SINGAPORE - Private sector doctors here have openly expressed their unhappiness with Integrated Shield Plan (IP) insurers for excluding many private specialists from their panel of doctors for policyholders.

They say the panels are "highly exclusive", with private specialists accounting for only 21 per cent of all doctors on the panels of many IP insurers.

They also say the process of choosing doctors for inclusion as preferred providers in the panels is unclear, and note that several IP insurers reimburse doctors at rates that are "clustered around the lower limit only".

These are key points raised in a position statement on "troubled" IPs by the Singapore Medical Association, which represents most doctors here, that The Straits Times has obtained.

The rift between private sector doctors and IP insurers has intensified in recent months, placing how recent policy changes have affected policyholders in the spotlight.

IPs offer benefits such as coverage for better-class wards in public hospitals and private hospital stays. Currently, all IP providers have their own panel of preferred doctors that policyholders are encouraged to pick from. Having such panels is meant to help the insurers manage escalating costs, as they want to ensure doctors will not overcharge.

The panels were among measures recommended by the Health Insurance Task Force in 2016 to help address the overcharging, over-servicing and over-consumption of healthcare services.

Many doctors are questioning why they are excluded from the panels when they have a good track record and charge fees that are within the fee benchmarks given by the Ministry of Health (MOH).

Some have been rejected from joining the panels and others have lost patients with whom they have built up a rapport after these patients switched to panel doctors to avoid unnecessary out-of-pocket expenses, which some could not afford, said SMA president Tan Yia Swam.

In 2018, MOH phased out new riders or add-on insurance plans that cover the entire medical bill. It meant that from April 2019, the riders sold required policyholders to co-pay at least 5 per cent of their hospital bills. The full riders sold in the year before this will transition to these co-payment riders in April this year.

The co-payment is capped at $3,000 a year, provided the policyholder seeks treatment from the insurers' preferred healthcare providers or obtains pre-authorisation to see a doctor not on the panel.

If the treatment is not pre-authorised, policyholders who want to see their own doctor will have to pay 5 to 10 per cent of the bill, with no cap.

Limited choice of panel doctors

SMA's Dr Tan has seen some patients reluctantly switch to a panel doctor after they were given a major breast cancer diagnosis.

"It's an emotional diagnosis and they would like to stay with the same doctor for the surgery and for peace of mind," she said.

"I feel sorry for them, in the midst of this, feeling distraught and trying to handle the diagnosis, trying to decide what surgery to do and worrying about the future, and when it comes time when they need the insurance, they feel the insurer has let them down."

There are also patients who do not make use of their IP, as they are unsure of what is covered under them and thus do not want to risk the shock of high out-of-pocket expenses.

In a recent Forum letter, the Life Insurance Association Singapore (LIA) said that policyholders who seek treatment with panel doctors (instead of non-panel doctors) may have some benefit enhancements, such as being able to have a co-payment cap without needing to do pre-authorisation, having lower deductibles, or a longer period of pre- and post-hospitalisation cover.

An LIA Singapore spokesman told The Straits Times that panel doctors are selected based on quality and reasonableness of charges. "Insurers have an interest in ensuring that their panels are comprehensive and provide good quality and affordable care, as this helps insurers to manage claims costs," he said.

"It requires time and effort to properly vet and monitor panel doctors, which therefore imposes limits on how large panels can be."

Still, PR consultant Oo Gin Lee, 51, who has an IP, does not see the need to limit panel doctors or to even have a panel in the first place.

"Cost is only an issue when the doctors overcharge. So, one solution to manage costs is not to limit the doctors but to make the fee scales clear," he said.

"If not, what is your selection criteria? It should not be based on whether I like your face or not."

Having full riders is a "utopian dream", he said. "It's like going to a buffet. Unless you impose a charge on wastage, some people are going to waste the food."

However, it's a "terrible idea" to link premiums to claims like in motor insurance, he said.

"If you get two motor claims a year, no one else will insure you but your own motor insurer, who will increase your premiums," he said.

"Now, if you get sick and make a claim, your premiums will rise. Do we want a situation where people don't want to claim because it would cause their premiums to rise?"

Insurers can change their rules and their panel doctors every year, but the policyholder cannot keep changing their plans, he said.

Changing insurers is not an option for those with pre-existing conditions, as these will not be covered.

Why IP insurers appear to be taking losses

In its position statement, the SMA said IP insurers appear to be loss-making not because of excessive or higher claims but due to their spending on non-healthcare items.

It noted that for 2016-2019, the estimated average payout per claim slipped by 1 per cent, which shows that payout size remained unchanged during those years. Instead, the management and commission expenses of IP insurers rose rapidly in that same period.

IP insurers "must take much of the responsibility for the quagmire that they find themselves in: where IPs with as-charged and first-dollar comprehensive riders have consequentially higher and more frequent claims by policyholders" since they were the ones who introduced these "add-on" plans, SMA said.

The association suggested that insurers can be made to spend 85 to 90 per cent of the premiums collected on health costs, instead of the current 75 per cent, as this would help "instil cost discipline in IP insurers".

Dr Tan, who is a Nominated Member of Parliament, had previously asked about the proportion of Singapore residents who need an IP. The combined market share of private hospitals and A class and B1 class beds in restructured hospitals is estimated to be in the range of 30 to 35 per cent. "Yet the proportion of Singapore residents buying an IP is nearing 70 per cent," she had said in parliament.

Right now, the insurers' IP businesses are indirectly subsidised by the Government when IP policyholders voluntarily downgrade to subsidised wards in restructured hospitals when they are entitled to higher ward classes. As the Government's budget is finite, this deprives poorer patients of more subsidies, she had said.

One way to improve the long-term sustainability of the IP sector would be to consider whether there is a need to have seven IP insurers, as having too many of them leads to a duplication of resources and costs, said the SMA.

Meanwhile, it is planning two initiatives this year to combat this: Getting doctors to rank IP insurers via an annual survey, as well as setting up a committee to gather feedback on IPs and health insurance from doctors and the public.

ST has contacted MOH for comments.

Historical context of Integrated Shield Plans (IPs)

- IPs have been offered since 1994, when NTUC Income introduced IncomeShield. This came four years after the MediShield health insurance scheme was introduced.

- IP policies that were sold between 1994 and 2005 had co-payment features such as co-insurance and deductibles.

- In 2005, a plan that pays medical bills "as-charged" was introduced. In 2006, policyholders could buy riders or add-on plans to cover the entire medical bill.

- In 2007, the Singapore Medical Association (SMA) fee guidelines for medical procedures that had been in place since 1987 were withdrawn.

- The Health Insurance Task Force was set up in 2015 to rein in rising costs and its report was published in 2016. MediShield was revamped and replaced by MediShield Life in 2015.

- In 2018, the Ministry of Health (MOH) published fee benchmarks for the 222 most common procedures. Each benchmark came with a lower and an upper limit.

MOH also halted the sale of full riders, which allowed policyholders to not pay a cent. Thus, anyone buying a new rider from April 2019 would need to pay at least 5 per cent of his hospital bill. This is capped at $3,000 a year if the policyholder goes to the insurer's panel of doctors or has pre-authorisation to see the doctor they want.

- Those who bought full riders from March 8, 2018 to March 2019 will transition to the new riders with the co-payment feature upon their renewal from April this year.