Impact of removal of medical fee guidelines on healthcare costs

Asked the Minister for Health (a) whether the removal of the Singapore Medical Association’s (SMA) Guidelines on Fees (GOF) in 2007 has resulted in more competitive medical consultation and procedure fees in the primary and specialist healthcare sectors; (b) if so, what is the evidence of such price competitiveness and, if not, whether the removal of the GOF has directly or indirectly contributed to healthcare inflation; and (c) whether the Ministry plans to introduce legislative amendments to override the Competition Commission of Singapore’s concerns about fee guidelines and allow the guidelines to be re-introduced to help contain healthcare inflation.

Parliamentary Question on 8 September 2014

Mr Gerald Giam Yean Song asked the Minister for Health:

(a) whether the removal of the Singapore Medical Association’s (SMA) Guidelines on Fees (GOF) in 2007 has resulted in more competitive medical consultation and procedure fees in the primary and specialist healthcare sectors;

(b) if so, what is the evidence of such price competitiveness and, if not, whether the removal of the GOF has directly or indirectly contributed to healthcare inflation; and

(c) whether the Ministry plans to introduce legislative amendments to override the Competition Commission of Singapore’s concerns about fee guidelines and allow the guidelines to be re-introduced to help contain healthcare inflation.

Mr Gan Kim Yong (Minister for Health): The Ministry of Health (MOH) has been monitoring healthcare charges in the private sector. Between 2007 and 2013, based on a sample of 10 common procedures, the increases in the median Surgeon Fees at the major private hospitals ranged from 3.2% per annum (for Hip Replacement Surgery) to 9.7% per annum (for Heart Bypass Surgery). Similar increases were seen at the 75th percentile level. The overall healthcare inflation rate was 3.4% per annum over the same period.

Our samples do however show more variation in the rates of increase for charges above the 75th percentile level. This wider variation may reflect underlying differences in case complexity, individual patient conditions, or different charging practices among doctors. It is therefore difficult to determine the direct impact of the GOF on fees.

Nevertheless, MOH has been working towards facilitating greater price transparency to help both patients and doctors make informed decisions. Since 2003, MOH has been publishing Total Hospital Bills for common conditions at both public and private hospitals. On 1 September 2014, MOH published information on the Total Operation Fees for 65 common procedures at public hospitals. We will continue to explore more avenues to provide useful information and guidance to doctors, patients and their families.

Healthcare costs also rise as a result of the ageing population. As we grow older, we tend to consume more healthcare services which in turn drive up demand and costs. The increasing use of more expensive new technologies in diagnostics and treatment may also drive up healthcare costs. MOH has recently introduced Health Technology Assessment for medical devices to ensure they are both clinically- and cost-effective. We are also working with the public hospitals to set up Medical Device Committees to ensure rational selection and utilisation of these devices.

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.