Keeping doctors' high fees in check

There are ways to moderate doctors' high fees in private practice. These include setting fee guidelines and letting private-sector doctors 'give back' their time to the public sector at set public-sector rates.


Private specialist Tang Kok Foo commented in this newspaper that he was "amazed at how expensive it has become to be treated by doctors in private practice over the past five years". He also lamented the practice in the public sector where, allegedly, foreign patients can be surcharged up to 400 per cent standard fees.

Earlier this year, the MediShield Life Review Committee in its report identified "high professional fees" as a key driver of private insurance premium increases.

Are Singapore's doctors charging too much? And if so, what should be done about it?

To begin, I would say that Singapore doctors deserve to be well compensated.

There is a strong public interest in ensuring that enough of Singapore's talented young take up medicine and remain in medicine their entire careers, and compensation is an important enabler for this.

Paying doctors incomes comparable to the average Singaporean's would be insufficient. Doctors inevitably compare their earning potential with those of top performers in other sectors and cannot or will not see themselves falling too far short.

That said, doctors are professionals and a key tenet of professionalism is to put society's interest first.

Spiralling health-care costs driven by high professional fees are patently not in society's interest. There is thus a tension between individual and societal good which needs to be managed.

Costs aside, there is another societal dimension: Fees cannot be so high that the public views doctors as people out to fleece patients. The Singapore courts in Lim MLS vs. Singapore Medical Council (SMC) frames this issue as one where "a doctor is subject to an ethical limit on the level of fees".

So how does one draw the line?

There are lessons from other countries that Singapore can draw from. In the United States, Medicare payments are made to doctors based on Relative Value Units (RVUs). RVUs are computed by taking into account three factors: the physician's work defined based on "time, technical skill and effort, mental effort and judgment, and stress", the expenses of the physician's practice, and professional liability insurance.

This is very similar to how other professions price their services. For example, lawyers typically bill on a per-hour basis and the more senior or the more specialised the expertise, the higher the billing rate.

But use of RVUs and other similar schemes is usually confined to state-funded health care. In the private sector, is it fair and reasonable to price based on the patient's ability to pay? Should health care be a market and services allocated based on ability to pay?

In my mind, the answer is both "Yes" and "No".

"Yes", because a doctor's only "product" for sale in a sense is her time. In the private sector, this finite time going to the highest bidder is not unreasonable. "No", because medicine is a profession and citizens with complex medical needs but without sufficient monies should not be deprived of appropriate care.

Singapore cannot afford to have policies which condone such exclusionary practices by medical professionals on the basis of wealth. This is bad policy and even worse politics.

In concrete terms, what then should be done? Three areas merit further consideration.

Fee guidelines

THE first is to bring back guidelines on doctors' fees.

The Singapore Medical Association Guideline on Fees was withdrawn in 2007 due to concerns it was infringing competition laws.

The Competition Commission subsequently advised the guideline would contravene the Section 34 prohibition of the Competition Act. It further noted that the guideline sought to address information asymmetry but considered that there were "other more effective measures" such as pricing benchmarking and transparency.

While data on hospital charges is now published, in accordance with what the Commission envisaged, for various reasons, data on doctors' fees is not put in the public domain in a way that patients as consumers can find meaningful and use in decision-making.

Meanwhile, health-care costs have increased 10 per cent every year, over the last five years.

The SMC is currently reviewing guidelines for "determining ethical and reasonable medical fees" and recently suggested: "Perhaps the Medical Registration Act should be amended to include a provision to override any competition commission concerns on setting of fees and to allow SMC (or another body) to set fees".

It may be time to bring back fee guidelines.

To keep fees reasonable, a good course of action is to publish doctors' fees data. A compromise is to return to having guidelines on fees.

Fee guidelines can help rein in high fees as the guidelines typically set an upper limit to what is considered reasonable. Doctors who exceed this limit will naturally ask themselves whether this can be justified.

Make medical outcomes transparent

THE second way to rein in professional fees is to make medical outcomes public and transparent.

The science of performance measurement in health care has progressed by leaps and bounds in the last decade. This can enable price-setting based on medical performance or outcomes.

For example, the price of a knee replacement operation at a facility with a high success rate might be higher than that at a facility with a lower success rate.

The world-renowned Cleveland Clinic reports its outcomes data, which is benchmarked against itself and other health-care institutions. In benchmarking against itself, the Cleveland Clinic compares its actual outcomes against what they were expected to be, based on calculation of the complexity of the treatments and the patients' medical conditions.

Hopefully with both policy initiatives and public pressure, doctors and hospitals will start publishing such data. This will help patients make much better decisions, at least in the specialities where such benchmarking is possible.

And if patients are paying more, my guess is they would be prepared to, if they feel they are getting more bang for their buck, in terms of better outcomes.

Let private sector give back to public sector

THE third thing that can be done is for private-sector doctors to "give back" to society by treating patients in the public sector.

What happens if a Singaporean in a public hospital has a complex disease, but the best physicians for that disease reside in the private sector? Rather than have the public sector soldier on and risk poor outcomes, or have the unfortunate Singaporean sell everything he or she has to access the needed expertise in the private sector, it would be better to organise a system in which private specialists contribute back a certain proportion of their time at standard public-sector rates.

I'd like to believe the vast majority of my fellow doctors are honest, decent professionals seeking fair remuneration for their skills and expertise painstakingly built up over the years.

I would venture that most would not be averse to giving back their time to the public sector to take care of complex cases at set rates.

Yes, there are and there will always be a few black sheep. But with fee guidelines and robust outcomes measurement, the medical profession and society at large can take these deviants to task.

Finally, with schemes akin to the legal aid schemes organised by the Law Society of Singapore, we can collectively ensure all Singaporeans can avail themselves of the appropriate expertise when needed.

The writer is a partner in the global consulting firm Oliver Wyman.