Non-Constituency Member of Parliament Gerald Giam from the Worker’s Party had asked Minister for Health Gan Kim Yong what the ”minimum Capital Adequacy Ratio (CAR) that MediShield targets to maintain over and above the minimum CAR of 100% required by MAS” is.
Mr Gan had said that, “While the minimum CAR is 100%, MAS requires funds to meet a minimum threshold CAR of 120%, below which a “financial resources warning event” is triggered and the regulator may intervene.” He added that, “As at end 2012, the CAR of MediShield Fund is about 165%. The MediShield Fund has set a target CAR of 200%”.
The Worker’s Party’s Mr Giam explained that, “This means that the scheme has enough capital set aside to fund up to 165% of its claims in 2012. While MAS requires a minimum threshold of 100-120%, MediShield is in fact aiming for a CAR 200%.”
However, to put things into perspective, we have calculated previously that of the MediShield balance available, the Singapore government had spent only 25% in 2011 (Chart 1).
Chart 1: Ministry of Health
Also, of the available Medisave balance and Medifund endowment fund, the amounts spent were a lot lesser – at only 1.3% and 3.3% respectively in 2012 (Chart 2).
Chart 2: Ministry of Health
When you put the available 3M (Medsave, MediShield and Medifund) together, of the total available sum, the total spending would have spent been only 1.8% of the total sum, on the 3M in 2012 (Chart 3).
Chart 3: Ministry of Health
However, when you look at the total health expenditure in Singapore in 2012, the 3M expenditure accounted for only 8% of the total health expenditure (Chart 4). Government subsidies accounted for 23%.
And because the government had spent only 31% for the total health expenditure, Singaporeans would have to fork out-of-pocket 69% of the expenditure.
Chart 4: Ministry of Health
Seen in this light, does it seem extravagant that what the government has set aside in the capital in MediShield is enough to “fund up to 165% of its claims in 2012″? Singaporeans have to fork out more out of their own diminishing incomes to pay for healthcare, while the government continues to sting on healthcare, by spending only 1.8% of the 3M total sum, which covers for only 8% of the total health expenditure, while Singaporeans have to pay 69% out-of-pocket.
Already, at 31%, the Singapore government spends the lowest expenditure of health, as a proportion of total health expenditure, as compared to the developed countries, and compared to many of the developing countries as well (Chart 5).
What this means is that Singaporeans thus spend the highest out-of-pocket, as compared to the other developed and many developing countries (Chart 6).
In actual monetary terms, this means that even though Singapore has the lowest total per capita expenditure among the developed countries (Chart 7),
But because Singaporeans spend the highest proportion out-of-pocket, we end up paying the highest out-of-pocket in actual monetary terms (Chart 8).
Already, the burden on Singaporeans to pay for our own healthcare is very heavy. There has been instances where because patients were not able to pay their medical bills, they had to sell their homes to pay for the bills, only to lose their homes and end up in welfare homes and shelters. Similarly, many Singaporeans have had to postpone seeking medical treatment because they couldn’t afford medical care, only to end up having their health condition worsen and developing chronic illnesses, which created an even heavier burden on their incomes.
In order to be able to pay for their medical bills, Singaporeans would need to purchase private medical insurance, in order to be more adequately covered. Indeed, the Ministry of Health had also said that, “many middle and higher income Singaporeans have also supplemented their basic coverage with integrated private insurance policies (“Integrated Shield plans”) for treatment in the private sector.” However, because private insurance is very expensive, especially as one ages, only “60 per cent of residents here (who are able to afford to do so) have opted for this higher coverage“.
What this means is that 40% of Singaporeans do not thus have adequate financial protection for health in Singapore.
According to the World Health Organisation, out-of-pocket expenditure which is more than 50% – Singapore is at 69% – will create a health system that is “extremely inequitable” and where there is a “high prevalence of poverty due to catastrophic health expenditure”.
Indeed, the poor shoulder a heavier financial burden on their health spending (Chart 9).
Chart 9: Ministry of Health
It is also estimated that 28% of Singaporeans are living in poverty (Chart 10), which would be the highest among the developed countries and also when compared to the East and Southeast Asia countries in the region.
As such, is there a strong case for the government to increase its public expenditure on health, seeing that not only is the Singapore government not spending on par with what the other high-income countries are doing – the other countries spend an average on 80% of total health expenditure whereas the Singapore government spends only 31% – the low financial investment by the Singapore government on health has also made it difficult for the low- and lower-middle-income Singaporeans to be able to afford adequate healthcare?
As we have previously calculated, if the government increases the spending of the 3M by about 10 times, we would only use up about 16% of the 3M total sum, while covering for all the health expenditure in Singapore (Chart 11).
Chart 11: Ministry of Health
As it is, the highly unequal situation that has been created in Singapore – Singapore has the highest income inequality and one of the highest in the world – necessitates that the government respond more decisively towards increasing the government’s financing on health to protect not only the health and well-being of its citizens, but also ensure that they have a respectable standard of living in Singapore.
Even as the government had said that they would increase the health expenditure as a proportion of GDP, from the 1.4% now to 3.5% in 2030, and the health expenditure as a proportion of GDP, from the 31% to 40%, this would still be the lowest, as compared to the developed countries, and even to the countries in the region.
Thus it is highly unreasonable when Prime Minister Lee Hsien Loong had announced at the National Day Rally 2013 that Singaporeans should expect that to pay higher Medisave contributions and higher MediShield premiums. PM Lee had also suggested that tax might be increased.
However, when compared to the Singapore government’s dastardly selfish spending on health, it should be in no way expected that Singaporeans should alone shoulder the burden of the increase of health spending, without seeing a significant response from the government to do so on their side. And by significant, as the one of the richest, if not the richest country in the world by per capita GDP, the Singapore government should spend 10% of GDP (as compared to 1.4% now) and 80% of total health expenditure (as compared to 31% now) on health – comparable to what the other high-income countries are now spending.
Clearly, it is high time the government takes on more responsibility over its citizens and not relegate the care of Singaporeans onto the citizens alone. The rising health prices and stagnating wages demand for a more responsible action by the government. The severe lack of financial investment to increase the protection of the people living in this country is an embarrassment and is no excuse for the government to keep harping on self-reliance as the objective of the Singapore’s health system. When the people, especially the lower- and lower-middle income groups, are not even able to overconsume on health, but are in fact underconsuming on health, there is a moral responsibility that the government would need to step up do with immediacy.
Leong Sze Hian and Roy Ngerng of The Heart Truths