Medical IPOs resulting in higher charges

Dr Desmond Wai has rightly pointed out that doctor's fees are not the only reason for the staggering 18 per cent annual increase in private healthcare costs (More in-depth analysis of healthcare costs needed; Jan 3).

The private hospital market in Singapore is an oligopoly, with four premier facilities owned by the same publicly listed company.

The sum of all fears with regard to medical IPOs resulting in higher charges and monopolistic practices has, unfortunately, come to pass.

As healthcare is a business, operators of private hospitals are responsible to their shareholders in terms of profits and dividends. Is it any wonder that the escalating cost of healthcare has become an issue?

The Health Insurance Task Force reported that the average bill size at private hospitals is almost three times that of their public counterparts.

Some of these private facilities embed hidden charges into inpatient bills that are not obvious to the layman. A major cause of expensive bills is the enormous mark-up for basic medication and supplies. These charges do not include any service element as there are also daily treatment, ward, nursing and miscellaneous fees on top of the charges for room and board.

Private hospital charges are largely unknown to the patient before admission, when only an estimate of the final bill is given. It is difficult to decipher or verify complex hospital bills because of the arbitrary manner in which services and consumables are levied at times.

Another reason for the increase in healthcare costs is the easing of advertising rules for the profession.

Now that private hospitals are allowed to advertise their services, the impact of patients' feedback on overcharging and unnecessary treatments has diminished. The cost of advertising is, of course, passed on to the patients.

The ultimate losers from spiralling prices are not merely the patients, but also stakeholders, such as private and public hospitals, as well as doctors, who may lose more patients to up-and-coming medical tourism destinations in the region.

Singapore's reputation as a regional medical hub may also be tarnished as a result.

The rising concern over cost implications of medical IPOs cannot be overstated.

Edmund Khoo Kim Hock

A version of this article appeared in the print edition of The Straits Times on January 12, 2018, with the headline 'Medical IPOs resulting in higher charges'. Print Edition | Subscribe