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Mitigating Rising Healthcare Cost In Singapore


Healthcare inflation is a measurement for the rate of increase for healthcare related expenses paid by patients after government subsidies. Between 2011 and 2016, the average annual healthcare inflation rate in Singapore was 2.4% as compared to the Organization for Economic Cooperation and Development (OECD) where the average was 1.6%.


In Singapore, our national healthcare spending has increased by more than 60% from $11.5b in 2011 to $18.8b in 2015, as we built more healthcare facilities and hired more healthcare workers to meet our growing healthcare needs. As reported by The Straits Times, elderly healthcare costs in Singapore are projected to rise tenfold by 2030 to more than US$49 billion ($66 billion) annually. This statistics is the highest in the Asia-Pacific region.


Reasons For Rising Healthcare Costs


1. Increasing Overheads

The cost of running a medical practice has gone up tremendously over the past few years. As we progress to build more facilities to ensure that healthcare services are available island wide, to bring in more capacity and competition thus lowering costs.


However, we are short of skilled medical personnel. As mentioned by Dr. Wai in his interview with Today, skilled medical personnel are offered a big pay rise to join new hospitals. In return, existing hospitals have to match the pay rise to keep their staff. In addition, skyrocketing rents for clinics are also a contributing factor for rising overheads.


2. Advances In Medical Technology

Progress in technology has revolutionised healthcare. For instance, in the past, patients with unresectable liver cancer where the affected portion of the liver could not be surgically removed only had a few months to live. However, new treatment options such as live-donor liver transplantation, and even an oral chemotherapy drug, which can prolong the lifespan of patients are available now. The downside is both treatments are costly and hospital bills can skyrocket to hundreds of thousands of dollars.


3. Increase In The Aging Population

Between 1965 and 2015, Singapore’s population grew from 1.9 million to 5.5 million. However, the number of citizens aged 65 and above is increasing rapidly, as population growth slows. The size of this group of citizens doubled from 220,000 in 2000 to 440,000 today and is expected to increase to 900,000 by 2030. Based on current trends, the population pyramid will be inverted with a more elderly population by 2050 despite immigration. With a shrinking labor force, there is lesser tax revenue to finance Singapore’s healthcare, pushing healthcare cost up.


What Can Singaporeans Do?


1. Regular Checkups

Going for screening is an important part of staying healthy and fit. Health screening is important to help detect disease before any symptoms are present. Under the Health Promotion Board’s (HPB) Screen For Life programme, recommended screening tests for chronic conditions i.e. hypertension, diabetes, and lipid disorders are offered at subsidised rates. Elderly patients can also use their Medisave (up to $400 per account per year) for the management of 19 selected chronic conditions under the Chronic Disease Management Programme at Medisave-accredited clinics.


2. Keep Yourself Updated With The Healthcare Schemes & Subsidies

Singapore has a multi-layered healthcare scheme that provides subsidies to Singapore Citizens and Permanent Residents before they would need to tap into their Medisave, Medishield and finally Medifund to pay for their healthcare expenses. Medisave is a national medical savings scheme which helps individuals put aside part of their income into their Medisave Accounts to meet their future personal or immediate family's hospitalization, day surgery, and certain outpatient expenses. MediShield Life is a basic health insurance plan which helps to pay for large hospital bills and selected costly outpatient treatments, such as dialysis and chemotherapy for cancer. Lastly, Medifund is an endowment fund set up by the Government to help needy Singaporeans. It is a safety net for patients who face financial difficulties with their remaining bills after receiving Government subsidies and drawing on other means of payments including MediShield Life/Integrated Plans, Medisave and cash.


3. Regular Review Of Insurance Portfolio

Despite adopting healthy lifestyle habits, one is still susceptible to illness. Therefore, purchasing healthcare insurance for yourself and your loved ones is critical. Statistics have shown that 8 in ten Singaporeans are potentially under-insured. It is wise to constantly reach out to your financial advisor to plan and prepare yourself for unexpected situations. Scrambling to find solutions to cover your healthcare costs only when an unfortunate event happens will only add burden to you and your loved ones.


At the end of the day, healthcare providers want to deliver cost-effective healthcare to their patients. Any doctor or hospital that charges unreasonably high fees will not be able to attract patients in the long run. However, it takes all parties — the doctors, hospitals, patients, insurers and the regulatory bodies — to act together to achieve cost- effective health care.

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