Properly incentivising providers (COS – MOH)

Can MOH explore alternatives to the current fee-for-service payment approach? Fee-for-service payment tends to give providers a perverse incentive to boost revenue by increasing patient throughput, rather than keeping patients healthy and out of hospital.

Parliament, 12 March 2014

Madam,

Traditionally, we contain healthcare costs by curbing patients’ demand for healthcare. We do this by making patients co-pay, so that they think twice before seeing the doctor or requesting for more diagnostic tests.

However, most times it is the doctors who decide on the course of treatment for the patients. Therefore healthcare providers, not patients, drive the bulk of healthcare spending. If we want to control costs, we need more focus on the providers.

Can MOH explore alternatives to the current fee-for-service payment approach? Fee-for-service payment tends to give providers a perverse incentive to boost revenue by increasing patient throughput, rather than keeping patients healthy and out of hospital.

Instead, MOH should better incentivise providers to contain the overall growth of healthcare costs across the continuum of care – from primary to acute to step down care.

Doctors and healthcare providers should be given greater financial flexibility to redesign care delivery, so that proven and cost effective services can be reimbursed. For example, we could reward providers for efforts to enhance patients’ medication compliance, monitor patients’ weight gain or blood sugar levels in their homes, or perform follow-up consultations using web conferencing.

Second, different providers should be better integrated and made collectively responsible for providing coordinated care for patients. GPs, acute hospital specialists and step down care professionals should be rewarded for cooperating and sharing information to improve quality and control costs, not simply by the volume or class of patients they treat.

Author: Gerald Giam

Gerald Giam is the Member of Parliament for Aljunied GRC. He is a member of the Workers' Party of Singapore. The opinions expressed on this page are his alone.