SPEECH BY MR ONG YE KUNG, MINISTER FOR HEALTH, AT THE MINISTRY OF HEALTH COMMITTEE OF SUPPLY DEBATE 2024, ON WEDNESDAY 6 MARCH 2024

Healthier SG – A Movement for Singapore 
 
Mr Chairman

         I will devote a large part of my speech to address two pressing issues for healthcare. One is the hospital capacity crunch, and the other is healthcare cost. Then I will talk about the major transformation that we are bringing about in our healthcare system which will further address these two concerns.

Addressing Hospital Capacity Crunch

2.     Mr Pritam Singh, Mr Ang Wei Neng and Associate Professor Jamus Lim raised the issue of capacity and waiting times at polyclinics and hospitals. Post COVID-19, indeed, this is the experience of many countries around the world. Waiting times have gone up all around the world.

3.     In Singapore, what is driving up hospital bed occupancy is the increased  number of seniors with complex conditions. Post COVID-19, we saw a surge in the numbers. I have reported to the House earlier that average stay went up from about six days to seven days pre- and post-COVID. That alone represents a 15% increase in patient load.

4.     This is happening against the backdrop of a rapidly ageing population, which compounds the problem, and makes it a long-term challenge.

5.     Mr Singh suggested that we provide dynamic waiting times of Emergency Departments (EDs) across hospitals, publicly, in real time. It is possible but we have been reluctant to do so, for a good reason.

6.     Ambulances today already have a process in place to ferry patients needing urgent care to the nearest appropriate hospital for priority treatment. However, at the EDs, 40% of the cases are not life-threatening or urgent but they ended up there anyway. So our worry is that giving dynamic information may perversely drive more non-urgent cases to the hospitals, and worsen the overall situation.

7.     I know it is very uncomfortable and unsettling for a patient who is quite unwell to have to wait many hours for a bed. But please be assured that hospitals will triage patients quickly upon arrival, and start treatment for urgent cases, even if the patient is waiting for a bed.

8.     Mr Ang Wei Neng raised the issue of Changi General Hospital (CGH), which was also reported in a Straits Times article. CGH has an old structure, with only four ambulance bays. So the queue builds up quite fast. But actually that is not the limiting factor. We can always triage in the ambulance. It is a small problem. What we need to watch out for are ICU occupancy and resuscitation occupancy. If those are full, we divert them. When ambulance bays are full, we can handle it. On the surface it looks bad, but operationally, it is not a huge problem to overcome. 

9.     Associate Professor Jamus Lim suggested using more Urgent Care Centres (UCCs). UCCs have been useful and effective. We have also been using the GPFirst scheme, especially around the Changi area and that is also useful. We will continue to deploy all possible methods to alleviate patient loads at the EDs.

More Hospital Capacity 

10.     To tackle the challenge more fundamentally, we need to expand capacity, and catch up the time lost due to the COVID-19 pandemic.

11.     We opened about 640 new acute and community hospital beds since June last year. They make up the over 11,000 public hospital beds that we have today.

12.     We intend to add another 4,000 beds by 2030. We should see new capacity coming on stream every year from now to 2030.

a. Starting with 2024 and 2025, Woodlands Health will commission up to 700 beds;

b. In 2026, Sengkang General Hospital and Outram Community Hospital are expected to expand by about 350 beds by converting non-clinical areas into hospital wards;

c. In 2027, the Elective Care Centre at Singapore General Hospital is expected to open, with 300 beds;

d. In 2028 and 2029, the redeveloped Alexandra Hospital is expected to open progressively; and

e. In 2029 and 2030, the new Eastern General Hospital Campus is expected to open progressively.

13.     Then we move into the early 2030s. That is when we hope to see the completion of a new regional public hospital that we have started work on.

14.     We have just completed one in the North – Woodlands Health, we are building another in the East, and we are expanding SGH in the central region. So, the next new public hospital should be in the West.

15.     We are planning to site it in Tengah Town, which is an emerging population centre. It will best complement current hospitals in the West. The new hospital in Tengah will be run by the National University Health System cluster.

Doing More for Right-Siting and Telehealth

16.     Notwithstanding this plan to expand capacity, we should not be trapped in the mindset of ‘building hospitals’ when thinking about capacity. There is potential to better anchor care outside of hospitals, in the community.

17.     Not all patients require high acuity care and constant monitoring in a hospital throughout their treatment course. Many need convalescent care and rehabilitation, with the assurance that medical help is readily available nearby.

18.     That is why we have built more community hospitals for sub-acute and rehab patients, and Transitional Care Facilities for patients who are waiting for longer term care arrangements.

19.     With our efforts, the number of long staying patients has come down. These are patients who are medically stable for discharge but have been staying in  hospitals while waiting for longer term care, for longer than 21 days. They are what we refer to as long staying patients. Two years ago, it was about 300 such patients at any one time in our hospital system. Now, it is under 200 such patients at any one time, and there is still room for improvement.

20.     To facilitate appropriate transfers from acute hospitals to community settings, we will also be making a few policy changes, as follows.

21.     One, more funding for community hospitals. Acute hospitals have experienced friction in transferring suitable patients to community hospitals.

22.     Why? For example, certain diagnostic services such as CT and MRI scans, and certain more expensive drugs, are not subsidised in community hospitals today. This is based on the consideration that these are recovering patients and they may not need these interventions.

23.     Unfortunately, this means operational delays in transferring patients to community hospitals. There are patients who are medically ready to be transferred but they are just waiting for a follow-up scan. They should be transferred without delay, and do the scan at the community hospital.

24.     Others worry that after transfer, what if I unexpectedly need a scan, for some reason. Hence they insist on staying in the acute hospital “just in case”.

25.     To remove this friction, from the last quarter of this year, we will allow more diagnostic services like CT and MRI scans, and relevant drugs to be subsidised at community hospitals.

26.     More broadly, we will also align the community hospital subsidy framework to the acute hospital subsidy framework. That way, patients receive the same subsidy rate, which is 50% to 80% throughout their inpatient stay, regardless of settings. With this important enhancement, most community hospital patients will see smaller hospital bills.

27.     The second change is to make Mobile Inpatient Care at Home (MIC@Home) a mainstream service. What is MIC@Home? This is a pilot project where we set up virtual hospital beds at the homes of patients, and have doctors and nurses visit them, as if they are in a hospital. Dr Tan Wu Meng, Mr Pritam Singh, Ms Ng Ling Ling and Ms Mariam Jaafar have asked or talked about such a scheme.

28.     At the end of last year, more than 2,000 patients have benefitted from this scheme. This translates to around 9,000 hospital bed days saved. Having done this for several months, we are convinced that the scheme works well for the patients, and has great potential to relieve stress at hospitals.

29.     Hence, from April this year, MIC@Home will become a mainstream model of care in our public healthcare institutions.

30.     As a result, patients can be assured that they will not pay any more for MIC@Home than they do for acute inpatient care in a public hospital. All our hospitals intend to price MIC@Home similar to or lower than a normal hospital ward. Patients will be supported by subsidies, MediShield Life and MediSave, no different from a physical inpatient stay.

31.     In response to Associate Professor Jamus Lim’s suggestion, I don’t think we therefore need to give an incentive for transition to home care now. It will be better to develop MIC@Home into a well-accepted mainstream mode for acute inpatient care.

32.     We will also further expand the capacity of MIC@Home as a first step from 100 in 2023, to 300 in 2024, with the potential to scale up further.

33.     Third change is to encourage telehealth. 40% of attendances in a typical polyclinic are for chronic care management. Last year, we extended subsidies and allowed the use of MediSave for the use of telehealth for chronic care.

34.     By the second half of this year, we will also expand MediSave coverage to telehealth consults for preventive care, such as follow-up reviews after regular health screening. This represents another 10% of polyclinic attendances.

35.     With this change, telehealth is treated almost the same way as physical consultations in terms of financial support. The only difference is telehealth for common illnesses, i.e. when patients experience symptoms like cough, cold and fever.

36.     Patients still cannot use MediSave for such consults for common illnesses – also for a good reason. We are holding this back as many people have been using such teleconsults as an easy way to get MCs. So there will need to be greater discipline in issuing MCs before we consider this final move.

Not Just About Having More Doctors Either

37.     Another key aspect to expanding capacity is to enhance manpower.

38.     Mr Ang Wei Neng and Dr Tan Wu Meng asked if we need to produce more doctors to meet demand. Yes, we have been and will continue to do so. In fact, intakes into our local medical schools have increased by about 30% over the past ten years, to about 500 now. If you consider each cohort which is now slightly over 30,000, about half of them, 15,000 to 17,000, go to university. Out of that group, 500 are training to be doctors, and still more are training to be allied health professionals and nurses. So we are taking quite a lot of talent.

39.     We are also offering awards and grants to actively attract Singaporeans who graduated from overseas medical schools back into the local public healthcare system. Where does Singapore stand in terms of our doctor-to-population ratio? Ours, in terms of practising doctors, is about 2.6. Let’s put that number into some perspective. Compared to developing countries, we are ahead and higher. Compared to developed economies in Asia, we are similar. In fact, similar to Japan, which is also 2.6; to Korea, to Hong Kong, to Taiwan, all around 2.6. Considering that Japan actually aged much earlier than us, and about 30% of their population is now 65 and beyond, they also have a ratio of 2.6. Then if you compare to developed Anglo-Saxon countries like UK, US, Canada, we are slightly behind, not very far behind. It is when we really compare to continental European countries and Australia, that we are a notch behind. Why is that so? I think there are various reasons. Could be a legacy of the welfare state, could be the fact that European countries don’t really have a tradition of planning for manpower. 

40.     We can explore further. If further increases are needed, but we have to recognise that talent is in short supply across all sectors, and healthcare, we should attract our fair, but not disproportionate, share of talent. Beyond this fair share, countries can also end up chasing its own tail.

41.     Why is that so? For one, it is not a simple numbers game. The right mix of doctors is just as important as the sheer number of doctors. If somehow doctors get registered but don’t practice, it doesn’t help. If doctors are practising but go into areas like aesthetics, it also doesn’t help very much.

42.     In Singapore, graduates from medical schools are already finding it more competitive to get residency positions to be trained as specialists, because there is not much of a shortage in many of these specialist areas.

43.     On the other hand, we are facing shortages in areas like Family Medicine, Internal Medicine, Geriatric Medicine, and Rehabilitation Medicine. This is because as Singapore becomes a super-aged society, we have more patients with complex and multiple medical conditions, needing doctors with these more broad-based skillsets. Hence, MOH has been increasing the number of training positions in these specialist areas.

44.     We have also seen in many countries how the supply of doctors creates its own demand. As more doctors compete for business, there will be a tendency to prescribe more tests, scans, medications and procedures. Patients are not likely to say no, because your health is at stake, and especially if healthcare is free or insurance covers all the costs.

45.     Hence, while Mr Ang Wei Neng provided numbers to show that Singapore’s doctor-to-population ratio is lower than some OECD countries, this did not translate to poorer health outcomes, less accessibility or affordability in Singapore.

46.     For example, we know that the US healthcare system is not the most accessible, unless you have the right insurance. The UK, with a higher doctor-population ratio than us, has eight million patients on their waiting list, and is suffering from a chronic capacity crunch. Germany, also much higher than us in terms of the ratio, is facing a major challenge in meeting the healthcare needs of their seniors across their Landes, or their states.

47.    Conversely, Singapore is delivering quite good health outcomes. A commonly accepted broad measure is the expected healthspan and lifespan of our people. In Singapore, a person is expected to live up to 74 years old in good health, one of the highest in the world, compared to 66 in the US, 70 in the UK, 71-72 in Germany, France, Denmark, Netherlands, Australia etc.

48.     Singapore achieved this by spending about 5% of our GDP on healthcare, compared to 10 to 13% in most developed countries, and 17% in the US.

49.     In short, we have better outcomes with less spending and lower hospital beds and doctor-to-population ratios than many OECD countries. Because it is not just a numbers game. The quality and the mix of doctors, the geographical spread of the country, how the whole system is run, the behaviour of patients – all make a big difference.

50.     We have a lot of room for improvement, but there is no reason to feel bad about ourselves or to envy others. We are in fact in a good place, as we continue to learn from others and strive for improvements.

Tackling Healthcare Cost Increases 

51.     Chair, let me now address the next concern, which is rising healthcare costs. Dr Lim Wee Kiak, Ms Mariam Jaafar, Ms Ng Ling Ling, asked what is driving up healthcare costs.

52.     So in this section, I will talk about the likely reasons for rising healthcare costs, explain the realities of healthcare financing, and what we are doing to try to moderate costs.

Ageing, Technology, Inflation, Moral Hazard

53.     A major factor for rising healthcare cost is that we are getting older, and as we get older, we are more likely to fall seriously ill. Over the last five years, the number of Singaporean seniors increased by almost 20%, from 560,000 to 690,000 now. We are on the verge of being a super-aged society. These are not macro numbers. It directly affects individuals and families.
 
54.     In a family, when one member grows older and falls seriously ill, the entire family feels the burden of healthcare and caregiving costs, and caregiving burden.

55.     Second, advancement in medical technology. Technological advancement can make a car or a smart phone cheaper and better, but in healthcare it is often not the case. New treatments may work better, but always cost more.

56.     For example, advancement in orthopaedic surgeries have made knee replacements much easier to do.

57.     In my constituency, I have met many seniors who have gone through knee replacements, some even for both knees. When I meet them, because I have gone through one, we end up comparing our ‘battle’ scars.

58.     In the past, people with degenerating blood vessels in their eyes due to old age would lose their central vision. Now, the condition can be treated and controlled through repeated intravitreal injections

59.     These advancements allow a person who cannot walk to walk again, and allow a person who would have been blind to see again. The value to the patients is priceless. The cost to the patients has also gone up.

60.     Third, healthcare cost inflation. Even for the same treatment, and I am not talking about medical advancement, the cost has gone up. Inflation all around the world has gone up in recent years, and that has also affected healthcare costs.

61.     A key component of healthcare delivery costs is manpower. In Singapore, manpower is more than half of the cost to run the healthcare system.

62.     We all agree we need to compensate our healthcare workers fairly and competitively. As healthcare demands have gone up in many countries, the competition for medical manpower is now international and has become more intense, and this has pushed up manpower cost, and therefore healthcare cost.

63.     Finally, insurance. Insurance gives us peace of mind, but when the coverage becomes too generous, down to the last dollar, we start to see excessive prescriptions and tests, and even unnecessary treatments.

64.     This is the classic buffet syndrome which has driven up claims. If already paid for, might as well over-eat. Therefore it has driven up claims and insurance premiums. Yet it is frustrating to see insurance companies continue to offer unsustainable terms, presumably competing for market share.

65.     So how do we address rising healthcare cost? We need to first recognise two truisms in healthcare financing.

The Two Truisms

66.     The first truism is that ultimately, the people always pay. Let me explain with a personal example.

67.     When my wife and I moved to Switzerland for a year for me to do my Masters programme in 1999, we had to make a social security payment. It was not cheap – a few thousand Swiss Francs for two of us. It was compulsory. If we don’t pay, we can’t live in Switzerland.

68.     Then we got pregnant. My wife found a good gynaecologist, and each time we visited her, we didn’t have to pay anything. Was it really free? Not really, we had paid for it already – through the rather expensive social security fee.

69.     In Britain, the National Health Service (NHS) operates by the principle of free healthcare at the point of delivery. No UK government has ever touched that principle. They maintain it and it continues to be free at the point of delivery.

70.     But is it really free? Not really, the British have to pay high taxes to finance the NHS. Because there is no cost at the point of healthcare delivery, the waiting times at the NHS are very long. I talked about eight million people waiting. So British patients are also paying with their time and their patience.

71.     There are different ways to pay for healthcare.  By taxes, by compulsory social security payments, through insurance premiums, or personal savings or your personal time. Ultimately, the people always pay – one way or another. That is truism number one.

72.     This leads to the second truism, which is how we pay affects how much we pay.

73.     If a government uses taxes to make healthcare ‘free’ at the point of delivery, then it will likely lead to the buffet syndrome that I just mentioned. There will be over-consumption, wastage and high cost inflation.

74.     If a government leaves the people to buy their own health insurance, people will tend to be very careful, which can moderate healthcare expenditure. But if someone did not buy insurance and is uninsured, they will be underserved.

75.     That is why in Singapore, we weaved together a more robust way of paying for healthcare. It comprises subsidy, funded by taxation; MediSave, which is your own personal savings; MediShield Life, which is the national insurance scheme; and MediFund, which is the final social safety net – what we term S+3Ms.

76.     S+3Ms ensures universality because it provides all Singaporeans access to quality healthcare. It is also a targeted system, focusing assistance on those who need it most.

77.     To illustrate, subsidies of up to 80% are extended to C Class wards in public hospitals, but not A Class wards, and not the  private hospitals.

78.     MediShield Life covers a significant part of the remaining bill after subsidy, but we ensure some co-payment by patients, mostly through MediSave, so that there is less of a buffet syndrome.

79.     MediFund comes in for the lowest income who cannot afford the co-payment.

80.     This is a key reason why we can achieve good health outcomes with national healthcare spending of 5% GDP, compared to jurisdictions with blanket assistance schemes.

Subsidies are Rising

81.     With these two truisms in mind, what can we do and what are we doing about rising healthcare cost?  

82.     First, let me start with the S – subsidy – of S+3Ms will continue to have a big role to play.  

83.     When I first joined the Government in 2015 and entered this House, I was the Acting Minister for Education. MOE’s budget was the second largest amongst Ministries, at about $12 billion, only behind MINDEF’s. MOH’s was a distant third, just over $9 billion.  

84.     Today, nine years later, I became Minister for Health. MOH’s budget has far surpassed MOE’s, to almost $19 billion, and is not very far behind MINDEF’s.   

85.     MOH’s budget is tax funded. It is channeled to fund many aspects of the healthcare system – to build new healthcare infrastructure, operate hospitals, polyclinics and nursing homes, procure medicines and equipment, develop new IT systems, hiring doctors, nurses and all our medical personnel.  

86.     MOH’s tax funded budget constitutes healthcare subsidies, which have been rising significantly over the years.

Review MediShield Life

87.     The second M – MediShield Life – will also need to work harder. To this end, we will be conducting a comprehensive review of MediShield Life.  

88.     MediShield Life is a national health insurance scheme. It covers everyone for life, even those with pre-existing illnesses. It is specifically designed for the great majority of subsidised patients who are encountering a major health episode.

89.     That last sentence needs some deciphering. It contains a couple of important phrases which I will explain. I said ‘covers great majority of subsidised patients’, because most Singaporeans seek subsidised care, and the great majority of them need financial assistance to foot their healthcare bills.    

90.     Hence, a C Class Ward patient will find that after subsidy, MediShield Life claims should substantially pay for the rest of his hospital bill. For a patient who goes to a private hospital, he will find that MediShield Life covers only a modest part of his hospital bill. That is how MediShield Life is focused on the subsidised patients, especially those who use C Class Wards.

91.     ‘A major health episode’, because this upholds the spirit of insurance, which is to protect us against the rare occasion when we incur a big hospital bill because we fall seriously ill.  

92.     With that context, let me report the state of MediShield Life today. It was designed such that nine out of ten subsidised bills are adequately covered. What remains are relatively small and expected co-payments, which can be paid from MediSave.  

93.     However, this nine in ten benchmark is being eroded, because the size of hospital bills is getting larger and larger. Bill sizes have grown by 5% annually in public hospitals, and by 7% annually in private hospitals, over the last few years.  

94.     As a result, the proportion of subsidised bills adequately covered by MediShield Life has come down to around eight out of 10, and is expected to slip further.  

95.     The practical impact is that subsidised patients are seeing hospital bills that are unexpectedly large. And after subsidy and MediShield Life, there is still a substantial out-of-pocket component left. This is when higher healthcare costs really start to bite. 

96.     MOH has therefore tasked the MediShield Life Council, which comprises various stakeholders led by a private sector person, to comprehensively review the scheme. We have given the Council some direction.  

97.     First, enhance MediShield Life to give Singaporeans greater assurance against large bills. This means increasing how much a patient can claim from MediShield Life – this is what we call claim limits – for both surgeries and hospital stays.

98.     We envisage a fairly significant increase in claim limits. For example, for an episode involving angioplasty where a stent is placed into your heart to open up a blocked artery plus a few nights stay in ICU, the claim limits may need to double. This will reduce out-of-pocket costs significantly. 

99.     Second, enhance other outpatient coverage. We also need to raise the claim limits for treatments such as kidney dialysis, to reduce out-of-pocket expenses for patients. The Council will also explore extending coverage to more types of outpatient care.  

100.     Some of the most costly outpatient treatments are for cancer. Ms Sylvia Lim asked if we could improve financial literacy for patients to better plan against such a disease. 

101.     There are resources available online and we will raise the public’s awareness of them. But I think the issue goes beyond financial literacy. It is actually more serious than that. We are facing an especially difficult challenge for cancer, as treatment costs were rising uncontrollably. So I am not surprised at the survey results cited at all.

102.     Hence, we recently reviewed cancer drug financing and introduced changes that allowed us to negotiate for lower prices for cancer drugs. As a result, prices for approved cancer drugs have since dropped significantly, some by up to 60%. The impact is still playing out, and we will continue to monitor the situation. 

103.     Third, the Council will consider expanding MediShield Life coverage to new groundbreaking treatments, specifically Cell, Tissue and Gene Therapy Products (CTGTPs). 

104.     Medical science is advancing rapidly, and CTGTPs have the potential to revolutionise healthcare and deliver effective treatment of previously incurable diseases. Some describe this as the equivalent of a moonshot for healthcare.  

105.     Essentially, the treatment involves extracting blood from the patient, teaching and equipping the cells in the blood to target and kill, say, cancer cells, and then putting the cells back into the patient’s body to do its work. It is a one-time treatment. 

106.     However, while the technology is promising and advancing fast, it is nascent, and very expensive. It could cost anything from a few hundred thousand dollars to a few million dollars, per treatment. 

107.     We want to start including CTGTPs under MediShield Life. But we need to put in place safeguards to ensure that the financing of CTGTPs is sustainable. For instance, we will need to extend MediShield Life coverage only to treatments that are assessed to be safe, clinically effective and cost effective. In other words, if a treatment costs a few million dollars, with a small hope of curing a small group of people, it is not cost effective.

108.     This is a significant step to help all Singaporean patients, regardless of their income levels, have access to cost effective, novel, state-of-the-art therapies. 

109.     These proposed changes will better protect subsidised patients against major health episodes. MediShield Life premiums however will inevitably go up.  

110.     The last time we reviewed the scheme, premiums went up by 25% on average.  But rest assured that we will do the necessary to ensure that as far as possible, premiums can be paid fully by MediSave.   

111.     For example, we will consider enhancing premium subsidies, or have MediSave top-ups for specific groups. We may have to use more MediSave for small hospital bills so that MediShield Life can better focus on big hospital bills. That way, we moderate premium increases. 

112.     No one will lose MediShield Life coverage due to a genuine inability to afford the premiums.

113.     We will share more details when the Council completes its review in the second half of this year.

A Healthier Population

114.     Mr Chair, while we address these immediate concerns, we should not lose sight of the longer term, strategic direction of healthcare. That is, continue to build health, and not just treat illnesses.  

115.     We have crystalised this strategy around Healthier SG. Ms Ng Ling Ling, Mr Yip Hon Weng and Dr Syed Harun asked for an update on Healthier SG. I am very glad to say that it has been progressing encouragingly.