Name and Constituency of Member of Parliament
MS TIN PEI LING
MP FOR MACPHERSON
Question No. 2502
To ask the Minister for Health in light of the recent case of MediShield Life disbursing only $4.50 as payout for an eye operation (a) whether he can reiterate the role of MediShield Life in our public healthcare financing system; (b) how does the Ministry determine the claim limits and ensure that MediShield Life provides adequate coverage for Singaporeans; and (c) whether the Ministry will review MediShield Life's claim limits to address the gaps.
Name and Constituency of Member of Parliament
MR MURALI PILLAI
MP FOR BUKIT BATOK
Question No. 2536
To ask the Minister for Health how does the Ministry ensure that the pegging of hospital charges for complex medical procedures for the purpose of assessing Medishield Life coverage is made current so that subsidised patients who undergo complex medical procedures will continue to be protected against large hospital bills.
Oral Answer
Functioning Healthcare Financing System
1 Our public healthcare financing system comprises several components that work together to keep healthcare affordable for Singaporeans:
- First, patients in public healthcare institutions enjoy subsidies of up to 80% of their bills.
- Second, we have introduced MediShield Life, a universal healthcare insurance which provides all Singaporeans lifelong protection against large hospital bills and selected costly outpatient treatments, regardless of age or health condition.
- Third, MediSave can be used for the balance of the bill and helps Singaporeans lower their out-of-pocket cash payments.
- Finally, MediFund and various forms of financial assistance at our public institutions provide discretionary, targeted assistance for those who have financial difficulties. Last year, for instance, MediFund provided about $150 million in assistance to patients who require additional help with their bills.
2 Taken together, this “S+3M” framework has worked well. It ensures that healthcare is affordable to Singaporeans, and no Singaporean is denied appropriate healthcare due to an inability to pay. To underscore this point, in our public hospitals, 7 in 10 subsidised bills are fully paid without any cash outlay by the patient. In other words, 70% of all subsidised bills do not require any out of pocket cash payment by the patient at all. Of the remaining 30% of bills, one-third require payment of $100 or less in cash, and another one-third is paid for using a cash outlay of between $100 and $500.
MediShield Life - Adequate Coverage and Affordable Premiums
3 The enhanced MediShield Life was launched in 2015. This is a key component of our healthcare financing framework which provides universal and lifelong coverage, including for those with pre-existing illnesses. The Government provides premium subsidies to the lower- to middle-income group to keep premiums affordable, and additional support to those who need more help with their premiums.
4 MediShield Life aims to strike a balance between keeping premiums affordable and ensuring adequate coverage of subsidised care. For this reason, MediShield Life has design features such as claim limits, an annual deductible and co-insurance.
5 Coverage of claims and amount of payouts have improved since the introduction of the enhanced scheme in 2015. To provide members with a sense of the comparison:
- In 2017, 555,000 MediShield Life claims were approved and $845 million paid out. This is up from 344,000 claims and $448 million correspondingly in 2015 under the old MediShield.
- The average payout per claim was $1,520 in 2017, compared to $1,300 in 2015.
- For larger bills, the payout was correspondingly higher. For the largest 10% of subsidised hospitalization bills, which was above $4,000 in 2017, the average payout per claim was $5,800. In comparison, the MediShield paid out was $4,000 on average for the largest 10% of subsidized bills in 2015.
Setting of MediShield Life Claim Limits
6 As I had mentioned earlier, claim limits is one feature that helps MediShield Life strike a balance between keeping premiums affordable and ensuring adequate coverage. MediShield Life claim limits and premiums were last revised in 2015, when the enhanced scheme was launched. At the time of launch, the claim limits were set to cover 9 out of 10 subsidised bills. In addition, for larger bills within claim limits, the patient’s co-payment is reduced as the claimable amount goes up, dropping from 10% to 5% and finally to 3%. Hence, for claimable amounts above $10,000, the patient’s co-payment is 3%.
7 For bills that exceed the claim limit, patient’s co-payment will include the remaining bill not covered by MediShield Life. These bills tend to be for more complex cases or where patients received lower means-tested subsidies because of their higher income.
8 The latest available figures show that 8 in 10 subsidised bills remain fully within the MediShield Life claim limits. This has come down from the limits set in 2015, caused in part by increased healthcare costs. We will review this, and adjust the limits as necessary. However, even at present rates, in respect of the bills which fall outside the claim limits, about half exceed the claim limits by $230 or less.
9 The claim limits are necessary as they serve to keep premiums affordable.If we are to remove the claim limits altogether, there will be significant premium increases for all Singaporeans across the board, to the order of 30% or more. Therefore, rather than impose this on all Singaporeans across the board, those who prefer to have higher coverage and are willing to pay higher premiums can consider private Integrated Shield Plans which can include “As-Charged” features that cover 100% of the bill. Conversely, where patients cannot afford the cash outlay, they can tap onto MediFund as I explained earlier, or on other financial assistance schemes.
10 In the recent case of Mr Seow Ban Yam, we understand that he had undergone a duct drainage procedure at SNEC. The surgical procedure, which was performed by a senior consultant in an operation that took three hours, was complex given his age. It is also not common for the procedure to be performed on both eyes at the same time, and this was only done for seven patients out of 42,000 procedures performed by SNEC that year. Mr Seow’s bill was about $12,000 before subsidy. Of this amount, the Government subsidises approximately $7,500, leaving a balance of $4,500, or roughly about $1,400 above the MediShield Life claim limit in this case.
11 Because the SNEC bill was significantly higher than the claim limit, the payout was comparatively small, after the yearly deductible of $3,000. However, the balance of Mr Seow's bill was thereafter fully covered by MediSave, which meant that Mr Seow did not have to pay any cash out of pocket for the procedures which he underwent. Nonetheless, we had asked SNEC to review their charges. Following the review, SNEC has decided to scale down its fees for this procedure and also for a number of other complex procedures with higher fees, and will do so from 1 Mar 2019.
Frequency of Review of Claim Limits and Premiums
12 MOH regularly reviews MediShield Life claim limits and benefits. For example, we recently extended coverage to Home Parenteral Nutrition and direct admissions from emergency departments of public hospitals to community hospitals.
13 Last year, we also started a review of claim limits, with a view to making the appropriate adjustments as may be necessary. This ongoing review requires a careful assessment of the appropriate claim limits and also the consequential impact it may have on premiums, to ensure that the coverage of MediShield Life remains broad-based and also sustainable. This review is also being done in the context of the commitment to keep premiums constant for five years after the scheme was introduced in 2015.
14 We expect the latest review to be completed by end 2020. If the review is completed ahead of time, we will announce the revisions earlier. Moving forward, MOH will conduct these reviews of claim limits more regularly, around once every three years.
Managing Costs and Fees
15 Just as important as having a good healthcare financing framework is managing healthcare costs effectively, so that overall affordability can be maintained. We have to work on hard on this, and also explore various fronts on which this can be done.
16 The need to monitor and manage costs and charges in public healthcare is particularly important. Majority of Singaporeans utilise subsidised healthcare in our public healthcare institutions. Some examples of our efforts to keep costs sustainable are the use of group procurement to get better prices, tapping on technology to improve productivity, and applying healthcare technology assessments to guide the appropriate use of services, devices and also drugs. We have also introduced programmes and services to help Singaporeans receive care earlier or at more appropriate settings. For example, under the hospital to home programme, patients receive visits at home for a few months after hospital discharge, to ensure that they recuperate well and do not get readmitted to the hospital. Together, these initiatives help Singaporeans manage costs and moderate increases in healthcare bills.
17 We will keep a close watch on public healthcare costs, and re-double our efforts to keep healthcare costs sustainable and affordable for Singaporeans.
Conclusion
18 To sum up, we have a healthcare financing framework that has worked well in striving to keep healthcare affordable for Singaporeans. The healthcare financing framework is designed with several different but overlapping components to provide holistic support to meet Singaporeans’ healthcare costs. MediShield Life is one key component that provides Singaporeans lifelong protection against large hospital bills and selected costly outpatient treatments. Its features are aimed at ensuring adequate coverage while keeping premiums affordable. We will continue to review, refine and strengthen MediShield Life and other components of our public healthcare financing system, and, just as importantly, manage our healthcare costs to ensure that public healthcare remains affordable for all Singaporeans.