Presentation at Tembusu College on Changing Political Philosophy in Singapore Healthcare

Below is the text of a presentation prepared for the Tembusu Forum 18 Feb 2013 [To check against delivery].

CHANGING POLITICAL PHILOSOPHIES- IMPLICATIONS FOR THE FUTURE OF SINGAPORE HEALTHCARE

Friends and colleagues,

It gives me great pleasure to be here today. My thanks to Prof Tommy Koh for his kind invitation to come and share my perspectives on the very exciting developments in Singapore healthcare. I look forward to an exciting exchange and learning together with all of you. I’d like to discuss the dominant political philosophy with regards to healthcare and then highlight the profound changes that have occurred in recent months and are still occurring. Let me first state categorically that Singapore has done very well and our health system, a unique product of Singapore’s unique circumstances has served Singapore very well. The challenge moving forward is whether it can continue to do so, and if not, what needs to change. I am focusing on political philosophy as it is my firm belief that the design of our financing and delivery systems are by products of underlying ideology. Once we understand more completely the articulated and unspoken beliefs and mental models, we can debate more discerningly what the future can and should look like.

Singapore was born in uncertain times where even her survival was questionable. Health was not foremost in the policy makers’ minds, to put it mildly. In fact, Mr Yong Nyuk Lin, then health minister, shared at a World Health Organization meeting very frankly:

“In Singapore, we have no illusions as to where Health stands as regards its priority for public funds. In my view, Health would rank at most fifth in order of priority. My order of priorities for public funds would be as follows:

  1. Security and Defence
  2. Creation of job opportunities
  3. Housing
  4. Education
  1. Health”

Related to the deep seated desire to use public funds wisely, then Prime Minister Lee Kuan Yew was adamant that subsidies were fundamentally wrong, saying “Subsidies on consumption are wrong and ruinous … for however wealthy a nation, it cannot carry health, unemployment and pension benefits without massive taxation and overloading the system, reducing the incentives to work and to save and care for one’s family – when all can look to the state for welfare. Social and health benefits are like opium or heroin. People get addicted and the withdrawal of welfare benefits is very painful.” It is telling that health is considered ‘consumption’ as opposed to education or economic infrastructure which would be ‘investment’.

It should thus be no surprise that we are capacity constrained. This to some extent is a deliberate policy decision. Only 5 years ago, the health minister said, “If we overestimate demand and oversupply, we end up with under-utilized assets, a costly outcome. Between the two, I prefer to under-supply than to over-supply as this will put pressure on ourselves to intensify usage and minimize over-consumption. A built bed tends to be a filled bed.”

Healthcare from this perspective then is not just as a moral obligation of governments but also an instrument to be used, and used sparingly in the context of supporting economic development. Interestingly, this has been studied extensively in the East Asian economies with Professor Ian Holliday of Hong Kong describing it as productivist welfare capitalism:

“Social policy is strictly subordinate to the overriding policy objective of economic growth. Everything else flows from this: minimal social rights with extensions linked to productive activity, reinforcement of the position of productive elements in society, and state-market-family relationships directed towards growth.”

It was thus in the early 1980s with Mr Goh Chok Tong at the helm of the health ministry that the concept of ‘individual responsibility’ for health and healthcare was introduced. This has been a prevailing principle right through the years. In the seminal 1993 White Paper on Affordable Health Care penned by none other than our current Prime Minister Mr Lee Hsien Loong when he was Minister for Trade and Industry, the direction was consistent and blindingly clear: “The healthcare system needs to be structured to strengthen this sense of personal responsibility. It must give the individual maximum incentive to stay healthy, save for his medical expenses and avoid using more medical services than he absolutely needs.”

In many ways, this merely cements our long-standing commitment to co-payments to combat the scourge of ‘moral hazard’. In fact, co-payments in healthcare were introduced even before Singapore’s independence. In 1960, one year after self-government, Mr Lee Kuan Yew introduced user fees into government healthcare, charging 50 cents for attendances at government outpatient clinics for weekdays and one dollar for public holidays!

Co-payments were also seen as proportionate to the government’s contributions. Health ministers from Mr Yeo Cheow Tong to Mr Khaw Boon Wan had highlighted the need to cap government spending with Mr Khaw remarking at a public forum in 2008 that health spending may rise to 7-9% of GDP but that would entail a commensurate increase in individual spending to “some 15 per cent of his own income on medical expenses, including health insurance premiums and co-payments”.

The ‘greatest good for the greatest number’ concept was also deeply embedded in our collective conscience. For years, the Ministry of Health had strenuously resisted including children with congenital illnesses into MediShield. This had the dual effect of leaving parents with no recourse to MediShield as insurance for the acute treatments needed and also severely constraining future opportunities for these children to be insured, whether under MediShield or other schemes. Many had rallied for such children to be covered by MediShield. For example, Ms Salma Khalik of the Straits Times had advocated strongly in 2007 for inclusion of children to no avail. The Ministry’s response: “Unfortunately, actuarial studies suggest that premiums will have to go up significantly if MediShield is to cover congenital illnesses. This may render MediShield unaffordable to many… We will continue to look for viable solutions”. 

What are the results of this political philosophy? First, Singapore has become the envy of many fiscally challenged countries for her very low spending of less than 4% GDP on healthcare coupled with very impressive population health metrics. Secondly, the ratio of government to private spending has flipped in the last 4 decades with the government now putting out roughly a third and private monies covering the rest. Thirdly, comments such as “It is better to die than to fall sick” reflecting the public anxiety over ability to afford healthcare despite government assurances. The anxiety was brought into sharp focus when Minister Balaji Sidasavan, undergoing treatment for colon cancer, remarked he was not surprised that some families had to sell their homes to afford cancer treatment.

Ironically, it is the much-lauded strengths of the Singapore health system which have enabled low spending and good population outcomes that are also responsible for the concerns. Singapore has low spending because the government has intervened to control supply and co-payments are an effective, perhaps too effective, deterrent to healthcare spending. We must be careful not to throw the baby out with the bath water and be absolutely clear what we are sacrificing or trading off as we heed calls for healthcare reform.

The Rapidly Changing Landscape

Fast forward to the present and the healthcare landscape is buzzing with change. Just 2 months ago, Minister Gan Kim Yong, the current health minister announced in a front page article a “Major review to keep healthcare affordable” where he highlighted the need to ensure affordability from the patient’s perspective. It should be noted that whoever pays for healthcare, it needs to be paid for, and the less patients pay, the more the government has to shoulder. Is two-third to one-third weighed towards patients paying more the correct ratio for Singapore? Can the government assume a larger role? It certainly looks like this will happen.

The second paradigm shift is in planning ahead and over-building. Singapore appears to be moving away from a deliberate ‘tightness’ in supply to encourage efficiency towards planning “ahead of need”. This to me is a good thing but we must accept higher healthcare costs albeit with better quality of care and better quality of life for Singaporeans- two sides of the same coin. Perhaps the pain of constrained supply is politically unbearable and policy makers now see the current situation as excessively onerous for patients.

It is interesting that the inclusion of children with congenital illnesses into MediShield coverage has happened with no discussion on the financial implications, and no talk of even premium increases. The actuarial numbers cannot have changed dramatically between 2007 and 2013 but the political landscape has.

******

Friends, we have travelled 50 years of political philosophy evolution in healthcare. From ‘productivist welfare capitalism’, ‘health as an individual responsibility’ and the ‘greatest good for the greatest number’, we are evolving to ‘Major review to keep healthcare affordable’ (from the patients’ perspective), ‘over-building a bit’, and MediShield for congenital illnesses with no concomitant premium increases. Is Singapore becoming soft as we cross into the fifth decade of independence? Are we embracing the dreaded ‘W” word (welfare)? Or is this just a re-calibrating of the unabashed capitalist directions with all its excesses Singapore society has taken in recent years?

At this point, it is timely to recall the words of Mr Lee Kuan Yew:

A competitive, winner-takes-all society… would not be acceptable in Singapore… To even out the extreme results of free-market competition, we had to redistribute the national income through subsidies on things that improved the earning power of citizens, such as education. Housing and public health were also obviously desirable. But finding the correct solutions for personal medical care, pensions or retirement benefits was not easy. We decided each matter in a pragmatic way, always mindful of possible abuse and waste. If we over-redistributed by higher taxation, the high performers would cease to strive. Our difficulty was to strike the right balance.”

Lee Kuan Yew (From Third World to First: The Singapore Story 1965 to 2000)

Are these sincere and fundamental departures from the founding philosophy, or are they just posturing in reaction to electoral set-backs? The optimist in me says we are on the threshold of a new era of government interventions to promote health and well-being, recognizing that even as Singapore strives to be a dynamic nation, social cohesion must be deliberately planned and funded for, especially in light of worsening inequalities. The pessimist says a leopard hardly ever changes its spots and that the policy makers’ underlying world view has not changed and will not change. Without a change in mental model, changes in financing and delivery will be merely marginal and not transformative.

Whatever it is, it is clear that this is today a course charted not by a few elites sitting in hallowed halls of power isolated from the travails of the common man, but a journey (and a destination) collectively embarked on by all Singaporeans. The future of Singapore healthcare lies in the hands of all of us and it is for us to imagine, to advocate and to work towards. I leave you with the wise words of the great Mahatma Gandhi, “The future depends on what you do today”.

Thank you.

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