Private medicine in public hospitals- Thoughts on Low Thia Khiang’s parliamentary comments Mar 2013

The comments by MP Low Thia Khiang (Specialist Care and Hospital resource 12 Mar 2013) revisit a perennial question of the role of the public hospital in private medicine. It is a difficult issue with no fully satisfactory answers. No private medicine in public hospitals and too many doctors may leave (unless the government funds sufficiently to reduce need for income supplementation from private patients). Unfettered private medicine in public hospitals and subsidized patients get crowded out. I’ve inserted some thoughts into the text of Mr. Low’s comments.
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COS 2013 Debates: MOH – Specialist Care And Hospital Resource (MP Low Thia Khiang)
By MP for Aljunied GRC, Low Thia Khiang
[Delivered in Committee of Supply on 12 March 2013]

The Ministry of Health website states that: restructured hospitals are different from the other private hospitals …. AND they “are to be managed like not for profit organizations”.
At present, restructured hospitals appear to be managed like profit-driven companies. International Medical Services that solicit business from foreign patients are present in most of the restructured hospitals. The common argument is that money earned from private and foreign patients is used to support treatment for local, subsidized patients. If so, then what proportion of the overall patient load should private and foreign patients constitute – 20%, 30% or more? Who provides and overseas the implementation of the guidelines? [Agree that it is worthwhile being clear about where the boundaries lie and have broader societal agreement. I am not too sure whether there are any actual cross-subsidies. If the numbers are as small as Minister Gan reported in parliament (about 2 per cent), then the overheads from the International Medical Services offices, higher costs of maintaining private wards etc, may negate the benefits of any higher fee collections. Might be useful to have some clarity in this regard]

If they are such guidelines, does it based on department-specific or hospital-specific? I understand that while the hospital as a whole may see more subsidized patients than private/ foreign patients, how about individual departments? Moreover, given the current patient load of restructured hospitals, is it justifiable to allocate resource to serve foreign patients? [Anecdotally, it would be surprising if hospitals other than SGH and NUH had substantial numbers of private/ foreign patients. I do know of public sector doctors who have very substantial private patient volumes and this has a corrosive effect on morale and ethos. Perhaps, an alternative way of looking at Mr Low’s point is whether there are minimum subsidized patient volumes and responsibilities of public sector doctors. Some doctors are prepared to work 80-120 hours a week and we should not begrudge their private patients and hence additional income. But to be a public sector doctor with the attendant perks, there should be norms as to what this entails in caring for subsidized patients.]

Next, I would like to discuss remuneration scheme of specialist doctors. Many specialists in restructured hospitals are under a remuneration scheme that rewards them for treating private patients, i.e non-subsidized patients.
I believe that the remuneration scheme is one of the factors hindering the hospital to improve the situation of long waiting time, especially for subsidized patients. Despite the long waiting times to consult a specialist in the hospital, there is little incentive for hospital to re-appropriate the ratio of subsidized to private out-patient specialist clinics. [Well, incentives drive behavior and higher remuneration for one type of patient would result in these patients being moved to the front of the queue. I think the MOH used to report waiting times for surgeries, clinic consultations etc for both private and subsidized patients; such data would be helpful in understanding whether there is an issue and the magnitude. Good also to be clear what acceptable differences are. There must be differences or it would be meaningless to pay private rates.]

There is also a policy for selected specialists from SGH to see private patients at Gleneagles and Mount Elizabeth hospitals. The Minister for Health explained that this frees up physical resources for subsidized patients. However, if the specialists are outside of SGH to treat these “off-loaded” private patients, then one may assume that junior doctors have been delegated to treat the subsidized patients in SGH.
The waiting time for surgery is also long, especially for subsidized patients. This is because the current remuneration scheme favours shorter waiting times for private patients. In addition, subsidized patients may also be encouraged to upgrade to a private status.
I am of the view that the current remuneration scheme incentivizes specialists to treat private patients over subsidized patients. As a result, there is unequal distribution of workload among specialists. Morale drops and specialists leave. Over the years, pay increases alone have not been able to stem this tide of resignation.
Other remuneration schemes should be considered to incentivize doctors to treat both subsidized and private patients equally. Perhaps, remuneration should be based on the number of patients seen AND the complexity of patients managed.
A variant of this scheme already exists in some restructured hospitals where specialists accumulate “points” for care/ service rendered. Each “point” has a monetary value. However, such scheme has been overshadowed by the more favourable incentives to treat private/ foreign patients over subsidized patients. I think it is timely for restructured hospitals to remove the incentives for the treatment of private/ foreign patients and to move to a “point-based” remuneration scheme. [The challenge is that hospitals and doctors are aligned financially here. Public hospitals rely heavily on revenue from patient fees. Consider for example SingHealth’s revenue. Based on the latest annual report, S$1,065 million (46%) were from patient fees and S$968 million from subvention (or MOH funding). Doctors may earn more from private/ foreign patients, but hospitals also earn more and the revenue is needed since government funding accounts for only 41% of total revenue. Furthermore, if the public hospitals are serious about attracting private/ foreign patients, they have to incentivize their staff to treat and want to treat such patients. Otherwise, service standards would be no different between private and subsidized patients. I doubt patients would then want to pay a premium to be a private patient. This holds in the private sector too: The S$10,000 a night ‘presidential suite’ patient would have much greater attention compared to the S$200 a night 4-bedder patient. Guess the more fundamental issue was the one Mr Low began with: Are public hospitals different from private hospitals?]

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