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MOH to revise public healthcare subsidy framework to benefit those with greater needs

SINGAPORE — From the middle of next year, means-tested public healthcare subsidy frameworks are set to be revised as government spending on patient subsidies is projected to hit S$6.5 billion in the 2020 financial year, up from S$4 billion five years before.

From the middle of 2022, a common subsidy framework will be applied to patients in B2 and C wards at public hospitals.

From the middle of 2022, a common subsidy framework will be applied to patients in B2 and C wards at public hospitals.

  • Per capita household income will be used to differentiate subsidy levels for patients' hospital ward choices
  • This is part of a new acute inpatient subsidy framework
  • Singaporeans in subsidised wards at community hospitals will have their care subsidised by 30 to 80 per cent 
  • Subsidies at specialist outpatient clinics for those whose per capita household income exceeds S$3,300 will be reduced

 

SINGAPORE — From the middle of next year, means-tested public healthcare subsidy frameworks are set to be revised as government spending on patient subsidies is projected to hit S$6.5 billion in the 2020 financial year, up from S$4 billion five years before.

The Ministry of Health (MOH) said during a debate on its budget on Friday (March 5) that the changes, while comprehensive, would not result in a reduction in government expenditure on patient subsidies. 

They are aimed at ensuring that the subsidies are “progressive”, so that resources better target those who need them more.

Announcing the changes in Parliament, Dr Koh Poh Koon, Senior Minister of State for Health, said: “As a society, we widely accept the need to be progressive and target subsidies at those with greater needs.”

He added that the changes would also encourage patients to seek care at settings appropriate to their medical needs.

The changes are warranted because healthcare expenditure is expected to rise over time as well. Singapore’s population is ageing and there is a rising incidence of chronic diseases, while accessibility and quality of care are improving.

Here is a look at the changes.

1. Singaporeans needing hospitalisation for acute conditions

BASIS FOR MEANS TESTING

Current: Individual monthly income

Revised: Per capita household income, computed as the total gross household monthly income — including overtime pay, allowances, cash awards, commissions and bonuses — divided by the number of members in a household. 

Why the change: Per capita household income better reflects the means of a patient because it takes into account the overall financial resources of the household against the number of household members.

Noting that this is already the basis of means testing in all other healthcare settings here, MOH said that the alignment would avoid disadvantaging patients who are getting a different subsidy status as they move across different care settings.

SUBSIDY RATES FOR B2 AND C WARDS

Current: Patients at Class B2 wards have 50 to 65 per cent of their hospitalisation bill subsidised, while those at C wards are subsidised at rates of 65 to 80 per cent, depending on the average monthly income of a patient.

Revised: Subsidies for B2 and C ward patients will range from 50 to 80 per cent, depending on the patient’s per capita household income. 

For instance, those with a monthly per capita household income of S$1,800 and below may qualify for a 80 per cent subsidy. Those with a monthly per capita household income of more than S$3,100 will get a 50 per cent subsidy. 

The same framework will apply to day surgeries, where subsidies are at 65 per cent now.

Projected impact: The majority of patients will not see a change in their out-of-pocket payments, but the bills of about 15 per cent of patients, mainly those from households with higher per capita household income, will see a median increase of about S$200.

The bills of about 30 per cent of patients, mainly those from households with lower per capita household income, will see a median drop of about S$150. 

These include day surgery bills, where 70 per cent of such patients will receive higher subsidies, MOH said.

Why the change: With per capita household income as the basis for means testing, MOH said that it would no longer have to rely on its legacy system of using ward choice as a proxy of means to differentiate subsidy levels.

It added that ward choice has also become an inadequate proxy of means, since differences between B2 and C wards have narrowed owing to changes in ward configurations, driven by improvements in patient safety and infection control standards.

2. Singaporeans at community hospitals

SUBSIDY COVERAGE

Current: 20 to 75 per cent

Revised: 30 to 80 per cent

Projected impact: Almost all patients will receive more subsidies. 

MOH said that 95 per cent of patients under sub-acute care (those who no longer require more intensive care at acute hospitals) and rehabilitative care (those who need extended periods of rehabilitation to regain functional abilities) are expected to benefit from higher subsidies. 

After accounting for MediShield Life health insurance claims, there will be a fall in co-payment for nearly 60 per cent of community hospital bills, with a median decrease of around S$120.

Why the change: This is to facilitate the right placement of patients from acute hospitals to community hospitals, MOH said, as community hospitals play an increasingly important role in healthcare.

3. Singaporeans accessing specialist outpatient clinics

SUBSIDY COVERAGE

Current: Lower-income families, defined as those with a per capita monthly household income of S$2,000 or below, are eligible for 60 to 70 per cent subsidies on their bills. Subsidies for all other patients are at 50 per cent.

Revised: There will be new subsidy tiers for those whose per capita household income exceeds S$3,300.

  • 40 per cent subsidy for per capita household income of S$3,301 to S$6,500

  • 30 per cent subsidy for per capita household income that is more than S$6,500

Why the change: To allow resources to be distributed to those in greater need

Projected impact: About 30 per cent of all subsidised patients will have to pay higher bills — seven in 10 of them will see an increase of less than S$100 in co-payment each year. 

The changes will not translate to higher out-of-pocket payments if patients can tap their MediSave health savings scheme or MediShield Life.

For seniors, any increase in co-payment will be partly offset by larger Pioneer or Merdeka Generation subsidies.

ACCESS

Current: Patients who opt for private wards in public hospitals, such as Class A or B1 wards, do not qualify for subsidies at specialist outpatient clinics, should they require follow-up visits after discharge.

Revised: Private patients in inpatient settings will be allowed to opt for subsidised follow-up care at specialist outpatient clinics, based on the means-testing framework.

Projected impact: Right now, about 20 per cent of patients admitted to public hospitals are in private wards. They will benefit from the option of subsidised follow-up care.

Why the change: MOH said that it wants to make it easier for patients to get subsidised consultations, since subsidies are now more targeted.

OTHER CHANGES

From June 1, seniors aged 60 and above may tap up to S$300 a year from their own or their spouse’s MediSave accounts to pay for their outpatient expenses at polyclinics, public specialist outpatient clinics and general practitioner clinics under the Community Health Assist Scheme, which subsidises visits by patients from the lower- and middle-income groups.

Right now, they may use up to S$200 a year under the Flexi-MediSave scheme, which may also be used in conjunction with other outpatient MediSave schemes such as MediSave500 and MediSave700.

MediSave500 allows patients to withdraw up to S$500 yearly to further offset their costs for outpatient chronic disease treatments, approved vaccinations and screenings. MediSave700 was introduced from Jan 1 to better support patients with complex chronic conditions, who can withdraw up to S$700 yearly under the scheme.

MOH said that it would continue reviewing its MediSave schemes to ensure that they remain relevant and adequate for Singaporeans.

Related topics

subsidies MOH hospital MediSave healthcare

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