(Article edited for word count, with no intent meant to plagarise.)
Whither our 3M healthcare system?
There are great expectations arising from the year-long Our Singapore Conversation. Many have expressed their concerns and wishes for the future development of healthcare. And recently, we have been deluged with many articles and commentaries on the advantages and disadvantages of the Singapore system, offering various diagnoses, prognoses and even policy lessons for other countries.
Healthcare consultant Dr Jeremy Lim As a frequent commentator on the local health scene recently noted that “it is not the invisible hand of the market that drives costs down in Singapore’s healthcare system. It is the very visible hand of a strong Government that does so, as regulator and in deciding what to subsidise and what not to subsidise”.
Dr William Haseltine’s recent book, Affordable Excellence: The Singapore Health Care Story, attracted both bouquets and brickbats from international reviewers on the left and right of the ideological spectrum. Lay users such as Financial Times Assistant Editor Gillian Tett, who personally tested the quality of Singapore’s health services, praised it in an article.
The system is held up as a model for achieving impressive health outcomes with a low level of spending compared to other developed countries. Dr Haseltine attributes this success to “managed capitalism”, with competition and informed consumers who are incentivised to keep costs down as they have to exercise “individual responsibility” and co-pay high user fees.
But like many other casual observers, he mistakenly links Singapore’s excellent standards of health — such as high life expectancy and low mortality rates — primarily to the merits of the 3M financing system: Medisave, MediShield and Medifund.
A recent editorial in the British Medical Journal by Professor Martin McKee and Professor Reinhard Busse expresses a similar basic misunderstanding of the Singapore system. They describe the notion of savings and individual responsibility (as encapsulated by Medisave, in particular) as anathema to the European values of equity and solidarity — concluding thus that the Singapore system has nothing to offer other countries.
30 YEARS ON, MEDISAVE RE-EVALUATED
So, are “pay as you go” systems of financing healthcare through taxation or social insurance doomed to certain bankruptcy in countries with very high elderly dependency ratios?
To answer this question, it is instructive to re-examine fundamental assumptions in the National Health Plan of 1983, when the idea of a national savings scheme for healthcare was first mooted — the first anywhere in the world.
Medisave as part of the Central Provident Fund was touted as the way to avoid the problems of inter-generational income transfer. The original intention was for every generation to build up its own nest egg, so it would not have to depend on limited contributions due to a shrinking tax base or insurance pool as the population aged.
Yet, 30 years later, we are saddled with the fears that, despite our huge savings — Medisave has accumulated savings of more than 10 years’ equivalent of our annual health spending — there will not be enough in the average individual’s Medisave account.
In fact, after Medisave was launched, it was soon realised that it needed back-up insurance coverage for catastrophic illnesses requiring higher expenditures. MediShield was thus born in 1990, as a low-cost and limited social insurance for dreaded diseases. Medifund was created as an endowment to pay the medical bills of the indigent or individuals whose families qualify after stringent means testing.
In an ideal situation, a well-designed and well-implemented 3M system would have become the dominant mode of financing over the years — instead of a situation where there is Medisave surplus for most people and inadequacy for many others. Its restrictive use has also led to the lop-sided, perverse use of hospitals, rather than encouraging alternatives and substitutes to hospital care.
MORE OUT-OF-POCKET COSTS
Meanwhile, we also have an imbalance in the other financing levers of taxation and user fees. While subventions to public hospitals are capped and subsidies are targeted, cost-recovery rates ranging from half to two-thirds of total hospital spending have resulted in more and more out-of-pocket payments being forced outside the 3M framework.
At the current rates of medical inflation and rising prices, many older and lower-income Singaporeans do not have enough in their Medisave, and may not want to burden their children or be stigmatised by applying for Medifund.
So, how do we correct the imbalances in healthcare financing?
Short of a radical overhaul, there are several adjustments needed to fine-tune the Government’s share of financing and the 3M schemes. Healthcare financing mechanisms would have to be realigned to create the necessary incentives for both users and providers to use healthcare services in a more cost-effective manner, and for these to be more affordable.
There are calls to avoid the excesses of generous welfare benefits or the abuses generated by for-profit insurance that induces unnecessary spending. Thus, it is prudent to move with caution in developing both the social and private insurance components of MediShield and the Integrated Shield Plans.
Yet, Singaporeans are lucky that they have built up a large pool of Medisave savings and still have the luxury of tapping these to enhance the insurance components for future catastrophic and long-term care.
FIVE CHANGES AHEAD?
It is expected that, in the coming days, the following measures would be announced and implemented:
One, increased budget allocation to cover rising costs in the health sector (the Government has signalled its intention to double its share in coming years), for outpatient care or long-term care of the elderly population, especially the lower-income.
Two, further liberalisation of Medisave to allow for greater coverage of chronic conditions — such as more preventive care like certain vaccinations and screening that may save on future treatment expenses.
Three, a shift of Medisave premiums into MediShield so as to provide greater social protection for larger catastrophic illness bills.
Four, the possible enhancement and integration of MediShield and ElderShield covering community-based services for long-term care.
Five, control of supply–side medical practices and professional fees when it comes to the use of medical technologies and expensive drugs or medical equipment.
FUTURE WITH MORE PEACE OF MIND
It is timely that the various control knobs in our healthcare financing system be adjusted continually — taxes to redistribute resources to the poor and elderly, savings to generate more resources for future ageing needs, and social insurance to provide greater risk-pooling to cover high-cost catastrophic illnesses.
This is needed to achieve the proper balance between supply and demand for healthcare, between the different levels of primary preventive, acute and long-term care, and between the public, private and people sectors.
By Dr Phua Kai Hong
http://www.todayonline.com/singapore/wh ... are-system
A short intro. Our public healthcare financing system is based on the 3M system, however, up to 80% of the population has private health insurance/health benefits tied to their employers.
Medisave-a compulsory health savings account, that until less than a decade ago, could only be used for hospital(and some hospital outpatient) charges. Its still heavily restricted on what it could be used for.(If anyone here has read Tim Hartford undercover Economist and his paragraphs on Singapore health savings scheme...... he's wrong).
Medishield- an opt out castrophic health insurance scheme run by the government. It is possible to purchase additional health insurance linked to Medishield, riders as they're called. These are usually used to allow additional health coverage in private hospitals, or even provide income so as to meet daily living expenses. Premiums are usually drawn from Medisave.
Medifund- a state run fund that helps meet healthcare cost needs for the poor.
Linked to this is Eldershield, another health insurance which provides for disability income.
The experts gripe about our system is... well, its still based around the model 30 years ago, where healthcare episodes happen in hosipitals, was mostly acute and just doesn't factor in life expectancy and quality of life.
SINGAPORE: The government will improve healthcare financing to give all Singaporeans more peace of mind.
Medical insurance scheme MediShield will be revamped to become MediShield Life -- to offer universal coverage and better protection for large hospitalisation bills.
Prime Minister Lee Hsien Loong, in his National Day Rally Speech on Sunday, also introduced a new Pioneer Generation Package to make sure that Singapore's pioneer generation does not need to worry about healthcare costs in their old age.
Falling seriously ill and being saddled with large hospital bills are major worries for many Singaporeans, especially those who are not insured under MediShield. Those aged above 90 are also not covered by MediShield.
To allay these concerns and give better protection against large bills, MediShield will be revamped to become MediShield Life.
Prime Minister Lee said: "The MediShield Life will not stop at 90. So don't worry, it will cover old people. Secondly, MediShield Life will be universal. It will cover everybody, every Singaporean -- old ones , young ones, those newly born.
"Even those who are now outside the MediShield network, we will bring them back in. You may be elderly, you may have dropped out, you may have pre-existing illnesses, we will bring you back in -- it may cost you a bit more but it can be done. There will be no more opting out for MediShield."
This means patients can expect to pay less cash out-of-pocket. But with better benefits and coverage, the premiums for MediShield Life will be higher too. The government will, however, subsidise MediShield Life premiums for those who cannot afford them.
As MediShield Life is a major change, the Health Ministry will conduct a public consultation exercise to seek views before deciding on the details of the scheme.
Another group that needs special care is from the pioneer generation, who are now mostly retired and are in their late sixties, or older.
They will get help to pay for their MediShield Life premiums, under a new Pioneer Generation Package.
Mr Lee said: "We are going to spend more on healthcare, year by year. The goverment subsidies are going up and will go up some more. But some part of it has to be paid by ourselves and each of us must save enough to pay for our share.
"Therefore, I think you can guess what my next line will be -- Medisave rates have to go up. It has to be. We will increase these contribution rates over time, as and when our economic conditions permit.
"How? How much? We will have to discuss carefully, but the direction is quite clear. We need to save more and that will stand us in good stead because one day we will all grow old, if we are lucky."
Besides enhancing the current healthcare framework, Mr Lee said that the best way to keep healthcare costs down is to stay healthy. This is especially so for the elderly, for whom exercise is not just about keeping fit but also to make friends.
- CNA/al
http://www.channelnewsasia.com/news/sin ... 81478.html
To put it simply, our government has decided to make the state run health insurance mandatory for all Singapore residents. We will be undergoing a series of public consultation in the next few months, but there's a MAJOR problem.
First, the public. Their reaction ? There's a strong core of people against this. From the "its our money gang, stop telling us how we must use it and let us use it" to libertarians. And said public consultation?
What WILL happen is the typical shadow play(wayang), where the government has framed the topic so narrowly that it draw out extreme views from opponents, the public representatives crushed them and walked over to victory. That or in lieu of their subpar public performance in the last 8 years, lose face as they make stupid remarks/soundbites and they console themselves with the idea that uneducated peons simply don't understand anything.
And simply ignore the fundamental problem.
HOSPITAL CHARGES ARE NOT THE PROBLEM!
On one hand, I REALLY love this idea of making health insurance mandatory with government aid to help fund premiums. It some form of concrete shift towards the government actually creating a social safety net.
On the other, revamping Medishield by making it mandatory and increasing outpatient benefits/charges from Medisave is only part of the solution. The REAL bugbear, from the experts, and we KNOW that the Health Minister knows this because he harped about it before is that our healthcare financing system is based on an obsolete 30 year old model where Singaporeans were young, healthcare needs were episodic and relatively rare and in a scenario of acute disease. You get cancer? Ok, linger for 6 months and you're dead or alive.
That scenario is no longer true. And to make things worse, in order to work around the fact that we have the developed world lowest doctor to population ratio, the developed world lowest hospital bed to population ratio, we're talking increasingly about home care or 'right siting' care.
And it would be EXTREMELY radical if the government actually places those charges, the equipment, the supplies, the resources needed to right site care under Medishield. This even as the families most unable to afford the charges, are those LEAST able to actually take care of the sick. The most I forsee is the government allowing community hospitals and outpatient community services like dementia daycare, rehab, respite care to claim from Medishield. Nursing homes? Lol. Forget it.
The sad thing is, given the fundamental opposition to social welfare and Not My Problem crowd, they definitely won't endorse this..... And its already too late to invent another scheme.
My thoughts are a bit jumbled up as I been.... defending this scheme against a bunch of "oh no, the government are stealing our money! Stupid foreign trash are here to suck up our money!" on a local forum. And while there's no way I can make this mess comprehensible as a blog entry, I do want to get some form of commentary and discussion going. So......... here it is......
Of course, such a development towards MANDATORY government insurance means lots of American libertarians will need to eat crow:D
I don't get it. Just how did libertarians equate compulsory and mandatory health savings= libertarian?
http://www.freedomworks.org/blog/breean ... -singapore
Imagine going to the doctor with the flu and paying $30 for the visit and $10 for the medicine with no further medical bill. Now imagine going to the doctor and finding out you have cancer. You have enough money in the bank to deal with such a medical emergency and whatever you can’t cover, the federal government will pick up. All citizens of the country in these scenarios have the same deal and the government only spends 4 percent of GDP on health care. Sound impossible? Welcome to Singapore.
Touting arguably the best health care system in the world and a per capita income higher than America, Singapore is the answer economists have no doubt been shouting at their televisions during every health care debate the last eight years. The Singapore health care system presents an ideal blend of left and right ideas on health care and still manages to be more free-market than U.S. health care has been since prior to the "New Deal." Due to the creation of Medicare in 1965, the federal government has been spending more each year on health care; which has brought us to a current rate of 17 percent of GDP on health care. As explained by senior fellow at the Manhattan Institute and Forbes writer Avik Roy,
...if we measure the relative freedom of health-care systems by the dollar amount of government involvement in health spending, the French system is actually meaningfully freer than America’s.
Yet the French still spend thousands more per person on health care than Singapore. So how does Singapore do it? They call it the three Ms - Medishield, Medifund and Medisave. Medishield is optional catastrophic insurance run by the government. Should a consumer opt to use Medishield, the cost of services has a cap with the government covering the majority of the ultimate cost. Singaporeans can alternatively purchase private catastrophic insurance.
Medifund covers the bottom 10 percent of income earners and is funded by interest the government has accrued from their initial investment in the program. The program currently has $3 billion in interest. Eldershield is also available to cover long-term medical care for those with severe disabilities and the elderly. Between Medishield, Medifund and Eldershield, the left’s goal of universal health coverage is achieved with the added benefit of all being optional and very low cost to the government.
The glue that holds it all together can be found in Medisave, which translates to health savings accounts (HSAs) in America. 85 percent of Singaporeans participate in the program, which redirects 20 percent of their income into a Medisave account. For many Medisave pays for Medishield. However, Singaporeans maintain complete control of their Medisave accounts and can choose from whichever public and private insurance options best meet their needs. In giving citizens ultimate control over their health spending, as opposed to the government like in the U.S., Singapore has incorporated the free-market approach that those on the right know creates success. Roy likens Singapore’s health care system to the way Americans view other types of insurance:
We conservatives have long felt that the most market-oriented approach to health insurance is to think of health insurance the same way we think of all other insurance. Which is to say when we get car insurance, we don't use car insurance to pay for our wiper fluid, car wash or gasoline. We buy car insurance so that if we crash our car or it gets stolen, we can cover that heavy financial risk that we wouldn't otherwise have. And that's what health insurance should be too.
So if you get hit by a bus, you have a stroke, you have a heart attack, you're going to the hospital and you would otherwise have this huge hospital bill, catastrophic health insurance would pay for that. Say anything above $8,000, $10,000, all that would be covered by insurance. If you had a plan like that it would cost almost nothing, those kinds of plans are very cheap. It's when you have plans that cover everything under the sun, including your routine health expenditures, it drives up the cost of insurance.
It's like an open bar. Or when 8 people go out to dinner but you're splitting the check evenly, everyone orders lots of stuff thinking that, "Well I'm splitting the check anyway so what does it matter?" and then it ends up being a bigger bill. It's like that with health insurance; everyone consumes more because they're not price sensitive, because they're not paying for it directly, everyone's bill goes up. That's how our health insurance system works. So if actually you move to a system where there's true catastrophic insurance, where just like with the car insurance or your homeowners insurance, if you really do get some calamitous event happen to you, you're covered.
As for routine medical expenses, that is where HSAs (Medisave in Singapore) come in. Says Roy:
So what a health savings account does is it allows you to save for those expenses in a tax free way, the same way you would for a 401K. So it's tax free, you can invest it, it can grow over time, any unused money you put in there rolls over to the next year. So over time, if you stay healthy, you get rewarded. Because if you're healthy but you keep putting money away in your HSA, over time you have a lot more money. Where as if you're unhealthy then you spend it all, and so you have a much bigger incentive economically to stay healthy. Where as in our current system with a lot of health insurance that covers everything, you don't have a lot of incentive to stay healthy because if you are unhealthy it is all covered by insurance. If you are 400 pounds and you become a diabetic as a result of that, or you have chronic obstructive pulmonary disease because you smoke all the time, your insurance covers all of that; so you end up not having any economic cost. But if you have an actual economic incentive to stay healthy and not smoke, go to the gym every once in a while, that’s what HSAs help you do.
So that system is more attractive on a lot of different levels than what we do today. So conservatives for a long time have wanted to move the U.S. in that direction. And actually the Bush 2003 law that gave us the Medicare prescription drug benefit also legalized health savings accounts; before that you really couldn't do anything with HSAs. So now, actually, a lot of people have HSAs. Millions of Americans have them and it's growing steadily every year.
For the skeptics, the proof is in Singapore. Life expectancy at birth in Singapore is longer than in the U.S. and their infant mortality rate is less than half of America’s. Singaporeans are healthier than Americans because in part, they are in charge of their health care spending.
An additional benefit of a healthier population is a completely different experience when one does need to go to the doctor. With less patients, individuals can spend more time getting personalized attention. As one Singaporean put it, “I feel like I’m in a Norman Rockwell painting... only the doctor is Asian.” In fact, Singapore is a top destination for those around the world seeking quality care.
So what does America need to do to get affordable, quality healthcare? Well we know Obamacare isn’t the answer. The CBO is already projecting the cost to double in the first 10 years. While conservatives have been fighting hard to repeal Obamacare, talk of what should be done otherwise has been scarce.
Perhaps the bigger question is can both sides actually work on something bipartisan for the good of the country? The left wants universal health care and the right wants individuals to be in control of their own health care. The Singaporean health care system proves that both sides can win.
Roy maintains that spending is the most important aspect to him. “If we can cover everyone, but we’re spending a quarter of what we’re spending,” he considers that a victory. Whether or not Obamacare is repealed remains to be seen. However, in either case our health care system was already broken and it’s time to come to the table with actual solutions.
ROFL.
This even as our own libertarians debate whether healthcare should be socialized or commercialized.
http://newasiarepublic.com/?p=36836
