Insurance alone cannot pay the big bills
Salma Khalik
Wed, Feb 13, 2008
The Straits Times
MEDISHIELD premiums are set to rise again, just three years after
an extensive overhaul of the Medisave-based insurance scheme.
Health Minister Khaw Boon Wan decided on this course to give
subsidised patients some relief from having to fork out too much in
cash. He wants patients with bills of $10,000 or more to pay less
than the 40 per cent they now have to fork out.
Only 'a small percentage' of subsidised patients are landed with
such huge bills each year, said his ministry's spokesman. But the
pain from such out-of-pocket payment can be crippling.
But how are such large bills accumulated in the first place?
The Health Ministry gives two main causes: days spent in intensive
care units (ICU) and expensive, but better quality, implants.
How is it possible that, even with the generous medical financing
in place, subsidised patients still need to make hefty out-of-
pocket payments?
The answer turns on the kinds of treatment a subsidised patient
is eligible for. Such a patient, for example, cannot pick the more
expensive drug eluting stent that keeps arteries open, if his
doctor does not think it is necessary.
A patient who insists on the stent must switch to a private ward
class. So subsidised patients, by definition, are given only
treatments that doctors say they need.
For such treatments, the Government pays about 80 per cent of
the bill for C class patients and 65 per cent for B2 class
patients. On top of that, the Government also absorbs the 7 per
cent Goods and Services Tax for them.
Granted, the above doesn't explain a $10,000 out-of-pocket
payment, unless the total bill for a C Class patient is $50,000.
But a closer look at the make-up of the bill will shed some
light,
The subsidy for ICU ward fees for C class patients ranges from
about 66 per cent to 85 per cent, with patients paying between $100
and $200 a day. They also need to pay for the medication and
treatment they get in ICU.
Some may require medicines that are not on the subsidised list.
For example, haemophiliacs who lack the coagulant that stops
bleeding may need 10 to 12 vials of a non-subsidised medicine to
stop them from bleeding to death following surgery. At $1,500 a
vial, the total bill can be staggering.
Such medicine is not subsidised, since there are cheaper
coagulants available. For the small number of patients for whom the
cheaper drug is not effective, getting the expensive one is a
matter of life and death.
MediShield insurance allows claims of up to a maximum of $500
daily for ICU stay and treatment. And at $1,500 a vial, the
medicine alone would more than bust the limit.
Implants, too, can be very expensive. A spinal implant, for
example, could set a patient back by up to $18,000.
The 1993 White Paper on Affordable Health Care called for basic
medical care to be heavily subsidised. It defined basic medical
care as 'essential and cost-effective medical treatment of proven
value for illnesses, without which the patient's health and quality
of life will be significantly compromised'.
This did not include 'artificial appliances other than the most
basic models for the heart, hips, knees, etc'.
As a result, the subsidy on implants was capped at 50 per cent
of the cost of the implant, up to a maximum of $500, for patients
in both B2 and C class wards.
This means that if the implant costs $1,000, the Government will
pay $500 or the full 50 per cent subsidy. But if the implant is
more expensive, the percentage subsidised will be lower than half.
A $2,000 implant will have only a 25 per cent subsidy, while a
$5,000 implant will get only a 10 per cent subsidy.
Orthopaedic implants are no longer a rarity, with thousands of
patients getting them every year - mainly for the knees, hips and
spine. Singapore General Hospital alone carries out about 100 knee
implants a month.
In the 15 years since the White Paper was drawn up, orthopaedic
implants have become part and parcel of basic medical care -
without which quality of life will be 'significantly compromised''.
No one would want an artificial knee or vertebra unless it were
medically necessary.
While only several hundred people may need spinal implants each
year, the cost is high, between $2,500 and $18,000 each. At the
higher end of the price range, the subsidy for a C class patient
does not even come to 3 per cent. Those with MediShield can claim
up to $2,500 for implants.
With such big bills, Mr Khaw's plans to tweak MediShield seems a
perfectly rational way to help patients defray medical costs. The
obvious solution is for the insurer to cover a bigger portion of
the bill. But for them to be able to do so, premiums must go
up.
Perhaps we should also ask other questions: Is the Government
subsidy for C and B2 patients sufficient and equitable in the first
place? Should the 15-year-old definition of what constitutes basic
medical care be broadened?
If implants are considered part of basic health care, then a C
Class patient's share of a $18,000 implant would be 20 per cent or
$3,600. With MediShield insurance, his out-of-pocket payment will
be just $1,100 - a sum that many patients can dip into their
Medisave to pay for.
Expecting insurance - which means the 2.8 million people insured
under MediShield - to make up for the shortfall in subsidy seems to
be passing the burden of caring for the poor to people who have
taken the precaution of buying insurance.
When Mr Khaw was pushing for means testing at public hospitals,
he took the view that society should not begrudge poorer patients
better quality health care.
He was referring to improvements in the quality of subsidised
wards today, with the promise of more improvements in future.
Nicer surroundings would be welcome, of course. But better still
would be if funds could be channelled to B2 and C class patients to
give them the full 65 per cent and 80 per cent subsidies for needed
treatments. Patients would then not have to face such enormous
out-of-pocket payments.
Orthopaedic implants are generally needed by the elderly, many
of whom do not have medical insurance. MediShield also stops
covering patients once they reach the age of 85.
Raising the insurance payout is not going to help them, but
increasing the subsidy will.
