AFFORDABLE HEALTH CARE (Motion)

[Mr Speaker in the Chair]

Debate resumed.

Mr Tong Kok Yeo (Nominated Member): Sir, the White Paper has spelt out in great detail the Government's health care philosophy and the various approaches the Government will take to regulate and contain health care costs, the main objective being to ensure that Singaporeans receive good basic health care at a price they can afford. In this regard, it is reassuring to note that the Government has taken into due consideration the concerns, especially that of the lower income group, by ensuring that medical care in class B2 and C wards will reflect the basic health care package, and that these wards will be heavily subsidised by the Government and the Government should continue to do so.

Sir, having noted the experiences and problems other countries have in their health care system, I find it difficult to disagree with the sound principles expounded so convincingly in the White Paper. Nevertheless, I wish to focus my comments on employer medical benefits. Medical benefits have always been part and parcel of the terms and conditions of employment. It has always been an item for negotiation in every collective bargaining exercise between employers and unions. Therefore, medical benefits constitute an important item in the outcome of the collective bargaining process. The role of trade unions in negotiating this item should not be in any way diminished or reduced by the proposals contained in the White Paper on employer medical benefits.

In the 1993 survey conducted by the National Productivity Board and the Singapore Institute of Labour Studies, more than 90% of employers, employees and unionists surveyed ranked health care as the most important benefit for promoting employee commitment and also the most important benefit in enhancing the quality of work life now and over the next five years. This convergence of priorities indicates the high importance the three parties accord to the useful role health care can play in promoting employee commitment and in providing workers with a quality work life.

There are several advantages and merits in the new model of converting traditional medical benefit to additional Medisave contribution. However, I was trying to find a definition of what traditional medical benefits mean. However, we have heard the Minister for Finance earlier announcing the revised medical benefits package for the civil service. I would draw the conclusion that traditional medical benefits mean hospitalisation benefits. Therefore, employers will look towards the civil service model and for that matter are encouraged by the Government to follow. Employer medical benefits vary from company to company. What is traditional benefit in the case of the civil service means hospitalisation benefits. What is traditional benefit to one company may not be the same for the others. Nevertheless, in view of the fact that voluntary additional Medisave contribution is capped at 2% of the salary, efforts must be taken to ensure that the high importance accorded to health care by the employers and unionists is not eroded or diluted in the process.

The question asked is whether the additional Medisave contribution will be adequate over the years as medical cost may rise over the years. Of course, pegging the additional Medisave contribution to the salary will ensure that such contribution increases as salary increases. However, this would not be true for those employees whose salary is stagnated. This category of employees is likely to be older and more prone to illnesses and therefore may have to pay higher premiums if such employees do take up coverage under MediShield II or private medical insurance. This concern is compounded if such employee uses his or her Medisave savings to also cover his or her family members who are not employed, for example, non-working spouse, schooling children, and parents.

The Government has indicated that it will implement the additional Medisave contribution to new recruits in lieu of traditional medical benefits, and has encouraged the private sector employers to follow. This inevitably will have an impact on the role of trade unions in negotiating these benefits, as the additional Medisave contribution is capped at 2% of salary. I certainly hope, with the adoption of this new model, employer medical benefits over the years will not eventually evolve into a non-negotiable item.

I hope the Government and private sector employers, in adopting the new model, will continue to bear their liability of medical charges arising from hospitalisation should their employees suffer from industrial diseases, or industrial accidents or accidents met in the course of performing work. These certainly cannot constitute traditional medical benefits.

The Government has announced its revised medical benefits scheme for the civil servants. It would take time to study and assess its impact on the civil servants at large. Private sector employers will of course look forward to how the Government implements this, and its impact on the employees will then depend very much on the implementation aspects.

Sir, with these comments, I support the motion.

Mr Yeo Cheow Tong: Mr Speaker, Sir, I will take this opportunity to elaborate on several of the key measures contained in the White Paper as well as address some of the points and concerns raised by Members.

First, health care financing. Sir, a key element of the Government's health care philosophy is personal responsibility, and this includes each of us putting aside some money while we are economically active to meet our health care needs when we are elderly and after we have retired.

Sir, the introduction of Medisave has enabled Singaporeans to save for the future. When patients directly pay for medical services, whether in full or with the help of Government subsidy, they become more aware of the cost of what they are using. They are then more likely to use such services prudently and judiciously. This approach has enabled us to avoid the problems faced by the developed countries. Over there, their health care financing systems are mainly tax-based or insurance-based. And as the medical expenses are paid for by a third party, the patient becomes desensitised from the cost of the services that he is receiving. What is worse is that very often, the patient feels entitled to use as much medical services as he wishes since he has already prepaid in the form of either taxes or insurance premiums.

Sir, let me relate to you a personal experience. In the mid-1970s, I was working in the USA on a job training programme. One day an American colleague I was working with told me that he would be away for the next week on holiday. So I was quite surprised. I said, "Well, good. Where are you going?" To my surprise, he gave me the name of a very good hospital down the road. So I was taken aback. "You are going on holiday to a hospital?" He said, "Yes. You know, under my insurance coverage, I am entitled to an annual check-up. This will involve three or four days' stay in the hospital. There is a nice park next to it. Between check-ups, I can go to the park, lie down and have a holiday." So he was entitled to his annual all-expenses paid holiday at the local hospital. I mentioned this story to several people recently, and I said, "Well, luckily, such things have not happened in Singapore yet." To my surprise, one of the people there said, "Well, you will be surprised. One of my managers is in fact already looking forward to his annual check-up in a private hospital, all-expenses paid." It is just as I have described.

Sir, the buffet syndrome is not unique to any particular nationality. Already in Singapore, we see it in many of our restaurants when there is a pre-paid buffet available. People load up their plates, and have a good time. It is therefore important that we keep this nexus between the use of, and payment for, medical services utilised.

Today, more than 80% of the patients use Medisave to pay for their hospital bills. Medisave balances have been increasing partly because most of the Medisave members are still young and their health care needs are still low. The average Medisave balance in 1984 when the scheme started was $1,750. This increased to $4,400 by the middle of this year. Currently, the Medisave contribution rates are between 6% and 8%, depending on the age group. As health care cost increases, which is inevitabe, the Medisave contribution rate will have to be increased as well. But we should try to delay this for as long as possible. And if the measures to contain health care costs, as laid out in the White Paper, prove to be effective, the long-term Medisave contribution rate may not need to exceed 10%.

Secondly, insurance. As the Minister for Trade and Industry had stated in his opening remarks, high Medisave balances also increase the temptation for patients to draw on these balances more than they absolutely need to. That is why we introduced the insurance component in MediShield. MediShield reduces the amount of personal savings needed.

Sir, MediShield currently covers one-and-a-half million people or almost 90% of all eligible CPF members. As a catastrophic insurance scheme, MediShield has been able to keep its premiums very low, and each year about 10% of hospital patients, mainly those with serious medical conditions and who require prolonged hospitalisation, receive MediShield reimbursements. We will improve on the system by enhancing and extending MediShield. This will be done in two ways. First, MediShield will reduce the existing deductibles while retaining the current premium rate. This will enable 20% to 25% of hospital patients to benefit from MediShield, instead of the current 10%.

Second, we will introduce MediShield II with higher benefits. It will come in two options. Option A covers patients who use A Class or private hospital beds. And Option B, which has lower premiums, will cover those using B1 wards. MediShield II, like the current MediShield, will have deductibles and a payment co-component. It will be a voluntary opt-in system, and Medisave can be used to pay for the premiums. The lowering of deductibles for MediShield and the introduction of MediShield II will take effect from 1st July 1994. The details will be announced in the next few months.

Sir, some people have time and again suggested that MediShield should extend its coverage to those beyond 70. MediShield has in fact gone beyond the conventional practice by extending its coverage limit from 65 years of age to 70. We will study the implications carefully before deciding whether to further extend the age limit in the future.

Sir, another key cost containment measure is the capping of patient revenue in subsidised hospitals. The patient revenue comprises fees collected from patients and, secondly, subsidies received by the hospitals from the Government. The patient revenue adjusted for workload changes will not be allowed to increase by more than the consumer price index (CPI) plus X percent. That means, it will not be allowed to increase by more than the inflation rate plus an X percent factor. For the next two years, we have fixed the X component at 2%.

Sir, this formula of CPI plus X will constrain the rate of cost increases in the subsidised hospitals and, in turn, restrain the increases in the charges imposed on patients. At the same time, this formula will allow hospitals enough resources to maintain the quality of their medical services and to introduce new medical developments that have been proven to be cost effective. The X factor will take into consideration the cost of labour and wage increases. And this is an important factor because in the hospitals, between 60% and 70% of the cost actually are labour costs. So when Singaporeans enjoy a 10% increase in salary, they can expect that the hospitals would have incurred a cost increase of 6%, almost automatically. So, as long as all Singaporeans enjoy good salary increments, the hospital staff will likewise enjoy similar increments and health care costs will increase in proportionate quantum.

Sir, if the hospital's actual revenue is higher than the revenue cap, the subsidy from Government will be reduced by the same extent, that means, if hospitals increase their charges by, let us say, in total, $1 million annually, above the revenue cap, an equivalent sum of $1 million will be reduced from the subsidy. So, therefore, there is no incentive at all for hospitals to increase charges more than what they are allowed to under the cap, because any extra charges that they collect will be given back to the Government.

The hospitals are also expected at the same time to operate within their revenue collections. With their revenues capped, the hospitals will be constrained to service their patients within a fixed amount of resources and to conform to reasonable service norms. This would discourage the hospitals from ordering unnecessary tests and investigations because all those unnecessary tests and investigations cannot be charged to the patients. It will just be additional costs which the hospitals will have to bear. They will have to be very careful to ensure that whatever they order are necessary and not wasteful.

The subsidised hospitals will have to strive to improve the quality of their medical care within the resources available. If they are efficient they will be able to generate cost savings and therefore generate surpluses. They will be able to keep their surplus. It will be an incentive for them to do better. And they can use these surpluses to improve their services or to upgrade essential equipment.

Sir, those hospitals which attract more patients, whether they are subsidised or non-subsidised, will generate more revenue from fees as well as from subsidies. There are, therefore, adequate incentives for hospitals to innovate and to improve their efficiency while maintaining a high quality of medical care. Otherwise, they are going to lose all their patients. The revenue cap mechanism will help to restrain cost increases and ensure that patients will continue to receive affordable quality health care in the subsidised hospitals.

Sir, but it is not sufficient to have cost containment in only the subsidised hospitals. The public and the private health care sectors are closely linked. If the private sector doctors and other health care workers enjoy a significant increase in income, the public sector cannot afford to lag far behind. Otherwise, they will lose their key staff and jeopardise the care they are providing to the majority of Singaporeans. We must, therefore, apply similar cost containment mechanisms to private sector hospitals and doctors. We propose to do this through the Medisave mechanism.

The Government is, in fact, the custodian of the Medisave funds. We have the responsibility to act as a purchaser of medical services for our Medisave account holders. MOH will set limits on balance billing for patients using Medisave in the private hospitals and doctors. Health care providers, who are willing to accept the stipulated rates, will be registered by Medisave and be allowed to take on Medisave patients. However, the providers are free to set their own charges for patients who do not use Medisave and this will include foreign patients.

Sir, the limit on balance billing will be implemented in two stages. Stage One will cover operation charges and doctor's daily hospital attendance fee. Stage Two will cover the fees charged by the private hospitals. We expect to implement Stage One by the end of 1994, and Stage Two for the hospitals, by the end of 1995.

There are some concerns that the setting of cap on private sector charges may actually result in doctors and hospitals all charging at the maximum allowable rate. Sir, that may happen. But I think what is more likely to happen is that the doctors who are already well-established will charge at the maximum allowable rate and doctors who are junior and who are still trying to establish themselves, will have to compete by charging at a lower rate and also compete by ensuring that they are able to give better service.

Some others are also concerned that the quality of medical care may be compromised if charges are controlled. I want to assure Members of this House that the rates set will be fair to both the patients as well as to the doctors and hospitals. Private hospitals and doctors are likely to see a drop in income initially but it will still be a decent income.

On the other hand, because their charges will be more reasonable, they may in fact attract more patients who would otherwise have gone to the subsidised hospitals. There will be no need for providers to compromise on the quality of medical care. We expect the doctors and hospitals to compete on price as well as quality within the caps. If a doctor or hospital decides to cut corners, he will risk losing his patients, or, worse, he may even lose the licence to practise. We will step up our medical audits to ensure that the quality of medical care is not compromised. In any case, Sir, the subsidised hospitals will continue to maintain the service quality and remain as a benchmark for medical service. The private sector must continue to compete effectively or they will lose their patients to the subsidised hospitals.

The Ministry of Health will work with representatives of the private sector hospitals and doctors to come up with the balance billing limits. In working out the caps, we will consider the existing private sector costs as well as the fees charged by the Government and restructured hospitals. We will be fair to all parties concerned.

Sir, let me move on to the points raised by Members. Mr Lau Ping Sum has suggested that we should reduce the number of Class A beds, as those who can afford such beds should be encouraged to use the private hospitals. He also proposed that the community hospitals should only have subsidised beds and not Class A beds. Sir, we should ask ourselves whether the removal or the reduction of Class A beds from our hospitals will be in the interest of the subsidised patients. Non-subsidised patients play an important role as quality controllers. Yes, they can afford to use private hospitals. But by choosing to use the non-subsidised services in a subsidised hospital, they confirm that the medical care in that hospital is of an acceptable quality. The Class A beds also serve as a benchmark for the private sector and help to restrain the cost of private medical care. This, in turn, helps to keep costs down in subsidised hospitals. There is no need for us to force those who are able to pay the full cost of the A Class beds into the subsidised wards. If they cannot get the Class A beds, some of them will actually just move into the subsidised wards. If they do that, this will only reduce the subsidies available to those who truly need these subsidies.

Sir, the key is to ensure that there are enough subsidised beds for those who cannot afford to pay the full cost of their medical treatment. My Ministry regularly monitors the occupancy rates of the various ward classes and we adjust the bed composition, when necessary, in line with patient demands. If demand for B2 and C Class beds increases, we will make available more beds. But on the other hand, if demand for Class C beds declines, as has been happening in the past few years, we would also have to adjust the numbers accordingly. In the case of the Ang Mo Kio Community Hospital, only 7% of the beds are A Class beds. The number has been reduced to the bare minimum and there is no need to reduce further.

Mr Peter Sung expressed concerns about an over-supply of specialists in the private sector and public sector as well. Sir, my Ministry controls the supply of specialists through the provision of specialist training positions in our subsidised hospitals. We closely monitor the supply and demand for specialist treatment and we allocate trainees according to the need for such specialists. Our aim is to train no more than 40% of each cohort as specialists. The remaining 60% will work as primary health care doctors. I can assure Mr Sung that we share his concerns and we will make sure that we avoid an over-supply of specialists.

Sir, Dr Michael Lim stated that the subsidies distort usage patterns. He suggested that we avoid over-subsidising the patients and to educate the public on the true cost of health care. Sir, Dr Lim is correct. It is important that we focus the heavier subsidies on those who genuinely need financial help and that is why we have the different classes of wards - A, B1, B2 and C. This allows us to focus on the subsidies. We also ensure that there is a co-payment element because there is nothing worse than free treatment. It will just generate more demand and cause the standard of health care to decline, as we have seen in countries with free treatment. Of course, for those who are indigent and poor, they will receive free treatment, but after we have ensured that they are genuinely indigent and poor.

Dr Lim had stated that some of the tests in his Cardiac Department appear to be too inexpensive, too over-subsidised. Sir, I am not too familiar with the details in his Department but I will ask the CEO in NUH to review what he is talking about and to apply the appropriate subsidy level to those that have been inappropriately priced. Perhaps, Dr Lim may wish to inform the CEO which of those items are involved.

Sir, because of the variety of medical conditions, certain patients may occasionally require expensive tests, whether they are in Class A, B2 or C. Our system of subsidy also ensures that for the more expensive tests, we have a cap on the price that we charge for that test. So for those expensive tests, they are only ordered when they are needed and the patient actually receives a higher subsidy rate so that he is not deprived of that needed test. It is up to the doctors to exercise their professional judgment and order those tests only when they are needed. They should not order those tests because the patients demand for them, or because we have heavily subsidised that test and is now so cheap. Tests must never be generated upon patients' demands. They must be generated only upon the professional judgment of the doctors concerned. And if the tests are warranted and helpful, I think the subsidies would have been well spent.

Sir, Dr Lim also requested for Medisave to be extended to more outpatient treatments. Mdm Yu-Foo has also made the same request. We are already extending the use of Medisave for outpatient treatments and these apply to those services or procedures that are more expensive and they apply to day surgery cases as well because we want to encourage patients not to be hospitalised if they can. This will help to keep their health care costs down. The guiding principle is that Medisave will be extended to outpatient treatment where the indications for treatment and procedure are clear and there is little risk of a doctor generating unnecessary demand for those services just because Medisave is available.

We have to avoid extending the use of Medisave to outpatient treatment too liberally because, firstly, the administrative costs will rise exponentially because there are many outpatient treatments and, secondly, the patient-load can be substantial. Thirdly, it will create demand for more of these services unnecessarily. However, I am prepared to take suggestions from Dr Lim. If he has any item that he wishes to propose, we would definitely review and consider it carefully.

Sir, Dr Lim also stressed the importance of educating the public on the true cost of health care. I agree with him. Health care costs are expensive. There is no doubt about that. We cannot hide from that fact. It is better that every Singaporean knows it so that he would take the effort to practise a healthy lifestyle, live a healthy lifestyle, and increase his chances of remaining fit and healthy. Also, when he needs to use the medical services, because he knows that it is costly, hopefully it will make him to be more prudent in the usage.

Sir, the education process is a continuing process. We now have financial counselling for all patients upon admission to hospitals. They are told what is the cost if they go to A Class, which is the full cost, and what it will cost them in the other wards. Similarly, the private hospitals are also required to do financial counselling. And in the Government hospitals, every patient receives a bill which shows the full cost of the services received. At the end of the bill, he will also get a statement that he has received so much in subsidies and the actual bill size to him is the full cost minus the subsidy. This tells him two things. Firstly, what it costs the hospital to deliver that service to him. Secondly, if he is in the subsidised classes, it tells him how much of that cost has been borne by the Government. I think these two facts are important for him to appreciate.

Dr Lim also mentioned about the difficulties of deciding borderline situations, whether to withhold treatment for a patient who is critically ill, especially one who is terminally ill and especially if the family insists that treatment should be continued. Mr Loh Meng See has also mentioned some concerns about people interpreting the basic health care package as a first step towards euthanasia. Let me strongly stress that we do not practise euthanasia. Euthanasia is the deliberate action of a physician to terminate the life of a patient so as to relieve him of his suffering, eg, by giving him a lethal injection. But we must recognise that death is a part of life, and dealing with death has always been a part of medical practice. Modern medicine has made it more of a dilemma now for doctors, of course. However, the process of death in terminally ill patients should not be unnecessarily prolonged through futile intervention. In trying to help, doctors and family members may actually be prolonging and increasing the patient's suffering. This is something which we all should strive not to do.

Doctors are trained to make professional judgment in the best interest of patients. In deciding on treatment, doctors are guided by treatment protocols which set out the standard practice which, of course, vary from patient to patient according to the circumstances. These are the everyday decisions that all doctors have to make, when and how to treat, when to intervene and when not to. When junior doctors are uncertain, they refer to their senior specialist for a second opinion and advice before coming to a joint decision.

Medical undergraduates receive lectures on medical ethics. My Ministry also organises a seminar on medical ethics and responsibilities of medical practice for all newly qualified doctors. To assist doctors in borderline cases, all hospitals now have their own ethics committee. My Ministry is now looking into the establishment of a national ethics committee to identify the ethical issues relating to medical practice and to develop guidelines on the ethical code of conduct for doctors.

Sir, let me move on to the points raised by Mr Low Thia Khiang. I was truly astonished yesterday when I heard Mr Low speaking in this House. I thought he wanted Singaporeans to be the last of the Mohicans. Every country in the world with a system of socialised medicine is sorely regretting it. And Mr Low was standing there in front of us preaching that the Government should be responsible for an individual's medical costs because no one wants to be sick. Sir, even China has openly declared that free medical care for the masses is now history. I am glad that he subsequently clarified, a bit reluctantly I thought, that actually what we heard was not what he had meant to say. He had meant to say that the Government should only intervene to subsidise those who cannot afford to pay the full cost of medical services. I am indeed glad that Mr Low agrees with the Government's approach to health care subsidies.

Mr Low also claimed that the restructuring of hospitals has resulted in higher hospital fees and consequently the poor now cannot afford medical care. At the same time, low income earners are unable to obtain help from Medifund. Perhaps he also did not mean what he said.

Sir, let me throw some light on the matter again. Firstly, 75% of all class C bills in our hospitals are below $420. Three-quarters of all the class C bills are below $420. For a person earning $800 a month, this represents only seven months of Medisave contributions. And those who cannot afford to pay even this heavily subsidised bill size, maybe because they have been sick for a long time and therefore unable to work or because of their prolonged sickness they have depleted their Medisave, these people can still apply for a waiver of hospital fees. The waiver process extends not just to the poor but also to the low income earners.

With Medifund, the process is even simpler. Each hospital has its own Medifund committee and therefore can process the appeals and applications quickly. Medifund also extends special treatment to those who were born before 1940. It is a very generous scheme. If Mr Low is aware of any person who is not receiving medical treatment because he cannot afford it, I hope he will not hesitate to give me the details and we will definitely arrange for treatment to be extended to that person.

Sir, Mr Low also touched on the five sub-specialities in the Singapore General Hospital without C class wards. Mrs Yu-Foo also mentioned this topic. Let me explain again. These five sub-specialities require well-trained staff and they are high cost disciplines. We have grouped them under B2 as a minimum so that we can better contain costs and therefore make it even more affordable for the low income earners. Patients who cannot afford the B2 rates can appeal for their bills to be reclassified to a class C bill. If this is still too high, they can also appeal for those bills to be waived. The hospitals will definitely consider them carefully and if they are genuine cases, they will be obliged.

Sir, low income patients who normally would have stayed in a class C ward therefore have the advantage of staying in a B2 ward while paying class C fees. So they are really given the best of both worlds.

[Mr Deputy Speaker in the Chair]

3.52 pm

Mr Yeo Cheow Tong: Let me move on to the topic of basic health care. Mr Low has questioned the need to limit subsidised medical services to a basic medical package. Most people that we have talked to so far accept that it is not possible to offer medical services without any limit and at the same time keep health care costs under control, but there are concerns as to whether the basic package will be too limited.

Sir, let me show Members these two volumes [indicating]. These two volumes contain the international classifications of about 5,000 disease conditions and about 3,000 surgical and non-surgical procedures. Of the 5,000 disease conditions in this book, only nine are not in our basic package. These include AIDS, gynaecological problems such as infertility and impotence, sexual deviations such as lesbianism and homosexuality, and disorders of the breast such as unusually large or small breasts. Of the 3,000 procedures in this book, only 14 are not included. These include heart, liver and bone marrow transplants, cosmetic dental work, sex change operations, IVF, cosmetic surgery such as face lift and breast enlargement or reduction. Only 23 of the items in these two large volumes are not in our basic package. And because these excluded items are mainly uncommon conditions, our basic package basically covers well over 99.9% of patients. Our basic package is therefore more than generous.

Mr Cheo Chai Chen touched on two issues - the health care costs of the elderly and those with chronic conditions. Mr Cheo was concerned about the indigent elderly singles. I would like to assure him that such persons would be eligible for public assistance and will receive free health care. Elderly persons facing financial difficulties in any case qualify for generous help from Medifund since they were born before 1940.

Senior citizens who fall ill or suffer from chronic illnesses can obtain medical treatment in our polyclinics. There, they pay only half the regular fees and the fees can also be waived if they are facing financial difficulties. Mr Cheo worries that if elderly patients need to apply for fee waiver, it will result in delayed medical treatment. He proposes that since we have plenty of national reserves, the Government should provide more subsidies and, in fact, subsidise all elderly, without their having to resort to apply for a fee waiver. Sir, I would like to assure Members that it is an established hospital procedure that if patients have difficulties making payments, the hospital provides the necessary treatment in class C wards first. After the treatment has been given, it will make the payment arrangements. So no one is deprived of treatment just because he or she could not make the payment upon admission.

Sir, Singapore has healthy national reserves because the Government has exercised great prudence in spending the people's money. As a result, we have been able to invest in education, health and a superb infrastructure for the economy. The welfare system that Mr Cheo is still arguing for has been proven to be a failure. The European and Scandinavian countries, Australia, New Zealand and others are now trying desperately to unwind their welfare systems. Unfortunately, they are finding great difficulties. But unless they succeed, their economies will continue to be crippled by their welfare systems and the dependency mentality that it breeds.

Sir, our system of focusing help only where help is needed is the most appropriate and effective one. It promotes responsible behaviour. People get to keep more of their money and decide on how to use it. The Government and community organisations provide a safety net for the few who genuinely need help. The alternative of the Government taking most of a person's salary through taxes and then deciding on how to put the money to use is one that we must avoid at all costs.

Sir, Mr Loh Meng See has asked that we ensure that the cost containment measures do not end up jeopardising or compromising the quality of our health care or the safety measures that we have in place in our health care system. He cited the recent news about the AIDS-tainted blood in Germany and how it has caused irreparable harm to people's confidence as well as to the image of Germany. Sir, I can assure Mr Loh that stringent measures have been taken to ensure that the safeguards on our blood supply remain. We will audit and we will make sure that the system is maintained and that the health of Singaporeans continues to be protected.

Sir, we have certain measures in place, eg, our donor selection. Unlike many countries, we do not pay for the blood that we collect. So no one comes forward to sell blood. They come forward voluntarily to donate blood. But, nonetheless, we take measures to ensure that the donors are healthy donors. Not only that, we also have a very stringent screening process for the blood supplies. We test 100%. Every unit collected is tested. We test for sexually transmitted diseases, for hepatitis and we test for AIDS as well. And if any sample is shown to be even mildly positive, the sample is rejected and the donor is advised not to donate blood again in the future. So we do have the necessary measures in place to ensure that the blood is safeguarded. We will ensure that the other safety measures in the health care system, not just with regard to blood supply, are also maintained.

Mr Loh requested that my Ministry regularly reviews the list of standard drugs. He also requested the drugs for conditions like cancer and heart diseases and other common and complicated conditions be included in the standard drugs list. Sir, I would like to assure him that the drugs for cancer, heart diseases and other common conditions are indeed within the drugs list, and that my Ministry reviews that list every year to make sure that the drugs there remain relevant.

Sir, many of the Members and Mr Loh have touched on the proposal to allow employers to pay some contributions into the Medisave account in lieu of the medical benefits. Sir, the White Paper now makes this option available. Whereas in the past, that option was never available. There are some advantages. Firstly, most workers do not really use acute medical services. Most of them use outpatient services. The money that is being used to either purchase insurance for hospitalisation coverage, or being borne directly by the company, can then be paid into the Medisave account of the patients and that money can be utilised by that worker after he has retired. So that is one advantage.

Secondly, it gives that worker the flexibility to decide on what to use with Medisave, ie, whether to purchase coverage that entitles him to a C class bed and therefore save the rest of the premiums or to purchase a higher class coverage. Thirdly, it allows him the flexibility to purchase medical insurance and thereby safeguard coverage for himself, especially when he suffers from serious illnesses. For example, if he suffers from kidney problems and he cannot work and the company boards him out, he will be without coverage. By the time he goes to get an insurance coverage, the insurance company will not cover his pre-existing condition. But if he had already purchased that coverage under his own name, even if he is jobless or when he joins another company, that coverage is still active.

Sir, the medical benefits of most companies now come to less than 1% of the salaries. We will leave it to the employers and the unions to negotiate. Government will encourage, but not compel. So in the end how fast this proceeds will be determined by the employers and the unions.

Mr Othman Haron Eusofe this afternoon mentioned that many people do not use Class C wards because they are not sure about the quality and requests that we assure patients that the quality of Class C treatment is good. Sir, we have been assuring patients all the time and we will continue to assure patients that Class C treatment is of a high quality. The outcomes of treatment are no different from the outcomes of patients in other wards.

Dr John Chen asks whether we will allow workers to purchase insurance to cover the co-payment section. Sir, I had earlier explained why it is important that we do not rely on third-party systems because it is a prepaid scheme. The buffet syndrome automatically comes in. We will therefore not allow insurance to be purchased for the co-payment for him. It is good for the patient or the worker to pay a portion of the bill from either his own savings or his Medisave.

He has also requested that the Ministry discuss with NTUC on its proposed MHS system. Sir, we are definitely willing to discuss with the NTUC and to see how we can be of assistance.

Dr Low Seow Chay also talked about the need to reduce demand for health care and to also have cost containment measures. Sir, he has asked whether we are training excessive numbers of doctors. He feels that even with the reduced number that has been recommended by the Singapore Medical Council, we will still end up with more doctors than necessary. Sir, the need for doctors will continue to increase in the coming years for two reasons. Firstly, our population is still increasing. It is growing every year. Secondly, our population is ageing. As we all know, when we get older, the need for health services increases. So we are going to continue needing more doctors. The question is, what is the right number. We have used other countries as models, studying what is their make-up, what is their proportion. We feel that the ratio of 650 to 670 population to one doctor by the year 2000 will be adequate. Yes, there may be a need for some more or a few less. But, by and large, our system will still remain a system that is able to deliver quality care at affordable prices. But we will continue to review. Every five years, we review our situation and, if need be, we will make additional amendment.

Sir, he does not feel that it is wise for us to increase the Medisave contribution rate further and to build up larger Medisave balances. Sir, I think the key point is that at the end of the day what is the average Medisave balance of our Singaporeans. We already have a mechanism limiting the maximum amount to be kept in the Medisave account. We will adjust the maximum balance over time to ensure that the sum is enough but not excessive. Excess contributions are then transferred to the Ordinary Account of the account holder so that he can use those contributions to either purchase his home or for investment. This is as Dr Low Seow Chay has proposed. But I think he has gone one step further. He has proposed that we treat the whole CPF account as a Medisave account so that whenever they need they can transfer from their Ordinary Account to the Medisave account for use. Sir, in that case, he contradicts what he has been talking about because instead of stipulating a definite Medisave balance quantum, he is now extending it to the full CPF. For certain account holders, you are talking of hundreds of thousands of dollars. I think we better stick to what we have now, which is, stipulate a maximum, allow the excess to be paid into the Ordinary Account and, if there are special circumstances, we even allow the person to return those excess payments back to the Medisave account if the account holder suffers a serious illness that he now needs these additional funds.

Mr Chia Shi Teck feels that we should be giving Singaporeans more incentives to keep healthy. He mentioned that we should give everybody $1,000 contribution if he does not use medical services each year, give him a certificate of fitness, and pay for MediShield. When I was toting up the numbers, it means we will be giving to everyone much more than what we are spending in the whole health care system each year. But the key point is that he has misinterpreted the whole intent behind the statement that we should give Singaporeans the incentives to remain healthy. What is the biggest incentive for a person to remain healthy? Surely, it must be that by being healthy he will be able to enjoy a higher quality of life. He can live life to the fullest, he can spend quality time with his family and, best of all, he will not have to spend unnecessarily on medical care. That must be the biggest incentive.

We will continue to promote the healthy lifestyle message to impress on Singaporeans that it is for their own benefit that they put in the effort to have a healthy lifestyle and to remain healthy, and not by giving them more money. But, of course, for employers, since they are giving medical benefits, a healthier worker means lower medical cost, it may be worth their while to look into how to link workers' efforts at remaining healthy with some motivational tools.

Sir, he also questioned whether the Ministerial Committee consulted the private medical sector before coming out with the White Paper, since they are the ones who are the experts. He seems to get the feeling that we are blaming the doctors. Sir, nowhere in the White Paper have we blamed doctors for our situation. In fact, we have been praising our medical professionals that they are some of the best brains and they are well trained. Because of that, we have a good health care system. But the White Paper goes beyond pure medical professional matters. The White Paper actually deals with economics, the relationship between demand and supply and financing, and the influence of financing systems on behaviour. In terms of medical professional inputs, my Ministry has got ample supply of people in this area and we have taken their advice in terms of the medical professional factors. But we will definitely consult with the private medical sector in areas where they have an active role. It is right that we consult them and get their inputs because we will be implementing systems and procedures which will apply to them.

Sir, Mr Chia also made a very sweeping remark that the hospitals charge drugs at five to seven times the cost. Unfortunately, he is not here. I asked him for a clarification as to whether he was referring to the private hospitals or the subsidised hospitals. His answer was both. I will get my officials to contact Mr Chia to substantiate his allegation. But I can state categorically here in this House that the subsidised hospitals have a formula for charging drugs, and the formula is a very simple one.

Mr Deputy Speaker: Mr Yeo, you have three more minutes.

Mr Yeo Cheow Tong: It is the cost of drugs plus a certain percentage to cover handling charges.

Mr Chia also mentioned about the ICUs. He said that we should not be controlling ICUs just because they are very expensive and that we should not be doing things arbitrarily. Sir, I wish to clarify that the Government does not do anything arbitrarily. Every action that we take are actions decided upon after consideration. We will make sure that the number of ICU is adequate, but not excessive.

Mr Low Thia Khiang: May I seek a clarification from the Minister, Sir? The Minister mentioned that 75% of C Class ward bills are below $420. Would the Minister provide the bill amounts for the B1 and B2 Class wards, and a detailed breakdown of the bill size for these wards?

Mr Yeo Cheow Tong: Sir, I will be very happy to supply the data when Mr Low tables a question, because I do not have the data now. But when he was talking about affordability, I would imagine that people who have difficulties paying their bills, who are from the lower-income group, would be people who are using the Class C wards. They will not be people who will be using the Class A wards.

Mr Low Thia Khiang: B2 and B1.

Mr Yeo Cheow Tong: Or even B2. If they have some difficulties meeting the hospital bills, they should go for the ward with the lowest bill size. And that is why I only quoted the Class C ward charges.

Dr Tan Cheng Bock (Ayer Rajah): Mr Deputy Speaker, Sir, may I seek a clarification? Do I get it correct that a C Class patient, having been upgraded to B2, because he cannot get one of the five modalities of care at C Class, he needs to pay only C Class rate? I got a different answer from the Minister the last time.

Mr Yeo Cheow Tong: My answer is exactly the same. If he had listened carefully, what I told him the last time was when a patient goes into a Class B2 ward, he will be billed at Class B2 rate. But if that patient cannot afford the Class B2 bill, he can request to be reclassified as a Class C patient, and the bill size will be reclassified accordingly. This is exactly what I have just said also.

Dr Toh Keng Kiat: Sir, I would like to have two clarifications from the Minister. The CPI plus X factor has been used as a formula to control increase in revenue for subvented hospitals. Will the Minister tell us whether, with each revision, as the CPI plus X increase, as revenue is equal to cost recovery plus subsidy, this revenue will come mainly from cost recovery, or will there be a tandem increase in the subsidy?

The other clarification is on the balance billing for Medisave. It may be premature now, but the Minister has told us that this will be after due consideration has been given to the cost of running a private medical practice. But he has not told us what happens when a patient requires the services of more than one specialist to look after him or, for a very sick patient, when more than one visit per day will have to be made to that patient.

Mr Yeo Cheow Tong: Sir, the CPI plus X formula applies to the whole revenue. The subsidy will be based on the revenue cap. So it depends on the class of ward. If it is Class C, the hospital will get 80% of that new revenue cap. Of course, if the cost goes up, then we expect the hospitals will also increase their fees to cover the cost increase in that portion which is not subsidised.

Sir, as for the balance billing, we are still working out the details, and I think those are implementation details which we will take up with the private sector later.

Dr Wang Kai Yuen (Bukit Timah): Clarification for the Minister. I would like to ask the Minister whether kidney dialysis is within the definition of all the diseases in that two volumes, and whether that is covered in the basic health care package.

Mr Yeo Cheow Tong: Sir, we do provide kidney dialysis and it is also provided through the National Kidney Foundation (NKF). And because this is considered to be in the package, that is why MediShield also covers kidney dialysis, and which is why we encourage Singaporeans to ensure that they do not opt out from MediShield, so that when they get kidney problems they can get the support from MediShield which covers the bulk of their dialysis cost.

Mr Low Thia Khiang: Clarification, Sir. Would the Minister confirm that kidney transplant is part of the basic package?

Mr Yeo Cheow Tong: Sir, if Mr Low had read the White Paper carefully, it is inside there.

Mr Chiam See Tong (Potong Pasir): Thank you, Sir, for allowing me to join in the debate.

Sir, the Cost Review Committee has pointed out that the cost of health care has risen in recent years. Many Singaporeans or their relatives who have been admitted to hospital already know that. We MPs who are running town councils also know that. We have seen instances of residents coming to ask for delay or waiver of payment of the service and conservancy charges, because the breadwinner of the family had been stricken with cancer or other serious disease and was warded in hospital. All the family savings were used up to pay for his hospital bills, and the family as a result was left in debt.

When the Government hospitals were restructured and the consequent removal of much of the Government subsidies, the medical cost in those hospitals escalated sharply. The policy then was to cut down the number of C Class beds. The Government policy at that time was to remove C Class wards in one or two Government hospitals. The reason given was that the C Class wards were not popular. Patients were allowed to use their Medisave to pay for their medical services and as a result, many of them opted for better service, either in the B Class or even the A Class wards. They did not want to be admitted to the C Class wards as they had enough in their Medisave to pay for the better class.

For that reason, the Government went ahead to reduce the number of C Class beds. As I remember it, many MPs in this House were alarmed at the rate the Government was cutting down the number of C Class beds. Obviously, now there is a change of heart on the part of the Government. This is reflected in the White Paper. In the White Paper, it says that "there shall be a cap on the revenue of Government hospitals and that Singaporeans are guaranteed affordable basic medical services. There shall be Government subsidies for the B2 and C Classes." This is certainly a departure from the tough stand taken by the Government a few years back. At that time the Government wanted the restructured hospitals to be self-supporting. That meant the restructured hospitals were thrown into a laissez-faire situation. They have to earn their own keep. Under those circumstances, they have no choice but to up their charges to ensure that they are not in the red.

When the Government withdrew its helping hand, the cost of the restructured hospitals had to go up, and not only go up, but go up sharply. Naturally, the population was alarmed, especially the older folks. Obviously, the Government has taken note of the concern of Singaporeans over the rise in health care cost and has taken steps to contain the rising cost. The Government can only do that by giving a helping hand. I note that it intends to do so. The majority of the beds in subvented hospitals shall be subsidised. I hope that the standard of care of patients in the B2 Class and C Class beds shall not drop because they are subsidised.

Generally, I agree with the Government's health care philosophy. But it appears to me that there are contradictions within that philosophy. On the one hand, the Government wants to promote personal responsibility for one's health and avoid over-reliance on state welfare or medical insurance. But on the other hand, the Government is committed to giving a good medical package to the people which includes 65% subsidised medical services in subvented hospitals. In this respect, the Minister should clarify. On the one hand, you say that Singaporeans must take care of their own health, in other words, pay for all their own health needs out of their own pocket. On the other hand, you say you want to subsidise 65%, so the Government does recognise that there must be subsidy in hospitals, and not rely on individual persons taking full responsibility of their own health care.

One wonders whether the Government wants, in the ultimate scenario, every Singaporean to pay for himself all the medical services he needs, or the Government wants each Singaporean to be responsible for his own personal health, in the sense that he exercises regularly, eats simple food, and has a healthy lifestyle. But despite these efforts, should he still fall ill, the Government still makes available to him subsidised beds in subvented hospitals which are affordable to him. In my mind, the former scenario shall never prevail if he gets sick.

I had better explain. Despite all efforts in keeping good health, he is stricken with a disease such as cancer. What I want to say is that the individual should not be held entirely responsible for the diseases which he inevitably suffers. Similarly, if he is stricken with a disease such as cancer, which has no effective cure at the moment, it is not prudent to depend on state welfare or medical insurance. It is important that those who fall sick should not be put in a position where they will worry as to where they will get the money to pay for the hospital bill. In this respect, I would like the Government to consider, in its medical package, implementing some form of national insurance scheme. I know the Government is against the buffet system. But we can have a national system where we cater only for a definite, specific number of services, something like the scheme implemented in Oregon State, USA, or in Canada, as mentioned at page 22 of the White Paper.

The other aspect of the health care philosophy, I would like to mention in relation to Government's subvented hospitals, is, "To rely on competition and market forces to improve service and raise efficiency". Again, how can we do this when the Government intends to cap their revenue? In other words, how can they compete if you want to cap their revenue? Be that as it may, the competition among subvented hospitals may not be a good thing. Instead of competition, the Government should promote productivity. It has been shown that "productivity is directly linked to the production of competitiveness rather than its increase". This is quoted from Psychology Today, September 1986 issue, pages 22 to 26. It must be realised that trying to beat others and to do well are two different things as they actually work at cross purposes. In a cooperative situation, others are depending on each other person to succeed. While in a competitive situation, others are hoping that you will fail. I think it is not right that subvented hospitals which are built at great public expense should go all out to make money and become richer through competition. The purpose of subvented hospitals is to serve the public well, and this can be done by good innovative management. Government can give it autonomy or there must be less bureaucracy.

Mr Deputy Speaker: Order. It is 4.30 pm. Moment of interruption. Debate to be resumed, what day?

Mr Dhanabalan: Tomorrow, Sir.

Mr Deputy Speaker: So be it.