Health-care costs jumped 6.2% last year

Health-care costs jumped 6.2% last year
Explaining the rise, minister gives the assurance that costs will remain affordable
By Lynn Lee
22 Jan 2008

THE cost of health care shot up last year by 6.2 per cent, a big jump over the annual average of the previous five years.
The rise between 2002 and 2006 was an average 2.4 per cent a year.

In releasing the figures yesterday, Health Minister Khaw Boon Wan attributed the 'higher than normal' increase to the jump in medical fees and prices of Chinese medicine.

He was responding to MP Sam Tan (Tanjong Pagar GRC), who asked why health-care costs had shot up and what aid poor Singaporeans would receive.

Replying, Mr Khaw explained that the health-care inflation rate was measured by the price changes of a basket of items and the cost of three, in particular, had soared.

They were: fees in public and private hospitals; outpatient specialist fees in public health-care institutions; and the cost of Chinese herbs and treatment from a Chinese physician.

For instance, traditional Chinese medicine cost 33 per cent more last year than in 2005.

The minister traced the various increases to these factors: higher oil prices causing imports to cost more; the rise in wages of health-care workers; and the goods and services tax (GST) going up from 5 per cent to 7 per cent last July.

These were also the factors that fuelled Singapore's inflation rate, which hit 4.2 per cent in November and could cross the 5 or even 6 per cent mark this year.

The fast-rising cost of living was also noted earlier in the House by Finance Minister Tharman Shanmugaratnam. Four MPs, including Madam Halimah Yacob (Jurong GRC), raised questions on, among other things, the plight of the poor as prices rise for necessities such as housing.

The Finance Minister assured Singaporeans that the Government would continue with its 'targeted and efficient' help schemes, such as Workfare for needy older workers.

Mr Khaw made a similar pledge. Public health-care costs, he said, would always stay affordable, even though some inflation was inevitable.

The needy are already getting help in several ways.

For instance, the Government has absorbed the GST hike on their health-care bills.

It is also reviewing MediShield to see if this national medical insurance scheme can cover bigger hospital bills.

But, Mr Khaw said, the Government was not in favour of increasing hospital subsidies for the lower-income. Subsidies now stand at 80 per cent for C-class wards and 65 per cent for B2 class.

'I think it is unwise to vary (the subsidy levels),' he responded to Mr Tan's suggestion. One reason: The level of subsidy will be refined when means testing takes effect.

It will give the rich a lower subsidy than the poor for the ward that they choose. The aim is to give scarce resources to those who need them most.

For those in dire need, they can turn to the Government's health-care safety net Medifund to pay their medical bills. Around 98 per cent of those who apply for help get it.

Sometimes, it results in them getting a 100 per cent subsidy on their hospital bill, said Mr Khaw.

Nominated MP Siew Kum Hong asked why the average Medifund payout had decreased from $174 in 2001 to $132 in 2006.

Mr Khaw said the figure was not the average payout per person. Rather, out of the 300,000 or so approved applications last year, some would have been repeat applicants.

Thus, the payout would vary depending on how much a person had received, and whether it was for inpatient or outpatient bills.

'So I'm not surprised it should come down or go up, and I don't think we should read any more than that into it. The key point is, those who need help will be helped,' he said.

lynnlee@sph.com.sg