AFFORDABLE HEALTH CARE

Order read for Resumption of Debate on Question [10th November, 1993],

"That this House endorses the principles and approaches set out in Paper Cmd 16 of 1993 on "Affordable Health Care" as the basis for Government policies to contain health care costs and to keep good basic health care affordable to all Singaporeans." - [Minister for Trade and Industry].

Question again proposed. 1.00 pm

Encik Othman bin Haron Eusofe: Mr Speaker, Sir, I support the Government's health care philosophy as outlined in the White Paper on Affordable Health Care. I am happy to note that the Government has guaranteed Singaporeans access to affordable basic medical services.

Sir, health must indeed be a personal responsibility. We have to keep fit and healthy to enjoy a good quality of life. The Government, employers, unions, and the community at large have a crucial role to play. Firstly, to motivate the people to always keep healthy and fit and, secondly, when they are unfortunate to fall sick, to help them obtain good and affordable medical services.

Sir, the most effective way to keep health care cost down is through prevention. This calls for health education and disease prevention programmes which, effectively, reach all levels of the population. We must vigorously promote a healthy lifestyle, with good health habits, and especially to keep fit through regular exercises and to be moderate and very careful in what we eat and drink. Employers can help their employees promote their health and well-being by implementing health promotion programmes at the various workplaces.

Sir, the White Paper has pointed out that the national health expenditure is currently 3.1% of GDP. Government subsidies amount to 0.7% of GDP. The concern is that health care costs and demand for health services can increase rapidly beyond what the nation can afford. The proposed Government measures are aimed, therefore, at keeping health care generally affordable to all sections of the population, based on their need for medical services and what they are able to afford without imposing a financial hardship on their families. Here, it is crucial that the measures are carefully balanced against the provision of good quality health care for all sections of the population.

The key question is: what is a good basic medical package? The White Paper states that "the basic package will reflect up to date good medical practice. It will contain essential and cost effective medical treatment of proven value." It also states that medical care and services in Class B2 and C wards at subvented hospitals and polyclinics, which are heavily subsidised by Government, will reflect this basic package.

Sir, an important consideration is that the basic medical package will be reviewed from time to time to incorporate advances in medical treatment. Here, we have to take heed of the ground perception of the quality of medical care and services, particularly, in the Class C wards. Some are not confident that good quality medical care and services will be available in these wards. They feel that they will not be able to get good quality medical care, good doctors and nursing care.

Sir, the Government must ensure that good quality medical care will always be provided in the Class C wards. There must be the confidence that a reasonably good quality medical care is always available in these wards. When this is accepted, there will be less demand and pressure for hospitalisation at Class A and B1 wards and this will help relieve the financial burden on low and middle-income families when a member of the family falls ill and requires hospitalisation.

Sir, the next issue is the cost of hospitalisation in these wards, that is, the level of subsidy will not be reduced. Any increase in costs must be carefully taken. It must be kept gradual, keeping in mind what the lower and middle-income groups can afford.

Sir, now let me turn to the issue of employer medical benefits. Let me state at the outset that I agree that the provision of employer medical benefits should not transfer the responsibility of staying healthy from the employee to the employer, or shift the burden of payment to a third party.

The Ministry of Finance has just announced the new medical benefits scheme for civil servants where new recruits will not receive hospitalisation benefits but, instead, will receive additional Medisave contribution over and above the statutory Medisave contribution. They will, however, still receive traditional outpatient benefits, but subject to a cap. It is intended to provide more freedom for them to decide on how to use the funds provided for their medical needs, including purchase of insurance coverage with MediShield II, or a Managed Healthcare System which NTUC Income and NTUC Healthcare Cooperatives are developing.

Sir, more importantly, it provides a way to shift to other types of medical benefits which will not encourage over-use. In the case of the civil service revised medical benefits scheme, I think there will be some compensation in the form of additional adjustments to salaries and I hope that the two will match because workers fear that their existing medical benefits will be cut by their employers who will try to introduce changes to the medical benefits scheme to contain cost. We have to approach this issue by taking both managements' and workers' concern into consideration. This is a sensitive and emotive subject. By looking at the total remuneration package or the total salary, I think it gives us a way to find a solution to this problem. Any change to the employer medical benefits scheme should not reduce the value of the total remuneration or salary package.

Here, I would like to stress that employers must be fair and recognise that our union leaders are responsible. They want to help their companies enhance their competitiveness but, at the same time, they want to ensure that their union members and workers will continue to be provided with a good quality of health care. I would like to urge the employers and the unions to work together, share information on the challenges ahead and find solutions which safeguard the employees' health and well-being and strengthen the company's competitive position as well.

Sir, on this note, I support the motion. Let me stress that while we want to have measures introduced to keep the lid on health care cost, these measures should be reviewed from time to time and be carefully balanced against the need to ensure good quality health care for our people.

Dr John Chen Seow Phun (Hong Kah GRC): Mr Speaker, Sir, the NTUC has set up a Committee on Health Care Policies to examine the implications of the White Paper, especially on medical benefits for workers. The Committee is examining how employer medical benefits can be restructured to ensure that workers continue to be provided with good health care, without leading to excessive costs. As Chairman of the Committee, I wish to share our preliminary findings and position.

Workers currently enjoy both outpatient and hospitalisation benefits provided by employers. A recent analysis based on almost 1,000 collective agreements (CAs) in the unionised private sector reveals the following:

For outpatient treatment, the majority of companies (about 99%) allow workers free medical treatment if prescribed by a company doctor, or company appointed doctor. Most companies do not allow workers to consult a private doctor unless there is an emergency.

For hospitalisation benefits, while 20% of the CAs impose no limit to total hospitalisation charges, the remaining CAs exercise cost control through a cap on hospitalisation entitlement. Such caps come in the form of either a limit to the maximum number of days of ward stay, or a limit to the surgical or specialist fees incurred per year, or per disability, or a predetermined level of coverage under medical insurance schemes.

The controls on medical benefits exercised by employers have, to a large extent, prevented abuses. What is lacking are incentives to the worker and his doctor to save on medical costs. When a third party, either the employer or the insurance company, is picking up the tab, it is natural that the patient (the demand side) and his doctors (the supply side) will be less cost conscious.

On the supply side, I fully support the Government's proposal to regulate key areas of pricing and operations of subvented hospitals and control charges of private sector Medisave patients. This will help ensure that treatment is carried out only when there is medical necessity and with the most cost-effective means.

On the demand side, workers have to accept two things. First, they must realise that asking from employers better and better medical benefits, CA after CA, is not necessarily good for them. Second, they must accept certain personal responsibility in the utilisation of medical benefits.

During the public debate on escalating medical costs last year, some employers have expressed concern that unions have been pushing for better medical benefits in each CA negotiation. The NTUC has since advised unions that this may not be a wise thing to do. High medical costs will not only affect wages directly, it can erode the competitiveness of a company to the detriment of both the employer and the employees.

To find out whether our unions have taken heed of this advice, I did a check on all the CAs that have been signed in 1993. There are 126 of them covering almost 19,000 bargainable workers. I discovered that only four unions covering 9% of the workers have asked for their class ward entitlement to be upgraded. Two of them upgraded their ward entitlement from C to B2 and the other two upgraded from B2 to B1. On the other hand, there are three unions covering 12% of the workers which have actually lowered their class ward entitlement from B1 to B2 or from B2 to C on an optional basis. Workers who opt for a lower class ward will be given an allowance. The above observation shows that our unions have, by and large, taken our advice.

On the personal responsibility aspect, it is generally true that when an employee has to pay part of the medical services at the point of consumption, it will give him the incentive to use medical services responsibly. The NTUC will encourage unions to consider incorporating this aspect of personal responsibility in their future CA negotiations.

However, to enable unions to be receptive to such changes, we must address two legitimate concerns they have. The first is that such changes should not result in costs shifting from employers to workers. Workers should not become financially worse off for the same benefits they enjoy. Second, the effects on older workers have to be specially looked into as they are more likely to use medical services.

The Government will be taking the lead as the largest employer. For new recruits, they will receive additional Medisave contributions over and above the statutory Medisave contributions. The Finance Minister has earlier briefed us on the new scheme but he has not touched on what the MediShield II Scheme will be like. Because for those who opt for the MSO Scheme, they will have to use their Medisave to purchase medical services. At the moment, they cannot use that to purchase an insurance scheme and we know that the existing MediShield Scheme is too conservative. So we look forward to the new scheme and we hope that the improved MediShield or MediShield II should provide sufficient hospital coverage for them and their dependants without depleting their Medisave. As choosing a level of medical services to suit one's needs is not a straightforward matter, the Government should provide consumer education to the new recruits.

Existing Government employees are already paying 20% of their hospital ward charges. They are concerned about the co-payment they have to make for treatment charges and whether Government will give them enough compensation in terms of wages. This fear of uncertainty is particularly felt among the older employees. In fact, many of them hope that they can opt to stay in the existing scheme, ie, to continue to enjoy the treatment free of charge. And even if change is certain, they would want to know whether the Government would allow them to buy an insurance plan to cover their co-payment. In other words, because they are old and they know that they are prone to be hospitalised, they do not know whether they can afford the co-payment. So for the co-payment part, they would like to buy an insurance plan so that they are fully covered. I wish to seek the view of the Government on this matter.

Sir, for the private sector, there are a number of possibilities for employer medical benefits to include an element of personal responsibility. First, it can be in the form of deductibles or co-insurance, although the latter will be more difficult to accept for older workers. Deductibles are likely to be acceptable because there is less uncertainty. Savings through the new introduction of deductibles can be passed back to the workers. Alternatively, employers can consider setting up reimbursement accounts that employees can use to satisfy deductibles and co-insurance or pay for uncovered health care services. According to our CA analysis, more and more companies are adopting medical insurance policies to cover workers' hospitalisation expenses. The percentage of companies with medical insurance policies is now 31% compared to 10% in 1989. These policies have no deductibles or co-insurance although there are caps on the entitlement. There is therefore a need to increase the element of personal responsibility in this regard.

Second, unions can consider co-payment if employers are prepared to extend medical benefits to dependants, just like the Government has done.

Third, employers, with the support of unions, can convert their medical benefits to the Managed Healthcare System (MHS) which NTUC INCOME and NTUC Healthcare Cooperative will be offering next year. MHS is different from a normal medical insurance scheme. Physicians in the normal insurance scheme have no incentive to save on medical costs because they are paid on a fee-for-service basis. Under the MHS, which provides for primary, specialist and hospital care, physicians providing primary care will be paid on a capitation basis, ie, a fixed sum per member regardless of the actual utilisation of medical care. This will minimise over-treatment by the physicians, who will be given incentives to serve as "gatekeepers" to keep out unnecessary specialist and hospital treatments. At the same time, co-payments for consultation and cappings or deductibles for hospital care will be introduced to promote personal responsibility. A system of providing rebates to members who do not make excessive use of medical care will also be put in place. Monitoring the utilisation of medical care and the treatment outcomes will be done to ensure that members receive good quality care.

Managed health care is not new in Singapore. Our system of polyclinics, secondary and tertiary public hospitals offer a form of managed health care. We should bring managed health care into the private sector and the NTUC MHS will be an attractive scheme to treat patients in the most cost effective way. NTUC hopes to discuss with the Ministry of Health the details of the scheme so as to obtain their support to treat MHS as an approved health care plan to draw on Medisave.

Sir, I support the motion.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): ( In Mandarin): Mr Speaker, Sir, the White Paper on health care is a result of realising the immense difficulties faced by the advanced countries in the West, in their health care problems. This White Paper provides a health care programme which will not burden our State and our people. I fully support the philosophy of the White Paper that the State should provide health care to every one, including the poor and destitute who cannot afford to pay for their health care expenses.

A lot of space has been spent on explaining how to curb rising medical cost due to uncontrolled medical cost and consumption. I agree with the two approaches mentioned in the White Paper. Firstly, avoiding the stimulation on excessive medical consumption due to health care over supply of services. Secondly, we should curb those unnecessary medical demand due to over-subsidy and free medical care. There are many reasons for the long-term increase in health care cost. Many MPs have already spoken on this. But I feel there are two major reasons. Firstly, the general rise in costs and, secondly, the increased consumption of health care. The former is an economic issue which is directly linked to the rise in prices in the market place, and it is not easy to curb or to overcome it. But the latter, I think if we can curb the excessive use of our health care services, we will be able to moderate the rate of increase in health care cost. If we can curb or put a restraint on those unnecessary consumption of health care service, I think we will achieve our purpose. However, the recommendations in the White Paper seem to be in conflict with the general principle. We should study them more carefully.

First, doctor to population ratio. The White Paper mentioned that the present ratio is one doctor to 800 people and by the year 2000, the ratio will be increased to one doctor to 650 people. The number of specialists will be 40% of the number of doctors. This doctor-to-people ratio and the ratio of specialists to general practitioners are quite similar to those in the UK. We know that the UK government has met with immense difficulties in their health care system. So this makes me wonder whether the ratio that we propose is advisable. Is it higher than that in the UK? Is the rate correct? If you take into account the density of population in UK, we will find that our doctor-to-population ratio is much higher than in the UK. I think we should re-consider it.

Following the principle outlined in the White Paper which mentioned that the medical demand is supply initiated, the over-supply of medical services, including doctors, the health care cost is bound to go up.

Secondly, Medisave. The White Paper recommends that we should increase the Medisave contribution rate in order to make up for the increase in health care cost. Eventually, it will be increased to 10% of the salary. Although Medisave is a good scheme, we should understand that Medisave is also a contributing factor towards rising health care cost. We observe that more than half of the newborn babies in Singapore are delivered in private hospitals and that 17% of patients who live in A class wards are earning salaries of less than $1,000 per month. Why is this so? I feel that this is because of the generous use of Medisave fund. I do not think it is a good move to increase the contribution rate to Medisave, because the direct result will be that there will be big sums of money in the people's Medisave accounts. It cannot be used for other purposes except to purchase medical services. People would then tend to use this money for their medical expenses, excessively and wastefully. I feel that there should be other ways in place of the proposed increase in the contribution rate towards Medisave, such as allowing the account holders to transfer a limited sum of money from their Ordinary Account to Medisave account to pay for their medical expenses. This will give them flexibility to make use of thei6r Ordinary Account for medical expenses or to use it on buying property and investment. In this way, it could heop in avoiding the rising health care cost.

Thirdly, private medical insurance. I feel that this scheme, if not handled properly will lead to wastage in medical expenses. If we do not restrain the use of private medical insurance, we will fall into a trap similar to that of the US medical insurance. Fortunately, these private medical insurance schemes are not quite popular in Singapore. The White Paper mentions that we can use Medisave to pay for private medical insurance. I do not think it is a good move because this will encourage more people to buy medical insurance. The White Paper also mentions the fact that the medical insurance companies have been spending 22% of their budget on administration. If, including the profit of the insurance company less than 70% of the premium will be used on medical expenses. The medical insurance scheme, directly leads to the increase in health care cost. If we allow Medisave to pay for the private medical insurance, we will encourage people to participate in private medical insurance schemes. I do not think this is a good move. If there is any good reason for having a specific medical insurance, it should be run by a non-profit making enterprise, every citizen should participate in this scheme and with some form of co-payment like MediShield. In this way, the insured will use his own resources to pay for part of his medical expenses to avoid excessive and unnecessary medical consumption. With more people participating, it will be more cost effective and the premiums could be reduced.

The White Paper also mentions about the implementation of MediShield II. However, the White Paper does not give details on the implementation of this scheme, except stating that the insured patients be allowed to use this to pay for A class ward expenses. This will certainly lead to the consumption of more medical services. People would then choose to stay in the A class ward because of this scheme, otherwise, he would just stay in a B1 class ward. This will run counter to the principle of the White Paper.

Sir, apart from the comments I have made above, I would like to support this motion.

Mr Chia Shi Teck (Nominated Member): May I first refer to Mr Low Thia Khiang's point that the Government is duty-bound to provide for the medical needs of the people. I think those of us who have read the White Paper can clearly see that that is precisely what the Government is trying to do. The Government spells out a health care philosophy based on the five fundamental objectives. If the Opposition Member has read them, he should say whether those objectives are fundamentally wrong or whether he has better ideas than those fundamental objectives. Because the very purpose is to ensure that we have a health care system that is: (a) sound, (b) equitable, (c) fair, (d) sustainable, and (e) not detrimental to the country.

The Government cannot promote an irresponsible free spending system that will bankrupt the country. Minister Dhanabalan had yesterday explained that all subsidies are ultimately paid for by the people. If we run into debt, then we are talking about following the western world that actually makes the future generations pay for what they consume today. I think that is not allowed and, in fact, it should be the duty of the Government to keep away from such pitfalls. The fact is that users of health care must pay.

I fully agree that we owe it to ourselves individually to keep fit and healthy. But from the report we are just talking about 14% of Singaporeans who are actually actively exercising. So the Government intends to give the individual maximum incentives to stay healthy, save on its medical expenses and avoid unnecessary consumption, resulting in huge wastage. On the question of incentives, probably we could venture a little further. As we all agree, prevention is better than cure. A fit and healthy individual actually benefits the company and the country as well as himself. Therefore, we should introduce even more incentives.

On the part of the State, what about following the National Service reservists' fitness scheme where we could give them some incentives, maybe a personal allowance of $1,000 per annum, based on a certificate of fitness, and not entitlement, if they keep fit? What about rewarding those who do not consume the State's health care expenditure? It is like the insurance no-claim bonus. And if they do not claim it, we can waive or pay for their MediShield premium because they are not consuming the State's expenditure on health care.

What about allowing discounted entries into sports facilities? Could it be that our sports facilities are charging exorbitantly that very few can actually have regular exercises? Even credit card companies give discounts for those who spend using their cards. What about lucky draws? We have a lot of condominiums to go by for lucky draws if they do not consume medical services. We have got to think of ways of getting people to maximise the incentives, and getting people to be concerned and actually put it on themselves. After a while it becomes natural that they will stay fit and healthy.

The idea of MediShield II is good. The unions are worried that employers would just pass the buck to the workers but I think the union leaders are responsible. So are the employers' group. Under such a tight labour situation, they cannot just get away. But as the two Ministers have spoken, at the end of the day, whatever the company pays for, it is part of the wage package. That is clear. But the 2% cap on salaries is not fair to the lower income earners. I think the executive workers are drawing a higher salary and topping up 2% on their salary is not fair. I am happy the Minister for Finance has said that for the civil service they are capping the 1% up to $7,000 of salary. But a fairer thing would be a quantum for the two groups: an executive group and a non-executive group. Probably even the age group has got to be taken into consideration. The civil service is talking about a cap of $350. So if the employers' group is also paying in that region, probably we could have, instead of percentages, a fixed quantum, to be fair to the lower income earners. It does not mean that the higher income earners will fall sick more often and need more medical attention.

Many Singaporeans are actually worried about the affordability of the future. That is why, on and off, when we talk about the cost of living, the retirees are a group that we single out. Very soon, many of us Singaporeans will be on the retiring bench. So one way to actually allay this fear is to have a special retirement account. On good years the Finance Minister has been very generous in giving a 5% or 10% tax rebate. Probably, in future, instead of giving tax rebates, where they actually net off the cash, we could start a Retirement Account where the 5% or 10% tax rebate could go into that account. Over the years, they could accumulate a huge sum and they know that when they retire there is a sum for them to draw on for their old age.

The health care cost component is something that we should look at. In the White Paper, we seem to have left out the doctors' participation. It is as if they do not matter. From what I read of the Singapore Medical Association's latest November Report, they were invited on Wednesday, 3rd November, to a feedback session to give their comments. They came out with a quick comment. They said that it was too short a time for them to study the White Paper. So it suggests to me that the different medical bodies have not been consulted. The report says that "the medical profession supports the general principle enunciated in the White Paper towards providing affordable health care for our people. It is our hope that the views described would contribute towards the successful implementation." So this suggests to me that they have not been consulted. Very quickly, they came out with the fear about the capping of the CPF and whether that will affect their income. They also go on to say, if I can quote the editorial:

`One is likely to blame the doctor when health care costs go up. Besides the doctor's fees and the service fees described above, there are also administrative costs and it is important that these two are kept down. Doctors are at the mercy of free market forces too, the cost of premises and staff salaries ...'

So what they are trying to say here is, do not just blame the poor doctors. But they are those who buy a lot of bungalows! The health care cost components are the doctor's fees, drugs, laboratory tests, hospital charges, operating theatre charges, and so on and so forth. Actually, the doctors also have the incentive to be doctors in that you are capping the number of doctors. As Assoc. Prof. Low has questioned earlier, is that capping itself sound in the long term? We seem to have missed out on the pressure from the fact that we are promoting ourselves as the medical hub.

No mention is made in the White Paper about the impact of the foreign nationals seeking treatment in Singapore. The ratio is 1:650. But those who come here for medical treatment are the people who are coming here to exert the pressure. Very often, we know that specialists do charge the foreign nationals higher charges than Singaporeans. I was told of this, but I do not know how far it is true. How much of the incomes of these specialists and the hospitals actually come from foreign nationals? I think that part is not reflected in the White Paper. If we are promoting ourselves as a medical hub, more pressure will be here, and how does that impact on us. The pressure of charges from there actually goes up. The nursing staff and the administrative staff in the private sector hospitals like to treat the foreign nationals because they also tip them very well, they pay very well, and they are less fussy than Singaporeans. I was told of this when I visited them. There is no fuss in getting through the CPF and Medisave approval and things like that.

The other matter is the medicine fee versus the non-medicine charges. We were told at one feedback session that the medicines that the Government has in the hospitals, they actually charge something like five to seven times their cost. We do not know whether there should be a cap in the way medicine is priced. Even for a simple non-medicine thing like cotton wool and the gauze, they are charged at very high prices and different clinics and hospitals charge them differently.

The Minister for Health (Mr Yeo Cheow Tong): Just a clarification. Is Mr Chia referring to the subsidised hospitals or the private hospitals?

Mr Chia Shi Teck: In general. We got the feedback from someone who is actually in the business of supplying medicine. He said that the price that they tendered versus the price that is ultimately put up in the market shows something like five to seven times. There is no mention in the White Paper whether the medicine cost could be actually capped. The doctor is providing a service, so he charges a fee. Based on his experience and the kind of treatment, the length of visit, the type of sickness, he has to charge different rates. But must he profit out of medicine? Must he profit out of all these other supplies? He has also got people who go back to him just to collect medicine the second time. Is consultation fee applicable or should it be cheaper for repeat visits, which are basically going back to collect medicine?

Then you have doctors talking about rentals and the premises that they have got to pay. My fellow colleague, Dr Toh Keng Kiat, has asked once whether there should be designated Housing and Development Board shops. They have to tender together with the jewellers and the traders and whether that could be transformed. At the way things are going, that may form a big part of the cost and we should study that. Could they operate out of void decks, for instance? Town Councils may allow void decks to be used. Could they operate out of their homes? I do not know. That will take away the element of rental cost. All these have to be studied.

As regards the number of hospital beds, we already have reports that the private hospitals are worried that there are too many beds. And too many beds would mean that they will charge a higher fee. It does not mean that it will be cheaper. Unlike hotels, when there are too many rooms, the rates go down. In this case, they just pass it on because patients have no choice as to which doctor to go to.

In all, I think the Government has done the right thing in that we must actually have a system where the people have got to pay when they consume, and there is no end to it. I am disappointed that the Opposition Members are not here to say how they feel. We may have reserves, but how long can these reserves last if there is no cap and no co-responsibility?

Before I conclude, there is one area that I am not very comfortable with, which is the control of ICUs. The reason is that ICU is the most expensive service. But is the White Paper telling us that there are too many ICUs around? There must be a need for them before you have that number of beds in the ICUs. So you cannot just, because of cost, reduce the number of ICUs. It must certainly be based on the needs and demand.

With that, I support the motion.

Mr Chin Harn Tong (Aljunied GRC): ( In Mandarin): Mr Speaker, Sir, the White Paper on Affordable Health Care has been published with the object of controlling the rise in medical cost and ensuring the people enjoy affordable health care. This White Paper deserves to be highly commended by all of us. However, there are some recommendations in the Report which can be further improved. Let me touch on only four points:

Firstly, the White Paper recommends that the maximum growth in revenue for a hospital should be calculated by a formula of CPI plus X. This formula contains the variable "X", which will be determined by the Ministry of Health and the Ministry of Finance. When formulating this formula of CPI plus X formula, there is a presumption that CPI is something which is already accepted by all and, hence, uncontroversial. But the fact does not appear to be so. CPI has been hotly criticised and became an issue when we debated the Cost Review Committee's Report last month. Now, the White Paper has adopted the formula of CPI plus X as the cap for the maximum revenue of our hospitals. This will again give rise to controversy among members of the public. At the same time, X, as a variable, is also very ambiguous. It can be more, it can also be less. But very often it will not be a negative figure. If it represents something that is going up all the time or most of the time, then this will add on to the burden of the public.

Secondly, the White Paper recommends that the proportion of doctors in subvented hospitals be fixed at 60% for general practitioners and 40% for specialist doctors. My question here is: by so doing, will it give rise to a brain drain from subvented hospitals to the private hospitals? Because the private hospitals are better in financial resources and they can employ better trained and talented specialists, especially now that the Government's policy is to restrict the number of specialist doctors in practice in Singapore. This measure will, all the more, cause a possible brain drain of specialists from Government hospitals to the private hospitals.

Thirdly, the White Paper also refers to the total number of beds in the hospitals. These beds are meant for patients in general. My view is that in the White Paper there is lack of attention given to the aged sick, people who are sick because of old age. No attention has been given to this in the White Paper. These aged sick people do not really need plenty of medical care. All they need is the availability of hospital beds for them to recuperate or to sleep in. With the aging population in Singapore, and with the rising life expectancy in Singapore, there will be more and more of such "patients". Therefore, the White Paper should have made some provisions for these "patients".

Fourthly, because the cost of training a doctor is high, and in order to control such costs, can we not consider the development of some kind of para-medics between doctors and nurses, so that these para-medics can provide the services in hospitals or the polyclinics to look after people who need only health care, rather than medical care?

Mr Chay Wai Chuen (Brickworks GRC): Mr Speaker, Sir, I wish to speak on this motion standing in the name of the Minister for Trade and Industry.

I must say that I find this White Paper quite sensible, contrary to what has been echoed about free market health care system not so long ago.

To many of the aged and to many of the retirees, I think this White Paper and the policies it spells out are a great relief. This White Paper, I believe, rests on sound economic and social perceptions. It recognises at the outset that the public health care system constitutes a unique case for market failure and that regulatory controls should be made in order to generate an outcome that is equitable, choice-friendly and affordable. In going from this starting point of goal-setting to the end point of achieving the outcomes, one has to trespass a whole minefield of controls, levers, pressure points, compulsions, regulations, and incentives. That is the menu of health care systems all over the world.

While the White Paper is quite clearly written, I do not think that the process will be so simply administered neat, cut-and-dry. At the end of the day, some loopholes, some bypasses will be exploited, mismatch between means and ends in this complex system will recur. Nonetheless, by starting on the right footing, as I think this White Paper has, we will hopefully avoid the pitfalls of cost escalation in health care that is found in many of the developed countries, especially in the United States and the United Kingdom, and, hopefully, avoid some of the mistakes in developing a viable and economically efficient and affordable health care system in Singapore.

Singapore spends about 3.1% of our GDP on health expenditures compared with 13% for the United States, 6% to 9% for the OECD countries, and about 6% for Japan. It may appear that we are very low compared to the developed countries, but we must remember that we are a relatively young population compared with them. In fact, the percentage of our people over 65, as found in the Report, in the total population is about half of theirs. As people age, more is spent on medical and health expenses. Hence, we should address the problem seriously now in order that we should avoid the problems faced by them presently. Yet while I can understand the range of regulations and control measures the Government intends to administer for our affordable health care system, I urge the Government not to throw away competition from the bathtub. They must basically allow competition to enjoin within the parameters set by the Government. The health care market should be wisely governed and not allowed to operate unbridled.

Going through the White Paper, I have two points to make here. One concerns the cap the Government intends to set in terms of the average revenue per patient day. Just now my colleague, Mr Chin, has mentioned about the problem of X. It is indeed mentioned in the White Paper that the Government will set the maximum percentage growth in revenue allowed each year to the CPI plus X (where X is the control variable). This control variable is supposed to represent productivity increase and medical progress.

I do not know how the Ministry intends to compute this productivity increase and medical progress rate. If they know of a method, I am eager to know of it. Also, it is mentioned that this rate X will not be revised annually, but only once every few years. I remember in the Cost Review Committee Report debate, it was quite clear that one of the recommendations is that the increases in fees, etc. should be gradually done in order to make adjustments easier for the people. It seems to me there are some anomalies here. On page 39 of the White Paper, it is mentioned that "to give hospitals some stability in planning, X will not be revised annually, but only once every few years". But in page 40, the last sentence reads:

"They should give people adequate warning of price changes, and make more frequent but smaller price adjustments instead of infrequent large adjustments."

I hope during the course of this debate some clarification on this may be made.

The second point I wish to make is that the Government should appoint a special medical audit body to verify and ensure that the regulations and controls, and the charges and the rates, are observed in true spirit and in law by the hospital bodies. This will give periodic adjustments in rate-setting and standard-setting greater credibility. It will also ensure that timely feedback on the whole system is possible. The working of this complex system of affordable health care will be closely monitored by this specialist auditor body. It will help the Government in achieving its goal of affordable health care and provide, hopefully, true and fair views on the whole system.

Mr Speaker, Sir, I wish to support the motion.

Dr Wan Soon Bee (Brickworks GRC): Mr Speaker, Sir, let me begin by congratulating the Government on the publication of the White Paper on Affordable Health Care. The question of affordable health care has been one with which I have been most concerned for the past few years.

In my constant interaction with the ordinary man-in-the-street, I understand how concerned our citizens are with the rapidly rising health care costs. The perception of many lower and middle-income families is that in time to come, they may not be able to afford the medical charges in our hospitals. I have often spoken in the past on the need to contain health care costs in Singapore. And I am glad that the Government has set up a Ministerial Committee to study the issue. I fully support the basic philosophy of dual responsibility which underpins the White Paper.

Experience has also shown that pure market forces cannot be permitted to work freely in an area as vital as health care. Health care is a basic human need and it is the Government's responsibility to ensure that each and every Singaporean can afford it.

If market forces were permitted to work without some intervention from the Government, very soon a large proportion of Singaporeans would find even the most basic health care beyond their reach. This would be totally unacceptable.

On the other hand, I feel it is correct that the citizen should also bear a portion of the health care costs. First, we do not wish to foster a welfare state mentality in our citizens. Second, by making the citizen bear some of the costs, it will help discourage unnecessary consumption and wastage of precious resources. We have seen that countries where health care is free now face a problem of excessive and uncontrollable demand.

However, in trying to curb the demand for health care and to cap health care costs, we must vigilantly guard against taking things to such an extreme that citizens with genuine health problems are prejudiced. We must ensure that the basic package, which is being proposed in the White Paper, must be as comprehensive as possible. It must provide for all the basic health care needs of even the poorest Singaporean.

I believe that, on the whole, the White Paper has adequately addressed many of the concerns expressed both in Parliament and by the man-in-the-street. It is now up to the Government to implement the proposal in such a way that we achieve the stated aim of a good and affordable health care for all Singaporeans. We must present the proposed basic package in as positive a manner as possible so that the basic package will not be misconstrued as being second rate and providing only the bare minimum.

Further, while I feel that the White Paper has addressed most problems, I am, nonetheless, concerned and feel that there are certain areas which will require more careful study. For example, while I agree that it is not always possible or wise to keep a terminally ill patient alive via high-tech and expensive machines regardless of his quality of life, I, nonetheless, feel it vital to provide proper safeguards and guidelines to ensure that a decision of such monumental proportions as deciding whether a human being is to be kept alive, or allowed to die, should be made only after the most careful consideration. In making decisions of this nature, our guiding principle cannot be the issue of costs.

I also feel that the Government must make adequate provision so that citizens who, through no fault of their own, are stricken with serious and chronic illnesses will not be financially debilitated by the costs of getting necessary treatment. For example, patients who require regular kidney dialysis face, together with their families, serious financial burdens. Many kidney patients are constrained to forgo necessary treatment, or to undergo dialysis less often than recommended, because they simply cannot afford the treatment. In such cases, I urge the Government to be compassionate and to provide greater financial assistance. I feel that these cases need to be treated as exceptions and, therefore, subsidised more generously.

A further point I should like to make is in connection with the private sector patients using Medisave. I understand that there will be a cap on charges above Medisave limits for such patients. While this is necessary, measures must be taken by the Government to ensure that such patients are not given second best treatment as a result of the control on the charges which may be imposed by the private hospitals. As far as encouraging competitiveness and efficiency amongst hospitals is concerned, I think we should be circumspect. While some competition is necessary, hospitals must be monitored to make sure that they do not cut corners just to maintain maximum returns on their investments or that health care is sacrificed for economic efficiency.

I feel that more emphasis needs to be placed on the importance of preventive medicine. The best way to ensure that the nation's health care bill does not escalate is to teach our citizens to be as healthy as possible.

I feel that medical students, doctors and other health care givers must make it their top priority to inculcate in our citizens an awareness of the need to practise preventive medicine. Doctors and other health care givers should not simply be concerned with healing the sick, they are not simply dispensers of medicines. They should also be teachers. They must concern themselves with teaching patients how to stay healthy and prevent illnesses.

In this connection, I welcome the recent efforts of the Ministry in vigorously promoting a healthy lifestyle for Singaporeans as well as in advocating the beneficial effects of exercises. Here, perhaps some incentives would be useful to encourage more people to participate.

Finally, let me sum up by saying that the guiding principle in providing affordable health care must always be to ensure that all the basic health care needs of even the poorest citizen are met at a cost which both the nation and the individual citizen can comfortably afford.

It is undoubtedly a difficult task to balance the need to contain health care costs against the need to provide all the basic health care needs of our citizens. However, I am confident that the Government, together with the guidance of the Ministry of Health, will find a way to meet this challenge.

I support the motion, Sir.

Mr R. Sinnakaruppan (Kampong Glam GRC): Mr Speaker, Sir, I rise in support of the motion.

The White Paper is an excellent example of the responsiveness of the Government to the issues that affect and concern Singaporeans. The White Paper is indeed timely as many of us have been concerned about the rising costs of basic amenities and services.

Mr Speaker, Sir, many of the hon. Members of this House have spoken about the various general issues that have been examined in the White Paper. I would like to limit my comments and suggestions to two areas. These are:

(a) The importance of ensuring that the reliance on competition and market forces to improve health care services is sufficiently balanced by Government intervention to keep costs down; and

(b) The need to ensure that employers are encouraged to provide sufficient medical coverage for their employees without creating a mentality of over-use of limited resources.

Let me address the first point. Ideally, it is not a good idea for intervention by way of capping medical fees. However, we do not live in an ideal world. Singaporeans who would carefully weigh and choose the options available in purchasing their daily necessities and even their homes are far less likely to be able to exercise informed choice when it comes to medical care. Most of us would spare no expense in obtaining what is perceived as the best medical care for ourselves and our loved ones. In our minds, there is a mystique about the doctor and, very often, we do not question his or her judgments and pronouncements. Our perception of what is best, or even what is good, is often not accurate when it comes to medical care. A lack of information and knowledge would result in Singaporeans spending substantial funds on cost ineffective treatments. An informed choice is often not possible.

Where an informed choice is not possible, it is the role of the Government to monitor and guide market forces. In this respect, the proposal to control the balance billing for patients using Medisave in private sector hospitals is certainly welcome. The White Paper, however, is somewhat terse on the details as to how this control of balance billing is to be carried out. I would suggest that a scale of fees for treatments and procedures be set out. The present SMA Guideline on Fees can be a good starting point. Such a list of treatments and procedures should be sufficiently wide and extensive to ensure that common and necessary treatments are covered. If the list is generally accepted by medical practitioners and patients as a list of accepted and effective treatments, then doctors who depart from the list of treatments would have to explain the need for such departure to their patients, who can then make an informed decision whether to proceed with the treatment.

Mr Speaker, Sir, I am somewhat concerned about the suggestion in the White Paper that we move to a mechanism of Diagnosis-Related Group to control the total amount a hospital can bill for a particular type of illness, regardless of the number of days a patient stays in the hospital or the type of tests or medication ordered for him. On the face of it, this sounds like a good proposal to curb unnecessary stays in hospital and unnecessary treatment. However, the proposal would tempt some doctors and private hospitals who may be less high-minded to carry out all sorts of treatment right up to the limit of the cap and then to discharge patients, whether or not they have recovered. In countries like the United States, the availability of insurance coverage has resulted in some hospitals admitting and discharging patients based on the extent of coverage, rather than on the medical care required. If a wider role is to be given to the private sector to provide health care without increasing costs, then it is inevitable that a greater extent of control would be required for the good of all Singaporeans.

The recommendation that greater emphasis be placed on primary health care, especially in the training of doctors, would play a critical part in reducing the high costs incurred in the treatment in hospitals, whether public, subvented or private. A strong commitment towards personal responsibility for one's own health, coupled with a good primary health care system would result in a healthier population. This means that less people would be hospitalised, and therefore leading to greater savings for the individual, employers and the Government.

Now, let me move on to my second area of concern, ie, sufficient medical coverage for employees. Sir, the entire objective and thrust of this White Paper is the need to ensure affordable health care. The White Paper has encouraged employers to make voluntary Medisave contributions in lieu of part of their traditional medical benefits in kind. The tax free nature of such contributions would be capped at 2% of total remuneration. I am of the view that such a cap must be constantly reviewed and not only be decreased but also should be increased, if necessary. The fear that too much payment into the Medisave account would result in unnecessary health care expenditure would not come true, if there is a controlled fee structure for treatment and procedures.

Employers should not use the proposal to substitute in-house health care schemes with higher voluntary Medisave payments and cut back on health care benefits presently being given. It would be ironic that a proposal to ensure affordable health care is misapplied by some black sheep employers to reduce the coverage given to employees. I am confident that the good rapport between employers and the unions will ensure that the proposals are equitably implemented.

The White Paper has emphasised the importance of the promotion of personal reliance for one's health. Employers should provide opportunities, facilities and education for their employees to maintain and improve their health. Funds spent by employers on such schemes should not be subjected to a cap specified for tax-free medical benefits. Such expenditure is an investment both for the employer, who would enjoy a healthy and productive workforce, and for the employee, who would be able to stay in good health longer and reserve his Medisave funds for the inevitable ravages of old age.

Sir, I would like to conclude by saying that the White Paper is a landmark document that is both comprehensive and farsighted. It boldly addresses issues and problems that will arise and proposes appropriate solutions. The next step is to obtain feedback from the ground and fine-tune the proposals. A good start has been made and I am confident that we will have a health care system that will serve us well into the next century.

Sir, I support the motion.

Mrs Yu-Foo Yee Shoon (Yuhua): ( In Mandarin): Mr Speaker, Sir, why are we here to review our health care service? Why are we discussing affordable health care now? Many people have complained that the expenditure on medical services by our Government took up only 2.5% to 3.1% of our GDP. Singapore has great achievements today because the people of Singapore and the Government have farsighted planning and they have always made preparations for eventualities. In recent years, the development in our medical services and health care has achieved very good results. Many developing countries such as Malaysia, Vietnam, Indonesia, Hong Kong, and even developed countries like Sweden and the United States have sent their experts to Singapore to study our health care and Medisave systems. Many Western countries are facing the problem of rising health care costs. In the United States, about 40 million people do not enjoy medical insurance. In Canada, the United Kingdom and Australia, on the surface, the people are enjoying very low medical care but, in actual fact, they have to wait for a very long time before they could receive treatment for a very simple problems, eg, for surgical operations on cataract or piles.

I am very glad to read from the White Paper on Affordable Health Care published by the Government some of the good suggestions or recommendations they have made on controlling medical cost. This once again proves that the Singapore Government and the people are able to make preparation and to discuss problems before they surface. I support this attitude and approach and I also support the basic objectives and principles of the White Paper.

The White Paper recommends that everybody looks after his own health care and be concerned over his own health. It is imminent to provide affordable and good health care for everybody while we let the market forces decide its cost with Government intervention only when necessary. While I support the principle set out in this White Paper, I would like to raise some of my personal views and to reflect some of the views of the workers on the White Paper. I hope that when the Government is implementing the recommendations of the White Paper, they would emphasise more on how to educate the people so that the people will have more confidence in the Government. The most important thing now is to let the people have confidence in us. Then we will be able to implement our plans smoothly.

First, demand and supply. As I have said, I agree with the Government's control on medical cost and, if necessary, to intervene directly in the health care sector when the market fails to keep health care cost down. But we must also ensure that the employers will not pass the buck and will not reduce the medical benefits that are being given to their employees. Because when we implement this plan, the important thing is to control health care cost. So we must try and retain as much as we can the medical benefits that are now being given to the employees. As for those who are about to retire, particularly those in the lower income group and daily-rated workers, we have to look after their medical needs.

On the demand side, as a unionist and a labour MP, we feel that we should educate the workers so that they would adopt a correct attitude when making use of medical services. Just now my colleague also mentioned that there were very few unions requested the employers to increase medical benefits for their employees. In fact, many of them are reducing the benefits given to them. As far as workers are concerned, the majority of them are adopting a very proper and reasonable attitude. We hope that the Government would ensure that those people who make use of B2+, B2 and C class beds would feel that they are getting what they have paid for so that they have more confidence in the Government, and that the people would feel that they are well looked after by the Government when they fall sick.

As we know, all the expenditure of the country is being borne by the people who have to pay taxes. So we should look after them when they are sick. I believe our people would understand that they have the responsibility to look after their own health. But as an employer, particularly the Government being the biggest employer in Singapore, when they are implementing this new medical plan, they should not let the people lose confidence in it. We must let the people know that our purpose is not to reduce cost but to control cost in the long term. We must convince our people that they should share their medical cost by paying part of the medical expenses.

As far as the employer is concerned, medical cost is part of their labour cost. But we must not reduce the medical benefits in order to save costs. As it is, the Government has already announced that there will be a capping of 2% of the total payroll which can be tax deductible. This is a reasonable percentage at this point of time. But five years later, it may not be appropriate. We should let this capping stagnate at 2%.

In this White Paper, it is mentioned that part of the benefits would be replaced. In fact, many people are worried. I hope that as the biggest employer, the Government would further explain to the people so that they could understand the whole concept.

I also hope that we would allow Medisave to be used for outpatient treatment. When the lower income workers go to the outpatient clinics for further investigations such as an X-ray examination, they would have to pay cash for the treatment. Some of these workers who are in the lower income group cannot afford the outpatient treatment fees which they have to pay by cash and so they opt to be hospitalised so that they could use Medisave. I think that is not the right thing to do. We should review this and allow Medisave to be used for outpatient investigations such as X-rays, etc.

Now, let me talk about the basic medical package. The White Paper has recommended the setting up of a specialist consultation committee. I hope that this committee would regularly review the package so that the items included in the package will not remain the same all the time, because medical science is advancing every day. On the one hand, we do not want people to waste money by having too excessive medical investigations. But there are some surgical operations which need to be done, eg, coronary heart disease and some operations which are not available in the C class beds. I hope that this could be reviewed so that in future years, such an operation can also be included in the basic medical package. We can accept the package as it is today but it has to be reviewed from time to time.

The White Paper has also mentioned the exclusion of certain chronic diseases which will have to be treated on a long term basis from the package. Of course, this would be a burden on the patient as well as his family members. Being sick is something which is inevitable. We cannot talk only about economic benefits all the time. We have also to look after old people who are suffering from chronic diseases. If they are to stay in a traditional hospital, it will be difficult. We should encourage more people to set up voluntary or community hospitals. I know there are many organisations which have set up community hospitals to serve the chronic sick people. I think the Government should give them more support in their endeavour to set up such hospitals.

Another point I would like to touch on is the formula for the control of medical cost, ie, CPI plus X variable. This variable has also caused some alarm to the people, because this X variable would be decided by the hospital authorities and the Ministry of Finance. It has no direct link to our salary or wage increase. I think we should take this into consideration when we decide the X variable. I hope that the X variable should not be increased more than the actual wage increase of the workers.

We have been talking about how to control and reduce medical cost. On the other hand, we should emphasise more on how to encourage the people to keep fit, to be healthy, and to give them some incentive so that they would want to keep fit. Maybe we should give them better interest rate for their Medisave accounts. The Minister for Finance mentioned just now that female civil servants would also enjoy an additional 1% contribution to their Medisave accounts and that they could make use of this benefit to pay for their family members' medical expenses. We have been asking in this Parliament for more than 20 years for medical benefits of female civil servants to be extended to their husband and children, but the Finance Minister has persistently rejected our plea. I feel that we are also working very hard for our people. We are contributing to the country. Therefore, the Minister for Finance should consider giving us equal pay for equal work. There should not be discrimination between the male and female civil servants. We would have to continue "fighting" for this. Perhaps, we should have more female MPs in Parliament.

Another matter I would like to raise here is how to make the people understand the purpose and contents of the White Paper. We should let the people know how to effectively make use of all the medical and health care facilities, such as MediShield, Medisave and some form of medical insurance for retirees. I think we should let our people know that everyone has a responsibility to keep fit. Of course, we have one Opposition Member saying that keeping fit is the Government's responsibility, not the individual's responsibility. But I feel that we should make the people understand that it will be for their own good to keep fit.

We see in the newspapers every day many advertisements on "fat reducing tea" and all sorts of fat burners and other methods of slimming. I think we should also educate our people on how to choose the right type of medicine. They should also learn how to adopt preventive measures. For the factory operators, they should know how to look after their own health, such as their hands, their back and their eyes. We should inculcate in our people the habit of regular exercise. I think we should establish a committee for this purpose. In fact, I would suggest that the Government set up a "National Keep Fit Committee". The duty of the committee is to promote some long term health-care programme to educate the people on how to look after themselves and on occupational health and also the advantages of keeping fit. It will also help the lower income people to realise the importance of keeping fit. This National Keep Fit Committee will play a very important role and should have representatives from the unions and the medical practitioners. They could be formed in conjunction with the National Arts Council or the Singapore Sports Council.

In conclusion, I support the principles and objectives of the White Paper. I think the Government, as the biggest employer, should command the confidence of the people. When we implement the plan we should be more flexible. The most important thing is to let the private sector employers feel that the Government is doing the right thing and they should follow the example to provide adequate medical benefits to their workers and not reduce their medical benefits.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.10 pm.

Sitting accordingly suspended at 2.40 pm until 3.10 pm Sitting resumed at 3.10 pm