Consumers expecting a silver lining in the recent report of the Health Insurance Task Force had reason to be crestfallen. They were instead blamed for pushing up health costs by "overconsuming" services, after buying touted insurance plan riders to avoid out-of-pocket expenses. Additionally, they were told to take "personal responsibility for their health and healthcare", and were asked to learn more about healthcare financing.
Earlier, many had hoped insurers would give something back as MediShield Life now offers basic cover for large hospital bills and certain costly outpatient treatments. But that did not transpire, prompting a reader to observe that insurers collectively "collect two premiums for one risk" - as seen when no discount is given to those covered by a group health plan at work and also by their own Integrated Shield Plan (a hedge against employment change). Instead, the premiums for the latter plans will have to go up "to keep up with the claim amounts", according to industry players.
One can forgive consumers for being bewildered by the circular argument: Medical treatment options (they might not know enough about) can lead to ever-higher costs (that are beyond their control). These prompt the use of riders which widen options and thus contributes to price inflation.
Despite the higher premiums being paid by consumers, "the current rate of escalating claim costs in Singapore is not sustainable", insists the Life Insurance Association. Hence it is critical to tackle the root of this cost surge. At the macro level, public healthcare spending will hit over $13 billion in 2020, while eldercare costs are expected to rise tenfold over the next 15 years, according to a report by insurance and risk management group Marsh & McLennan.
Demand is a key factor and is set to grow as the number of seniors increases to 900,000 by 2030. Supply will certainly have to keep pace. But more will have to be done alongside, as the Health Insurance Task Force usefully pointed out. A systemic approach is needed to deal with cases of "over-charging, over-servicing, and inappropriate medical intervention", as patients are ill-equipped to call these out. Insurers should share and mine claims data to identify such practices. They and referral services should work to reward healthcare providers who actively manage medical costs for the benefit of patients. Importantly, there must be far greater transparency to help consumers make better judgments. That should include a comprehensive set of medical- fee benchmarks, with narrower bands for ease of reference. For too long, this issue has been held hostage by the anti-competition argument that guidelines will prop up prices. In healthcare, the reverse is true. Costs keep rising insidiously when consumers are kept in the dark.