Consumers urged to stay fit and consider co-payment options; insurers advised to look at value rather than cost
More awareness and collaboration among the key stakeholders in the healthcare sector are essential to ensure that medical costs remain affordable.
Consumers should also assume greater responsibility for their healthcare, including taking preventive measures to stay healthy and considering co-payment options, according to the five panellists at a recent Straits Times Roundtable moderated by me.
Pricier healthcare is a top concern for many Singaporeans. Private healthcare costs have been rising at a rate of 18 per cent a year while public hospitals have seen a 12 per cent increase.
Rising medical inflation and claims, especially in the private healthcare industry, have led to persistent increases in premiums for private medical insurance plans across the industry.
Five out of six Integrated Shield (IP) insurers have raised their IP premiums following the expiry of a 12-month moratorium imposed when MediShield Life was introduced on Nov 1, 2015.
Panellist Mack Eng, head of medical at insurer Prudential, which sponsored the roundtable, said that all these trends had prompted his firm to introduce a pricing structure for its IP rider to ensure that private healthcare insurance costs are contained in the long term.
"The pricing approach deter- mines premiums based on claims as well as age, which makes it fairer for our customers," he added.
"Importantly, it encourages customers to take care of their health as those who make low or small claims at private hospitals pay lower premiums than those with larger claims.
"Such a pricing approach, designed to reward and encourage the healthy, is new in Singapore and hence may take some getting used to but we are confident it is a step in the right direction towards sustainable healthcare."
Mr Chye Pang Hsiang, principal consulting actuary at Milliman, recalled that one of the founding principles of medical insurance was financial responsibility but that has been diluted.
"I think we have to come back to the fundamental principle that policyholders need to take some financial responsibility for their own healthcare, and insurance is there to protect consumers against big hospital bills."
MR CHYE PANG HSIANG
Principal consulting actuary, Milliman
MR MACK ENG
Head of medical, Prudential
DR JEREMY LIM
Partner and head, health and life sciences practice, Asia-Pacific, Oliver Wyman
MS PAULINE LIM
Executive director, Life Insurance Association DR CAROL TAN Geriatrician and chairman of The Good Life Cooperative.
Sunday Times Invest editor
Fellow panellist Carol Tan, a geriatrician and chairman of The Good Life Cooperative, said she is worried about the sustainability of the entire healthcare system and its funding because needs are going to rise with an ageing population.
Dr Tan stressed the need to educate consumers and other stakeholders on healthcare.
Noting that prevention is cheaper than cure, she pointed out that our health literacy as a nation is "very low" even though we are highly literate as a country. This means, for example, knowing and understanding the pills we are taking and how to take care of our health.
Taking a step towards healthy living, Prudential is offering a myDNA product to some of its policyholders, Mr Eng said. It will help them better understand how their genes affect their diet, nutrition and exercise, and provides an opportunity to chat with dietitians.
Life Insurance Association executive director Pauline Lim said insurers are moving beyond just paying claims, and offering various incentives and mobile apps to motivate customers to lose weight and providing tips on healthy lifestyles.
Dr Jeremy Lim, partner and head of health and life sciences practice for Asia-Pacific at consultancy Oliver Wyman, pointed out that the key is for insurers to look at value rather than cost.
"There is no point having cheap and bad doctors or cheap and bad healthcare, and if insurers are only looking at cost, then we are really barking up the wrong tree and heading into a deep and dark hole. Please do collect data on financials as well as quality of care," he said.
The panellists also discussed the issue of having fee guidelines so as to establish boundaries on what is appropriate and inappropriate practice, and to minimise wastage in the healthcare system.
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