Critical for private medical providers to change their ways

It is alarming to learn that healthcare costs have risen by 30.6 per cent from 2005 to 2015, which is significantly faster than the rate of general inflation in Singapore (Two quick fixes to rein in healthcare costs; April 13).

However, it is hardly surprising that the biggest culprit behind the escalating cost of healthcare is the private sector.

According to research carried out by the Life Insurance Association covering the period from 2012 to 2014, overall bill sizes at private hospitals grew by 8.7 per cent annually, compared to the modest 0.6 per cent increase at public hospitals.

Private medical insurers have long suspected that certain doctors and hospitals in the private sector routinely put their bank balances before their patients' needs.

Such friction between insurers and medical providers has existed for years.

Relations appear to have further deteriorated. Insurance companies have declared that claims from private hospitals have gone up at a faster rate than expected, and it appears that their containment measures have been unsuccessful so far, since premiums for Integrated Shield Plans have risen by as much as 37 per cent this year.

As long as healthcare is a business and private hospitals are owned by publicly-listed companies, the responsibility to shareholders in terms of profits and dividends outweighs obligations to patients under their care.

In order to meet lofty financial targets, some of these hospital groups will be tempted to charge way above what they should. Unethical doctors may spin out treatment cycles and order unwarranted laboratory and radiology tests, owing to referral fees from the hospitals.

Another big concern is putting patients through unnecessary surgery and overlooking better options. A significant proportion of a surgeon's remuneration is related to the procedures they perform. It is in their financial interest to justify that an operation goes ahead.

Requiring policyholders to contact their insurance company before beginning treatment is a prudent move. Routine pre-authorisation is crucial to reining in abuse. Patients can also be assured that their policy covers their treatment.

Insurers should also give policyholders the option of getting a second or third opinion to save themselves from intrusive and potentially risky diagnostic tests and operations.

Change is critical if Singapore is serious about achieving the quality of efficient healthcare that the country needs. Major insurers, because of their size, have a special responsibility to tackle the problem.

Edmund Khoo Kim Hock

A version of this article appeared in the print edition of The Straits Times on April 26, 2017, with the headline 'Critical for private medical providers to change their ways'. Print Edition | Subscribe