Healtcare Costs ... Again

[This will definitely never make it to the MSM. Thank goodness for the internet!]

Here we go again.

Dear Minister of Health, you just don't get it do you?


Sep 9, 2006
Five steps to keeping health care affordable

Excerpts from a speech by Mr Khaw Boon Wan, Minister for Health, at the China-Singapore joint health care forum yesterday in Xiamen, China

LAST week, I met Health Minister Gao Qiang in Beijing. We chit-chatted and shared our experiences. We both knew that it is tough being a health minister. [Probably tougher on the Chinese Minister due to his dramatically lower salary, must be mired in corruption by Singaporean logic.]

This is because patients expect us to do magic. They expect us to deliver a very high standard of medical service but at a very low cost, preferably free. These objectives are almost contradictory. How can we deliver First World health care at Third World costs? [Yes yes, it is a condition endemic only to Singaporeans & Chinese apparently. Of course nobody in the world will want to pay Third World rates for First World goods, we all really really want to pay First World rates for questionable goods on which some of us are tested.]

Early this week, I read a newspaper article (ST, Aug 4) which quoted Indian Tourism Minister Ambika Soni as saying that India offers 'the best treatment for one-fifth of the cost (in the West)'. For example, bone marrow transplants cost US$30,000 (S$47,000) in India as compared with US$250,000 in the US. Likewise, cardiac surgery in India costs a quarter of that in the US.

But hospitals offering US standards of care are rare exceptions in India. [As is the story of Singapore. But why can we not strive to be like that Indian hospital? As a tax payer I would happily send a team from your Ministry with MY money to India to study how this hospital pulls off this feat then try to replicate that in Singapore to the benefit of Singapore citizens while creating a possible medical tourism plus point. In this flattening world, price will be the ultimate dictator of where most of the spending dollar goes. Gucci and Mount E. nuts aside.]

The bulk of health care in India remains at Third World level. Hence, it is possible for a few hospitals to offer US standards of care while leveraging on the large number of health-care workers who remain on Third World wages. [Dear Minister, in the international medical community Singaporeans probably ranks as an oddity. First world country, Third world painkillers. Having been treated in the US and here in Singapore ... I would have to say we Singaporeans tend to suffer a lot more pain rather unnecessarily due to your controlled substances acts. Your policy on proven drugs simply does not qualify for any price increases.

Singaporean workers bore the brunt of bringing Singapore to the First World on Third World wages. You are expecting us to now pay for First World priced medicine?]

The challenge is to keep wages and costs at Third World levels while the rest of the health-care system moves to First World standards. It is almost impossible. [Last I heard in Singapore we have a very close tripartite working relationship where Singaporeans will gladly suffer cuts in CPF and raises in broad based taxation like GST and ERP. Our wages have not really gone up sir! And before you pull that Progress Package stunt again ... where is that money going to come from?]

With globalisation, the wages of health-care workers as well as the prices of medical products are converging. Cross-border migration of health-care workers is now common. For a small country like Singapore, we import most of our medical products, like drugs and X-ray equipment. We have to pay international prices for these imports. [I called for local production of generic drugs during this past GE, you responded that we do manufacture medicine here. I have to ask again sir: we produce only Panadol and Axe Oil here? Why can't we produce and possibly export generic drugs that have run their patent life duration? We'll have to ask your colleague Mr. George Yeo I believe. Are drug prices and the ability to produce generic drugs in Singapore bound by FTAs recently signed by any chance? Are Singaporeans being made to pay more for costly drugs in exchange for what the EDB or MITI can later proclaim to be a victory of negotiation at the trade table?]

With people living longer and mothers producing fewer babies, uncontrollable healthcare costs can potentially wreck our finances, not to mention create major political problems. [I believe it too! And the issue at hand is cost! Not whether or not we have more money, through CPF or other means, to pay for escalating medical costs! Costs needs to be contained please, not alleviated by simply allowing us to spend our own money which we otherwise would not have been able to till after retirement.]

Singapore is fortunate that our founding fathers were successful in developing the economy. With clean water, clean air and good sanitation, the health of our people has improved over the years. We now enjoy high life expectancy and very low infant mortality rates.

Our [health-care] system today is not perfect but it is not bad. WHO has rated our system as among the top 10 most cost-effective in the world. [Dear Minister, independent research shows your statement to be in sync with what has been published. May we move on and try to gun for a better and cheaper system then please?]

Today, we spend only 4 per cent of our GDP on health. The average public hospital bill size for the unsubsidised Class A ward is about one month of the average salary. In the heavily subsidised Class C ward, the average bill ($786) is less than a week of salary. [Yes, but we also spend 24% of our salaries, in one form or another, on our beloved HDB flats according to a Cisco international salary survey - the highest in the world! Add the differing costs together and you do not have a low cost model that is attractive to MNCs .... and eventually citizens as well.]

For the high standard of medical care that hospitals provide, we think this is very good value for money. [Comparing with John Hopkins or with the above mentioned Indian hospital?]

Five aspects of managing a health-care system

First, we work on the basis that health-care cost will continue to rise. While we do our best to manage medical inflation, we know that the trend is rising. The reason is simple. Doctors and nurses will continue to command high salaries and advances in medical science will continue to churn out new drugs and new equipment which are more expensive than their replacements.
The key to managing health-care cost is therefore to ensure that there is a constant and expanding flow of money going into the health-care sector to pay for new services. There is no short cut to this problem. [I concur, there is no short cut to this problem. Allowing the population to understand how medical costs are derived will allow for greater transparency which you argue for later on. Let's talk about the real cost of medical treatment in Singapore. Dollars and cents, just like what you forced to be published last year for some treatements at different hospitals.]

We are more likely to succeed if we share the financial burden widely. If we load the burden on one payer - whether the government as in the British system, or the employers like the American system - we will cause very severe strains. In Singapore, we involve both the Government as well as employers, and in addition, we rope in patients and their families as well. Our health-care system is supported by all the major stakeholders: Government, employers, patients, family members, insurers and charities. [So the new major shareholder in tripartism is now the patient and their families? At times I feel my tax money goes to supporting our incredible high Ministerial salaries. Perhaps it is time to once again raise the platform of medical national service for doctors / nurses who graduate from our 'heavily subsidised' educational system? If you crank out 100 doctors a year and they have to serve say, 4 years at NS pay levels, would that help lower costs?]

Second, we believe that the health-care market can work better under competition. Market competition is the best way to allocate resources efficiently. Compared to other economic sectors, the health-care sector is notoriously unproductive. But there is no fundamental reason why the health-care market must fail. It fails only because we allow it to fail. [Another common reason for market failure is imperfect information. In Singapore, yet another reason exists for market failure - governmental intervention.]

For markets to function, there must be timely information so consumers and producers can make rational decisions. When we want to buy a mobile phone, we shop around for the best prices for the functions that we desire. But how many patients shop around before they go for their cataract eye operation or knee cap replacement? And how can they shop around when information on how much patients pay for such operations is not easily available?
In Singapore, we are trying to push out timely and relevant information. We gather data from our hospitals and publish them regularly. [Great first step Minister! *applause*]

Third, we must empower patients and get them to take greater responsibility for their own health. This is particular so in the management of chronic diseases like diabetes and hypertension. If we manage chronic diseases well, we are more likely to avoid or at least delay or minimise the onset of future medical complications requiring costly treatment. [Sorry, this is a no-brainer, no applause here. Only thing I will say is to encourage the PAP to continue with its nanny function. Keep it up! Keep it up! .... "Don't worry, the government will take care of it. They have the best brains and they know what they're doing. No one else should interfere!"]

Patients should take responsibility for their own health and work with their doctors and change their lifestyle. Eat healthily, exercise regularly, avoid obesity and smoking, take medication as prescribed by their doctors while regularly monitoring their own health and looking out for signs of complications. Many pilot studies of such structured disease management programmes have shown the benefits to the health of patients, while saving them money. [Please don't give me this whole bullock cart worth of bovine manure. How much time off does your assistant get? How much time off does a wannabe-high-flyer civil servant get? You have a paunch too Minister. We live in Singapore. There is no time to muck around other then to work and to please our bosses. You have not watched 'Singapore Dreaming' have you?]

Fourth, we must revive the important role played by the primary health-care sector. In many countries, this sector has been marginalised as patients and doctors flock to the more glamorous tertiary sector. An over-swing to the tertiary sector has been a major contributor to escalating health-care costs in many countries, without any corresponding improvement in health outcomes. [You said upgrading is good right? So how can you describe the move into the tertiary health sector as an overswing sir? They are merely following their societal instincts to make hay while the sun shines at the risk of being labelled - "see how much they earn? so little" which I believe is attributable to you in the month of August 2006.]

As a rule, we need to keep patients away from unnecessary care by specialists at expensive hospitals. When a patient who can be adequately treated by a GP is instead managed by a specialist in a tertiary hospital, it means a waste and abuse of expertise.

Often, financial incentives and remunerations for the doctors work against the right siting of care. [Is this not where governmental policy would do some good though it is intervening in a market model? To acheive a slightly more socialistic outcome in terms of primary medical care?]

When insurers reward high-intensity, high-cost surgical treatment but do not reimburse GPs who provide low-intensity, low-cost health education and dietary advice to their chronic sick patients, we should not be surprised that the outcome is disappointing. [Yes sir! Because at one point in time not too long ago, primary health care cost was affordable. Insurance had no business there because it was not a marketable model, no one would buy insurance then for primary healthcare. Now the cost of primary healthcare has gone up, which publicly listed or private insurer in their right mind will provide insurance where the payouts are likely to be equal to or more then the premiums collected. ...... ]

Fifth, we should exploit globalisation to help lower cost. While globalisation is itself pushing up wages of health workers, we should leverage on it to average down our cost. [If you guys want to muck around with the market then continue to do so and not shove the final responsiblity on the citizens when the market begins to behave out of expectations due to your shortsightedness or 'globalization'.

And hey, 'globalization' has been taking place since ships first sailed. it is not a recent phenomenon. It is truly a wonder few people in Singapore flip when the government cites 'globalization' as a factor for everything bad. And everything good must be a result of wise decisions and policies by the government. Complete bollocks!

In any event, an elected government is beholden to the people in terms of their welfare. I have to ask what your annual KPIs are Minister? Achieving budget surpluses?

If you can't take the heat, get out of the kitchen!]