Singapore’s Inadequate and Inefficient Healthcare Spending

When the news about public hospitals in Singapore faced serious bed crunch in the last week of 2013, which patients have to be left sleeping on corridors or even “air-conditioned tents”, a debate erupted on my Facebook on the comparison of Hong Kong’s healthcare spending vs Singapore.

The bed crunch in Singapore public hospitals is definitely NOT a new problem at all. There has always been bed crunch every now and then, especially during the seasonal peak of dengue epidemic every year. Way back in 2010, I have written on the very fundamental reason why we have to face severe shortages of hospital beds: the incompetency of PAP government of pure neglect in infrastructure building when they planned for a rapid increase in population. (http://singaporealternatives.blogspot.sg/2010/03/sorry-no-enough-minister-khaw.html) 

The irony is that some years ago, Mr. Lee Kuan Yew has once criticized London’s healthcare system after his wife was deprived of VIP treatment that they used to enjoy in Singapore. He complained that they need to wait a long time for a bed, then for a CT scan on her brain. He claimed that he could get a bed very fast in Singapore, CT scan anytime etc. He then of course, self praise the healthcare system he has created.

Ironically, he was so OUT OF TOUCH and still is. He and his family are able to get a bed at hospital so fast and CT scan anytime he needs in Singapore because he was treated like a King here. There will always be VVIP room standby ready for him and family. It is alright to let him have some VIP treatment in Singapore but he actually thought everybody in Singapore enjoys that level of "good VVIP service"?

I guess the Ministry of Health just got blown off in cloud nine after such praises and ended up with total neglect and ignore all the signs of strains on its hospital system. It is so ironic that we have “suddenly ended up like London”, from LKY’s perspective.

It is definitely a totally irresponsible act of wanting to take the short cut of increasing GDP at all cost by increasing population size rapidly without taking necessary corresponding actions to increase housing, public transport, hospital and healthcare facilities as well as public space at the same time.

However, in order to understand slightly more indepth of this problem and how UNREASONABLE PAP government are in their healthcare expenditure and the amount they are charging us, we will have to make comparisons to a similar modern city like Hong Kong which enjoys similar quality of healthcare services. These comparisons will be made from several perspectives, including total expenditures made by both places on healthcare, the number of beds provided by the two systems and the cost citizens or residents have to pay for these services, in 2012.

The comparisons will be made with a few statistical tables and I hope you will bear with this long article.

Singapore’s Inadequate Healthcare Spending

First of all, let’s take a good look at the healthcare expenditures committed by both Hong Kong and Singapore in Table 1.

Table 1 Healthcare Expenditure Comparison Hong Kong vs Singapore 2012

No.	Year 2012	Hong Kong	Singpaore
1	Population	7.178 m	5.312 m
	GDP	HK$1,889.8 billion	S$345.6 billion
2	Total Government Expenditure (TGE)	HK$380 billion	S$50.11 billion
3	Percentage of TGE over GDP	20%	14.49%
4	Healthcare Spending (HS)	HK$45 Billion	S$4.8 billion
5	Percentage of HS over GDP	2.38%	1.38%*
6	Percentage of HS over TGE	11.84%	9.58%**
7	Total Number of Public Hospitals	38	8
8	Total Number of Beds in Public Hospitals (excluding nursing home and specialty)	27153	6704***
9	HS Per capital	HK$6269 per capital	S$904 per capital***
10	HS Per Hospital Bed	HK$1.68m per bed	S$715,990

11

Bed Per 1000 person

3.78

1.26

 
* In 2011, the percentage is only 1.2% (http://www.moh.gov.sg/content/moh_web/home/statistics/Health_Facts_Singapore/Healthcare_Financing.html)

** This figure is a big jump from 2011 whereby percentage of Healthcare spending was only 8.2 of Total government expenditure

***This is based on projection of 2015 number. In 2010, there are only 6304 beds

**** Ministry of Health uses only “residents” (Citizens plus PR) to calculate and claims that if expenditure from Endowment fund is used, the HS per capital is as high as S$1300. (this is in itself, a big jump from S$1077 per capital in 2011)

The first comparison we look at is the size of Total Government Expenditure (TGE) as a percentage to their respective GDP (Row 3, Table 1). Singapore has a smaller TGE basically because every receipt from land sales is put away into our Reserves instead of being treated as government revenue. This will put a false picture on government revenue (as well as surpluses) and thus restrict on its spending power. Thus, it is no surprise that Singapore government has a relatively smaller spending percentage than Hong Kong government.

The spending on Healthcare is even smaller in relative terms if we consider the relatively smaller percentage of Singapore’s Healthcare spending (HS) to total TGE (Row 6, Table 1). Singapore allocated only 9.58% of its TGE to healthcare while Hong Kong allocated 11.84%. It is thus not surprising that Singapore’s HS as percentage of its GDP is just a mere 1.38% (well, already an improvement of previous 1.2%) while Hong Kong registered 2.38%.

The immediate effect on Singaporeans is reflected on the Bed per 1000 persons provided by public hospitals (Row 11, Table 1) whereby Singapore has a very low rate of 1.26 while Hong Kong is THREE times of ours!

The inadequacy of HS is further manifested by the Healthcare spending per capital (Row 9, Table 1), which is only S$904 per person in Singapore while Hong Kong registered HK$6269 (or S$1027 @ 6.1 exchange rate) per person. i.e. Singapore spent roughly 10% less than Hong Kong in terms of HS per capital. 

Efficiency of Healthcare Spending in Singapore

Hong Kong has a relatively a vast area to cover than Singapore and thus, it runs more than 38 hospitals, which include hospitals in some of the outlying islands. Logically, Singapore should enjoy more economies of scale when it only needs to run 8 hospitals compared to the 38 in Hong Kong. In fact, most of Hong Kong’s hospitals are relatively “small” as compared to Singapore.    

But the curious thing is that Hong Kong could run more than 4 times the number of hospital beds than Singapore when its absolute spending in Healthcare is only roughly 1.54 times of Singapore’s. This is further reflected in the HS per hospital bed figures (Row 10, Table 1) whereby Hong Kong only spent about HK$1.68 million which is roughly about S$275,410 as compared to Singapore’s S$715,990!

This reflects a gross inefficiency of Singapore’s heathcare system, not forgetting that Hong Kong’s quality of healthcare services in their hospitals are more or less the same as Singapore.

What is more intriguing is that Hong Kongers (HK Permanent Residents) pay very much less for their hospital care than Singapore Citizens. This is despite of the fact that Singapore government claim to have put up “hefty subsidies” and implemented a differential pricing mechanism by setting up different classes of beds in our public hospitals to effect “cross subsidies”.  

The following two statistical tables will show the charges imposed on the respective residents or citizens of Hong Kong and Singapore.

Table 2 Hong Kong Public Hospital Fee Structure*

	Service		Fees
	Accident & Emergency		$100 per attendance
	In-patient (general acute beds)		$50 admission fee, plus $100 per day N1,N2
	In-patient (convalescent, rehabilitation, infirmary & psychiatric beds)		$68 per day N1,N2
	Specialist out-patient (including allied health services)		$100 for the 1st attendance, $60 per subsequent attendance, $10 per drug item
	Day procedure and treatment at Clinical Oncology Clinic and Renal Clinic		$80 per attendance
	General out-patient		$45 per attendance
	Dressing & Injection		$17 per attendance
	Geriatric, Psychiatric & Rehabilitation day hospital		$55 per attendance
	Community nursing (general)		$80 per visit
	Community nursing (psychiatric)		Free
	Community allied health services		$64 per treatment
N1		The rate of maintenance fee is per day or part thereof.
N2		Children under twelve years of age and babies who cannot be discharged at the same time as their mothers are charged half the maintenance fees appropriate to the type of bed occupied. All other fees are the same as those for adults.

For details, please refer to the Gazette – Public Charges – Eligible Persons. 
*I have chosen this table as it reflects the charges for Hong Kong Permanent Residents as compared to Singapore Citizens.

Source: Hong Kong Hospital Authority (http://www.ha.org.hk/visitor/ha_visitor_index.asp?Parent_ID=10044&Content_ID=10045&Ver=HTML)

 

Table 3 Singapore Public Hospital Fee Structure**

Room Type	Class C (Open Ward)
Hospitals*	Average Per Day ($)	Average Total Bill ($)	Total Bill at 90th Percentile	Total Bill at 95th Percentile
AH	162	1,067	2,059	3,112
CGH	189	1,640	3,452	4,962
KTPH	231	1,698	3,455	4,984
KKH	259	1,646	2,917	5,971
NUH	315	2,134	4,126	5,868
SGH	268	2,171	4,401	7,153
TTSH	194	2,069	4,643	7,169
NHC	766	3,062	6,135	7,895

** The proper comparison should be made with Class B2 which has 6 to 10 beds per ward because in Hong Kong, the common ward has about 8 beds per ward. But for simplicity sake and avoiding “excuses” from PAP people, I have used Class C ward pricing instead. This computation only includes Singapore Citizens.

Source: Singapore Ministry of Health (http://www.moh.gov.sg/content/moh_web/home/statistics/healthcare_institutionstatistics/average_hospitalinpatientbillsizetables/Public_Hospitals-Medical_Specialties.html)

I must stress that in Hong Kong, there is only one kind of ward and one kind of charges across ALL the 38 hospitals under Hong Kong Hospital Authority. There is no Class A to C.

The in-patient hospital charges in Hong Kong for Hong Kong PRs include almost everything, from surgeries to meals and even most medication. As an example, a woman can be warded for 4 days for giving birth to her child. She will only have to pay HK$400 in total (HK$100 or $16.39 per day) or S$65.60 for her hospital charges. In fact, after discharge, the newly born child will enjoy FREE check up and vaccines at government polyclinics every month, up to one year or more.

If you look at Table 3 which listed the charges of Singapore’s 8 hospitals for CLASS C, you will realize how expensive our hospitals are charging our citizens.  It ranges from $162 to $766 per day! This is about 10 to 46 times more than Hong Kong! On top of this, it doesn’t take into considerations of those cases whereby it could cost a bomb.

Now, the most important question we want to ask, why are we made to pay so much as compared to Hong Kong after PAP government claims to give “hefty subsidy”? Not to mention that Singapore hospitals should enjoy more economies of scale since their sizes are relatively large.

What is wrong with Singapore’s Healthcare system?

What is really wrong with Singapore’s Healthcare system?

There are quite a number of problems with the operations of our healthcare system. I will try to touch on some of the more important ones.

1)      Cost based vs Market Pricing

PAP government is obsessed with the concept of “Market Pricing”. The land and even services that hospitals provide are priced at Market Pricing. Thus the so call “subsidies” are actually “market discount” rather than cost subsidies. This will inflate the amount of money they spent on healthcare artificially. This is unlike Hong Kong’s system. They go by Cost pricing. Thus you can get largest value out of each dollar spent.

Public hospitals are treated as PURE PUBLIC SERVICE PROVIDER and not compared to private hospitals which are out to make money. Their sole purpose is to meet the demand of public healthcare and nothing else. The worse thing is for PAP government to treat it as a private entity, trying not only to get “cost recovery” from the hospitals but also aiming to “make money” from Medical Tourism!

2)      Fundamental Service Provision vs Grand Building

If you visit Hong Kong hospitals, you will be shocked or disappointed that they aren’t really the posh buildings you used to see in Singapore. No super nice garden, posh lobbies, nice reception etc. All are fundamentally functional. They definitely don’t spend over thousand dollars on chairs for their management staff like what our civil service does. But that doesn’t mean their healthcare technology is anywhere inferior to Singapore. They have just spent on the most fundamental and important things to make sure life are saved or illness is cured.  

Adding peripherals will not only involve higher construction cost but it also adds cost to maintenance, thus operating cost. 

3) Wastage of resources in differentiating Class

While we may think that having Class A or various Class B wards would allow hospitals to “make money” but such classification will consume more resources, both in terms of infrastructure as well as human resources. Thus, such classification should be removed in order to optimize resources, instead of “maximize” revenues.

4) Competing of Resources by Medical Tourism

I am always against Public Hospitals to get involved in Medical Tourism. Public Hospital’s sole purpose and aim is to provide good quality hospital care to Singaporeans and the country’s residents. If you can’t even take proper care of our own people, making them to suffer and sleep along corridors and tents, why are you diverting resources for Medical Tourism?

Such diversion of resources to Medical Tourism will inevitably reduce the resources for our own residents. Our government is already spending inadequate funds in our National Healthcare system as compared to international standards, such further competing and reduction in medical resources meant for our people will aggravate situation.

Conclusion

There may be many more other problems not listed here but it ultimately lies with the efficiency of each and every dollar spent. Of course, the inadequacy of the total funding spent in our healthcare system also contributes to the whole problem, along with the bad planning of PAP government in their population growth strategy without accompanying growth in infrastructures including healthcare.

Most important of all, Singaporeans must be well informed of how inadequate and inefficient our healthcare system is so that they could pressure the PAP government further so to improve it. Basic healthcare, basic hospital care is a necessity and not luxury services. People can die due to inadequate healthcare services.

I hope that such a simple comparison made with Hong Kong’s healthcare spending and system will enlighten more Singaporeans on PAP government’s incompetency. We are made to pay more for healthcare services due to their incompetency and stinginess. They are only interested in cost recovery and by introducing Medical Tourism to public hospitals; the amount of resources left for our people will be smaller.

Some PAP people have pointed out that Hong Kong does not need to pay for Defence spending and thus they can afford more funding to Healthcare. That is totally flawed argument. In the very first place, many other countries which have defence spending, had spent relatively far more money in their healthcare system, in terms of percentage to GDP or total government expenditure. Furthermore, even though Hong Kong does not allocate funds for Defence, but it has a huge social spending on unemployment benefits and social safety nets as compared to Singapore!

On the contrary, it has been shown by many other people that Singapore’s defence spending is just too huge in terms of percentage to GDP or total government expenditure. This is even so when compared to countries which are technically at war!

Thus I would say that the inadequacy in Healthcare spending is due to two main factors: Firstly, the limitation due to the exclusion of land sales as part of government revenues, secondly, the relatively huge defence spending which has taken up unnecessarily huge percentage of our budget.

If we have to change all this, we will have to either pressure PAP to change their budgeting strategy or just change them entirely.

Goh Meng Seng

Afternote:

PAP and WP people argued that somebody will have to pay for healthcare and it will not be "sustainable" if government is to foot the bill.

Yes, someone will have to pay, some may think it is either Government or the people but the TRUTH is, whether it is from government's coffers or Singaporeans paying out from their pockets, ultimately, it is Singaporeans who are going to foot the bill either via TAXES (yes, everybody pays tax in Singapore via GST). Thus such argument that government should not pay more but Singaporeans should is utter rubbish.

The reason of "unsustainable" is also utter rubbish because when the Nation as a whole, for whatever reasons be it aging population or population growth, increase in the need for more healthcare facilities, the society as a whole will need to pay for an expansion in healthcare spending. To say that it will not be "sustainable" if Government is to pay for more healthcare spending is silly because it would mean the people will have to pay if Government don't foot the bill. Would it be "sustainable" for the people? 

Thus, the key is efficiency and effectiveness in healthcare spending, apart from constrains on development on resources like human resources. Cost-effectiveness and efficiency of each and every dollar spent in healthcare spending are the key to so call "sustainability".