Singapore Boosts Healthcare Budget To Brace For Silver Tsunami (Part 2 Of 2)
This article was originally published in PharmAsia News
Executive Summary
[Editor's note: This is part two of a two-part story featuring Singapore's healthcare system; part one appeared in PharmAsia News, Sept. 11, 2009.]
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[Editor's note: This is part two of a two-part story featuring Singapore's healthcare system; (Also see "Singapore Boosts Healthcare Budget To Brace For Silver Tsunami (Part 1 Of 2)" - Scrip, 11 Sep, 2009.) appeared in PharmAsia News, Sept. 11, 2009.] SINGAPORE - The spectre of a "silver tsunami," a reference to the growing elderly population, has prompted Singapore to rethink its approach to healthcare, with "total patient care" the keywords underscoring new government initiatives to address the long-term healthcare needs of its 4.8 million citizens. With the number of people over 65 years of age currently at 300,000 and projected to treble to 900,000 by 2030, Singapore's changing demographics spell opportunities for drug and medical device makers targeting the geriatrics market. Figures for 2006 from the World Health Organization show that Singapore's government provided financing for 33.6 percent of total healthcare expenditures. Measured against total national spending, healthcare accounts for 5.4 percent in Singapore, which is among the lowest globally. The same source reveals that the U.S. government finances 45.8 percent of total healthcare expenditures, which is 19.1 percent of the national expenditure. A research report by Nanyang Technological University's David Reisman shows that 36 percent of healthcare expenditure was government financed in Singapore in 2007. For 2009, Singapore's Ministry of Health's budget has been increased by S$1 billion to S$3.7 billion, with $2.2 billion earmarked as subsidies for patients' bills, $500 million to boost medical manpower, $700 million for infrastructure and $300 million for research and public health initiatives. The official stand is toward co-payments for hospitalization and medical treatment, that is, individual responsibility for healthcare. Employees and self-employed make compulsory contributions to a social security savings plan known as the Central Provident Fund. A percentage of each account holder's fund is channeled to what is known as the Medisave fund - the first of "three M's," which characterize Singapore's healthcare policy. The other "two M's" are Medishield and Medifund. There is a cap for contributions to the Medisave fund for an individual, which is periodically reviewed. Medisave funds can be used only for purposes of hospitalization and approved outpatient treatments. However, a portion of the Medisave is used to pay premiums for Medishield, a basic catastrophic hospitalization insurance, with options available for higher premiums and consequently higher claims. In the case of major illness, the Medishield catastrophic insurance kicks in, but claims for hospitalization and approved outpatient treatments are subject to pre-determined limits. To keep the Medishield premiums low, according to the Ministry of Health website, patients are responsible for two cost components, a one-time deductible amount for each policy year and a co-insurance amount, which can be reimbursed from their Medisave accounts. The government providing partial subsidies for hospitalization to citizens and permanent residents is particular to Singapore, which has refrained from becoming a welfare state. In terms of government subsidies, age is one parameter to qualify for this privilege while means testing, based on the patient's income and type of accommodation, was introduced this year to determine the level of subsidy. As a last resort, the government has set up an endowment fund to help needy Singapore citizens who are unable to pay their medical expenses. This is a safety net for those who are unable to afford the subsidized charges at public hospitals even with their Medisave funds and Medishield coverage. Interest from the Medifund, which topped S$1.66 billion for financial year 2008, is used to help pay the medical bills for those requiring assistance. - Ng Ek Heng ([email protected]) |