In 2001, only 27 per cent of all patients chose C-class beds, where the Government foots 80 per cent of the bill.

Last year, 40 per cent did so, and this has put a strain on hospital finances.

The demand for B2 class, where the Government pays about 65 per cent of the bill, remained at about 35 per cent.

But demand for the private A class fell by 8 per cent, while that for the B1 class dropped 25 per cent. Of the 5,000 public hospital beds, 29 per cent are C class and 41 per cent, B2.

The reason higher demand for C-class beds puts a strain on hospital finances has to do with the way Government subsidies are given out.

In the past, the money was given out based on the number of subsidised patients served.

But now, hospitals get a fixed sum and have to divide it among a greater number of patients.

The strain that has resulted is likely a major reason prices for both inpatient and outpatient subsidised care were increased recently. If the trend towards C-class beds continues, more price increases could result.

Industry watchers say the increased demand for highly-subsidised beds can be attributed to an ageing population requiring long- term care and the growing realisation that health care is expensive.

Health economist Phua Kai Hong says people are becoming more aware that their Medisave money may not be enough for their lifetime hospital needs.

Dr Lim Suet Wun, who heads the National Healthcare Group of hospitals and polyclinics, said better quality C-class care is another reason for demand - more people consider it 'value for money'.

In fact, some of the patients who opt for C-class wards can afford better quality beds, but choose otherwise because of the value for money factor.

Madam Halimah Yacob, head of the Government Parliamentary Committee for Health, said people with chronic illnesses who need long-term care are more likely to pick subsidised wards so they do not deplete their Medisave and personal savings.

She added: 'This, coupled with the general sense that it is difficult to downgrade once you are in a higher class ward, could lead many more people to opt for the C class.'

But she said this does not mean that these patients are 'abusing' the system.

Both Dr Lim and Madam Halimah also pointed out that many older people do not have much in their Medisave accounts. Only a third of those over 60 years old have Central Provident Fund accounts, Madam Halimah said.

Health Minister Khaw Boon Wan told The Straits Times that many factors are at play.

'It is partly caused by ageing of population as the elderly stay longer in hospitals and tend to opt for C or B2 classes to save on cost,' he said.

But Mr Khaw said that the shift towards C class is not the trigger for means testing, which is a 'standalone policy option'.

The minister had said in April that means testing - to ensure that subsidies go to those who need it most - is necessary to prevent abuse of public health services by the well-off.

Once means testing is introduced, possibly by next year, demand for C-class beds will likely ease.

Details are not out yet, but it is likely to start with patients who stay five days or more. Many of the older patients with multiple problems will fall into this category.

salma@sph.com.sg