Former NTUC Income CEO Tan Kin Lian has condemned the way the MediShield national health insurance is structured and says that changes are needed to make the system less “confusing and messy” for patients.
Calling the government “naïve” for thinking that patients can control their hospital expenses, Tan said patients only have control over their choice of medical facility and that public hospitals should be the ones responsible for keeping treatment costs low.
Tan, a 30-year veteran in the insurance industry, also said it was “bad practice of the government to appoint Gan Kim Yong as Health Minister when “he had no prior experience in this complicated ministry”.
This is Tan’s full commentary on how the current problems with MediShield can be fixed:
“Medishield started in 1990 to provide insurance for catastrophic medical expenses. The co-payment was supposed to be covered by money in the CPF Medisave account.
The problem is that the medical expenses are too high. There are caps placed on the use of Medisave, to prevent too much money being siphoned out.
This result in the patient having to pay a large sum of money out of pocket.
In a recent case, a senior who opted for subsidised treatment for a cataract operation was able to claim for only $4.50 from Medishield.
He had to pay the balance of the post-subsidy bill of $4,477 out of Medisave and from his pocket. Medisave only paid $3,000, so the remaining sum of over $1,400 was paid out of pocket.
This is a complicated arrangement. l call it the “bits and pieces” payment system – some part paid here, some paid there. No wonder the people are confused with this system.
The govt thinks that this is necessary to make the patients responsible to help to control the medical expenses. In reality, most patients are so confused that they are not able to play a part to “control” the expenses. The actual expenses are outside their control.
The only control that they have is to choose the medical facility to go to. After that, they have to face the charges and add-ons for various kinds of treatment.
In the example of the cataract operation, the patient went to a govt facility to enjoy the subsidy.
The minister should, by now, realize the problem. Medisave and Medishield has been going on for almost four decades. He is not a new minister, as he has been in office since 2011.
Anyway, it was a bad practice to appoint him as the minister for health when he had no prior experience in this complicated ministry (pardon me, if I am wrong on this matter).
So, what is the solution?
The govt should take the responsibility to set the charges for various types of treatment, if Medisave and Medishield are to be used.
The public hospitals and clinics, which also have access to the subsidy, should be the expected to take the lead to provide services based on these approved rates. These rates will still yield profit to the restructured hospitals, but not the big margins that they enjoy now.
The approved rates should be an all-in rate for the treatment. The hospitals should be expected to absorb any variation in the treatment, and not allowed to charge for every item of service.
The restructured hospitals that are not profitable should look into the control of their expenses. We are currently spending too much for infrastructure, management salaries and expensive systems.
With proper rates in place, many private hospitals will probably join the scheme. They should be able to operate profitably on these approved rates.
If the rates are too low, the public and private hospitals will not provide the service. This will give the signal for the govt to revise the rates.
The deductible under Medishield scheme is too high. It should be reduced to $500 or even lower.
All the caps on Medisave should be removed. After all, the patient is going to an approved hospital for an approved treatment.
In Japan, they carry out the negotiations every year. It seemed to work well generally.
It is naive for the govt to think that the patients can control the expenses. They are leaving the patients to the mercy of the mercenary medical system.
Hospitals can be allowed to charge higher rates to local or foreign patients who do not wish to have access to Medisave or Medishield.
My suggestion is to set the approved charges for various types of treatments. I do not claim that this will solve all the problems. I am sure that other problems have to be dealt with prior to the launch or within a few years after that. But I am sure that it will be a better basis to deal with the problem than the current confusing and messy system.”