I applaud the Ministry of Health for finally bringing back fee benchmarks for surgical procedures by private surgeons (Opting for private surgeon? See fee guidelines; Nov 14).

The decision in 2007 to remove fee guidelines resulted in two detrimental effects to healthcare services in Singapore.

On one extreme, some surgeons took the opportunity to charge exorbitant amounts based not necessarily on the complexity of the case or their ability to deliver results, but on what they felt they could milk from the patient or his insurance company.

This has resulted in Singapore's private health sector gaining the reputation of being very expensive in the eyes of foreign patients, many of whom have moved to neighbouring countries where the healthcare costs are much lower.

The case of Dr Susan Lim, whose bill for seven months of cancer treatment in 2007 for a member of the Bruneian royalty totalled $24.8 million, is an extreme example of this. Many more cases have gone under the radar.

On the other extreme, third-party agencies arose on the pretext of helping insurers keep their claims payouts low for a fee.

In order to attract business from insurers, they capped doctors' fees at an artificially low level. This level is generally well below the lower end of the range of charges for each procedure as published on the Ministry of Health's website.

They prey on surgeons or proceduralists willing to undercut themselves and the market in addition to paying the third-party agency a commission in the hope of getting a bigger share of the pie.

This has created an unfair system of referral to panel specialists, where patients may not be getting the best care.

Panel specialists have a great incentive to perform more procedures, perhaps even unnecessarily, to make up for the opportunity cost of treating patients at artificially low fees, as well as the cost of giving these third-party agencies a cut.

Some specialists also charge more for treating patients not covered by their agreement with the third-party agencies in order to make up for the loss of revenue from treating third-party, agency-referred patients, thus further increasing healthcare costs.

With the new fee benchmarks, I sincerely hope both of these undesirable elements in private healthcare will be kept in check and eventually eradicated.

Andrew Yam Kean Tuck (Dr)