Higher spending on healthcare does not mean a healthier population: Ong Ye Kung

SINGAPORE - The Republic’s healthcare challenge in the coming years is not spending more, but to ensure that Singapore does not go the way of many OECD countries where healthcare costs are “spiralling and escalating out of control”, Health Minister Ong Ye Kung told Parliament on Wednesday.

Better health outcomes can be achieved by continuing with Singapore’s sensible and practical approach of having different layers of safety nets – subsidies, MediShield Life, MediSave and MediFund – and combining it with the

Healthier SG strategy

to reduce the sickness and disease burden even as the population ages, he added.

Mr Ong was responding to Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai’s assertion on Tuesday that the Government has not spent enough to cover Singaporeans’ healthcare costs, and should be spending more to help with medical bills.

Mr Leong had cited data to show that the Government’s share of healthcare expenditure is lower than the average among Organisation for Economic Cooperation and Development (OECD) countries. The majority of the 38 OECD members are regarded as developed countries.

Mr Ong noted that it is widely accepted by health economists that spending more on healthcare does not mean better outcomes. For instance, the United States and Britain spend about 17 per cent and 10 per cent of their gross domestic product on healthcare respectively, compared with Singapore’s 4 per cent.

Despite this, both those countries are facing a high incidence of chronic illnesses and high obesity rates, and expected lifespans there are lower than in Singapore, he said.

Conversely, Singapore has delivered good outcomes given how much it is spending, while keeping healthcare affordable for the middle- and lower-income groups, Mr Ong added. Seven in 10 Singaporeans in subsidised hospital wards do not pay any out-of-pocket expenses, and nine in 10 pay less than $500 in cash.

“So when Mr Leong asked the Government to spend more to lower out-of-pocket expenses further, he really meant to channel resources to unsubsidised patients, that is, those staying in A class wards or private hospitals,” he said. “This is where the big bucks and big expenditure are, and it will push our healthcare expenditure and spending to the levels of OECD countries.”

Mr Leong also failed to mention that such spending ultimately has to be raised from the people through taxes, and made no mention of where PSP will get the funding from, Mr Ong added.

The reality is that government healthcare spending has already been rising, having tripled between 2011 and 2020, and is expected to triple again between 2021 and 2030, said Mr Ong.

Mr Leong had also called for increased spending from the Pioneer Generation (PG) and Merdeka Generation funds, as he felt that spending from those funds has been small relative to their total assets.

This understanding is misplaced as both funds were sized based on the projected lifetime cost of the benefits, said Mr Ong.

He noted that PG members are as young as 74 and “still have quite a bit of runway ahead of them”, though the Government will continue to review the adequacy of both funds.

The Health Minister also responded to Workers’ Party MP Jamus Lim’s suggestion that Singapore’s medical infrastructure is too lean, and that the current hospital bed crunch speaks to a need to relook healthcare capacity.

Mr Ong said every country is facing a similar crunch post-Covid-19, including the OECD countries despite their higher bed-to-population ratio.

The reason for the bed crunch here is that the average length of hospital stay has increased by 15 per cent compared with before the pandemic, he said. This is likely a result of more older people falling ill due to an “immunity debt” as safe management measures were lifted, a problem exacerbated by poorer health from social isolation amid Covid-19.

Singapore is catching up on healthcare capacity as projects delayed by the pandemic – such as the Tan Tock Seng Hospital Integrated Care Hub and Woodlands integrated health campus – are now being completed, said Mr Ong.

More transitional care facilities will also be set up to offer rehabilitative care for more stable senior patients.

Closing the debate on the motion to support healthcare here beyond the pandemic, Nominated MP Tan Yia Swam responded to Mr Leong’s charge that drug prices were “marked up unreasonably for non-subsidised patients” in order to cross-subsidise others.

Dr Tan, who is a breast surgeon, asked if Mr Leong had evidence that this was happening, and noted that non-subsidised patients are those who opt for an A-class or B1-class ward, or foreigners.

“I, as a doctor, would think that allowing market forces to determine costings is fair, or would Mr Leong also want taxpayers to pay for everyone?” she asked.

Mr Leong said he had heard “feedback from residents (that) they pay different prices when in different classes”, and that while it is understandable for services to be priced differently based on ward class, this should not be the case for drugs.

The NCMP had earlier called on the Government to centralise drug procurement across public and private medical institutions, as doing so would reduce the cost of medicine.

In response, Mr Ong said Singapore deliberately chose to have a variegated market for healthcare, with private-sector doctors having different business models.

For instance, some private doctors charge very low consultation fees but make a margin on the drugs they sell, while others do the reverse, he said.

“Sometimes you want to let market forces operate, but at the same time have some discipline through... what we subsidise and what we don’t, and I think that’s how we rein in unnecessary healthcare costs,” said Mr Ong.