PRIVATIZATION OF THE SINGAPORE GENERAL HOSPITAL

Mr Chew Heng Ching asked the Acting Minister for Health if he will com- ment on the fears expressed by some members of the public that the privatisation of the Singapore General Hospital will result in higher fees for medical treatment.

The Acting Minister for Health (Mr Yeo Cheow Tong): Mr Speaker, Sir, let me first of all clarify that the Government's intention is to restructure the management and operation of the Singapore General Hospital and not to privatize it. The ownership of the hospital will still remain with the Government.

The objective of restructuring is to give hospitals greater autonomy in managing their daily operations and to be more responsive to the needs of patients. This will improve the level of service to the public. Restructured hospitals will be required to adopt commercial accounting practices. The stricter financial discipline and greater cost-consciousness necessary will result in better cost control which will ultimately benefit the patient.

Over 70% of the cost of running a hospital is due to the salaries of the staff. The cost of running a hospital has increased significantly, and will continue to do so with increases in salaries. For example, the recent increase in salaries for nurses resulted in an increase of $15.6 million in the wage bill for financial year 1989. Advances in medical technology and the introduction of new and sophisticated tests and treatment procedures will similarly increase the operating costs of hospitals. This has resulted in an increase of over 42% in the recurrent expenditure of Government hospitals over the last five years, from $220 million in 1983 to about $312 million in 1988. It is therefore inevitable that fees will have to be increased periodically in line with cost increases whether or not a hospital is restructured.

Patients, however, can continue to choose the class of ward accommodation they wish to be admitted into. Those who prefer greater privacy and a more personalized treatment would have to pay the full cost of such services without subsidy. Patients from the lower income group, however, can be assured that the fees for the highly subsidized C and B2 class wards will remain affordable.

For the indigent and those who are genuinely unable to pay the hospital charges despite heavy subsidies, government hospitals, including those that have been restructured, will continue with the present practice of granting waivers or remission of charges.