Elderly healthcare costs in Singapore are projected to rise tenfold over the next 15 years to more than US$49 billion ($66 billion) annually, according to a report.
This means an average of US$37,427 will be spent on healthcare for each elderly person by 2030. This is the highest in the Asia-Pacific region, just ahead of Australia.
The report was released yesterday at the launch of Marsh & McLennan Companies' new Asia-Pacific Risk Centre, which is supported by the Economic Development Board. The firm provides professional services such as risk management.
The US$49 billion figure was derived by taking into consideration demographic changes, long-term care costs and medical cost inflation. It includes public expenditure, private insurance and out-of-pocket spending.
The report estimated that US$5 billion was spent on healthcare for the elderly last year as a senior citizen's healthcare expenditure is estimated to be four times that of an average person's. By 2030, the healthcare expenditure for each senior is estimated to rise from US$8,196 in 2015 to US$37,427.
"It's a conservative estimate given that the numbers do not take into account indirect costs, such as transport, and opportunity costs from caregivers' time," said Dr Jeremy Lim, a partner in Oliver Wyman global health practice.
"It also assumes that we have the same ready access to cheap foreign labour which may not be the case in the future."
Dr Ng Wai Chong, chief of clinical affairs at Tsao Foundation, agreed. He felt the figures might even be an underestimate if the current health and social care systems are not improved and people do not manage their own health more proactively.
Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam said last year that healthcare spending in Singapore is expected to rise from over $9 billion last year to over $13 billion in 2020.
These are just public expenditure figures, the Ministry of Finance confirmed yesterday.
The implications of these new numbers are wide-ranging, said Mr Wolfram Hedrich, executive director of the Asia-Pacific Risk Centre.
"Our findings will influence government policies and decisions on healthcare infrastructure spending. Individuals need to carefully consider how well-prepared they are to fund their retirement healthcare needs, especially given the limited range of affordable insurance products," he said.
Dr Lim said the proposed review of ElderShield - announced during last Sunday's National Day Rally - is timely as it covers only the severely disabled and the payout is modest.
"We can also look at other new solutions such as having reverse mortgage schemes to allow people to monetise their housing assets to pay for healthcare when they are old or allowing the use of MediShield and Medisave overseas if their price points are lower," he added.
Dr Ng said there is a "keen awareness of the risk of rising healthcare costs at the government, community and personal levels".
When asked for its comments on the report, which it received yesterday, the Ministry of Health said it is studying it and will respond at a later time.
Marsh & McLennan Companies has four operating firms - insurance-broking and risk-management firms Marsh and Guy Carpenter as well as consulting firms Mercer and Oliver Wyman.