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Helping Singaporeans live long, live well and with peace of mind

2019 will open for Singapore healthcare with a focus on prevention and protection, from a “sugar tax” to prevent Singaporeans from getting obese and diabetic, and new details on the Merdeka Generation Package and CareShield Life to be announced to protect Singaporeans against rising healthcare costs. Will these help Singaporeans to live long, live well and with peace of mind?

The government cannot provide a blank cheque but at the same time, individuals should not bear the full brunt of outlier bills, says the author, who suggests a model where claims in which citizens pay the majority of the bill are flagged and exceptionally managed.

The government cannot provide a blank cheque but at the same time, individuals should not bear the full brunt of outlier bills, says the author, who suggests a model where claims in which citizens pay the majority of the bill are flagged and exceptionally managed.

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2019 will open for Singapore healthcare with a focus on prevention and protection.

To prevent Singaporeans from getting obese and diabetic, the government is exploring a sugar tax. Laws increasing the minimum age of legal smoking to 19 years will also come into force this year.

On the protection front, details of the Merdeka Generation Package and CareShield Life will be announced. The Ministry of Health’s stated vision is to enable Singaporeans to “live long, live well and with peace of mind”. Will these measures help?

The proposed sugar control measures include a nationwide ban on the sale of high-sugar, pre-packaged beverages and taxes on manufacturers and importers of sugar-sweetened beverages together with advertising restrictions and greater package nutritional information.

Of these, the proposed ban and tax have attracted the most attention.

Proponents argue that the restriction of individual liberties is necessary to shield citizens from hidden hazards and higher taxes will shift consumer behaviour as well as encourage manufacturers to modify recipes for healthier options.

The United Kingdom has claimed success with higher taxation, asserting that companies such as AG Barr, the maker of iconic Scottish drink Irn-Bru, and Suntory, which manufactures Ribena and Lucozade, have reformulated their products to avoid the tax.

Detractors however caution that despite the populist nature of taxes globally, there has not been clear evidence of their effectiveness and reduction in obesity or diabetes rates in countries that have implemented them.

Substitution is also a real possibility, with consumers simply switching to less-taxed beverages such as freshly prepared drinks that are high in sugar by coffee shops and cafes.

In Denmark, a "fat tax" was abandoned after surveys suggested less than 10 per cent of Danes had reduced their fat intake and instead were crossing the borders into Germany or Sweden to shop, leading to job losses in Denmark.

When it comes to smoking, the Singapore Government’s approach has been heavier-handed with high taxes on tobacco, banning of e-cigarettes and alternative nicotine products and from 2019, increase in the minimum age of smoking to 19 years.

This makes sense as in Singapore, nearly half of smoking habits get entrenched between ages 18 and 21, and progressively increasing the minimum age can help to minimise exposure during this crucial window.

However, we should challenge whether this will be effective in and of itself.

Notably, despite the minimum legal age being 18 years currently, the average age at which Singaporeans start smoking has ironically dropped from 17 years in 2001 to 16 years in 2013.

We thus have to implement other supportive measures including restricted marketing and targeted education to vulnerable populations.

IMPROVING FINANCIAL PROTECTION

Rising healthcare costs are a major worry for Singapore. Healthcare spending has increased eight-fold between 2000 and today.

Credit to the Government for its multiple schemes, including CareShield Life and the Merdeka Generation Package to address citizens’ concerns.

I hope these schemes will be designed to explicitly provide genuine peace of mind for citizens.

What do I mean?

Peace of mind comes from confidence that healthcare will always be accessible and affordable, and that no Singaporean will be denied medically necessary care because of financial reasons.

The Government takes great pains to emphasise its commitment to healthcare spending through direct subsidies to public healthcare clusters, Medisave top-ups, MediShield Life premium cover for low-income Singaporeans and so on.

But despite the billions injected, it is useful to ask if Singaporeans genuinely have the peace of mind that we can afford our healthcare.

I would attribute this to two main reasons.

Firstly, subsidies are designed from the government’s or the system’s perspective, e.g. MediShield Life will cover S$3,000 per month for "chemotherapy for cancer".

But what if the treatment is S$10,000 per month? Interestingly, on the Ministry of Health website, there is a page about exactly this, which is more formally described as a "stop-loss" feature.

MOH justifies the absence of a "stop-loss" feature with three reasons: Co-payments are necessary to discourage wasteful consumption; co-payment amounts can be paid through Medisave (and topped up further with cash), and finally seven in 10 bills in subsidised wards have S$100 or less out of pocket cash payments after insurance and Medisave.

But what about the remaining three in 10?

Finland, on the other hand, caps outpatient co-payments at €610 per year and for pharmaceuticals, €670.

In Germany, inpatients pay a maximum of €280 per year. The differences are philosophical — in Finland and Germany, as with many other European countries, the state with its resources and access to data takes the financial risks upon itself rather than transferring it to citizens.

In fairness, MOH assures that needy Singaporeans can “seek further assistance” but this leads us to the second reason. Further support is discretionary and the conditions for further support are not widely known.

Also the quantum of support Singaporeans ultimately may obtain is unknown before means testing. Contrast this with the English National Health Service (NHS) in which healthcare is free at the point of care.

When I was living in the UK, the English may have had their grouses about the NHS waiting times, distances to travel and so on, but rich or poor, they were secure and confident in the knowledge that if they fell ill, healthcare would be available to them with no concerns about being able to pay for it or not.

I’m not advocating for an NHS-type "peace of mind" construct but between this extreme which requires high taxation and the Singapore policy bias of designing for the system with consequent anxiety on the part of citizens, there can be a middle ground.

The government cannot provide a blank cheque but at the same time, individuals should not bear the full brunt of outlier bills.

Perhaps we could consider a model where MediShield Life claims in which citizens pay the majority of the bill are flagged and exceptionally managed?

Or even a guiding principle that citizens should not pay more than 30 per cent of a bill in excess of some pre-defined amount?

Would this mean higher taxes or higher premiums? Not necessarily so.

Today, MediShield Life has approximately one-third of its monies set aside as buffer for unexpectedly adverse scenarios and there is some leeway to relax this.

And with the ongoing transformations of the health system including the use of technology to drive productivity, total healthcare spending should stabilise, thus reducing the pressures on MediShield Life.

A great strength of the Singapore health system has been its ability to implement new schemes, monitor scrupulously and course correct as needed.

Medisave, the world’s first national health savings account, was instituted in the 1980s.

But with the realisation that another scheme was needed to address catastrophic illnesses, MediShield was launched in 1990.

More recently, MediShield Life, launched in 2015, had coverage expanded for community and long-term care just last November.

Likewise, a ban on high sugar drinks, CareShield Life, the Merdeka Generation Package and the like are pioneering policies for which there are no models to emulate.

Some uncertainty is inevitable.

But if we have the humility to listen to feedback, the honesty to track outcomes and the humanity to prioritise people over systems and make changes as needed, Singaporeans can look to 2019 and beyond with optimism that we will "live long, live well and with peace of mind".

 

ABOUT THE AUTHOR:

Dr Jeremy Lim is partner in the Health and Life Sciences Practice in Asia at Oliver Wyman, the global consultancy.

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