INCREASED MEDICAL COSTS FOR LOW INCOME PATIENTS

INCREASED MEDICAL COSTS FOR LOW INCOME PATIENTS: 7.

Ms Eunice Elizabeth Olsen asked the Minister for Health (a) whether low income patients have been paying more in medical costs given that the increase in aid applicants to Medifund is greater than the increase in Medifund payouts and that medical inflation has outstripped the national inflation rate; and (b) whether means testing will result in lower medical costs for low income patients.

Mr Khaw Boon Wan: Mr Speaker, Sir, Medifund payouts to help low-income patients have been steadily increasing over the years. In FY2006, it was $40.7 million, 4% higher than the disbursement in the previous financial year.

As medical costs increase in tandem with enhancements in standard, the cost burden on all patients, rich or poor, will similarly grow. But we ensure that healthcare services remain highly affordable to the low-income group, through heavy direct subsidies from the Government. As I said just now, Class C

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and Class B2 subsidies of 80% and 65% of cost remain unchanged.

As any patient can apply to Medifund, the number of applications itself does not tell the full story, as not all cases are as deserving. The fact though is that the bulk of the applications, 98%, were approved.

The proposal to introduce means-testing in hospitals is intended precisely to ensure that the subsidy for the low-income group will remain protected for them, as we upgrade the services in the Class C and B2 wards.

Mr Siew Kum Hong: Sir, I would like to ask the Minister why the average Medifund payout per patient has actually decreased from $174 in 2001 to $132 in 2006.

Mr Khaw Boon Wan: Sir, each year, Medifund applications run into hundreds of thousands of cases. "Applications" does not mean patients, because a patient may apply several times if there are several episodes, several clinic visits, and it will be the same patient and if his financial status is low income and has difficulty. So a patient may chalk up four or five applications. Last year, there was something like 300,000 applications which were approved.

As for the average bill size of the successful applicants, it is bound to vary from year to year, because these are for both inpatients as well as outpatients, and for all types of illnesses, all types of clinic procedures. Given such diversity, I am not surprised that it should come down or go up. I do not think we should read any more into it.

The key point is that those who need help will be helped. As I said, 98% of the applications were successful.

Ms Eunice Elizabeth Olsen (Nominated Member): Sir, I have two supplementary

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questions for the Minister. I would like to ask the Minister: since there is a greater cost recovery under means testing, how will the money from this greater cost recovery be used? Secondly, what yardstick will the Government use to measure the success of means testing, and how will the public know that means testing is working?

Mr Khaw Boon Wan: Sir, on means testing, how much additional revenue we will collect? It really depends on the details which are still being finalised and the eventual impact on the ground. As I said, it is not a scheme for the present. The problem is not really big, meaning that large numbers of high income or upper middle income groups are using Class C. Some do, but not in big numbers. And if they are not big numbers, the impact in terms of additional revenue collected by Government will not be huge. But whatever it is, whatever additional revenue collected will be ploughed back to Ministry of Health to subsidise more patients. So, the end result is year by year, with or without means testing, we will be spending more money to subsidise the low-income group. The additional incremental revenue that means testing will yield will just give me additional money to help the low-income group, which is really the purpose of this exercise.

What is the yardstick to determine whether means testing is successful or not? Let us go back to the objective. Our objective is to be able to continue to improve services in Class C and Class B2. If we are able to do so, then I will call that success. You just need to look at, say, Class C or B2 ward today, and 10 years ago and 20 years ago. The other day there was a public event where Mdm Halimah talked about her experience in KK Class C ward in 1981. She described it pretty graphically, and her conclusion is that it is a world apart, between then and

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now. And I hope, going forward, 10 years from now, the Class C of the future will again be better than the Class C of today.

As we narrow the differences between Class C and Class B2, Class B2 and Class B1, and if I do not have this filter, I think, more likely, I will begin to attract more and more who can actually well afford Class A or Class B1 to come and save a lot of money in Class C. Because the difference between Class B2 and Class C is four times. And when we narrow the differences, and without means testing in place, more will be drawn into Class C when they could well afford Class B2. The alternative is I do not improve on Class C. Then, of course, this change will not come about, in which case, I also do not need to have means testing. But I genuinely want to up the standard of Class C and Class B2 so that, in tandem with economic growth, we can pass on some of the benefits to the lower-income group in Singapore.