Strategic Orientations in Singapore Healthcare

ETHOS Issue 09, June 2011

Health systems around the world range in strategic orientation from the United Kingdom National Health Service (NHS)’s approach of free healthcare at the point of consumption, to the United States of America’s private insurance driven model. Singapore’s approach, most saliently articulated in five principles on Affordable Healthcare in a 1993 White Paper, is a combination of strong government intervention through both provision and payment, and aggressive use of market mechanisms. Singapore’s unique healthcare regime is premised on a few key ideological pillars, which can be expressed in terms of two broad themes: financing and delivery.

HEALTHCARE FINANCING

Healthcare financing in Singapore is strategically oriented towards three broad aims:

I. Maximal Value for Society Over the Individual

Professor Bryan Caplan has argued that unlike the US, where pragmatism has often meant “going along with public opinion and openness to political compromise”, the Singapore brand of pragmatism is about “judging policies based on their actual consequences, not their popularity. Pragmatism is virtually a synonym for 'utilitarianism’”.¹

In healthcare, this has meant striving for maximum value. Indeed, some readers may remember the banner that once hung in the College of Medicine Building describing the Ministry of Health (MOH) mission as building the “World’s Most Cost-Effective Health System”.

The Singapore Government has hence not been afraid to make unpopular decisions such as denying coverage for the breast cancer drug Herceptin®. The Straits Times columnist Chua Mui Hoong, writing about her diagnosis of breast cancer while in the US, wrote candidly: “If I had been diagnosed with cancer in Singapore, the chances are higher that I would be dead today.” She went on to explain that “in Singapore, access to promising but expensive treatments are sometimes curtailed on grounds of ‘cost-effectiveness’ and to keep health-care costs down”.²

The decision to not include Herceptin® is consistent with the purpose of the Standard Drug List which is a “list of clinically relevant and cost effective drugs considered as basic therapies that are essential for the management of common diseases afflicting the majority of our population”,³ and reflects a population-based “greatest benefit for the greatest number” approach to public policy.

A similar approach is taken in surgical procedures. For example, percutaneous aortic valve replacement, first carried out in France in 2002, is a safer procedure as compared to open valve replacement for patients with prior open heart surgery. In Singapore, percutaneous aortic valve replacement is offered to patients who are “assessed to be high surgical risk and not suitable for conventional aortic valve replacement”.⁴ However, government funding is currently not available to cover the costs of the artificial valve and patients undergoing the procedure are instead funded through philanthropic donations.⁵ The National Heart Centre actively raises funds for such patients through its Heart2Heart Fund, citing the imperative of bringing “proven and viable treatment modality to our patients at affordable cost”.⁶

II. Personal versus Collective Responsibility and the Principle of Co-Payment

Personal responsibility involves maintaining one’s own health through appropriate lifestyle choices. Singapore’s policy position is that “the provision of free healthcare at point of consumption wrongly incentivises over-consumption by patients”⁷ and Singapore has deliberately distanced itself from the NHS approach adopted by the British. In fact, one year after gaining self-government from British colonial rule, Singapore introduced a co-payment of $0.50 for outpatient consultations with an additional $0.50 surcharge for Saturday consultations.⁸

MediShield today is designed deliberately to avoid first-dollar coverage and in fact has relatively high deductibles and a further co-payment to avoid over-consumption encouraged by third party payments. Medisave minimises the out-of-pocket case component but maintains the philosophy of personal responsibility since Medisave is personal-to-holder, unlike insurance, which is based on risk pooling.

III. Targeted versus Indiscriminate Subsidies

The affordability of healthcare is a relative concept dependent on personal resources. Singapore has targeted subsidies to those most in need of them, through an escalating series of measures over the years. The introduction of different ward classes with varying levels of amenities and corresponding subsidies, and longer waiting times in polyclinics and public hospital specialist clinics were efforts to encourage patients to choose higher levels of service and hence lower subsidies, thus conserving subsidies for lower-income Singaporeans. However, as medical costs continue to escalate, Singaporeans are increasingly turning to public healthcare regardless of personal finances. In 2005, an Information Paper released by the Ministry of Health reported that 22.1% of Singaporeans in the highest income group elected for inpatient care in a B2 or C class ward.⁹

On 1 January 2009, Singapore implemented means testing for inpatient services in the public hospitals to “enable lower-income patients to enjoy more subsidies than higher-income patients”,¹⁰ effecting a tiered subsidy depending on personal income and type of residence. This approach to public policy is by no means confined to healthcare and similar philosophies guide decisions in public housing, where eligibility for grants available to first time owners is based on household incomes.

HEALTHCARE DELIVERY

I. Enabling a Healthcare Market

Healthcare infrastructure in Singapore, as with most other countries, is subject to substantial government planning through the levers of land release, regulation of health professionals and differential financing of public and private sector providers. That said, Singapore does not reject a market model outright and typically begins from a default position of governmental intervention “when necessary where the market fails to keep healthcare costs down”.¹¹ Intervention is not to reinforce a laissez faire approach to the market but rather to put in place mechanisms to ensure proper functioning.

An example of this approach would be mitigating information asymmetry; initiatives such as placement of hospital bill sizes online, making public results of patient satisfaction surveys and issuing of clinical quality information papers improve information availability, allowing consumers to make more informed choices. The National Electronic Health Records agenda may also be considered not only as a patient safety instrument but also a pro-market measure. Electronically captured and transferrable clinical data is akin to the portability of mobile phone numbers in the information communications sector – they lower the barrier to changing providers. They are also a mechanism to capture clinical quality data electronically for risk adjustment and subsequent public release, further narrowing the information gap.

II. Community-Based Provision of Healthcare Wherever Possible

Citing the rise in aging and chronic disease in his 2009 National Day Rally speech, Prime Minister Lee Hsien Loong called for the strengthening of community-based medicine, or what he referred to as "step-down care”. “Step-down care means slow medicine: community hospitals, nursing homes, GPs doing more work, home care – people taking care of sick people at home. Organised properly all this can provide competent, appropriate care especially for the elderly patients.”¹²

The MOH has since made ambitious plans to emphasise the role of community providers such as community hospitals, nursing homes, family physicians and home care providers. This movement is akin to London’s healthcare transformation – guided by the seminal document “A Framework for Action” which articulates cogently “The hospital is not always the answer” and “Most people are best cared for by community services”.¹³ The maxim for London is “localise where possible, centralise where necessary” and this, too, is the approach Singapore is moving towards.

The acute hospitals will always play a crucial role in the healthcare ecosystem. That said, the coming years will see hospital-based care positioned more as a transient phase in resolving a patient’s complex or acute healthcare issues.

III. ”Many Helping Hands”

The paradigm behind the concept of “Many Helping Hands” is a society self organising to support the less fortunate. It is about empowering the public to engage both directly in service provision and indirectly through philanthropic donations, which at the same time helps to strengthen the “social fabric” of Singapore. “Many Helping Hands” is closely related to the community-based provision of healthcare, as the intermediate and long-term care (ILTC) sector today is mostly made up of not-for-profit providers who “do an excellent job but they will need government help to deal with more elderly patients”.¹⁴ This “government help” was clarified subsequently by Ms Yong Ying-I, Permanent Secretary of the Ministry of Health, in a Straits Times interview where she described a future in which not-for-profits focused on pastoral activities and fund-raising while partnering with government hospitals for clinical service delivery.¹⁵ Today, this model is being realised through partnerships such as the ones between Tan Tock Seng Hospital and Ren Ci Community Hospital, as well as Singapore General Hospital and Bright Vision Hospital where the medical directors are seconded from the acute hospitals.

Hence the “Many Helping Hands” approach is not envisaged to be a messy potpourri of small and poorly-organised non-profits, but rather strategic partnerships between established, large healthcare providers and nimble non-profits more closely attuned to ground needs. Each would bring their respective strengths and knowledge to create agile, locally-oriented but professionally driven pairings which can better serve community and national needs.

Preventive Health Orientation

Preventive health has been widely encouraged through subsidised national programmes such as the National Immunisation Programme, Breast Screen Singapore, Cervical Cancer Screen Singapore and more recently, the Integrated Screening Programme, as well as general exhortations to lead a healthy, balanced lifestyle.¹⁶

From a medical perspective, preventive health also involves comprehensive chronic disease management and patient engagement and empowerment. In these areas however, Singapore does not do as well: Singapore has “one of the highest incidence rates of end-stage renal disease in the world”,¹⁷ and of the newly diagnosed kidney failure patients, more than half are secondary to poorly controlled diabetes.¹⁸ Amongst diabetics, two-thirds are undiagnosed¹⁹ although this has come down to slightly less than half.²⁰ Why doesn’t Singapore do so well? In many countries which do better than Singapore in preventive health, governments often generously fund screening and other population health initiatives and take special effort to ensure accessibility to such services. These government interventions are premised on the understanding that health services for well persons are often under-utilised due to the lack of symptoms and low personal prioritisation. Hence healthcare providers must strive to remove as many barriers as possible to access, be they financial, geographic or simply a lack of appreciation of the importance of preventive health.

Singapore’s financing philosophy is based on personal responsibility and co-payments, leading to imposition of charges even on basic preventive health services such as mammogram screening for breast cancer, which is priced at $50 in polyclinics. Does this deter participation? Academics believe so.^21,22 Perhaps given that recruitment and compliance remain “major challenges”,²³ the concerns over moral hazard should be overcome. The application of the principle of personal responsibility may be less appropriate in preventive health; mammography is reported to be unpleasant and painful and even if offered without charge, it is doubtful that women would over-use the service.

CHECKLIST FOR STRATEGIC CONGRUENCE

It is possible to condense a checklist of strategic considerations, consistent with Singapore’s core national healthcare objectives, for assessing any healthcare initiative:

• What is the societal value created?
• Does this initiative promote personal responsibility?
• Are the subsidies in this programme reaching the people who need it the most?
• Does this initiative strengthen competition and enhance market conditions in healthcare?
• Can this initiative be provided in and by the community?
• How does this support community participation and social engagement?

This checklist could be useful as a guide to analysing healthcare initiatives which warrant review, or new ones which may be proposed; the explicit documentation of these considerations can heighten awareness of the underlying mental models influencing policy decision-making in healthcare.

Proposed initiatives that depart significantly from these considerations should trigger robust discussion; at the same time, they may also signal the need to review the basic structure and thinking underlying the healthcare system. Such national introspection is healthy and vital to continued sustainability in terms of economic results and healthcare outcomes. How much a society should spend on healthcare, which areas and functions should take priority and so on are difficult issues in and of themselves; Former Health Minister Khaw has expressed that these are questions “for society at large to answer”;²⁴ a clear and transparent articulation of the principles that guide healthcare design and delivery, as is attempted here, should greatly facilitate resolution of any public debate.

NOTES

1. Lee, UW, “U.S. Prof Muses on Singapore Pragmatism”, The Business Times (6 December 2008)
2. Chua, MH, “Costly but Put Wonder Drugs Within Reach”, The Straits Times (29 October 2005)
3. Li, SC, “Health Care System and Public Sector Drug Formulary in Singapore”, ISPOR Connections, http://www.ispor.org/News/articles/Oct07/HCS.asp (Accessed April 2010)
4. Chao, VTT, et al. “Percutaneous Transcatheter Aortic Valve Replacement: First Transapical Implant in Asia”, Singapore Medical Journal, 51(1) (2010), pp69
5. In percutaneous aortic valve replacement, the synthetic heart valve is introduced into the body through an incision in the groin and threaded through the blood vessels to the heart where it is deployed. Outram Now (July/August 2009)
6. National Heart Centre Singapore Heart2Heart Fund. http://www.nhcs.com.sg/aboutnhcs/makeadonation/Pages/Home.aspx (Accessed April 2010)
7. Khaw, BW, The Politics of Healthcare Forum (30 March 2010) http://www.moh.gov.sg/mohcorp/speeches.aspx?id=24068 (Accessed April 2010)
8. Lim, MK, “Health Care Systems in Transition II. Singapore, Part I”. An overview of health care systems in Singapore. J Public Health Med, 20 (1998), pp16-22
9. Chua, BL, “Is B2/C Hospitalization Affordable?” MOH Information Paper 2005/09.
10. Khaw, BW, Ministry of Health Parliamentary QA Number 978, 13 April 2009. http://www.moh.gov.sg/mohcorp/parliamentaryqa.aspx?id=21422 (Accessed April 2010)
11. Singapore Government, White Paper on Affordable Healthcare (October 1993)
12. Lee, HL, National Day Rally 2009 Part 2 Our People (Healthcare). http://www.news.gov.sg/public/sgpc/en/media\_releases/agencies/pmo/transcript/T-20090816-1.html (Accessed April 2010)
13. Healthcare for London. A Framework for Action. http://www.healthcareforlondon.nhs.uk /a-framework-foraction-2/ (Accessed April 2010)
14. See Endnote 12.
15. Interview with Permanent Secretary (Health) Yong Ying-I. The Straits Times (August 2009)
16. The Health Ministry is also exploring the extension of Medisave use for health screening. See: Khaw BW. All can afford healthcare. http://www.moh.gov.sg/mohcorp/speeches.aspx?id=23956 (Accessed April 2010)
17. Lim, HK, NKF Centre Opening and Donor Appreciation Ceremony http://www.moh.gov.sg/mohcorp/speeches.aspx?id=1666 (Accessed April 2010)
18. National Registry of Diseases Office. Information Paper on End Stage Renal Disease (March 2010) http://www.nrdo.gov.sg/ (Accessed April 2010)
19. Ministry of Health, National Health Survey (1998)
20. Ministry of Health, National Health Survey (2004)
21. Seow, A, Straughan, PT, Ng, EH, et al. Factors Determining Acceptability of Mammography in an Asian population: a Study Among Women in Singapore, Cancer Causes Control, 8 (1997), pp771-9
22. Straughan, PT, Seow, A, Barriers to Mammography Among Chinese Female in Singapore: a Focus Group Approach, Health Educat Res, 10 (1995), pp431-41
23. Yeoh, KG, Chew, L, and Wang, SC, Cancer Screening in Singapore, with Particular Reference to Breast, Cervical and Colorectal Cancer Screening, J Med Screen, 13 (Suppl 1) (2006), S14-S19
24. Khaw, BW, quoted in Lee, HC, “Spending on Health Care ‘Bound to Go Up’”, The Straits Times (15 September 2008)