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For best outcomes, pay GPs the right way

Dr Lee Kheng Hock, in his commentary Reinventing Singapore’s GPs, calls for a radical change of mindset by patients and doctors alike to embrace community healthcare.

Dr Lee Kheng Hock, in his commentary Reinventing Singapore’s GPs, calls for a radical change of mindset by patients and doctors alike to embrace community healthcare.

The commentary, published in this newspaper last week (June 12), raises many important and urgent points that must be addressed to ready Singapore for the challenges of ageing and chronic diseases. However, what Dr Lee has not articulated fully are the deficiencies in healthcare financing that prevent our general practitioners (GPs) from realising their fullest potential in the future state he describes. In short, to reinvent Singapore’s GPs, we need to reinvent the Singapore GP’s business model.

The majority of Singapore’s GPs work on a “fee-for-service” model, meaning they are paid only when patients fall ill and require consultation and other services.

The “fee-for-service” model fosters reactive healthcare and is hugely inappropriate for the preventive, proactive and integrated health system we know Singapore needs.

Worsening the situation is the reality that patients with complex chronic diseases and ongoing social challenges require much more time to manage appropriately, and it is financially much more worthwhile in that time to squeeze in three employment screenings and one “cough and cold” patient.

Society benefits from good chronic care as hospitalisations are prevented and patients can continue to be economically productive citizens. GPs play a vital role in this, but the costs of achieving these are “privatised” in today’s financing model — GPs do not have a decent payment system.

And this, I would argue, is the real issue dragging down our primary care system.

A MORE SUPERIOR MODEL

Let’s be realistic: GPs are not only doctors but also businessmen and businesswomen who have overheads such as rental and staff costs to pay. They need to balance their patient mix to ensure they can pay the bills just like any other small business.

A better financial model for managing patients with chronic diseases is capitation, a system where the doctors are paid a guaranteed sum per patient for a specified total population.

If a doctor has 2,000 chronic disease patients and is paid an average of S$1,000 per patient annually to care for them, then she has S$2 million in all to provide for all the services the patients may require. A “quality bonus” can also be instituted to reward doctors who achieve exemplary disease control and quality of life for patients.

Why is this model superior? There are three reasons. Firstly, this assurance of income allows doctors to invest the time and resources to set up systems to proactively care for patients with chronic diseases. Maybe doctors can pool their resources to set up an IT system that will automatically send health information or reminders to patients to take their medicines.

Or, invest in nurse educators who can and do play critical roles in enabling patients to understand their diseases better and become more motivated. This will result in overall better care and lower costs.

Secondly, the perverse incentive to pursue more and more consultations that would be the economically rational thing to do in a “fee-for-service” model is removed, and patients would receive the amount of care they need, no more and no less, in creative modalities such as tele-consults or email without being confined to in-person visits only.

Finally, the “quality bonus” that is typical to such financial arrangements incentivises doctors and their teams to meet clinical targets such as good blood pressure control, avoidance of hospital consultations, and the like.

Who should bear this cost? Well, the avoidance of hospitalisations and other expensive healthcare utilisation mean lower spending by governments, employer and insurers, and hence it makes sense for them to bear some of the costs.

The patient clearly benefits from better health and, in our model, co-payments are expected and in this instance should be imposed. What is unworkable is to expect the doctor as a small-business owner to “privatise the costs and socialise the benefits”.

One final point is worth noting: Capitation models are not new, but were eschewed previously because quality of care was difficult, if not impossible, to ascertain in a data-poor milieu. “Fee-for-service” models then dominated because they were easy to understand and administer.

Today, the situation is radically different. Electronic records are a reality, and healthcare payers can today much more easily set the right payments, measure clinical quality and pay out bonuses accordingly as well as address nonperforming practices.

Over 10 per cent of the adult population suffers from diabetes, and one in four Singaporean adults have at least one chronic disease. With almost 2,400 GPs, this works out to one GP for about 400 patients with chronic diseases.

Supported by other healthcare professionals and enabled by technology, we have enough GPs to care for every last Singaporean with a chronic disease. But the business model must make sense. Why would GPs want to be “reinvented” if this worsens an already tough business environment?

Let’s start paying GPs the right way to do the right thing.

ABOUT THE AUTHOR:

Dr Jeremy Lim is head of the health and life sciences practice for the Asia-Pacific for Oliver Wyman, the global consultancy. He is the author of Myth Or Magic: The Singapore Healthcare System.

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