Means Testing in Singapore's Healthcare system
Subsidised Health Care for All?


  • Definition and Introduction to Means Testing  
  • Currently Means-tested: Step-Down care for Elderly  (since 2000)
  • Currently Means-tested: Inpatient Downgrading   (since 2001)
  • Means Testing (for hospitalised patients) on MOH Drawing Board  (25 Mar 2002)

    Recommendations of the Health Feedback Group
  • Affordable Health Care And Beyond  (10 Jan 2004)
  • MOH Statement on the recomendations  (18 Mar 2004)
  • Target the subsidy  (7 Jan 2004)
  • Well-off and in C-class ward? You may have to pay more.  (12 Jan 2004)
  • Well-off, but they want C Class   (26 Feb 2004)

    Means-testing in hospitals : GO! (2004-05)
  • Parliamentary Debate 2004 : Comments by Members of Parliament  (8-17 Mar 2004)
  • Parliamentary Debate 2004 : Reply by Health Minister  (17 Mar 2004)
  • MPs oppose linking income to health subsidy  (18 Mar 2004)
  • Hospital fee relief: Checks working so far  (19 Jan 2004 )
  • Sympathy for 'rich' who go to C class wards  (9 Apr 2004)
  • Means-test a health priority for this year  (29 Jan 2005)

    Means-testing in hospitals : No-Go? (2005-06)
  • Medishield reforms take priority over means testing  (28 Feb 2005)
  • Health Minister avoiding questions on means-testing: Worker's Party  (3 May 2006)
  • Means-testing not likely in the next two years: Health Minister  (3 May 2006)
  • Means testing in hospitals may not happen at all: Khaw   (4 May 2006)
  • Means testing only if feasible  (4 May 2006)

    Means-testing in hospitals : On again! (2007)
  • Means testing may kick in within next 12 months  (7 Apr 2007)

    Means-testing outside hospitals
  • Parliamentary Debate 2002   (20 May 2002)
  • New criteria, subsidy cut for nursing homes   (14 Jun 2004)
  • Tricky test of means and ends  (13 Jun 2006)

    Means-testing (General)
  • The Real Cost of NOT Having a Means Test  (Apr 2006)

    Questions for discussion
    Updated: 13 Jan 08
    Return to Main Medical Index

  • Means Testing
    Intro, Definitions and Examples

    From Barron's:
      Principle that holds that Social Insurance programs should be for the benefit of lower socioeconomic segments of society and not for that segment of society that does not require financial assistance.

    From The American Heritage Dictionary:
      An investigation into the financial well-being of a person to determine the person's eligibility for financial assistance.This article from

    From Wikipedia (25 Dec 2006):
      The term means test refers to an investigative process undertaken to determine whether or not an individual or family is eligible to receive certain types of benefits from the government.
      The "test" can consist of quantifying the party's income, or assets, or a combination of both.

    From Singapore Ministry of Health FAQ (accessed 23 Nov 09):
    Means testing is "a way to focus limited resources for needy Singaporeans, by channeling it to those who need it most. Means testing has been implemented at the government-funded nursing homes since 2000 and at the other intermediate and long term care facilities since 2001. Lower-income patients receive more subsidies than the higher-income patients at these facilities."

    From Ministry of Health Eldercare FAQ (no longer published online):
      "Means Test" is a method to calculate the subsidies that an elderly will get if he/she needs step-down care services.
      It takes into consideration:
  • gross income of the patient, his/her spouse and the immediate family members
  • number of family members and
  • ownership of major assets such as private property

    New Singapore SharesHelp the lower income group tide over the economic downturn Cash handout based on
    (1)Type/Value of Home
      (e.g. 3 vs 4 vs 5-room HDB
        flat vs private housing)
    (2)Personal Income
      (for Progress Package)
    Economic Restructuring SharesHelp Singaporeans adapt to the structural changes in the economy
    Progress packageShare the Fruits of Growth
    Workfare BonusReward Low-Wage Workers for Work
    Utilities-Save, S&CC and Rental RebatesHelp Lower-Income Households with Living Expenses
    HDB Special Housing Assistance ProgrammeHelping the lower-income group cope with the New Economy
    MOE Financial Assistance Scheme
    Assistance to needy Singaporean pupils (students)

    Year IntroducedSchemeApplies to
    MedifundNeedy Singaporeans who are unable to pay for their medical expenses
    Step-down care services for the ElderlyCommunity Hospitals, Nursing Homes
    Day Rehab, Home Care Services
    Primary Care Partnership Scheme (PCPS)Needy elderly requiring healthcare by GPs
    Hospital ward downgradingDowngrade from a private ward (A, B1) to a subsidised ward (B2, C)
    Interim Disability Assistance Programme for the Elderly(IDAPE)Needy Singapore citizens who become disabled

  • United States : Department of Veterans Affairs
  • United States : Medicaid
  • Ireland : Medical Cards (Health Service Executive)

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    Means Tested: Step-Down Care for Elderly
    MOH Website


    Many patients who are well enough to be discharged from hospitals would usually like to return to the comfort of their own homes. However, because of their medical conditions, some may be unable to do so. Hence, they may require further care and treatment at centres that provide step-down care.

    Step-down care refer to selected services such as:
  • Community Hospitals
  • Nursing Homes
  • Hospices
  • Day Rehabilitation Centres
  • Home care services such as home nursing and home medical
    This article from
    Government Subsidy
    The Singapore Government recognizes that these step-down care services can be expensive because patients are admitted for long periods of time. As such, the government provides financial assistance in the form of subsidies to the elderly. To ensure that the subsidy goes to those who need it, an income assessment framework, called the "Means Test" was introduced in year 2000.

    Subsidies are available only to elderly who:
  • Are Singapore citizens or Permanent Residents
  • Meet the admission criteria of the step-down care services required
  • Are admitted to Government funded institutions and services

    The subsidy will go directly to the service providers who will use it to offset the bill for the step-down care fees and charges.

    Means Test
    "Means Test" is a method to calculate the subsidies that an elderly will get if he/she needs step-down care services.
    It takes into consideration:
  • gross income of the patient, his/her spouse and the immediate family members
  • number of family members and
  • ownership of major assets such as private property

    Amount of Subsidy
    There are currently three levels of subsidy - 75%, 50% or 25%. For example, if the total income is $800 per month and there are 4 family members, then the per capita income works out to $200. The elderly will qualify for 75% subsidy. This means that the Government will pay 75% of the fees and charges incurred for step-down care while the elderly and his/her family will pay the remaining 25%.

    Levels of Subsidy
    Per Capita Income    Rate of Subsidy
    $0 to $300    
    $301 to $700    
    $701 to $1000   
    More than $1000   

    MOH Website
    As of Dec 2006
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    Currently Means-Tested: Inpatient Downgrading

       Dear MOH,

      I felt that it is not right for the Ministry of Health to come up with a police of restricting private hospital patients who wish to transfer to government hospitals. If the necessity arises, the Ministry has to look at it on a case-by-case basis, because every patient’s needs, family background etc, is different.

       The cap of $15, 000 imposed to allow private hospital patients to transfer to a government hospital is a big sum, especially to many middle-income families.


    Reply from MOH

      Dear Sir,

      Please refer to your feedback concerning the transfer of patients from private to public hospitals.

      In the past, patients transferred from private to public hospitals were not allowed to downgrade in that they continue to be regarded as private patients and had to be warded only in class A/B1 wards in the public hospitals. The policy of no downgrading was to prevent private hospitals from dumping their patients to public hospitals once the patients have exhausted all their monies. Private hospitals have the moral obligation to care for their patients and manage their conditions, regardless of their financial status.

      While the policy intent of not allowing patients transferred from private hospitals to downgrade remains valid, the Ministry recognises that there could be some lower income patients who have genuinely made the initial wrong choice in opting for private hospitals that are beyond their financial means. Such patients and their families often face grave financial difficulties if there are any unforeseen complications that arise during their stay in the private hospitals. Copied from gerald

      For this reason, with effect from 1 Sep 2001, the Ministry has allowed patients transferred from private to public hospitals to downgrade to the heavily subsidised ward classes (i.e. class B2/C) if they pass a simple means test. Patients with a per capita family income below $500 per month would be allowed to downgrade to Class C. Those with per capita family income below $1,000 per month would be allowed to downgrade to Class B2. For patients who do not qualify for means testing, they can also request for downgrading if their hospital bills in the public hospitals have exceeded $15,000. The Medical Social Workers in the hospitals will assess their requests on a case-by-case basis.

      We wish to emphasize that patients must make their decisions carefully based on what they could afford. To help patients choose the ward class appropriately, the Ministry has already made it compulsory for all hospitals (including the private hospitals) to provide financial counselling to patients prior to admission. To help Singaporeans navigate our healthcare system better, the Ministry has also produced a brochure on "10 Tips to Stretch Your Health Dollar" to explain how Singaporeans can obtain affrodable and good healthcare at the public hospitals and institutions. The brochures are available at all public sector institutions and community centres.

      We thank you for your feedback.



    If you are staying in a restructured (aka public/government) hospital, and want to downgrade to a B2 or C class ward, these are the steps:
    1) Add up the combined income of all your family members
    2) Divide this by the number of members in your family to get the per capita income
    3) If the per capita income is :
  • Lower than $500 - you can downgrade to C class (80% subsidy)
  • From $500 to $1000 - you can only downgrade to B2 class (65% subsidy)
  • Higher than $1000 AND total bill more than $15,000 - you may appeal on a case by case basis

    Common Pitfalls:
  • You must be able to provide income documentation of ALL your family members. The hospitals will not process the application unless ALL the required documentation is in. This is the #1 reason for delays.
  • Only AFTER the downgrading is approved will you start paying lower charges. The subsidy will NOT be backdated.
         (Note the reverse is NOT true if you upgrade - all charges, except daily ward fee, will be backdated. Do not confuse the two!)

    For further details, contact your friendly Medical Social Worker (not me). They will try their best to help, but understand their hands are tied by Ministry policy and the administrators!

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    Means Testing On The Drawing Board
    The Opening of Singapore's 10th Parliament

       The Health, Environment and National Development ministries yesterday unveiled their plans and initiatives for the next few years in their addenda to the President's Address at the Opening of Singapore's 10th Parliament.



    • Introduce selective means testing for allocation of health-care subsidies to target subsidies at the lower-income groups
    • Introduce compulsory continuing medical education for doctors in 2003 and consider the need for regular re-certification of doctors
    • National screening programmes for breast and cervical cancers and basic oral-health services for all secondary schools
    • Start a system to detect and mitigate potential sources of medical errors Copied from gerald
    • Regulate health products like medical devices and health supplements
    • Create career-development opportunities for nurses and more opportunities for students to pursue para-medical degree courses overseas.
    • Pursue integration between the two health-care clusters and closer collaboration between the public and private sector
    Abridged, emphasis(in red) mine.
    Hansard (Singapore Parliament), 25 Mar 02
    The Straits Times, 27 Mar 02
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    Affordable Health Care And Beyond
    Health Feedback Group

      24. Healthcare financing should focus on the following aspects:
  • Perspectives on ‘affordability’.
  • Medical costs containment so that we are able to ‘get more for less’.
  • Financing means which looks at extending the sources of financing the healthcare costs.

    Perspectives on Affordability
      25. So far, the MOH is looking at this issue from the standpoint of whether our healthcare spending, in terms of percentage of GDP, is in line with that of developed countries. This seems to answer the question on whether as a whole, is Singapore’s healthcare spending on par with these countries. At the same time, we have various schemes such as Medisave and Medishield to provide medical cover when a person needs medical services, particularly hospitalisation and surgery. Coupled with a multi-tiered subsidy structure, The MOH seemed to want to draw the conclusion that Singapore healthcare is indeed ‘affordable’ to the masses.
      26. We should define ‘affordability’ in line with the perspectives of the ones who are receiving the services and footing the bill. And ‘affordability’ also depends on their age and whether they are dependents, working or retired.

    Privately funded health care services
      36. Perception: 16% of Singaporeans found medical services at private hospitals affordable. The group made the following observations that might explain the perception:
  • Possible reason for the unaffordable prices at private hospitals can be because of over-pricing and patients’ non-eligibility for government subsidy.
  • Assistance schemes like PCPS (Primary Care Partnership Scheme) should be promoted with greater publicity. There must be an outreach programme. It should also be made readily available to people who need them. A half-hearted effort would not work.
  • Subsidy is currently given to those who go to the polyclinics, but the polyclinics are overwhelmed by the demand. Subsidy amount should be used for primary care, so that the subsidy is widespread and whoever needs it will get it regardless of where they go.
    Recommendations - This article has been plagarised
  • Introduce a compulsory medical insurance scheme so that all will have enough money to pay for their illnesses.
  • There should be a new paradigm in healthcare subsidy. Consider new ways of distributing subsidy to the needy. Subsidy for Singaporeans should be made available to those who need it. They should not be restricted to pre-defined healthcare providers. As long as the provider can provide the same quality of services at the same cost, they should be acceptable.

    Health Feedback Group
    10 Jan 2004
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    MOH Statement on the recomendations of the Feedback group
    Introduction to Means Testing

      At the 6th Annual Conference of Feedback Groups on 10 January 2004, the Health Feedback Group presented its recommendations related to five key areas - basic medical healthcare, public funded healthcare services, healthcare services for the elderly, financing healthcare services; and provision of information to the public.

      On healthcare financing, it called for a new paradigm in health subsidy. Subsidy for Singaporeans should be made available to those who need it. This means pegging the amount of financial subsidy received by a patient to the patient's financial status.

      Ag Minister Khaw Boon Wan has also address(sic) this issue in his budget statement for MOH delivered in parliament on 17 March 2004.

    Ministry of Health Website
    18 Mar 2004

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    Target the subsidy

      A LITTLE over 10 years after the appearance of the White Paper on Affordable Health-care, the Health Feedback Group has presented its own paper, Affordable Health-care And Beyond, which reviews the 1993 document from 'a citizen's perspective'. Last week, the group released its recommendations on how to improve a cost-effective health-care system that is the envy of many countries. One of its suggestions stands out. This is the idea of a new paradigm in subsidies. 'Consider new ways of distributing subsidy to the needy,' it says. 'Subsidy for Singaporeans should be made available to those who need it.' Indeed so. As Deputy Prime Minister Lee Hsien Loong put it, it did not make sense for a well-off person to enjoy the same level of subsidy as a needy patient. Responding to questions on the group's proposal, he said that what the Government needed to do was to subsidise those who needed help, more than subsidising the particular service which they used.

      In a sense, it is already true that subsidies are targeted at those who need them most. In public hospitals, there is a sliding scale: Patients' choice of ward decides whether they pay full cost or enjoy subsidies ranging from 20 per cent of the cost to 80 per cent. The problem, of course, is that they have a choice, which means that even the well-to-do can opt for a subsidy should they want to. Hence the need for means-testing. In 2001, then Health Minister Lim Hng Kiang remarked that means-testing was an 'administratively clumsy procedure' which the public would take some time to get used to, but he added that when people were ready, it would be used more widely. The issue has often surfaced in public discussions. Last year, a writer to our Forum page suggested means-testing all patients who wanted to seek subsidised treatment at specialist outpatient clinics. This was because there were richer patients who went to polyclinics to get referrals which entitled them to subsidised specialist care. By contrast, poorer patients who visited private GPs were able to get subsidies at specialist clinics only if they passed the means-test. In its reply, the Ministry of Health acknowledged that means-testing was an equitable way to channel subsidies, with eligibility being based on specific income criteria. The feedback group has brought the argument forward, making means-testing a cardinal principle of affordability in the health-care system as a whole. Hidden text to catch cheats

      Its suggestion - and the Government's welcoming response - touches on a larger issue. Fine-tuning the health-care system is a necessity because the nature of affordability itself is changing with the rising expectations of the populace, which is also an ageing one that will tend to require more medical services in its greying years. Medical resources, by contrast, are finite. And costs continue to rise. The demands of equity bear heavily, therefore, on the Government as it judges how best to use the health dollar. Means-testing can be expected to alienate some Singaporeans who fall outside the range of subsidies which they enjoy now, but it is the sensible way forward. This is borne out by a survey in which 67 per cent supported the idea of letting the rich pay more and the poor pay less for health care, with 15 per cent disagreeing. Basic health care is a social service Singaporeans can expect regardless of their ability to pay. It only stands to reason that those who are least able to pay have the greatest claim on the state as it tackles the twin trends of rising expectations and costs.

    The Straits Times
    7 Jan 04

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    Well-off and in C-class ward? You may have to pay more.
    Financial checks may be way to ensure subsidies go to poor: Minister

      A PERSON who is well-to-do but opts for a C-class ward in a public hospital could have his financial status checked and be asked to pay more.

      This would be aimed at ensuring that government health subsidies go to poor patients.

      Acting Health Minister Khaw Boon Wan threw up the idea as one way to 'combine' what he saw as two extremes - the Health Feedback Group's recent recommendation that health subsidies be pegged to an individual's financial status, and the current practice of subsidising hospital wards.

      Mr Khaw, who was speaking at the opening of the Hindu Pongal (Harvest Festival) celebrations in Little India yesterday, said: 'We continue to allow a choice of wards, but in the heavily subsidised wards of Class C, perhaps even B2, maybe we should then have a good look at the financial status of the patient and the family.' He added that he should have more details on this by the time the Budget debate starts in March.

      In a public hospital, the ward a patient chooses - A, B1, B2 or C - now determines whether he pays the full cost or enjoys subsidies, which range from 20 per cent to 80 per cent of the cost. One of the primary reasons the Health Ministry subsidises wards and not individuals is that it can be difficult to distinguish the rich from the poor, said Mr Khaw.

      'Every day, we handle tens of thousands of patients, so we certainly don't want to create a whole big bureaucracy just to evaluate every case. 'Then the cost of health care will go up,' he said.Warning: Lifted from g e r a l d t a n . c o m

      Pegging subsidies to an individual's financial status might also increase costs, said Mr Khaw, especially if a large number of people end up in wards like the A-class ones. He said: 'Single rooms mean that nursing productivity is reduced... Whereas if you walk into an open ward, you see eight to 10 patients at the same time.' The vast improvement in the quality of C-class wards has resulted in more well-to-do people opting to stay in low-cost wards, he conceded.

      Responding to the Health Feedback Group's other observation - that health care for the elderly was too expensive - Mr Khaw said it would not do to generalise, either about their financial status or health. 'Please don't put them into one box - that they are all poor, disabled. Rubbish. Many are as fit as you and I,' he said.

      The minister also said he was happy that some private hospitals recently reduced the costs of some of the procedures which they offer. The Health Ministry had published some of the charges at public and private hospitals, so that patients would be able to make better choices. This had prompted private hospitals to review their processes, to see how costs could be cut.

      Mr Khaw said: 'It's just like with the (port operator) PSA. All right, there's competition from Pelepas and the regional ports, but it's not just simply about slashing prices. 'You must slash prices and still make good returns. 'To do that, you have to look at your whole process.'

    Alexis Hooi
    The Straits Times
    12 Jan 2004

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    Well-off, but they want C Class

      THEY may be among the richest people in Singapore, but when it comes to health care, they are not willing to pay what it costs.

      Of every 10 patients belonging to the top fifth of households by income, close to four opted for subsidised care in 2002.

      One in 10 even stayed in C class wards, sharing a room with at least five others, for which the Government pays about 80 per cent of the bill. C Class patients paid $817 on average that year, compared to a total bill of about $3,807.

      These figures are drawn from a two-year survey, involving more than three million patients, released by the Health Ministry yesterday.

      The survey comes amid calls to divert more subsidies to those who need them most, especially as the health-care system will come under greater pressure as the population ages.

      Government health-care spending rose 10 per cent a year since 1998, hitting $1.4 billion in 2002. About $609 million goes to subsidising hospital stays, with 90 per cent channelled to B2 and C class patients.

      What is needed, the Health Ministry concluded, is 'a framework to stretch the subsidy dollar by targeting it at those who need it most'.

      Means-testing, where patients' ability to pay decides the subsidy they should get, has been creeping into the health-care system in recent years.

      It is being applied in nursing homes, day rehabilitation centres, hospices and community hospitals.

      In public hospitals, however, it is for the patient to decide on the ward class, whether to pay more for more comfort or the assurance of getting their preferred doctor in attendance.

      Opting for a C class ward in National University Hospital for an angioplasty to unblock a heart artery, for example, would cost a patient $4,058 on average. In A Class, the patient would have paid about $16,350.

      But it appears that even those on lower incomes preferred the air-conditioned comfort of their own hospital room: About 3 per cent of the poorest fifth of the population chose A class wards.

      The ministry said that while the principle of having the more able pay more is easily understood and well accepted, 'the challenge lies in operationalising this'.

      This might be more of a challenge if the views of a lawyer who paid the subsidised rate at KK Women's and Children's Hospital when her 10-year-old son had a fracture are typical.

      'Given the choice, I would always choose to pay less,' she said. 'It is wrong to deny a sector of the population access to this common pool of money, which comes from taxes. The richer people are the ones who pay more tax.'

      And she said the definition of the top 20 per cent of patients - $3,999 a family member in the household - is 'not a lot of money'. 'It's just enough for a middle class lifestyle. And hospital bills can be very high.'

    Average per capita household income The class of ward they stayed in
    Class A Class B1 Class B2 Class C
    $400 3% 14% 48% 35%
    $700 5% 21% 48% 26%
    $1,100 9% 26% 45% 20%
    $1,700 16% 28% 41% 15%
    $3,900 34% 28% 28% 10%


    Salma Khalik
    The Straits Times
    26 Feb 2004

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    Comments on Means Testing by MPs
    Parliamentary Debate, 2004

    Mdm Halimah Yacob (Jurong, PAP):
      Sir, on means testing for hospital care, I agree with the principle that we need to focus subsidies on those who need them, and so make the most of our healthcare budget. However, usually the devil lies in the details, and I would like to urge that before we introduce any means testing for hospital care, we should study the issue very carefully. I know that means testing has already been applied for step-down care and in a few other services, but hospital care is a different kettle of fish, as the cost involved is much more and, for those suffering from catastrophic illnessess, the medical bills are huge.

      Singaporeans who are really poor, and the upper income, will have fewer problems, but those caught in-between may face difficulties. Likewise, those who suffer from a prolonged illness, even though they may be enjoying a certain income level, will have their savings wiped out and little monthly income to support their medical needs. We also have to bear in mind that we are an ageing society, and we now want families to have more children. If, as a result of the new means testing policy, they have to pay more in terms of hospital care, then our efforts at promoting procreation may be affected if families feel that they have to incur increased liabilities in meeting the healthcare needs of their children.

      Many Singaporeans today are saddled with multiple responsibilities. In addition to taking care of their own children, many have the responsibility of taking care of old and sickly parents. If we use income alone as a yardstick, it may not be very helpful, as a person may be earning a certain income but it may not be sufficient for him to take care of his multiple needs. Policy-making, Sir, is not an easy process and there are risks associated with any policy. We do not want to see a situation where, because of certain policies, people do not seek treatment or they neglect their aged parents. I do urge the Government to study these issues very carefully before proceeding with means testing, as healthcare is an issue which is close to the hearts of many Singaporeans. Means testing should not be the only way in which we control healthcare cost in Singapore. A lot more has to be done to ensure that healthcare remains affordable, particularly, continuous efforts like identifying and addressing the areas which had caused the cost of hospital care to balloon over the years.

    Mr Chew Heng Ching (East Coast, PAP):
      In line with this philosophy, I would like to urge the Government to continue with the implementation of means testing, not just in healthcare but also move away from across-the-board distribution of social handouts. Instead, we should have a more coordinated approach in delivering social assistance schemes, so that distribution will reach only those that really are in need of them.

    Mr Low Thia Khiang (Hougang, WP):
      DPM Lee also said that our social safety net must be carefully targeted and must not undermine our will to work and improve ourselves. As such, subsidies should be focused on those who need them most and in areas which yield the most public good. Means testing will, therefore, become an important feature in providing public services and social assistance.

      Mr Speaker, Sir, there is nothing wrong to encourage our people to be self-reliant and to make optimal use of our resources. But what is the Government's responsibility to the people? Should means testing be used as a norm to decide payment of basic public service is debatable. When the Government says that subsidies should focus on those who need them most, any person who has social justice at heart will generally accept this broad principle. However, judging from the PAP Government's governing style, I am afraid this is going to be another trick with the real motive concealed. The question is, who are those that most needed such subsidies? Are you saying that only those families whose income is less than $1,000 should be our focus, and those with $1,001 will not require the same level of assistance? No doubt, we do need to help the lower income people, but what about those who are unemployed and those whose assets have devalued and the “new poor” in the middle class who are squeezed? Do they not need the help too? Will the use of means testing to decide the medical subsidy not result in higher medical costs for most of the patients? If this is the case and the margin of increase is higher than the actual subsidies given to the needy, is the Government not benefiting from means testing? If this is in need either in short term or in long term, would it not extend the norm of means test to other public services such as education? Under the disguise of a broader objective of re-distributing public resources and building of a strong society, the middle-income group will be the ones who are squeezed most.

      Mr Speaker, Sir, what I would like to put to you is the fact that, regardless of whether the economy is good or bad, the burden of cost of living of our people in Singapore has never lessened, it has increased. When the times are good, the Government will say, “Well, you can now afford it, so all the fees and charges will be increased!” When the economy is bad, the Government will sit by and watch, and only step in when the people are in a state of extreme hardship. Even then, the support they give to the people is hardly sufficient in helping them to tide over the difficult times, and the Government even rubs salt into the people's wounds by emphasising how important it is to import foreign talents. Now our economy has yet to be fully recovered, but the Government is already in such a hurry to withdraw the various rebates and to plan for a new fiscal landscape. This budget has laid down the foundation of collecting more fees from the people by introducing means test in healthcare service and reviewing university subsidies in the name of building an efficient government and a strong society.

    Mr S Iswaran (West Coast, PAP):
      The third theme that ran through is helping those who are in greatest need. Hence, the discussion on the healthcare system and, in particular, means testing to decide whether and how much an individual should be entitled to in terms of subsidies from the Government. These are all sound underlying principles to achieve social equity and economic efficiency in public finance. But there are a few key concerns that I have because we are managing a transition from an economy in a high-growth phase with Government playing a very dominant role to an economy in a more challenging phase, and Government empowering individuals and corporations more to chart their destiny.

      In that context, one key element in all this change must be the preservation of choice. Singaporeans must be free to choose. If we take healthcare as an example, what level of healthcare do they want so that they can decide on how to spend their dollar? Whether it is full cost, private, "A" class in our Government hospitals or subsidised healthcare at "C" class or some intermediate arrangement, all these options must be available to Singaporeans. Then they can make rational choices as to how they want to allocate their budgets.

      In that context, I was quite heartened to hear that the Government will ensure that even the well-off can use C-class wards or will access to C-class wards, although they may not perhaps enjoy the same level of subsidy.


      The third aspect, Sir, I would like to highlight is, keeping it simple and fair. We have a system which is quite complex. Buying a car in Singapore involves, for some people, quite complex econometric modelling - trying to anticipate COE prices, their movements, and how various Government policies will have an impact on these. And, really these are very simple choices we should be allowed to make in our daily lives. From that context, when we talk about the means test, it should also be simple, but fair. What do I mean by that? When we consider some of the past Government assistance measures that have come in place, like CPF top-ups and so on, we have used housing type as the proxy for one's economic well-being and so the smaller your housing type, the greater the top-up you receive, or no top-up depending on how high the housing type is. That is at best a crude measure and certainly when we are looking at it in the context of things like healthcare we should be very careful how we administer such criteria.

      Specifically, I would say that we should not be looking just at assets, we should be looking at flows of income that people have, in deciding what category they fall into in terms of socio-economic groups. A good example would be older generation Singaporeans who might be living in landed property, but old landed property in some of the older estates in Singapore. For these individuals, to make an argument that they are asset rich and they could also sell their house and pay for their medical cost - economically rational, but I think socially quite difficult to communicate and convince people. So I would say that we need to strike a balance between the two, not totally disregard one's asset holdings, but find the way to strike a balance between that and the real income flows that individuals have, so that whatever means test we ultimately administer, will be seen as one that is fair.

    Mr Loh Meng See (Jalan Besar, PAP):
       I am pleased with this shift in emphasis away from dishing out wholesale subsidies to our people. Our population is aging fast. A lot more medical and healthcare resources are required to meet the growing needs of the elderly. With Government budget getting tighter each year, we need to find better ways to optimise the limited public funds to the areas of greater need. I therefore welcome the approach to target public subsidies at the segment of the population who needs most help.

       Sir, for some time, the Government had been reluctant to use means testing to determine those Singaporeans who are deserving of public subsidy in healthcare cost. Means testing was ruled out because we were told that the system is cumbersome and not cost effective to administer. It is out of necessity that we now have to use means testing to prioritise the most deserving cases for larger healthcare subsidy.

       There are many elderly citizens living in my Kampong Glam constituency. For those who are aged single and poor, help is easily available. There is, however, a sizable number of elderly residents who have little or no CPF savings but find difficulty in getting Government subsidy. Though these elderly citizens have grown up children, their children who earn barely enough to support their own young families could not at the same time contribute to their aged parents' financial needs. This category of elderly feels helpless.

       I am concerned that with means testing, we may unwittingly deny this marginal group whose circumstances are really in need of Government help. I hope the agency handling means testing would be sympathetic to the needs of the elderly Singaporeans who could not obtain support from their children. Certainly, we do not wish the very young from the lower income group with grandparents to support to suffer in the process. The children require nurturing and attention as they have a long future ahead of them.

       When the Government revised the CPF savings rate, it was stated that CPF was not intended to be all-encompassing but cover the vast majority of our working population. This would mean that there would always be a small proportion of working adults with little or no CPF savings set aside for their old age. If that is the principle adopted, we have acknowledged that there will always be a segment of Singaporeans requiring public assistance and subsidy. I wish to ask how stringent is means testing to be, and would it impose additional financial burden and hardship to the poorer segment of our population.

    Mr Zainul Abidin Rasheed (Aljunied, PAP):
      Means testing sounds equitable but, being new, I am glad to see the Government agreeing to "proceed cautiously". MOH needs to work out a system that is sustainable and this will be possible with time and experience. The Government must ensure that this means testing will not end up being seen as "mean".

      Flexibility must be its test, as services cover a wide range of inpatient care to surgery to specialist outpatient. There is also the need to differentiate from the ordinary observation ward to the ICU, with or without complication, no matter how low the chances of complications surface.

      The heart-wrenching case of filial children wanting to show gratitude to their father and placing him for observation in class A, ending up with complications and weeks in ICU and a $170,000 bill a year back, would be a case worth looking at. Indeed, for fear of such a situation or complications, there would be many Singaporeans who would prefer to be prudent in going for lower class treatment and not because they want to abuse the subsidy system.

    Dr Jennifer Lee (Nominated Member):
      As we have been saying with regard to means testing, we would like to target Government subsidies to those who need it. The $50 to $200 deposited into the Medisave accounts of those over 50s, who need it will, I can assure you, not be enough. The same amount deposited into the Medisave accounts of those over 50s who do not need it will be irrelevant, and hence wasted. The $104 million will end up neither providing adequate relief to the needy nor even gain much goodwill for the Government in the process. I would therefore like to ask DPM Lee to reconsider and redirect the $104 million to Medifund instead, as this will then indeed be used to give assistance to those who truly need it.

    Mr Gan Kim Yong (Holland-Bukit Panjang, PAP):
      Next, keeping healthcare affordable. Healthcare cost is one of the greatest concerns of Singaporeans, especially among the older generation. The Government has given assurance that healthcare will remain affordable here. There was a proposal to introduce means testing in healthcare services, especially in the hospitals. Means testing may be a good way to channel our limited resources to those who really need them. However, I would like to urge the Government to proceed cautiously and to consider several factors.

      Firstly, we must assure people that the Government is not taking this opportunity to reduce overall subsidy as a means to reduce the budget deficit.

      Secondly, the criteria for the means testing must be transparent and fair. Household income should not be the only criterion. There should also be some flexibility when there are special circumstances, such as handicapped members in the family.

      Thirdly, a tiered system is preferable rather than an all-or-nothing system. This is already the case for some of the Ministry's existing subsidy schemes.

      I would suggest that greater public consultation be carried out before means testing is introduced into our system.

    Dr Gan See Khem (Nominated Member):
       Madam, the Minister has announced that restructured hospitals will focus their attention on providing affordable care for Singaporeans. That is a call that many Singaporeans feel very comfortable with. The issue that some of my parliamentary colleagues brought up earlier is: can healthcare cost really be controllable? With increasing drug cost, labour cost, etc, can the Ministry effectively bring healthcare cost down so that it is affordable to many Singaporeans? Most Singaporeans look at subsidised care, ie, B2 and C class wards, as a safety net.

      For many years, low-income Singaporeans are guaranteed care through means testing, and this is something which we are all very supportive as a caring society. Middle-class Singaporeans look at the safety net, but many do not use these B2 and C class facilities if they do not need to. The announcement earlier on about the introduction of means testing for all Singaporeans has caused some concern for the middle and high income earners, because many of them will be denied access to subsidised care when financially they are in need of that type of care. Many older Singaporeans are widows. They live in private homes bought when they had high incomes. But as they get older, many of them are unemployed. If not, they are not retired and have no means of earning high income. So, the question is: why are we denying subsidised care to older Singaporeans, even for those who do not pass the means test? 93% of taxes were paid by the top few percent of Singaporeans, and should they not have the right to get access to subsidised care later on in life when they really need it? I think Singaporeans will be supportive of the test for eligibility, ie, we do not need to offer subsidised care to non-locals. But it is another issue when we do not take care of our locals when the time comes and they really need it. Would the Minister be able to give us an idea how the needs of those who do not qualify under the means test but are in need of subsidised care, going to be protected?

       The Government is now talking about introducing insurance. Healthcare insurance has failed in many countries, especially when access to care is unlimited. In the case of Singapore, people will support insurance if the Government really introduces means testing, because they all need the safety net. And what about the insurance premium? Where will it come from? Will it come from the individual's pocket, or will we be able to claim it from our Medisave account or from MediShield or Medifund? What are the plans the Government has to work with insurance companies to provide payment schemes so that more Singaporeans can get access to these insurance schemes?

    Dr Lily Neo:
      Madam, DPM Lee said in his Budget Statement that, even with means testing, a high income patient can opt for B2 or C class treatment but will be subsidised less. The concern is that there are people in the sandwiched group that do need the heavier subsidy due to financial constraints or heavier commitments. Considerations must, therefore, be accorded to this group who need the heavier subsidy, not by choice but by circumstance.

      Will MOH ensure healthcare affordability for the majority before implementing means testing? We should establish some alternative risk sharing insurance for our population before implementing means testing. To this end, healthcare financing through insurance to reduce an individual's burden at the time of need is a worthy consideration. As I have mentioned before in this House, national insurance covering the whole population through our Medisave should be allowed.This sentence inserted by Dr Tan to catch plagarism

      At present, means testing in nursing homes is based on the total income of older family members divided by the number of members in the family. Madam, this is unfavourable to small families. Often times, it is difficult to get information on income from all the members of the family and many elderly fail to get a subsidy as a result. Other times, family members or applicants are not willing or unable to submit their documents for a variety of reasons as with confidentiality or self-employment situations. There is a need to refine the present system of means testing.

    Dr Ong Seh Hong (Aljunied, PAP):
      Madam, actually part of the ground is edgy over the Ministry of Health's intention to introduce means testing in the allocation of resources. These are especially Singaporeans who are in the middle-class group and they are worried that they may be squeezed out of this subsidised healthcare. It also means that when means testing is applied, this group of people will enjoy a smaller subsidy, if any, from the Government. Most of them have no quarrel over the MOH’s argument that means testing is to better allocate limited resources in favour of the poor. However, they are worried that healthcare can be very expensive especially with an ageing population. They would like to be prudent and to stretch their healthcare dollar longer and further. They also feel that they have contributed in paying taxes and so on, so they should be entitled to subsidised healthcare.

      I would like to urge the Ministry to be mindful of this concern. Currently, the means testing is supposed to be used only in step-down care, supposedly only for the 50th percentile of income level, which means half of the population may not enjoy it. For acute medical care, some of the bills can be quite high and even for those who are just above the 50th percentile, it could be a very big burden on them. Their limited savings will be depleted very fast.

      Secondly, the current system of means testing on a per capita income basis is also biased against smaller families because regardless of the family size, the fixed cost of running a household is there. Maybe there is a need for further modifications on the current system of means testing.

      Thirdly, the percentage of subsidies should also vary, depending on the nature of treatment and the size of the medical bill. Because if we say that based on this income level, they can only enjoy x% subvention, for a small medical bill, for example, a simple operation that costs $2,000, if there is only 50% subvention, we just need to pay $1,000, that is fine. But if it happens that a person is to be in the ICU for a few months, and the bill can be, say, $100,000, then 50% of $100,000 is a lot of money.

      Finally, I would like to urge the Ministry to avoid creating a bureaucratic monster just to administer means testing.

    Dr Chong Weng Chiew (Tanjong Pagar,PAP):
       Madam, I declare my interest as the CEO of Ang Mo Kio Hospital.

      The principle of means testing to allocate subsidies based on a patient’s ability to pay is definitely a sound one, considering our limited resources in Singapore. Hence, I would urge the Ministry to consider implementing it in all public hospitals as soon as possible. I do understand that what I propose is a little bit different from some of the earlier speakers.

      The need to implement it as soon as possible is necessary because the longer we delay, the more difficult it would be to implement when the time comes. Definitely, we know that there are challenges in the implementation. I have close to about two years of experience in implementing means testing in community hospitals and nursing homes. The processes and tools involved can certainly be improved currently. There are messy and dodgy paperwork and there are long waits for family members to submit income documents, and as a result of which has led to delays.

      Therefore, I propose that the CPF Board and the Inland Revenue Authority , which currently are not involved, be involved so as to speed up the process. They could help to reduce administrative and manpower costs substantially.

      I would also like to propose, as what Dr Lily Neo has mentioned, to build more “C” class wards. “C” class wards 10 years ago and “C” class wards today are very different. The quality between subsidised wards and non-subsidised wards today is minimal. Thus, there is a good demand for subsidised wards, even from middle class and wealthy Singaporeans. Although they would not be entitled to subsidies once means testing is implemented, at least, they should still have the choice of lower cost wards.

      Next, would the Ministry please also review the proposed income caps to qualify for the various subsidies? They should reflect our remuneration conditions more realistically. The proposed caps are too low, as what Dr Ong Seh Hong has mentioned earlier on, and currently resulting in about half of the current Singapore population not qualifying for some form of subsidies.

      Lastly, both acute care hospitals and step-down care facilities must use the same template for means testing if we do intend to extend means testing to acute hospitals. For example, we should not use household income to determine subsidies at acute hospitals but per capita income at step-down care facilities. A one system, two methods, would cause much confusion and chaos for all parties - the families, the acute hospitals, as well as the step-down care providers.

      My very last point is that, from what I read in the newspapers, there is a great amount of misunderstanding from the public about means testing. Many thought that if they do not qualify for any subsidies, they are unable to go to low-cost wards, like “C” class wards. I think the Ministry should embark on an exercise campaign to let the public know what means testing is all about.

    Mr Chay Wai Chuen (Tanjong Pagar,PAP):
      Madam, I share the views of many of the previous speakers regarding means testing. I would urge the Minister to be cautious in moving this means testing scheme. Even professional and middle-class people are arguing that they should not be denied the services in hospitals if they choose to go for a “C” class or be charged at a subsidised rate. The argument is, why discriminate them of this right of choice? After all, they have paid all the taxes that they have to pay. And there is this fear amongst the generation of the post-war baby boomers, who are now almost reaching 60. They are very concerned about the healthcare charges for their old age.

      I urge the Minister not to roll out the means testing scheme unless he has in place a health insurance scheme in adequate range and cover. There has to be more work done by actual studies to arrive at the premium and scale of this insurance scheme. The coupling of this means testing to a fully comprehensive insurance cover scheme should be tightly done before we implement this means testing.

      I believe that the present MediShield scheme is not comprehensive enough. Should the Government not work towards liberalising this MediShield scheme to let it be completely available to insurance companies so that they can work out the right product through risk pooling? It may be very useful when certain treatments or procedures are going to be expensive or very costly than the differential rates of subsidies, like what was mentioned by Dr Ong just now.

      Finally, for patients who are recovering from operations or illnesses and require nursing care - I believe presently nursing care is not insurable - I hope that the Minister could consider including downstream nursing care to be incorporated into the insurance scheme for healthcare charges under this means testing regime.

    Mdm Halimah Yacob:
      Madam, everyone has an opinion on means testing because health is a matter that is close to the heart of every Singaporean. Even those who are healthy today are concerned over the implications because, as sure as the sun rises, everyone will fall ill at some point of time in their lives and may land up in a hospital.

      Many Singaporeans today belong to the sandwiched generation where they have to take care of not only their own spouses and children but also aged parents or, in some cases, sickly siblings. The Government has repeatedly said that while it will have schemes to support those who are in difficulty, the best defence will still be the families supporting each other. Yet, in introducing this means testing scheme, the Government is making it more difficult for families to help each other.

      I am concerned, Madam, about the social implications of such a policy and how it will affect behaviour on the ground. Will we see less support for elderly Singaporeans or those who are handicapped and sickly? And what about encouraging families to have more children? I am concerned that the policies and the messages that the Government is sending are contradictory and confusing. In my view, the angst, frustration and cost of administering means testing far outweigh whatever the benefits that can be reaped from introducing it. I would like to ask the Minister the following questions.

      Although means testing has already been implemented for step-down care and other services, hospital care is different. Even if per capita family income is used as the basis, a major prolonged illness can still cause a tremendous strain on the financial resources of a family. What yardstick will be used to measure affordability which is fair and equitable and also take into account individual needs?

      Secondly, will the paperwork and investigations associated with implementation of any kind of means testing add a substantial administrative burden to the system, with a resulting increase in administrative costs? A means testing system requires a large administrative staff to review applications and determine whether they meet the relevant criteria.

      Thirdly, will the means test be applied at a time the person is admitted to hospital or at regular intervals after the hospital stay started or for subsequent visits as a person’s status may change over time?

      Finally, means testing requires someone who wants to benefit from the subsidy to identify themselves as poor. The process of documenting one’s poverty and hardship can be a difficult and demeaning process in itself, to my mind.

      Madam, we should handle means testing with care. People are most vulnerable when they are ill. My concern is that means testing, instead of reaping any good, will instead create more ill-will and anger and is, therefore, counter-productive. I would therefore like to urge the Minister to allow for enough public discussions and airing of views before means testing is introduced. I would also like to suggest to the Minister not to introduce means testing before an effective insurance scheme is put in place to catch those who fall outside the subsidy net. The current deductibles under MediShield are very high. Those without an insurance policy to cover them and are not eligible for subsidies will be badly affected .

    Mr Gan Kim Yong (Holland-Bukit Panjang, PAP):
      Sir, the Government has proposed the introduction of means testing in healthcare services. I agree that with the given limited resources, we must refine our subsidy system to ensure that those who need it most will get it. I believe means testing is a workable service. However, the Ministry has not provided sufficient detailson the proposed system. It is a bit like watching a mystery movie - you are kept in suspense until the end. Many Singaporeans are confused and concerned. For example, they do not know who will be affected by the change and whether they are in the low income group that will benefit from it, or they are in the high income group that will have to pay more in time to come. They also do not know how much more they have to pay. Sir, this known/unknown is very unsettling, and I hope the Ministry can disclose more details as soon as they are available.

      I have received feedback from some of my residents. They think that the Ministry is using this means testing to reduce the overall Government subsidy because of the budget deficit. I think the Ministry should clarify its intention so that there will be no misunderstanding. In working out the details of the means testing, I would like to urge the Ministry to define the qualifying criteria clearly. Income should not be the only factor. Family obligations, such as handicapped family members, mortgage obligations, etc, should also be factored in. As I mentioned earlier, we should adopt a tiered system. I would suggest the Ministry studies similar systems implemented in other countries so that we can develop a comprehensive, fair and transparent system. I hope the Ministry will also leave room for some flexibility to cater for exceptional cases. In the introduction of means testing, the higher income group must expect lower subsidies. It would, therefore, be crucial that they be covered by some form of healthcare insurance. Therefore, it would be timely to review the MediShield scheme for this purpose.

      Lastly, communication is vital. I would urge the Ministry to conduct extensive public consultation so that the final scheme would take into account feedback from all segments of the population. The Ministry must also take pains to explain the scheme to the people to ensure acceptance. In this regard, I am sure grassroots leaders and MPs like us would be more than happy to help.

    Dr Michael Lim Chun Leng (Pasir Ris-Punggol, PAP):
      Sir, means testing is a means of trying to reduce the subsidy to those who are more able to afford healthcare services. However, knowing how the healthcare system works, I really have very bad vibes about means testing for healthcare services at an acute general hospital.

      I will give you 10 good reasons why we have to think very carefully before considering implementing means testing.
      (1) Penalising those who pay the most taxes by increasing their healthcare cost sends the wrong signals. This is not about giving tens of dollars in S&C rebates per household. This is about tens of thousands of dollars in cost per person.
      (2) Being hospitalised is not a vacation. It is neither an option nor a choice. You go into the hospital because you have to, and not because you want to.
      (3) Using household income or per capita income is not the solution as healthcare cost is personal and we cannot force the person to bear another person's healthcare bill.
      (4) As families get smaller, the children have to bear a significantly larger burden to support elderly parents, leaving them with little savings and disposable income.
      (5) Healthcare costs are unpredictable, and when a complication arises, the cost can escalate significantly. Every percentage point in subsidy can mean a lot to most middle income families.
       (6) I believe it is going to be a major public relations disaster. The Ministry stands to lose a lot of goodwill that the Ministry has built over the years.
       (7) There are too many variables and I cannot think of any simple formula. What it means is that there will be a lot of unhappy patients.
       (8) To do means testing for patients will require an entire bureaucracy that will have to manage a very unhappy public that have failed the means test. It reminds me of Casemix. The Ministry had spent millions of dollars on IT cost, man-hours and employing new staff. Yet, till this day, few believe that it has translated to any real tangible improvements in the healthcare delivered to the man-in-the-street.
       (9) Is the Ministry prepared to be totally transparent about their assumptions and methods for means testing?
       (10) Is the Ministry able to show significant real cost savings from this exercise?

       One comment that has been made is that Singapore is the only country in the world where the public hospitals have better finishes than the private hospitals. There are many areas where we can save cost, and I hope that we are not barking up the wrong tree and being penny-wise and pound-foolish. I would urge caution in rushing into means testing. I would like to suggest that the Minister considers setting up a committee to study this matter very carefully before making a decision. If the Minister cannot convince this House, how can the public be convinced?

    Mdm Ho Geok Choo (West Coast, PAP):
      Sir, much has been said recently about the need to revise hospital charges so as to better reflect the affordability of patients and their families to pay for the cost of their hospital stay. The main criterion by which affordability is determined appears to be solely that of income. Sir, the ground has raised, through feedback, a number of concerns with respect to the proposal to make changes to the proportion of subsidies, by the income of the patients and/or their families.

      Sir, first, is the question of income and affordability. The assumption that both of them are synonymous appears to be an unwarranted one. The high incomes that some patients earn could very well be spread out across very many family members who are dependent on the income of the breadwinner for their maintenance and sustenance. Whatever is done to change the manner by which hospital fees are to be charged will, in my view, have to take into consideration a whole range of factors, other than income by which to gauge the ability or otherwise of patients to pay.

      Second, Sir, is the question of fairness. If high income patients are made to pay for the subsidised wards, then the issue of double payment would crop up for high income patients are paying higher taxes, part of which goes to the subsidies that patients staying in Class C and Class B2 get to enjoy. If they are made to pay a higher fee for their wards, then they would effectively be paying twice for the cost that they incurred. Will the Minister reconsider this scheme to ascertain its desirability from the perspective of ensuring the efficient use of our resources and from that of fairness?

      My other question to the Minister is: if we use income as the main criterion for means testing, are there mechanisms in place for individuals to explain why they should be getting Government subsidies, even though their income would require them to pay more for the class of ward that they are staying in? From what I gather, in some countries that had adopted means testing as a way to determine the amount of subsidy that patients enjoy, mechanisms are put in place that permit patients and their families to explain more fully the specifics of their family situation. I think this is only fair because income alone does not indicate the ability of the family to pay for their healthcare cost. And so my question is: would the Minister adopt a more liberal and open approach to the determination of affordability, with income perhaps as one determinant of affordability and not the only determinant? And would the Minister consider putting in place mechanisms that would allow patients or their family members to explain the financial situation they are in?

    Mr Steve Chia Kiah Hong (Non-Constituency Member):
       Sir, there is alarm among many people that means testing is another mechanism for the Government to reduce its expenditure on healthcare over the longer term. Specifically, there is great concern among the middle income group that their healthcare cost is going to rise with this means testing procedure. I hope the Minister can provide some answers to these two questions. This sentence inserted by Dr Tan to catch plagarism

       (1) How will MOH determine how best to start means testing? Will the administrative cost for carrying out means testing outweigh whatever savings it could derive?

       (2) How will MOH know how much a patient earns? Will it be by personal declaration or will it be through access of the IRAS records? If it is by declaration, how does the Ministry intend to verify whatever is declared as genuine? But if it is through the IRAS records, many more people will be even more alarmed as these earning figures are very private details of the citizens and IRAS has no right to disclose such figures. What is the Ministry's assurance on this matter?

       Sir, citizens pay taxes for Government to provide certain essential services like healthcare. The Government should see subsidising healthcare as part of the essential services it provides to the citizens. How can the Government ask for double payments from the citizens, once, through taxes and then, again, through selective higher co-payment through means testing? Although I concede that it looks unfair for high income patients to enjoy the same 80% subsidy as poorer patients when staying in a Class C ward, I would like to ask the Minister further. How does he intend to define the rich and the high income group? Is it the top 20% earners of our population? Or is it the top 20% plus the middle 50% of our population, making 70% of our total population? Or is it somewhere in between? I hope the Minister can be more specific about the definition of "high income".

    Mr Low Thia Khiang (Hougang, WP):
      Sir, although I agree with the principle that medical subsidy should be given to those who are really in need, the question is: who is qualified for the so-called “really in need”? Means testing is also a departure from the current principle of Government providing affordable basic healthcare and the patient decides which class of ward is affordable to him or her. With means testing, the affordability of a patient is now dictated by the Government. Although the Government could argue that the patient could still decide which class of ward he or she wishes to be admitted, the patient who is deemed not qualified for the lower class ward will end up paying more.

       The Government said that it is unfair for high-income patients to enjoy some 80% subsidy as poorer patients. Can we have some statistical data to show what income level of patients use Class C wards? What is the extent of the problem? Could the scenario be that of people who are deemed rich by the Government, but the healthcare cost is too high, and they are not able to afford to go to a higher class ward? In other words, decreased affordability in health care forces more people to opt for Class C wards.

       DPM Lee painted two undesirable scenarios that in order to maintain the current level of healthcare service, either the Government has to spend a lot more, resulting in a tax raise, or the quality of healthcare provided will be lowered. Why must the Government's expenditure on basic healthcare service fall under these two paradigms? Is the self-professed highly capable and thus worth to be paid a million dollars and Government unable to continue to provide basic healthcare? May I know how much is the Government expected to save in this healthcare expenditure by implementing means testing? Is it not the Government's fundamental responsibility after collecting taxes to provide an affordable basic healthcare service for the public good, regardless of social and financial status? Here I am referring to Class C wards.

       I believe that, eventually, the notion of affordability via means testing will be felt by the bulk of Singaporeans who largely belong to the "not really in need class." I would like to end by quoting a Straits Times reader, Mrs Teo Lai Ching, who was quoted to have said that "she is not rich enough not to be affected, and not poor enough to qualify for help."

    Mr Andy Gan Lai Chiang (Marine Parade, PAP):
      Sir, cost issues on healthcare will never go away, as healthcare is a highly skilled and highly personalised service. High standards of medical services never come cheap, especially as new medical equipment and drugs are being introduced regularly. Furthermore, as our population ages, there will be a greater need for more medical services. And with higher expectations, greater costs will be incurred. The minimum level of medical services rises as the population grows to accept a higher level of medical care. Hence, I support subsidised class wards in general, as most people cannot afford modern medical and hospital services.

       As affordability differs from one person to another, means testing is necessary to determine the level of subsidy that one is entitled to. Means testing has already been practised in restructured hospitals. It is also carried out for patients who need to be referred to community hospitals or who apply for Medifund. Having means testing will ensure that those who are least able to pay have the greatest help from the State.

      However, medical care is not just about balancing cost and revenue. It requires finesse to manage people's expectations. The greatest drawback of means testing is that it transfers the power to choose from the individual to the State. Whilst I applaud the Ministry's good intention of making sure that the needy gets the maximum help, the Ministry should also make efforts to reassure the public that their interest will be looked after, no matter which level of income they fall into.

       Individuals that fall into the middle income bracket usually end up being squeezed in two ways. They do not qualify for subsidy nor can they afford the high cost. The reasons for Class C wards need to be reiterated and perhaps regularly reviewed to meet changing economic and social norms. It is equally important that at the time of admission, the inbuilt administrative system takes the individual's prevailing circumstances into consideration. Estimated total hospital charges together with hospital fees should be made known to the patient, even if he or she is entitled to a higher subsidy, as the patient's share of cost may be too high even for some to bear. For example, if a patient is out of job and cash poor, this should be reflected when the patient is being considered for subsidy.

       We should be careful against creating excessive bureaucracy in carrying out means testing. Processes should be simplified and patient's interest should be placed first. Perhaps the human touch should be reprioritised to a higher plane of importance.

    Dr Wang Kai Yuen (Bukit Timah, PAP):
       Sir, within living memory, a free public healthcare has always been a safety net provided by the Government. To many Singaporeans, this is being viewed as a right of citizenship. To others, it is being viewed as an entitlement that they have earned after a life-time of paying taxes. Of course, if a person chooses not to be treated in a Class C ward, he does so on his own free will. With means testing, this right to medical subsidies is being taken away from him. This is a big step affecting every Singaporean and a step not to be taken lightly.

      In the deliberation of medical subsidies conducted by the Feedback Unit, there emerged a view from the discussions that perhaps the amount of subsidy a patient would have received in a Class C ward should be credited to him whenever he is hospitalised. So, if he so chooses, he could be warded in a better ward in a public hospital or even in a private hospital. Then he could chip in his credit. This is more or less the same concept the Ministry has adopted for some outpatient visits to private clinics. This way, if we adopt it, everyone is happy. There is no need to introduce means testing.

      Sir, I think this school of thought is flawed, dangerous and reflects a self-centred view of the individual. I believe healthcare is not a buffet meal. Healthcare subsidy should be targeted at those who really need it. To pursue the viewpoint that healthcare subsidy should be credited would be simply ludicrous because we will be taxing ourselves to pay for our own needs. I think it is important for the Minister to explain clearly and convincingly why introducing means testing is necessary and why it is good for everyone in Singapore.

    Mdm Ho Geok Choo :
      Recently, published data on hospital charges show that facilities like Alexandra and Changi Hospitals, generally thought to be cost-effective regional hospitals, are not as cheap as they are perceived to be. In fact, prices for certain procedures at unsubsidised rates may be obtained more competitively at private hospitals. Well, taken in this context and with some reconsideration of determinants, I suppose the advent of means testing to determine the eligibility of patients to get subsidised care can be seen as a timely one.

       The Minister for Health has stated that the savings from not subsidising the better off will help put off annual increases in C Class rates. Linking the healthcare subsidy to a needy individual as opposed to a bed category will also allow the subsidy to be portable, as recommended by the Health Services Working Group. Patients who are means tested and receive a subsidy can choose to be treated in public or private hospitals. We should compete on the basis of price and care. The resulting market competition amongst public and private hospitals should lead to more cost-effective pricing by the hospital care providers. Therefore, my question to the Minister is: since the recommendations of the Health Services Working Group were accepted in full by the Government, does the Ministry of Health intend to make the healthcare subsidy portable?

    Emphasis(underline) mine.
    Part IV and V of First Session, Tenth Parliament.
    8th, 9th, 16th and 17th March 2004

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    Reply by Health Minister
    Parliamentary Debate, 2004

    The Acting Minister for Health (Mr Khaw Boon Wan):
       Sir, Dr Lily Neo, Mr Gan Kim Yong and many others spoke on healthcare cost. In fact, we had just recently, in this House, a short discussion on the same topic. People, all over the world, worry about rising healthcare cost. They want to be sure that, first, good healthcare services are available should they fall sick, and, second, they will have quick access to these services, whether they are rich or poor.

      The third strategy is for the Government to stretch our subsidy dollar. As Health Minister, Acting or otherwise, I will do my best to secure the largest possible budget allocation from the Ministry of Finance. But, realistically, Government money is not unlimited. So, my Ministry will have to stretch the subsidy dollar. How? Means testing.

      Many Members have commented on this. Dr Michael Lim gave us 10 reasons why it should not be implemented. On the other hand, Dr Chong Weng Chiew has expressed support and, in fact, urged me to do it as soon as possible. Dr Michael Lim pointed out that the number of well-off Singaporeans opting for B2 and C class wards should be small, and asked if it makes sense to put in place a system to catch such a small minority. Mdm Halimah also questioned if the social cost of means testing justifies the benefit. Mr Yeo Guat Kwang asked for some details, but all of you advised me to be cautious. So, this is clearly a complicated subject and, like non-catastrophic medical insurance, I would take my time to think through the issue, consult widely and hear all views, so that we can come out with a practical scheme.

      Dr Lily Neo and Mr Chay Wai Chuen stressed that medical insurance should be in place before implementing means testing, so as to avoid distressing the affected group. I think that is valid.

      Mdm Ho Geok Choo and Mr Gan Kim Yong said that the criteria for determining affordability should be multi-dimensional, ie, a range of factors, and not solely dependent on just income level. Family size should be taken into account. At the same time, however, Dr Lily Neo, Dr Ong Seh Hong and Dr Chong Weng Chiew pointed out that the current formula used in nursing homes seems to penalise small families. Dr Chong has two years of ground experience with means testing. That probably explains his confidence and why he recommended that I move faster. But he too noted that the current scheme was not perfect and should be refined.

      From the various comments, I have distilled several key principles behind what, I think, could be a practical means test scheme.

      First, it must be simple to implement. I agree with Dr Ong Seh Hong and many others that we should not end up with a bureaucratic monster. We will, therefore, need to simplify, but, to simplify, inevitably we will have to use proxies to determine whether it is wealth or income. The scheme should cause minimal inconvenience to patients and not delay their treatment. It should not be costly to administer.

      Second, it must provide choices. Mr Andy Gan reminded us that if means test results in taking away freedom of choice from patients, that would not be good, and I agree. So, Class C wards should remain open to all Singaporeans, rich or poor. Patients should continue to have the freedom to choose. In fact, there is nothing wrong about the rich going into Class C. Let us not be judgmental about their decisions. Mr Low Thia Khiang asked just now whether there are data. There are. A few weeks ago, I remember, MOH published an occasional paper and there were quite a lot of data in that paper to show the income profile of patients in the various classes. It is a small minority. I think somebody asked the question: who are well off? So it depends on how you define the "well off". It is, from my point of view, still a small minority. But it is not insignificant. And what we are trying to do is to, hopefully, nip the problem in the bud, to avoid a larger problem in the future. Dr Lily Neo and Dr Chong Weng Chiew reminded us to ensure an adequate supply of Class B2 and C beds, which I agree.

      Third, it must be fair. The aim of means testing is not to reduce Government subsidies because of the current deficit, as suggested by Mr Gan Kim Yong or some other MPs. The aim is to better target our subsidies to those who need them most. Dr Lily Neo and several MPs, eg, Dr Ong Seh Hong and Mr Nithiah Nandan, have spoken about the potential squeeze on the middle income group. I share their concerns, which we will take into account when devising the means test criteria. We will calibrate subsidy levels appropriately, to ensure that hospital bills remain affordable to all Singaporeans. That must always remain the priority.

      Fourth, we will be gentle in implementation. With simple rules, there will inevitably be deserving cases which fall through the cracks. Mr Andy Gan made the point that the patient's circumstances prevailing at the time of admission should be taken into account. We must be able to come in promptly when alerted, to sieve out such deserving cases and free them from unnecessary distress. Let me assure Mayor Zainul Abidin that our means test will not be mean. As Mdm Halimah pointed out yesterday, means testing should not be a demeaning process, but should be handled sensitively.

      Fifth, it must be transparent. And you know my view about transparency. Mr Gan Kim Yong and Dr Michael Lim called for transparency in implementation. I fully agree. The scheme must make sense to everyone, such that Singaporeans, if they like, are able to compute their own subsidy status.

      As this is a complicated subject, let us continue to discuss and suggest more ideas over the next few months. I have created a special section in the Ministry of Health's website to gather all feedback and suggestions. And I intend to continue to work with the Feedback healthcare group to advance this project.

      Mr Steve Chia objected to means testing. He asked several details, such as, will we be using IRAS data, therefore, breaching confidentiality. What is the cut-off? What do we mean by "well off"? Obviously, those are details that we will have to discuss through over the next few months. He made a point that if we means test out the rich, they will have to pay more. But the rich are also the ones who pay the most in taxes. Are we double taxing? But we are trying to achieve an outcome whereby, because we have to balance our accounts, subsidy is a zero-sum game. So, if I have more subsidy money because I collect more fees, then I can help the poor, I can stretch the subsidy dollar more. If we do not do this, and all rush to go to Class C when they could afford a lower subsidy, then I will first have to raise fees more frequently for all classes, including Class C, or raise taxes more, in which case, we will be going back to this top whatever percent who are the major taxpayers.

      So, let us not kid ourselves. We are not magicians here, and my job is to present the facts out into the marketplace so that people can see for themselves. If we are squeezing everybody, making profits, paying doctors and CEOs unrealistic pay and so on, then obviously we are in the wrong. But my job is to try to provide a good level of healthcare in a sustainable manner, and we all know a good level of healthcare does not come cheap.

      Mr Low Thia Khiang objected, I think, to means testing. I was flipping through some Hansard records a few months back, when I was asked to take on this job. I am relying on memory here. I am past 50, memory not perfect. I think I recall him making some comments, objecting to the rich becoming subsidised patients through the polyclinics, because our system is, if you are referred by the polyclinics, you are straightaway a subsidised patient. I remember, I think, he made such a comment that those who are rich should not be subsidised. But without means testing, how do I then know whether you are rich or poor? On that score, I thought he would then be supporting means testing. But I agree with him details are what count, and we will spend the next few months debating that.

    Mr Low Thia Khiang:
      Sir, may I seek clarifications from the Minister? The Minister referred to my previous comment in Parliament about polyclinics. Sir, I wish to clarify that I am not objecting to the basic principle that the subsidies in healthcare should be given to those who are really in need. I am aware of means testing for step-down care in the medical service. I have never complained about it.

      But, Sir, we must understand that we are now talking about C Class ward in the hospitals. We have to bear in mind that the cost of hospitalisation can be very high. No one really knows, whether you are relatively rich, or you are poor, and how much it will cost you. When people go for means testing, and some fall within the category of "not eligible for Class C ward subsidies", do they really know that they can afford? But affordability is dictated and determined by the Government that thinks they can afford. Is it fair to them? In my view, C Class ward, as it is now, is the last frontier of our social safety net system. If people are not sure whether they can afford, and they fall sick, they can go to C Class ward, and if they really cannot pay, Medifund will pay. I think people will not have so much anxiety. But the moment we change all this, when people fall within the category of non-eligibility, depending on where we set the benchmark, it will cause them a lot of anxieties and it is not being fair to them.

    Mr Khaw Boon Wan:
       Mr Low Thia Khiang also gave his explanation that he has no fundamental objection to the means test philosophy. In fact, he supported means test for polyclinics and nursing homes. But his worry is Class C ward. Because if you are wrongly means tested out or unfairly means tested out, then - to use his words - this last frontier of safety net will be taken away. I think I got him right now.

       At this stage, I am quite happy that if, on principles, we can agree on the whole conceptualisation of it, whereby if you are better off, you pay more than those who are less well-off, the rest are details. That is why I wanted the next few months to discuss those things. I do not think the last frontier is Class C subsidised ward. I think the last frontier, in the case of healthcare, has always been Medifund. Medifund is there to protect those who dropped through the safety net. So long as we have a good and sound Medifund in place, everybody can sleep tight. That is the reason why I persuaded DPM Lee and Minister for Finance to raise the Medifund allocation this year by another $100 million, to now make it $1 billion. But, never mind, let us hold the horses and await the details. We will have enough opportunities to discuss those details and then we can judge for ourselves whether they fulfill the various principles that I have outlined just now - simple, fair, etc.

    Mr Low Thia Khiang:
       Sir, further clarification. I do not agree to have means testing in hospitals, although I do agree, in principle, that healthcare subsidies should be targeted at those who are really in need. I also wish to clarify though I do not disagree with the means testing, for instance, in step-down healthcare or even polyclinics if we want it, because I think these are services that people could more or less cope with it to certain extent. Hospitalisation is something which is not that easy to cope with, and nobody really knows. I also wish to clarify that Medifund is not the last frontier. It is the Class C ward, which is the last frontier for many Singaporeans because not many people qualify for help under Medifund. Secondly, there is no need for people because they can calculate for themselves - if they think they cannot afford a higher class ward, they can go to C class ward. This is a comfortable social safety net. It is not something which people have to go and apply for it, beg for it and say, “Please, I am so poor.” I think it is demeaning for many people. That is why I am referring to it as the last frontier of our social safety net.

    Mr Khaw Boon Wan:
      I do not want to prolong this agony other than saying this. Whatever we do, affordability of healthcare to all income groups, rich or poor - that is always an important operating principle in the Ministry of Health. Whatever we design, whatever fees we charge, it must be affordable. How we design means test so that even if we assess that you are clearly in the category who can well afford, the charges remain affordable. I do not think I will cut the division of lines so precise that if you miss by a dollar, you are in this or that category. We will go for simple classification. That will be the approach I will take to this exercise.

    Mr Low Thia Khiang:
       One more clarification, please. I would like the Minister to clarify whether he thinks affordability should be determined and dictated by the Government or the Government should provide a range of services, and let people decide what is affordable to them.

    The Chairman:
      Mr Low, is that a clarification or a question? It sounds like a question, I do not think I can allow that.

    Emphasis(underline) mine.
    Part V of First Session, Tenth Parliament.
    17th March 2004

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    MPs oppose linking income to health subsidy
    But Acting Health Minister assures them that means testing will be simple and cheap, and care will be taken when implementing it

      ACTING Health Minister Khaw Boon Wan has promised to heed the impassioned pleas of the dozen MPs who questioned the need for means testing in hospitals and warned of dire consequences if its implementation went awry.

      'All advised me to be cautious. This is clearly a complicated issue... I will take my time to think through the issue, consult and hear all views,' he assured them.

      Although means testing to decide the level of subsidy has been talked about for years, it was only in January this year that endorsement by both Deputy Prime Minister Lee Hsien Loong and Mr Khaw made it a major issue for Singaporeans.

      In Parliament yesterday, Dr Chong Weng Chiew (Tanjong Pagar GRC) was the sole dissenting voice. Dr Chong, who heads Ang Mo Kio Community Hospital, wants it introduced 'as soon as possible' because any delay will only make it harder to implement.

      At the other extreme was cardiologist Michael Lim (Pasir Ris-Punggol). He said he had 'bad vibes' about it and gave 10 reasons why it could end up as a 'major public relations disaster', with the ministry losing the goodwill it had built up. Among his reasons were the unpredictable nature of such costs and the heavy burden small families have to bear in taking care of the old.

      Mr Andy Gan (Marine Parade GRC) disliked the idea of transferring 'the power to choose from the individual to the state'.

      Several others, including Madam Ho Geok Choo (West Coast GRC) argued for fairness. The rich pay taxes that pay for the subsidy of hospital wards. Depriving them of subsidised care means they are effectively paying twice, she argued.

      A common concern of MPs, reflecting an often-asked question in the past two months, was the definition of well-off. What will be the cut-off point, they asked.

      Non-Constituency MP Steve Chia was alarmed that it presages lower government spending on health care in the long term.

      Although it is too early to give details, the minister outlined several key principles that will guide the setting up of the means test scheme.

      It will be both simple and cheap to implement and will not turn into a 'bureaucratic monster', he promised.

      People's right to choose any class ward will stay, although he had indicated that they may not get the full subsidy.

      Figures show one in 10 rich patients picked class C wards where the Government subsidises 80 per cent of the bill. 'There is nothing wrong about the rich choosing class C and we should not be judgmental about their decisions,' he said. He assured MPs such as Mr Gan Kim Yong (Holland-Bukit Panjang GRC) that the aim in means testing is not to reduce subsidies, but to channel them to those who need help most.

       He also assured Madam Halimah Yacob (Jurong GRC) and Mr Zainul Abidin Rasheed (Aljunied GRC) that it will be handled sensitively: 'Our means test will not be mean.'

      He added: 'We must be able to come in promptly when alerted, to sieve out deserving cases and free them from unnecessary distress.'

    Salma Khalik
    The Straits Times
    18 Mar 2004

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    Hospital fee relief : Checks working so far
    But hospitals unsure if means testing
    should be extended to screen patients
    seeking admission to subsidised wards

      ONLY 55 patients asked for a downgrade from private to subsidised wards last year at the Singapore General Hospital (SGH), and all but two were allowed to do so after a means test.

      Means testing is already working well in certain areas in restructured hospitals, to channel subsidies to those who need them most.

      The main criteria used are the patient's per capita income - the total family income divided by the number of family members - and ownership of major assets such as private property.

      It is also carried out for patients who need to be referred to community hospitals or who apply for Medifund, a safety net set up by the Government to help the needy who cannot pay their subsidised outpatient or hospital bills.

      The issue being debated now is whether this check needs to be extended further to cover entry to subsidised wards as well, as hospitals now do not keep tabs on patients' financial status, and have no idea whether the needy are being crowded out of heavily-subsidised wards.

      In a report made public about two weeks ago, the Health Feedback Group had suggested all health-care subsidies should be tied to patients' financial status, instead of the hospital or ward class. The present system allows patients to select the level of subsidy because they can choose which ward to go into - A, B1, B2 or C.

      Acting Health Minister Khaw Boon Wan had responded by suggesting that possibly in future, the finances of patients and their families might be examined if they wished to opt for the heavily-subsidised wards, say the C- or even B2-class wards.

      But he warned that this could create excessive bureaucracy, lower nursing productivity and increase health-care costs in the long run, given the large patient volumes handled by public hospitals.

      At the six public hospitals here, the occupancy rates of C-class wards, which are 80 per cent subsidised, are between 80 and 120 per cent. When C-class wards are full, patients are allowed to stay in B2-class wards at C-class rates.

      However, there is some doubt among hospital administrators whether means-testing is required for such wards. They are not sure the number of patients in them will always be this high.

      Mr Steve Sobak, chief operating officer of KK Women's and Children's Hospital , said: 'In general, demand shifts with the general economic condition of the country. 'In good times, more people select private ward classes, whereas in bad times, more opt for subsidised classes.'

      Administrators and medical social workers interviewed also said that generally, only those who really cannot afford it will apply for subsidy. They point to the applicants for Medifund. At SGH, the largest public hospital here, 2,500 to 3,000 people applied for Medifund each month last year. Of these, 99.7 per cent were approved.

      Each year, about 800 to 1,000 people, or fewer than 5 per cent of all SGH's patients, pay their bills through instalments, which are usually spread over two years. Its chief operating officer, Dr Wong Chiang Yin, said: 'This shows Singaporeans are generally quite responsible, and that people who apply for subsidies are mostly those in need.'

      Still, he cautions that this is a 'a chicken-and-egg issue' and the rejection rate could be low partly because people who know they would not qualify do not apply.

    What a hassle to get subsidy

    A TAXI driver may need to go to the Subordinate Courts, pay $20 to get a statutory declaration of his income, then go to all his siblings' homes to collect their pay slips or income tax returns. After all that, he has to go to the community hospital with all these documents - just to get his father or mother admitted to a subsidised room there.

    The hassle involved in having to prove the income - not just that of the patient, but of all his children and any siblings who live under the same roof - is one shortcoming of means testing which needs to be simplified, said medical social workers.

    Means testing channels subsidies to those who need it most based on an individual's per capita income - the total family income divided by the number of family members - and ownership of major assets such as private property.To the marker: This article is not my own!

    There are three levels of subsidy: 75 per cent of the bill for those with a monthly per capita income of $300 or less, 50 per cent for those with incomes between $301 and $700, and 25 per cent for those earning between $701 and $1,000.

    At least one community hospital, Ang Mo Kio, has tried to simplify matters by registering a medical social worker as a Commissioner of Oaths, so that those who are unemployed or self-employed can make a statutory declaration of their status and income at the hospital itself, free of charge.

    Lee Hui Chieh
    The Straits Times
    19 Jan 2004

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    Sympathy for 'rich' who go to C class wards
    Most in feedback sessions urge extreme care

      THE $15,000 bill for the bypass operation was fine. Using MediShield, Medisave and cash, the Lais could pay for their father's treatment and his stay in a B1 class ward at the Singapore General Hospital.

      But when he had kidney failure and needed dialysis, the more than $3,000 monthly medical bill brought the family to their knees.

      Because he had been a B1 patient, Mr Lai could not be downgraded to subsidised care for his follow-up treatment. A downgrade is allowed only if the family's income does not exceed $1,000 a month per family member.

      The combined income of just two of his four children put the family of eight over the $8,000 mark. That the eight family members lived in a total of four homes did not matter.

      The son who earned the most turned abusive, blaming his father for choosing private care instead of subsidised care. His constant harangues reduced his mother to tears. The father became so depressed that he refused treatment altogether, saying he would rather die than burden his children.

      Seeing the state the family was in, the doctor treating Mr Lai for kidney failure wrote a letter to support his application to become a subsidised patient. This letter is necessary as the doctor earns a fee from private patients, but not from subsidised patients.

      A nurse told the daughter not to give the medical social worker the family's full income. Otherwise, letter or no letter, her father wouldn't get the downgrade. So she gave her brother's basic salary, but not the high commissions he earned. Her father was still working as a craftsman, but he was already in his late 60s, so she gave his income as lower than it was.

      'I didn't lie. But I didn't tell the whole truth. I felt very guilty, but what could I do? I was so afraid my father would die,' she said. The application was successful and the bill shrank to about $600 a month. 'I told my Dad the amount was manageable, so he started dialysis,' said the daughter.

      She added: 'My brother was less than filial, but what could I do? We just ended up quarrelling when I asked him to help. My father would be more upset if we took my brother to the Family Court. 'I couldn't afford the bill as I was already supporting my younger brother who had been retrenched.'

      She shared her experience with a group of about 30 people at a feedback session on the proposed means testing for public hospitals.

      'It's not the hospital bill. But once you choose the wrong class, the follow-up can be very expensive. So I don't blame the rich for choosing C class,' she said.

      She told her story at a session last Friday for people whose per capita family incomes exceed $2,000 a month.

      They were nearly unanimous in urging the Health Ministry to be very careful in implementing the scheme. Most sympathised with the so-called rich patients who chose to go to C class wards. About 10 per cent of the 'rich' patients do so.

      One man said that euthanasia should be legalised as he would rather die than be such a financial burden on his children, who may have to sacrifice much just to keep him alive.

      At a similar session with the 'poor' group, whose per capita family incomes hover around $1,000, most also said that people shouldn't be excluded from subsidised care just because they earn more.

      The session was chaired by Aljunied GRC MP Ong Seh Hong, who did his best to persuade the people present that means testing would actually benefit them.


    THE Health Ministry is thinking of introducing means testing to decide who is entitled to how much subsidy at public hospitals.

    Today, anyone can choose a subsidised ward at a public hospital. Those who opt for C class wards receive an 80 per cent subsidy; B2 a 65 per cent subsidy, and B1 a 20 per cent subsidy.

    Means testing is already used at step-down care facilities like nursing homes which have a three-tier subsidy scheme.

    Those whose per capita family income - total income divided by the number of family members - is $300 or less are given a 75 per cent subsidy.

    Between $301 and $700, the subsidy is 50 per cent, and between $701 and $1,000 is 25 per cent.

    Families with higher incomes have to pay the full bill.

    Salma Khalik
    The Straits Times
    9 Apr 2004

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    Means-test a health priority for this year

      MEDISHIELD reforms are barely in place, but the Health Ministry is already training its sights on three other priorities for the year.

      Look out for debates on means-testing, by which patients are subject to income tests before qualifying for subsidised hospital care.

      Health Minister Khaw Boon Wan knows this is controversial, but promises to do it gradually.

      For example: instead of shutting well-off patients out of all subsidised wards, there may be a sliding scale of subsidies, so those with higher-incomes can still go to subsidised wards, but get a lower subsidy.

    Chua Mui Hoong
    The Straits Times
    29 Jan 2005


      CHANGE: Link subsidised hospital care to income level. Likely to be discussed in detail this year, after the MediShield reform. At the earliest, may start next year.

      Mr Khaw said in an e-mail response to Insight that this was not a pressing issue as few people abused the subsidised ward system. But 'we can't be sure about the future', so it was advisable to nip any such problem in the bud. He prefers to introduce means-testing gradually. Instead of shutting out well-off patients from all subsidies, there may be a sliding scale of subsidies.

      For example, most Class C patients may get the usual 80 per cent subsidy, but a better-off patient choosing a Class C ward will get a lower subsidy.

      'With this incremental approach, the impact of means-testing on well-off patients may not be substantial.'

      Is this good for you? Yes, for lower-income workers. But some middle-income patients are worried.

      Worries: Some patients are asset-rich but cash-poor.

      Take Mr Philip Cordeiro, 52. He lives in a private apartment but has no regular income. He has a heart condition; his wife is on breast cancer treatment. 'A lot of grants are given based on house type. I don't live in an HDB flat. Will I be means-tested out of subsidies?' he asks.

      If means-testing is based on income, and hospitals have access to income databases, issues of privacy will arise.

      The challenge: Find an administratively simple, but equitable way to means-test.

    The Straits Times
    29 Jan 2005

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    Medishield reforms take priority over means testing
    Health Minister, in Parliament

    Oral Answers to Questions : Medishield Scheme (Means Testing)

      Dr Tan Sze Wee asked the Minister for Health, in relation to the recent MediShield changes, whether his Ministry (a) will consider using the means test as an inducement to Singaporeans not to opt out of the MediShield scheme and (b) plans to use the budgetary savings brought about, in future, by the 'means testing' scheme, to offset the increase in MediShield premiums especially for the older people.

      Mr Khaw Boon Wan: Sir, I thank Dr Tan for his support of means testing. I heard his first speech in this Parliament and I noticed he spent some time talking and supporting this particular idea. He has now suggested that we use means testing to induce Singaporeans to join MediShield. Actually, I am not in a hurry to introduce means testing. My priority this year is to implement the MediShield reform and to ensure that it meets its objective of easing the financial burden of Singaporeans with large hospital bills. Implementation is scheduled for 1st July and I would like to see how the scheme meets the objective before contemplating the next move on means testing. At that point, I would assess the need for Dr Tan's suggestion.

    28 Feb 05

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    Health Minister avoiding questions on means-testing for C-Class wards
    Workers' Party

      Workers' Party Chief Low Thia Khiang has accused Health Minister Khaw Boon Wan of avoiding the issue of means-testing for C-class wards.

      Mr Low challenged the People's Action Party on what would be the yardstick for deciding who would be qualified to be admitted to a hospital's C-class ward under means-testing and whether the measures would be implemented in the next term of government.

      He also questioned if the PAP government would provide lift stops at every level without asking residents to co-pay.

      Mr Chia Ti Lik, the WP candidate for East Coast GRC, attacked the PAP for not keeping to its election promises made at the last election in Nee Soon East Single Member Constituency which is also being contested by the WP.

      Mr Chia said that the PAP had previously promised a hospital for Yishun, but nothing had been done after the PAP had won the ward.

      He claimed that the PAP was only acting upon the issue when it was close to this General Election.

    3 May 2006

    Means-testing not likely in the next two years
    Health Minister

      Health Minister Khaw Boon Wan says means-testing will not be implemented in the next two years as originally planned.

      He was responding on Wednesday to a Workers' Party's concern over the criteria to be used for means-testing.

      Mr Khaw said: "The criteria? I don't know. I honestly don't know. I don't tell lies like some people. You don't want to implement a scheme that is so complicated, that it costs so much to do thorough means-testing. Then whatever you save, you have to now pay more for administrative costs. Now, that additional cost, someone has to bear it." To the marker: I have lifted this wholesale!

      Visiting residents in Admiralty on Wednesday, Mr Khaw said means-testing will only happen once a fair, cost-effective, thorough, yet simple system is in place.

      Means testing refers to a method to calculate healthcare subsidies patients can receive, based on what they can afford. It aims to reach out to those who need subsidies the most.

    3 May 2006

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    Means testing in hospitals may not happen at all: Khaw

    Full text unavailable - contributions welcome!

    Means testing only if feasible
    Health Minister

      Means testing for C-class hospital wards will not be implemented if it is not feasible, said Health Minister Khaw Boon Wan.

      A scheme which Mr Khaw has mentioned intermittently since 2004, means testing would peg C-class hospital ward subsidies to a patient's income level.

      Yesterday, Mr Khaw explained that he would be concentrating on chronic illnesses for these two years and does not see the implementation of means testing during this time. This is because details need to be worked out thoroughly and the scheme widely consulted before any decision is made, just like the MediShield reform last year.

      While the minister has repeatedly said that he is in no hurry to implement the scheme and so far, no details have been released, he raised the possibility of dropping it altogether for the first time yesterday.

      Speaking on the sidelines of a visit at Sembawang GRC where he is leading a six-member team, Mr Khaw said that his ministry does not want to implement a scheme that is so complicated that the additional costs of implementation would be passed on to the patients. These costs could result from hiring more manpower to do the means checks, for example.

      "If you can do it fairly, thoroughly and simply, I will definitely do it. But if (doing it) fairly and thoroughly is a very troublesome task that needs a lot of manpower and money, then I think no need to do it," he said.

      As to Workers' Party secretary-general Low Thia Khiang's call to make known the criteria for the scheme before Polling Day, Mr Khaw said that he has no idea because planning has not started.

      "The criteria — I don't know, I honestly don't know," he said. "I don't tell lies like some people. It's not my style, my character. In my religion, one of the biggest sins is to tell lies; the next birth, you will become a cockroach or something. I take things seriously. What I said, I can deliver. What I can't deliver, I dare not say."

      Mr Khaw added that he doesn't think means testing is a key issue and said the Opposition brought it up as they have run out of issues to talk about.

      The principle of means testing is one that nobody can fault, said Mr Khaw. "(The) rich pay more, the poor pay less; does Mr Low Thia Khiang disagree with that?"

      Besides, means testing is already informally in place as people choose their ward size according to what they can afford, he said. In other countries, public hospitals typically do not have ward classes.

      Mr Khaw also addressed WP East Coast GRC candidate Perry Tong's call for the Government to do away with the Goods and Services Tax (GST) for healthcare.

      Rather than go for a simplistic across the board waiver, Mr Khaw said the Government has absorbed the GST of subsidised patients since it was introduced in 1994.

    4 May 2006

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    Means testing may kick in within next 12 months

      Means testing may kick in within the next 12 months, says Health Minister Khaw Boon Wan.

      And the first to be affected will be patients in C-class wards who stay more than five days in hospital.

      Patients in C-class wards now enjoy an 80 percent subsidy. But the Health Ministry realised that not all patients need such a subsidy, as there are some in the high income bracket who choose to be hospitalised in such wards.

      To ensure that there is no abuse of the system, the Health Minister says means testing must be done on those who stay more than five days in hospital - the average length of stay. Means testing, which is a way to determine how much subsidy a patient should get, is already done in nursing homes and community hospitals.

       Mr Khaw says: "We are in this business where all of us want to constantly improve our service level. But if your prices are wrong, if they are heavily subsidised or free or whatever, you are going to attract more and more patients to you, including those who can go to Gleneagles Hospital and Mount Elizabeth and so on. And we have very good doctors, very good specialists. So we know that at the end of the day, means testing are important.

       "And until you introduce proper means testing, I'm afraid all these problems will remain, will simmer. I'm seriously thinking about all those who are long stay, who should now be discharged to community hospital, we should do means testing on them. Now they are saying that if they go to nursing homes they will be means tested but if they remain at SGH they are not means tested, therefore it's cheaper - then we will never solve this problem."

       Mr Khaw says for those who can afford to pay more, their subsidy may be reduced to less than 80 percent but they will not be asked to move to a higher class ward.

       However, he is not keen to extend means testing at the polyclinic level for practical reasons. Mr Khaw says: "It's not just looking at your personal income - we are talking about family income here. The whole family should be supporting the patient. So therefore I need to know how many children you have and how much are they earning. And we cannot have self-declaration because everybody will say they are poor, they earn $800 when actually it may not be so. So you begin to see the complexity of means testing.

       "We know that at our polyclinics, waiting time is already very long. If at the counter we are going to start asking all these questions, you know, I think we cannot do business. We will end up doing only means testing and no treatment. So it's not practical unfortunately."

       Mr Khaw was speaking at a dialogue session on on Saturday with unionists in the healthcare sector, where he answered several questions.

    Channel News Asia
    7 Apr 07

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    Debate in Parliament, 2002

    Dr Ong Seh Hong (Aljunied, PAP):
      Sir, I share the concern of rising healthcare cost, as highlighted by the hon. Member, Mdm Halimah.

      Sir, healthcare cost is rising because of several factors, such as aging population, introduction of new medical technology, use of newer drugs which are still under patents and, therefore, the cheaper generic drugs are not available, increasing demand of better-informed customers, ie, the patients themselves or their family, and rising labour costs. May I urge the Minister to look at the ways to contain the rising cost before passing them on to the patients and their family?

      When it comes to paying bills, our healthcare financing policy has always been to rely on co-payment to minimise abuse and wastage of our healthcare resources. This is well and good. However, I am concerned that in our haste to recover costs and to balance the budget, perhaps we have been pricing our healthcare costs too high to the patients, beyond the affordability of some of them. I feel that a bigger burden has been passed on to the patients and their family, sometimes more than they can afford.

      One point to note is that MOH has actually introduced means testing for step-down care services, such as nursing homes and chronic sick hospitals. It will apply to community hospital patients in July this year and I understand that, eventually, all acute hospital patients will also be means-tested. Here, I must first declare my interest as the Medical Director of Ren Ci Hospital, which will be opening its 200-bedded community hospital this year. I agree with the principle of means testing, so that the poorer patients actually get more subsidies while the better-off should bear a bigger burden of their medical bills. However, I find that our policy to subvent only the poorer half of the population's healthcare will make it unaffordable to many who are caught in between. Under the means-testing for a community hospital, for example, only the poorer half will get the Government's subvention between 25% and 75% of the cost. The cut-off is per capita household income of about $1,000.

      Let me illustrate my point using a very simple example. The norm cost of a "C" class in a community hospital's stay is about $200 per day, and the average length of stay is about four weeks. The average cost per hospital stay will therefore be about $5,600. Using our national statistics, the median household income is about $3,600. So if one is unlucky and probably has about $5,000 household income, most likely, he would not pass this means test and he would have to bear the whole amount, which is more than one month's income of the whole household.

      Even for those who just pass the means test and are eligible for 25% subvention, 75% of $5,600 would mean a hefty bill of $4,200. Compare this to the existing system which allows the patients to choose the class they wish to stay, if they stay in "C" class, they will get 80% of the subsidies. I feel that more people will be left out with this new means test.

      Therefore, I would like to urge the Minister to reconsider the policy of subventing only the poorer half of the population. Precisely because the healthcare cost is rising, more people are in need of subsidised healthcare. I would urge the Ministry to grant more subventions to patients and to make our healthcare more affordable. Otherwise, I am afraid the coffeeshop talk of "can die, cannot sick" may one day come true, which I certainly do not hope to see.

    Reply by Minister for Health

    The Minister for Health (Mr Lim Hng Kiang):
      Second, for the Government, we would bear our fair share of the healthcare cost. But if we want to keep to our share at between a third to half, then Members must realise that we cannot subsidise the entire spectrum of the population. We must target our subsidies to the most deserving, and that means, at some point in time, we would have to introduce means testing, so that whatever subsidies the Government is prepared to fork out, those subsidies are targeted at the low income, at the most deserving.

      The third prong is, as many Members have raised, how to reinforce the financing system through allowing better use of the Medisave, through expanding the scope of MediShield and when we introduce ElderShield, to make sure that ElderShield works. Sir, I will cover these points in turn.

      First, on means testing. Both Mdm Halimah and Dr Ong Seh Hong raised this. The idea of means testing is not new. This was mooted way back in the 1993 White Paper. It is a mechanism that will allow us to target subsidies at the lower income group. As Dr Ong himself has said, philosophically, I think most of us would not disagree that Government subsidies should be targeted and given to Singaporeans who are the most deserving.

      Today, we have some form of self-selection. Singaporeans who are better off would opt for B1 or A class and therefore do not avail themselves of the subsidies. Singaporeans who are better off would not go to the polyclinics and therefore do not compete for the subsidies in our polyclinics. As long as this self-selection takes place, then I think we can postpone the date of means testing. As long as the demand is within what our subsidised healthcare system can supply and there are no serious accessibility problems, such as long queues and waiting times, then there is no need to implement means testing in our hospitals and our polyclinics. But if the subsidies keep expanding and we need to target, then I am afraid, at some point in time, means testing would have to be introduced. So it is inevitable that, at some point in the future, we may have to introduce means testing. So how do we gradually ease this in? One approach is that whenever we introduce new programmes in our polyclinics and in our hospitals, and if it is appropriate, then we introduce means testing selectively. For example, when we introduce the Primary Care Partnership Scheme where we allow our senior citizens to see their private GP clinics and still claim subsidies from the Government, then I think that should be means tested. Whenever we introduce new programmes and it is appropriate, then we will incorporate means testing.

      Dr Ong raised a point about means testing in the step-down sector, particularly in the community hospitals. Let me reassure him that we will phase in the target subsidy rates gradually and we will work with the community hospital to moderate the impact on the patients' bills. We will also give the community hospitals additional funding so that they would not need to increase their fees and charges substantially. We will work with the other community hospitals and other step-down care operators to ease means testing in. But this is a transition. In the end, we have to decide on the fundamentals.

       Mdm Halimah asked whether we should just subsidise the lower half, or should we also subsidise the upper half of the population, in terms of income. If today, we are spending one-third of the overall national health expenditure, then it is inevitable that our subsidy is targeted at the lower half. Once we start subsidising beyond the median into the upper half, then Government's share of expenditure must increase substantially, beyond one-third to more than half to two-thirds.

    20 May 2002

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    New criteria, subsidy cut for nursing homes

      FEWER old people could be left to languish in nursing homes run by voluntary welfare organisations (VWOs), as the Health Ministry (MOH) is reviewing the admission criteria and subsidy framework for these homes.

      The review comes barely four years after means testing was introduced for nursing homes in 2000 to make sure that patients who needed financial support would get it.

      The Straits Times understands that the criteria will be made more stringent so that only patients who truly need round-the-clock care will be admitted.

      To boost the use of day rehabilitation services as an alternative for those who do not need constant care, MOH is also working with VWOs to improve transportation, opening hours and publicity efforts, it said.

      But a recent subsidy cut for all step-down services has left day rehabilitation centres wondering if taking in more patients simply means a heavier financial burden of having to raise more money.

      In April, the ministry reduced the norm cost - what it estimates to be a reasonable cost of providing the service - for step-down care, by 5 per cent.

      Step-down care includes nursing homes, community hospitals, hospices and day rehabilitation, and ministry subventions are based on the norm cost. The new norm cost for the 24 MOH-funded day rehabilitation centres is now $38.40, said the ministry.

      Nursing homes contacted said they had not been told the new numbers, but used to receive subventions based on charges to patients of $15.20 to $37.80 per day.

      Patients may not notice the difference to their pockets - the result of a ministry-wide Budget cut - because the VWOs which run these services customarily raise their own funds to support patients and programmes.

      'We'll have work harder to raise funds, as we don't want to compromise on quality,' said Madam Azizah Mustafa, the manager of Muhammadiyah Health and Day Care for Senior Citizens. The centre, which sees 85 patients, estimates it will need to raise $14,000 on top of the $280,000 it raises every year now to meet its yearly expenses of $400,000.

      The ministry did not reveal how much the cuts would save, but it subsidises step-down services by 25 to 75 per cent after assessing how much each patient can afford to pay.

      Part of the subsidies are drawn from interest earned on the ElderCare Fund, set up in 2000 for just this purpose. The fund, which now has $1 billion, will have enough to support all subsidies by 2010.

      MOH said that even now, 'most VWOs can break even and accumulate operating surpluses' to cope with unexpected emergencies such as Sars. But VWOs say the competition for the charity dollar makes raising funds tough. Most support low-income families, who either default on payments or pay only part of the subsidised fee.

      Six nursing homes contacted estimated they would need $100,000 to $300,000 more each year because of the cuts. One of the six said it may make patients pay more. The rest said they were likely to trim staff bonuses and cut back on the hiring of specialists or trained staff.

      Mrs Vijaya Sreenidhi, chief executive officer of the Sree Narayana Home for the Aged Sick, said her home, which ran a deficit of $450,000 last year, would be 'very badly affected'.

      But there are others who are taking it in their stride. Said Dr Stephanie Chee, the manager of Geylang and Toa Payoh Senior Citizens' Health Care Centres: 'If we continued to rely on the Government, we shouldn't call ourselves VWOs.'

    Vivi Zainol
    The Straits Times
    14 June 2004

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    Tricky test of means and ends
    Community hospital experience shows
    that means testing is not easy to implement

      Here's a surefire way to find out exactly how much your family members earn: Just go to a community hospital, or step-down care facilities such as nursing homes, day rehabilitation centres, or hospices.

      "Some people refuse to declare their income because they don't want their siblings to know," said a Bright Vision Hospital spokesperson. "In some cases, once some of them know how much the others make, they pass the buck in terms of paying for their parents' hospital bill."

      Call it a fallout of means testing. The concept created a huge stir during the recent General Election when the possibility of applying it to public hospitals was raised. The scheme has been put on the backburner for now and may even be canned if it is not feasible. After all, it is important to tread with care before the seemingly-rich are denied highly-subsidised healthcare in B2 and C class hospital wards.

      Even so, since 2000, families seeking subsidies for facilities for the elderly such as community hospitals and day rehabilitative services have been subjected to means-testing.

      Families with a per capita income of $300 a month are entitled to a 75-per-cent subsidy; those between $301 and $700 to 50 per cent; and those in the $701-to-$1,000 range to 25 per cent to 25-per-cent subsidy. There is no subsidy for families whose members earn more than $1,000 each, on average.

      Ownership of major assets like private property is also taken into account. It may appear simple on paper, but step-down care operators run into roadblocks almost every day.

      Problems start with that most basic of issues: Income.

      A check revealed that in as much as 70 per cent of cases, patients' families were unwilling to reveal their salaries. "It's not easy to administer," said director of Simei Care Centre, Mr Steven Ting.

      Medical social workers often have their hands full trying to persuade the families to open up and produce the relevant income documents. The pitfalls do not stop here. While most would agree that the better-off should not be subsidised as heavily as the less well-off, it's not always easy to determine just where a family stands financially.

      In some cases, family members do not live with patients. In others, they do not update their income statements every year. Assessing the incomes of the self-employed presents its own set of problems.

      And in cases where the patients are abandoned by their families, Simei Care Centre, which serves the mentally-ill, has to pick up some of the tab itself. When it comes to applying the concept to general healthcare, means-testing has evoked strong reactions ever since it was first debated in 2004.

      At feedback sessions it was pointed out that some families are asset-rich but cash poor. Would they have to dispose of their assets to pay their bills?

      A Today reader also wrote in to say that if if the criterion was per capita family income, wouldn't retired Singaporeans be at an advantage since they had large savings but no income?

      Also, those with handicapped family members — and the accompanying expenses — could not be considered as well off as someone of similar per capita family income.

      The problems of means-testing are not unique to Singapore. In the United States, mean-testing for elderly nursing care has become mired in law suits. It is this minefield that Health Minister Khaw Boon Wan is worried about if means-testing is to be applied to normal acute hospital care.

      But with the procedure already implemented at community hospitals, it is not a secret that some patients refuse to be moved to appropriate step-down care because they can be subsidised at acute hospitals. This contributes to the infamous hospital over-crowding.

      "I don't know how, but I'm wondering if there's any way to use a different set of tools to assess income," said Mr Ting.

    Tan Hui Leng
    13 Jun 2006

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    The Real Cost of NOT Having a Means Test
    Singapore Medical Association Newsletter

      Well, it is the year of the mutt and it is about time we re-examine why everyone is having a dog’s life in healthcare. While not everything can be attributed to this, certainly a significant part of our healthcare problems can be due to the absence of a means test in our public healthcare system.

      The most basic tenet of healthcare access and sustainability, as declared by prominent health economist and a former President of the American Economics Society, is that universal access to healthcare cannot be achieved without subsidisation and compulsion.

      What this means is that we have to subsidise those who cannot pay and compel those who can. We can only compel those who can afford to actually pay for the health services they consume if a means test exists. Otherwise, there will be folks who will naturally become free-loaders and avail themselves to subsidies when they do not need or deserve them.

      However, Singapore appears to have beaten the odds and achieved the impossible. We do not have a means test and we give subsidies to all Singaporeans and PRs as long as they choose to go to the polyclinics or get themselves warded in B2 and C class wards. But seriously, who are we trying to kid? We are not in Wonderland, Narnia or Middle-Earth and something’s gotta give, chum.

      Detractors often cite the problems of operational difficulties and cost of administering the means test as arguments against having one. Hobbit acknowledges that having a means test does carry with it these problems and difficulties but they are nonetheless surmountable. The real reason why we still do not have a means test is really as Hobbit remarked a few years ago: “A means test is a poisoned chalice”. It takes great political and personal courage to do the necessary. I am cheating and think no-one will notice!

      But let us take a step backwards for a moment and examine beyond the superficial difficulties – and we can only conclude that the true, indirect and hidden or direct costs of NOT having a means test are truly quite horrendous.

      The two fundamental problems of NOT having a means test are

  • Inability to control demand leading to ‘free-loading’ and a ‘buffet mentality’; and
  • Consequent need to try and control demand by class-differentiating: accentuating differences between unsubsidised and subsidised services to discourage ‘free-loaders’ from using subsidised services.


    Abuse of Polyclinic and A&E
      Because we have no means test, many patients want to get access to the subsidised specialist outpatient services by going to the polyclinics and A&E to get referrals to the subsidised specialist clinics in hospitals. This creates unnecessary work at the polyclinic and A&E level, as if the folks there do not already have enough to do. It is not uncommon for the polyclinic and A&E doctor to realise that the patient before him is there ONLY because he wants a referral to a subsidised clinic for a chronic disease.

    Inability to control workload or shift workload to private sector which has excess capacity
      Because subsidised services are so freely available and cheap, the swarmed hospitals and polyclinics are unable to shift patients to an environment where excess capacity exists – the private sector. They are also unable to control workload as patients in search (but not in need) of subsidies come in waves to them.

    Overload and overworked public doctors leading to talent drain, less time for teaching and research
      The previous reason leads to overwork, which results in doctors and other healthcare professionals leaving the public healthcare system, often not in search of better pay but just a comparable figure and a more manageable volume of work. Folks who we have trained at great expense do not stay and we end up in a vicious circle – continually training (and thereby incurring cost) people to address the brain drain.
      For those who stay, they also have no time for teaching and research. And because we have no means test and yet have to address the crowds, we pay doctors by work volume – and we wonder how come our doctors do not produce as much research as our Hong Kong counterparts even when we are similarly enmeshed in earth-shattering events like the 2003 SARS outbreak.

      With our desire to be a medical hub and a knowledge-based economy, what are the costs of keeping our public doctors running like hamsters on a wheel, with no time for research or teaching?

    Needless subsidising of free-loaders with truly needy not getting adequate care
      This is the simplest issue: the cost of needlessly subsidising free-loaders who can actually pay. The opportunity cost is of course that of the resultant denial of adequate services and subsidies to those truly in need due to the crowding-out effects of free-loaders.

    Stifling of private GP services and skills and wrong ‘site-ting’ of care
      The biggest cost to the country as a whole is the wrong ‘site-ting’ of care. Patients who can easily be treated at the GP or polyclinic, community hospitals and private nursing homes refuse to be treated at these places because hefty subsidies are freely available to all at the public hospitals. It is cheaper to stay in a C class ward than to go to a community hospital or nursing home where the means test already exists.

      Similarly at the primary care level, people would rather remain at the subsidised specialist clinic level than go to the GP or polyclinic because the former is the cheapest option even for those who can afford it (yes, again because there is no means test).

    Supplier-induced demand in areas where there is excess capacity
      Because there is no means test, we are unable to shift workload out of the public system; excess capacity exists in the private sector, both for the private GPs and private specialists. More and more GPs now turn to aesthetic medicine. This is good if their patients are mainly foreigners and such work helps to bring in foreign exchange. But we know most are locals, leading to unnecessary spending on healthcare. Private specialists who are not doing too well also are tempted to go down the path of supplier-induced demand.


    Operational inefficiencies and confusion of having four to five ward classes – Choice is cost
      The take-home message some folks would like the masses to get is: “You have a choice. You choose a ward that fits your wallet, ranging from A class to C class but we will not force you. There are always C class services available without a means test for all to choose.” The myriad of classes we have is really because we do not have a means test and we cook up as many as five different types of classes hoping that the population will self-allocate themselves into the appropriate class according to their ability to pay.

      But the fact of the matter is that choice costs. Hobbit knows of no other public hospital system that offers FOUR or FIVE classes of beds. Most countries’ public hospitals only offer two or at most three classes of beds, and for good reasons. The more classes we have, the more inefficient we become. We have to have different furnishings and fittings, different planning parameters, IT systems, even simple things like type of food and cutlery just to differentiate between classes. All these cost money, baby. With a means test, we can straightaway rationalise our inpatient services into two or three classes and gain better operational flexibility and economies of scale.

    Poor Patient Comfort
      Because there is no means test, we need to somehow differentiate in creature comforts for different bed classes so that the richer folks will automatically choose the B1 and A class beds. We try to achieve this by deliberately under-providing for B2 and C class beds in terms of material comforts – even though we can easily afford to air-condition B2 and C class beds. Major public hospitals’ turnover varies from S$200m to S$600m a year. How much more cost can we incur if we air-condition the B2 and C wards? Even classrooms are air-conditioned in some schools. Although we claim to be first world, we deliberately deny simple amenities like air-conditioning in B2 and C class wards even in the 21st century – when air-conditioning has been declared the greatest invention. We force our patients and staff (they do not have a choice, unlike the patients) to sweat it out. All because we do not have a means test and we promise B2 and C class services to all who want them – it is a half-hearted gesture of generosity that creates more problems than it claims to solve.

    Increase Risk for Hospital-Acquired Infection
      Who are we trying to kid when we say that the clinical quality across different bed classes is equal? The inpatient in a B2 or C class ward is more likely to get a hospital-acquired infection than an A class patient. SARS in 2003 conclusively proved that. Hospitals in Chinese cities now only have at most three or four beds to a room. We have eight or ten. Why? Because we have no means test and we need to differentiate between five classes. Our B2 and C class wards are epidemiological ‘time-bombs’ (yep, sounds familiar?) in case a fl u pandemic or some infectious disease epidemic strikes our public hospitals.

      What are the hidden, revealed, direct and indirect costs? Let us list out the 12 big chunks of costs associated with NOT having a means test:

  • Unnecessary work created for polyclinics and A&E.
  • Talent drain due to overwork.
  • Less time for research and training.
  • Needless subsidising of free-loaders.
  • Real needy not getting adequate care due to crowding out by free-loaders.
  • Private GPs and polyclinics unable to compete with heavily subsidised specialist outpatient clinics leading to wrong ‘site- ting’ of outpatient care at more expensive outpatient facilities.
  • Community hospitals and private nursing homes unable to compete with heavily subsidised inpatient services leading again to wrong site-ting of inpatient care at more expensive inpatient facilities.
  • Lack of work and excess capacity at private healthcare facilities facilitating supplier- induced demand.
  • Operational efficiencies associated with running four or five classes of ward classes.
  • Deliberately designed facilities to accentuate differences between different bed classes leading to poor patient comfort in our subsidised wards.
  • Too many patients sharing one cubicle which increases risk of hospital-acquired infection.
  • Too many patients sharing one cubicle which will prove very, very costly in any infectious disease epidemic or pandemic when infection will spread rapidly in such a crowded hospital environment. The costs of treating such infections can be huge, as demonstrated by SARS and VRE.

      These above costs are mind-boggling; far more than what we humble and lowly MBBSes (Mouth Big, Brain Small) can fathom. We have quite a few government scholars and administrative officers with Ivy League and Oxbridge degrees and blessed with ‘helicopter vision’, working in high places making policies, performing systems analyses and running spreadsheets faster than we can write an MC. Can they tell us the real costs of NOT having a means test (caveat: without hiring business and management consultants please, because that would also be another associated cost to NOT having a means test!)?

    1. Who shall live? – Health, Economics and Social Choice, Victor R Fuchs, World Scientific Publishing
    2. SMA News, Oct 2002, Hobbit’s Nonsensical Guide to Health Economics, Fear #1

    The Hobbit
    April 2006, Vol 38(4)
    SMA News

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    Questions for discussion

    1. Summarise the evolution of means testing in the Singapore healthcare scene.
    2. Name some ways that means testing can be further introduced in Singapore.
    3. What are objections that people have raised to means testing?
    4. What are some practical problems that have arisen as a result of means testing?
    5. What pitfalls do you forsee in the implementation of means testing in the acute setting?
    6. Have healthcare subsidies created distortions in the healthcare structure in terms of the Private vs the Public sector, or Paying vs Subsidized wards?
    7. "Everyone supports means testing, as long as they themselves qualify (for the subsidies)." Discuss.
          Email your answers here.

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    Related and Mispelled Keywords

    Singapore, Spore, S'pore, Singapor, Singpore, Government, Govt, Goverment, Governent, Ministry of Health, Health Ministry, Minstry, Minestry, Ministory, Ministr, Hlth, Healt, Helth, Halth, Minister, Ministre, Ministr, Minsitor, Ministre, Minster, Minstre, National University Hospital, NUH, Singapore General Hospital, SGH, Tan Tock Seng Hospital, TTSH, Kandang Kerbau Women's and Children's Hospital, KK, KKWCH, Changi General Hospital, CGH, New Changi Hospital, Alexandra Hospital, AH, Institute of Mental Health, IMH, Woodbridge, Jurong General Hospital, Woodlands, Yishun, Northern General, CPF, CFP, medishild, medi shield, medisave, medi save, medifund, medi fund, mens, meanss, meanstest, meantests, Home Relief, United States, USA, US, Food Stamp Program, Ross Perot, Social Security, subsidize,

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