SINGAPORE (Mar 15): Is there a perfect healthcare system? One that guarantees the best possible outcomes in terms of the population’s health, remains affordable for the government and the people, and gives the service providers a comfortable margin of profitability?

Healthcare systems across the world are as varied as they come. On one end is Britain’s National Health Service, a socialised healthcare service that people seem to love or hate in almost equal measure. At the other end of the spectrum is Switzerland’s largely private-run system that has been ranked as one of the world’s best.

Singapore’s healthcare system is, in some ways, similar to that of the Swiss. The Alpine country spends comparatively little public money on healthcare. There are subsidies for the lower-income groups, of course, but all Swiss residents are responsible for their own medical insurance and, as in Singapore, are required to pay part of the bill as deductibles and co-insurance, as a way to discourage overconsumption.

Insurers in Switzerland are, however, required by law to sell a basic insurance plan that covers a range of treatments to everyone regardless of age or medical condition. The plan covers most general practitioner and specialist services, pharmaceuticals and medical devices, and home care and prescribed therapy. It also covers some disease prevention measures, such as selected general health examinations, vaccinations and screenings. The insurers are not allowed to make a profit from the basic insurance plans, though prices on supplemental plans can vary. There are about 100 insurance providers in Switzerland, serving a population of some 8.5 million; this ensures a fair amount of competition on quality and price. There is also a national fee schedule for doctors, and charging above it is not allowed.

In Singapore, fee benchmarks were introduced at the end of last year, amid calls for the government to rein in healthcare costs. Yet, according to Chee Hong Tat, senior minister of state for health, there is no obligation for doctors to charge the benchmark rates. Indeed, doctors may continue to charge fees that are higher, or lower, than the benchmarks, although the public would know whether they were being overcharged by referring to the benchmarks.

In Singapore, the fees have been left to market forces. Fee benchmarks were removed in 2007 and, since then, the average bill for a hospital inpatient treatment has risen 9% a year. The increase has roughly coincided with the rise of medical tourism as a driver of economic growth. The quality of local healthcare services attracted patients from the region and beyond. Private medical facilities, with marbled lobbies and comfortable hotels next door, flourished.

The Singapore Tourism Board put out statistics showing medical tourism as a specific area of spending by foreigners in Singapore. In 2008, medical tourism receipts amounted to $1.05 billion, but fell to $732 million the following year. It rebounded to $1.1 billion in 2012, declined to $832 million in 2013, but rose again to $994 million in 2014. STB stopped unpacking the data in 2015.

Even public hospitals, already operating at almost full capacity, were chasing the foreign patient dollar. It was only in September last year that the Ministry of Health instructed public hospitals to terminate their contracts with agents who referred patients from abroad. The ministry said at the time that the priority of public hospitals was to serve the healthcare needs of Singaporeans, and that they were not allowed to actively market themselves to foreign patients.

But the clamour against rising healthcare costs has become too loud to ignore. As medical bills balloon, insurers say premiums will only continue to rise. Observers assert that Singapore is pricing itself out of the medical tourism industry. More importantly, will the medical services here be priced out of the reach of the locals? It says a lot that Medisave can be used for treatment in hospitals in Malaysia; Thomson Medical Group officials say they are expecting Singaporeans at their expanded facility in Johor.

The cost of healthcare also weighs on the government, which has taken to exhorting the population to take preventive measures against chronic illnesses, instead of having to pay for treatment later. Would stricter regulations for the industry help prevent costs from getting out of control? Of course, regulation — particularly if poorly thought out — could bring about inefficiencies and even higher costs as a result of bureaucracy.

Still, the World Health Organization has argued that healthcare should be a common good rather than a market commodity. In that vein, healthcare should be strictly regulated to ensure equitable outcomes for the population. WHO adds that healthcare outcomes go beyond the traditional gauges of lifespan, incidence of disease and overall health. It is not only about quality and efficiency. Rather, outcomes take into account fair financing and equity; poorer households should not be spending a larger proportion of their expenditure on healthcare than richer households do.

The stress of ensuring healthcare is of good quality and affordable for both the state and the consumer is taking its toll even in Scandinavia, the erstwhile hallmark of enlightened social policy. On March 8, Finland’s entire cabinet quit, a month ahead of a general election, when it became clear that it could not pass a set of reforms aimed at cutting spending on healthcare.

The task of quality, affordable healthcare should not be solely the government’s responsibility, of course, but the industry needs a countershock that can only be delivered by the state. 

This story appears in The Edge Singapore (Issue 873, week of Mar 18) which is on sale now. Subscribe here