arrangement for pre-funding. So, as an individual you pre-fund yourself; when you get older, you then draw on this rebate which comes from the reserves. And so in the design of the scheme, as we move forward, you will not want to put aside more than what is necessary; but we need to be advised by the actuaries on what is adequate. So I would assure Mr Giam that we will be very careful because we do not really want to increase premium unnecessarily. But if it is necessary for reasons of prudence, then I think we ought to do so.

Your second question on premiums across ages: for MediShield, the design of the scheme is such that each cohort will be risk-pooled together, so there is very little cross-subsidy between younger generation and older generation.

But if we start to do that, and as the younger generation begin to shrink, you will have a bigger problem in future for the younger generation to shoulder the insurance premium for the older generation, if it is built into the structure of the MediShield. Because once you go on that structure, that means the older generation is not paying their own premium. And you will find that as the younger generation grows older, they are already not paying their own premium and they are relying on the next generation to pay for them. And this inter-generation subsidy is between people who are unrelated. So I think it is a lot more difficult to persuade the younger generation to accept this. The risk of that is that some of the younger generation may opt out of the MediShield scheme and join other schemes that do not have this cross subsidy. Therefore, we have to be very mindful. Even the loyalty rebate I talked about, we also have to be very careful not to overload a person when he is younger. Because when he compares his own insurance premium versus premiums that are available in the private sector, they may ask, “why is my premium so expensive today?” Because he may or may not be aware that there is a loyalty rebate that will benefit him in future. So some of them may actually decide to drop out, and once they drop out, there will be problem, because they may not be able to rejoin due to pre-existing conditions. So, as we adjust some of these parameters, we have to be mindful and be very careful.

Mr Giam talked about Medisave sharing between generations. I think I have answered that question in a previous parliamentary Question. The answer – and I also mentioned it in my speech – is that family support remains an important component. But I also said in my speech that we have to recognise that the older generation has a lot more burden and we want to make sure that they too have a sufficient amount to meet their healthcare needs. And that is why, in this Budget, we have provided top-ups for the older generation, and the one-time top-up is specifically to help members pay for the increases in the MediShield premium when we adjust it. We want to strengthen family support for our Singaporeans but, at the same time, we recognise that we have to be very mindful that the older generation would have a higher burden, and we find different ways to help them. So our top-up is one way.

—————

[Source: Parliamentary Hansard]

Govt considers covering congenital illnesses under MediShield

MediShield should be run on social principles, to ensure that no child, no adult, no elderly person is left behind because of their inability to pay.

I am glad to read that, in response to the calls from several Singaporeans, including Tan Kin Lian and myself, the government is now considering covering under MediShield, the national health insurance scheme, children with congenital illnesses.

Continue reading “Govt considers covering congenital illnesses under MediShield”

MediShield should cover congenital illnesses

If CPF Board can cherry pick who to insure and who to reject, then what makes it different from any profit-oriented private insurance company?

Two letters to the Straits Times forum in the past week shed light on a little known fact that our national health insurance scheme, MediShield, does not provide the universal coverage that many Singaporeans would have expected it to.

On September 2nd, a parent wrote in to express dismay that his newborn daughter was refused MediShield coverage because she was born with a suspected cyst in her lungs, a condition diagnosed during pregnancy. He said the CPF Board, which manages MediShield, denied her coverage, citing “the higher insurance risk posed by her pre-existing health condition”.

Continue reading “MediShield should cover congenital illnesses”

Reduce abortions by helping pregnant mothers financially

Medical doctor Ng Liang Wei wrote a letter to the Straits Times forum today suggesting that a fund be set up to help mothers to defray the cost of their pregnancies so as to give them less reasons to abort their babies.

I fully support this idea. I have blogged about the issue of the staggering number of abortions in Singapore before. I think for too long, the debate on abortion (at least in the US — we haven’t debated much about it in Singapore) has been centred on pro-life vs pro-choice. Pro-lifers say abortionist are killing babies, while pro-choicers say anti-abortionists are restricting the freedom of women to do what they want with their own bodies. The argument goes on and any attempt to find common ground is squashed.

Continue reading “Reduce abortions by helping pregnant mothers financially”

Surviving (suspected) H1N1

I became one of probably hundreds of patients who were hauled to Tan Tock Seng Hospital (TTSH) in the past week for suspected Influenza A (H1N1), also known as swine flu. It wasn’t a very pleasant experience, but I’m in a way glad I got to witness first hand the fight in the trenches against this viral illness.

The episode started with my 4-day business trip to Australia last week. When I returned on Monday evening, I had a little runny nose and sore throat so decided to head straight from the airport to my GP clinic, even though I had breezed through the thermal scanners at Changi Airport without incident.

Continue reading “Surviving (suspected) H1N1”

Means testing or comprehensive medical insurance?

Health Minister Khaw Boon Wan has announced that means testing will likely be implemented in restructured hospitals by the end of this year. Although the details of how it is going to be administered have not been confirmed, one fact seems clear: Many middle-income Singaporeans are going to have to foot larger medical bills in the near future.

Low income Singaporeans can probably breath easy as means testing is unlikely to negatively affect them, since the Minister has said that only the top half of income earners who stay in Class B2 or C wards will undergo a means test.

Currently, patients admitted to Class C wards in restructured hospitals enjoy an 80 per cent subsidy on their hospital bill. With the introduction of means testing, many of them may no longer receive that subsidy, or may have to accept a lower subsidy.

The Government’s rationale for introducing means testing is to reduce overcrowding in Class C wards and ensure a sustainable healthcare financing system by providing heavy subsidies to only deserving low income patients.

Having heard the government’s arguments for means testing, many Singaporeans may be questioning whether it is really necessary, and if there are other better ways to contain rising healthcare costs.

Show us the numbers

The means testing concept makes sense in theory: Rich folks ought to be subsidised less than poor folks. Means testing could prevent “cheapo” rich people from consuming taxpayer funded subsidies when they can well afford to pay for their own medical expenses.

However I wonder whether the rate of abuse of the system is really as high as the government makes it out to be. Singaporeans have been presented with the rationale for means testing, but not the numbers to back it up.

The Minister has said that means testing is likely to be administered only for patients in the upper 50th percentile income bracket. How many patients currently in Class C wards are in the upper income bracket?

The median monthly income for Singaporeans last year was $2,330. That is not very much. Is it fair to consider a sole breadwinner who earns $2,400 a high income earner not entitled to Class B2/C ward subsidies?

Will the cost of planning and administering means testing exceed any savings for the government? These costs could be significant. They could include extra medical social workers to conduct assessments and investigations, new computer systems to manage the data, and time and effort spent by officials to respond to questions and complaints.

Mr Khaw, in fact mentioned that he is considering a graduated reduced subsidy from 80 per cent, point by point down, to 60 per cent for the top 20th percentile income earners. So after all this debate, we may be looking at just a 20 per cent reduction in subsidies for top income earners.

At the end of the day, the savings from means testing may not even justify implementing the system. It may be more efficient to keep the current system of letting patients decide which ward they want to go to, based on their own assessment of what they can afford.

Medical insurance and Medisave

Since means testing will be targeted at middle income earners, it is important to look into why so many of them would rather stay in Class C wards rather than more comfortable and less crowded B1 or B2 wards. Why do they still have to depend on government subsidies and why can’t their health insurance adequately cover their costs?

Most Singaporeans are insured under MediShield, Singapore’s national insurance scheme. MediShield helps cover the costs of catastrophic illnesses which require long hospital stays and result in crippling medical bills. The premiums for MediShield can be paid using Medisave, the national medical savings scheme. Typically, employees contribute 6.5 to 8.5 per cent of their wages to their Medisave accounts.

Unfortunately, MediShield’s coverage does not cover the entire hospital bill. For patients staying in Class B2 or C wards, an average of 40 per cent of their medical bill must be paid using cash or Medisave. Class A, B1 or private patients can expect to pay even more. Most of this payment is due to deductibles and co-payment. The deductible ranges from $1,000 to $3,000, depending on the ward chosen. Co-insurance will be 10 to 20 per cent of the claimable amount.

This means that for a claimable amount of $8,000, a Class A patient will have to pay a deductible of $3,000 and co-insurance of 10 per cent on the excess of $5,000. Hence, he will have to fork out $3,500 on top of the portion of the medical bill that wasn’t claimable under MediShield. Is it any wonder then that many relatively well-off people choose to be warded in Class C where the base charges are lower?

There are riders offered by private insurance companies to offset the co-payment and deductibles, but the premiums for these riders cannot be paid using Medisave. Consequently, most people do not take them up as it involves having to fork out additional cash.

This results in a vicious cycle of large hospital bills that MediShield doesn’t adequately cover, leading people to try to incur smaller bills by staying in Class C wards and costing taxpayers more.

To help to lessen this problem, the government should allow Medisave to be used to purchase not just MediShield, but also the riders to offset the deductible and perhaps even part of the co-payment. If CPF members are allowed to use Medisave to pay for these riders, surely many more will sign up for them. After all, many of them have more money stashed in their Medisave accounts than in their Ordinary accounts, as the latter is usually used to pay for their HDB mortgage.

This proposal was raised in Parliament by Nominated MP Cham Hui Fong during the budget debate in 2006. The Health Minister’s response then was, “This is not wise and we do not encourage this. That is why we do not allow Medisave to pay for the premiums of such riders, as proposed by NMP Cham Hui Fong. But if Singaporeans want to buy such riders out of their cash savings, I cannot stop them.”

I can imagine what the government’s concerns with this proposal might be: Excessive drawing down of one’s Medisave; over-consumption by patients and over-servicing by hospitals, leading to higher premiums across the board; and people buying unnecessary policies from aggressive insurance agents.

Fears that people will exhaust their Medisave by paying medical insurance premiums don’t make sense when Medisave can already be used make direct payments for huge hospital bills, and even the bills of one’s family members (including parents). These direct payments surely amount to much more than insurance premiums.

The concern that patients will opt to stay in hospitals for longer than necessary won’t apply to the majority of patients. Who in the right mind would want to stay in hospital if they have recovered from their illness? There may be exceptional cases, but these can be dealt with by doctors who have the authority to send patents home after they have recovered, or to step down care in community hospitals. As for over-servicing, surely we should have a little more faith in the integrity and professionalism of our doctors!

Lastly, to lessen the confusion about which rider to purchase, the government could simplify things by opening a tender for private insurers to provide a single, low-cost MediShield rider that people can choose from — much like how MediShield Plus was transferred to a private insurer (NTUC Income) through a competitive tender in 2005.

If most Singaporeans and permanent residents sign up for this proposed MediShield rider, the insurance companies may be able lower their premiums. With a system like this in place, Singaporeans will benefit from low cost and more comprehensive coverage and the government too will spend less on subsidies. Even insurance companies will find something more to cheer about.

Conclusion

Means testing is probably going to be one of the hot button political issues this year, as would any issue that involves the removal of key government subsidies. The Health Minister has got his work cut out for him convincing Singaporeans that it is the right way to go. Less than two years ago, his first attempt to impose it got beaten back during the heat of elections. This time, he will need to present more convincing arguments to an increasingly sceptical populace, or better still, explore a win-win solution by allowing Medisave to be used to pay for more comprehensive health insurance.

This article was written for theonlinecitizen.

Simple explanation from Raffles Hospital does not suffice

Blood shortage was not cause of death: Raffles Hospital
By Ng Baoying/Chua Su Sien, Channel NewsAsia | Posted: 11 July 2007 2214 hrs

The woman who died after giving birth to twins over the weekend was not denied blood, and her death was not because there was insufficient blood available at the time, according to Raffles Hospital.

It explained that an emergency blood transfusion was immediately started for Madam Swee Lay Kuan when massive bleeding occurred during surgery.

More blood was also immediately obtained from the blood bank.

The hospital said Madam Swee’s death was due to Disseminated Intra-vascular Coagulopathy (DIVC), an acute blood coagulation problem arising from massive bleeding and transfusion.

On Tuesday, it was reported that her husband had been told by hospital staff that if the family wanted more blood, they would have to round up others to donate some at the blood bank.

But Raffles Hospital clarified that while it is common practice to ask relatives and well-wishers to help replenish stock, it is never a requirement for blood to be released by the blood bank.

This is a stand supported by the blood bank.

Dr Diana Teo, Bloodbank@HSA, Centre for Transfusion Medicine, Health Sciences Authority, said: “It is not customary for the blood banks to request that hospitals ask family and friends to come forward to donate blood.

“However, we do know that some hospitals do try to help the blood programme by asking some of the patients to ask their family to come and support us. But I assure you that this is never a requirement from the blood bank.” – CNA/yy


I watched the original Channel 8 interview with the poor, sobbing husband as he described how the blood could not be released to his wife because of bureaucratic red tape. The next day, after reading the TODAY report, I got confused.

Raffles Hospital claims the patient was not denied blood. So why did the husband claim otherwise? Are they saying he was lying? Why then would he round up 200 of his friends and family (no easy task, if I might add) to donate blood to the blood bank so as to replenish its stock?

I don’t think Raffles Hospital should get off so easily with this simple explanation. It might be true that Mdm Swee died of causes other than a blood shortage, but sometime during the saga, one of its staff must have given the husband the impression that his wife had exceeded her limit. The hospital needs to explain in more detail why this happened. Is the hospital sure that all its staff are aware that no management authorisation or family blood donations are required to release more blood for emergencies? Or were they just reiterating a policy?

My deepest condolences to the family of the late Mdm Swee, especially her husband.

I hope this tragedy will spur more people to donate blood. I’m guilty of not doing donating for the last few years and really should do so soon.

Show that disgusting anti-smoking ad on Prime Time!

I’m not an avid TV-watcher, but the Health Promotion Board (HPB)’s latest anti-smoking ad has got to be the most disgusting and shocking one I have ever seen — and I applaud HPB for it!


This ad has caused unease among some parents of young children who are concerned that their kids’ delicate psyches would be damaged by the graphic image of a mouth cancer sufferer. One mother complained that her nine-year old daughter (that’s a primary 4 student, not a toddler!) was so traumatised by the commercial that she had a nightmare that night, waking up at 3am screaming for her daddy. Others had complained that screening the ad during dinner time turned them off from their food.


In response to public complaints, HPB has revised its advertising timing and channels “to minimise causing any alarm to young children”, according to its CEO Lam Pin Woon. The ad will now be aired only after 8pm.


I’m glad that it will still be aired early enough for most children to watch during “Prime Time” TV programmes. In my opinion, it is children and young teens who should be the target of anti-smoking ads, not older teens or adults. Trying to get an older smoker to quit is almost as hard as getting him to change his religion — it is possible, but not easy. If, however, such ads can sear in impressionable young minds the shocking consequences of smoking, it will forever be a subconscious deterrent to even pick up the habit, regardless of peer pressure when they hit adolescence.


I don’t know what the statistics are showing, but I seem to notice many more teenagers smoking nowadays. I believe teens are not ignorant of the health risks when they take up smoking. But if it is a choice between looking cool in front of your friends, or suffering some disease when you are 60, teens who are already suffering from self-esteem issues would likely choose to light up.


Thus, the thrust of the anti-smoking message to teens should not be to focus solely on the health risks, but to work with families, youth organisations, religious organisations and other social service organisations to raise the self-worth of teens. If they really loved themselves, do you think they would pick up a habit that is not only destructive to their health, but damages their image as well?


This might appear to go beyond the responsibility of HPB, but what is the use of tackling superficial issues alone without tackling the root problems? A multi-agency approach is therefore necessary to lower the smoking rate among our young.

——–

Update: This is Health Promotion Board’s reply to my feedback:

Dear Gerald

Thank you for your support and feedback. Since the launch of our Campaign, HPB has seen a 5-fold increase in the number of calls to QuitLine from smokers desiring to quit smoking. We have also received many compliments from smokers and non-smokers alike. Nonetheless, we give all feedback due consideration. In addition to re-scheduling our advertisement to run after 8pm, we will! also preface it with a warning.

2 This TV advertisement is the first phase of our 3-month long smoking control campaign and presents a fatal and debilitating consequence of smoking to motivate smokers to quit and encourage non-smokers to urge their loved ones to stop smoking. The second phase of our campaign adopts an encouraging tone to urge smokers to quit and non-smokers to support their efforts.

3 The reality is that 1 in 2 smokers will die from smoking-related diseases. Each smoker will on average die 13 to 14 years earlier than non-smokers. Disability, disfigurement and early death due to smoking are very real. As you have correctly pointed out, we need to use a multi-pronged strategy which starts with our children. We are engaing schools, youth organisations, family service centres and other like-minded organisations to help our youth lead a smoke free life. Our National Smoking Control Programme also includes mass media campaigns, public education, provision of smoking cessation services, legislation and tobacco taxation. These strategies has helped Singapore lower its smo= ng prevalence rate from 20% in 1984 to 12.6% in 2004, one of the lowest smoking prevalence rate in the world. We hope to continue to help more smokers quit the habit.

4 A survey conducted by HPB, also showed that the median age of children picking up smoking is about 12 years. Thus we hope that parents can also take this opportunity to educate their children on the fatal consequences of smoking as well.

Regards

Mr Norman Chong | Manager | Smoking Control, Adult Health Division | Health Promotion Board |