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The low-down on rising medical costs

In 2015, Singapore’s medical inflation rate stood high at 15 per cent, compared with 10 per cent globally. Why do medical costs keep rising? As a private specialist, I will try to offer some perspectives and suggestions. First, let us look at some facts.

AFP file photo

AFP file photo

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In 2015, Singapore’s medical inflation rate stood high at 15 per cent, compared with 10 per cent globally. Why do medical costs keep rising? As a private specialist, I will try to offer some perspectives and suggestions. First, let us look at some facts.

Most Singaporeans have private insurance plans for hospitalisation in the form of Integrated Shield Plans, and many buy plans with riders to cover various out-of-pocket expenses. Some feel this encourages the doctors to charge exorbitantly.

In its report last month on managing the cost of health insurance in Singapore, the Health Insurance Task Force (HITF) said that there are “natural” factors for rising costs, such as an ageing population, rising awareness, better access to medical facilities and advancement in research. The task force also noted that cost inflation in private hospitals outpaces that in public hospitals, and that patients with insurance tend to seek treatment in private hospitals.

In reality, doctors work in a very small circle. Information on what doctors charge is easily available.

In my course of work, when I refer my patients to other specialists, I always find out how much my patients are charged, and their outcomes. I will not refer future patients to any doctor who charges prohibitive fees.

Reputation is a doctor’s greatest asset. No reasonable doctor would like to be labelled as exorbitant.


Thanks to better health education, more people are seeking early treatment or diagnosis. Take colon cancer screening, for example.

The Ministry of Health recommends that Singaporeans above 50 years of age undergo colon cancer screening. Although screening via colonoscopy is costly, early detection saves lives. On balance, medical studies showed that colon cancer screening is cost-effective.

In the old days, we merely did a histological examination on a colon cancer specimen to confirm its cancer status, and that cost less than S$200.

Nowadays, once we diagnose colon cancer, we would do a series of specific mutation analysis tests to determine which chemotherapy would work best on it. The cost of this mutation analysis can top a thousand dollars.

Decades ago, an endoscopy — inserting a long, tube-like instrument to inspect the inside of an organ or body cavity — was performed without any sedation or anaesthesia. Patients often felt great discomfort during the procedure.

But in the last 20 to 30 years, endoscopies have been performed with patients sedated. Most do not feel any discomfort from the procedure. But the sedative may make them groggy for a few hours after the procedure.

Nowadays, some doctors perform an endoscopy under general anaesthesia. The advantage is that patients can resume their normal duties shortly after the procedure. The downside is, again, higher costs.

In the old days, patients with unresectable liver cancer — where it was not possible to surgically remove part or all of the affected liver — were given a few months to live. These days, new treatments such as live-donor liver transplantation, and even an oral chemotherapy drug, are available. They can prolong the lifespan of such patients. But both are costly, and treatments can run up to hundreds of thousands of dollars.


The cost of running a medical practice has gone up tremendously over the past few years.

Two major hospitals started operations over the past two years. They are supposed to bring in more capacity and competition, and lower costs.

But an unintended consequence is the acute shortage of skilled medical personnel. Nurses, therapists, dieticians, pharmacists, attendants, radiographers and receptionists are suddenly in short supply.

My nursing colleagues were offered a big pay rise to join the new hospitals. In return, existing hospitals have had to match the pay rise to keep their staff.

The resale prices of private medical clinics have also gone through the roof. The price of a medical suite at established private hospitals is more than twice that of the most-expensive condominium on Orchard Road. All these increases in overheads will eventually lead to higher hospital facility fees.


So what can we do? Insurers can compare the charges among different hospitals to identify the “outliers” who charge more than others. They can also study their clinical outcomes to see if the higher costs among the outliers are justified by better outcomes, and make this data public.

Insurers can also set limits on how much a patient can claim per diagnosis and per admission. The patient can fork out the difference if he or she insists on seeing the doctor.

Insurers can introduce incentives for its clients to stay healthy, for example, by offering discounts for future premiums for those who have not made a medical claim, much like how motor insurers offer a “no claim bonus”. Can we also reward patients for choosing a cheaper hospital/doctor, or to be discharged early?

Finally, we can bring back the Singapore Medical Association Fee Guidelines as a benchmark. This is one of the recommendations made by the HITF.

As a medical doctor, I do believe most medical staff and hospitals want to deliver cost-effective healthcare to patients. Any doctor or hospital that charges unreasonably high fees will not be able to attract patients in the long run.

It takes all parties — the doctors, hospitals, patients, insurers and the regulatory bodies — to act together to achieve cost-effective health care.



Dr Desmond Wai is a gastroenterologist and hepatologist in private practice.

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