As Singapore prepares to welcome universal healthcare at the end of the year, it is essential to remember the three basic tenets of a comprehensive, holistic healthcare system: universality without consideration of pre-conditions (risk sharing), financial contribution from all participants from cradle to grave (annuity payments) and a single payer system for the best control of healthcare costs.
With MediShield Life, Singapore would have adopted the first two of these concepts, but will not have fully implemented one of the most important - cost control.
This issue was recently highlighted by the high-level MediShield Life Review Committee, which suggested, as one of its major recommendations, cost management efforts to keep a lid on payouts ("IP insurers should pass on savings to consumers"; June 30).
Unfortunately, given the complexity of modern healthcare, with an ever-increasing battery of expensive tests and medicine, even countries with a single payer system, such as Canada, Britain and France, are struggling to rein in increasing costs, putting a strain on these well-tested systems.
At the extreme opposite end of the healthcare spectrum, as defined by these pragmatic, basically well-functioning systems, is the United States, which is experiencing cost increases of up to 25 per cent a year (even with Obamacare), as it struggles with a complex public-private service culture and the toxic cocktail of ever-rising costs that such an undisciplined system produces.
Given the Singapore Government's need to keep MediShield Life premiums reasonable, both now and in the future, and thus healthcare costs in check, following the American path is not an option.
Even the annual 12 per cent to 17 per cent increases in premiums mentioned in the June 30 commentary are unsustainable, and would prove a severe test for a system known for providing high-quality care at a reasonable price.
As the country enters this bold, new, universal healthcare domain, it is better to keep the genie of healthcare costs in the bottle, than to try to deal with them when they inevitably establish a trajectory that is unsustainable.
David F. Grant
This article was first published on July 15, 2015.
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