Obamacare and MediShield Life- TODAY 15 Nov 2013

I chaired a session on Obamacare and what implications there are for MediShield Life in NUS yesterday and later participated in a panel discussion on the topic. Must say it was pure coincidence that the Ministry of Health Singapore announced that it would reveal the names of the members appointed to the MediShield Life review committee today (15 Nov 2013). The take-home message to me is summed up nicely in the newspaper headline of the report: “Need to ‘revamp healthcare delivery with financing framework’”. I feel strongly confining the MediShield Life review to merely an exercise in juggling or jiggling the financials will be hugely disappointing. It would then be a wasted opportunity to leverage upon the review to fundamentally re-work our delivery system to address the changes in demography and epidemiology, i.e. aging and chronic diseases.

The constraints of space in a newspaper being what they are, I don’t think the media account fully captured the essence of my perspectives and so I shall attempt to be clearer here on two issues.

1. Community rating– Community rating in insurance refers to computing the premiums for an individual not based on individual underwriting or risk profiling but on what a cohort of similar individuals would pay. This can be taken for the entire community or stratified by age within the community. I believe community rating is necessary for MediShield Life although I agree that different age groups can pay different premiums in accordance with different risks, e.g. older age groups have higher risks of hospitalization and consume more during each hospitalization and so should pay more. That said, if the government determines that some degree of individual underwriting is needed, I feel the difference in premiums for the same age band for persons with different risk profiles should not be in massive multiples, e.g. 10-15 times different as this would negate any policy intent of enrolling every Singaporean. As Chia Chin notes, Obamacare limits this to three fold which I personally think is reasonable. Besides in Singapore, Prime Minister Lee has already reassured that the government will step in to subsidize premiums for those unable to afford them.
Another related issue not highlighted is the importance of solidarity and nation building. My view is that huge differences in premium rates for the same age groups do not contribute to nation building and a sense of being Singaporean and belonging
2. Transformation– I think the quote got truncated. The analogy used was ‘IT projects’ and I noted that the most successful IT projects were the ones that were not seen as IT projects but rather as fundamental business transformation projects. This difference in mindset drives performance and hence overall success.

Need to ‘revamp healthcare delivery with financing framework’

 TODAY 15 Nov 2013
SINGAPORE — As a committee gets ready to review the national insurance scheme to cover every Singaporean for life, healthcare experts yesterday highlighted the importance of revamping healthcare delivery together with the financing framework.
By Neo Chai Chin –      
SINGAPORE — As a committee gets ready to review the national insurance scheme to cover every Singaporean for life, healthcare experts yesterday highlighted the importance of revamping healthcare delivery together with the financing framework.

Payment-mechanism reforms alone are insufficient to set healthcare on the track towards cost sustainability and quality, said Dr Jim Bonnette, Chief Medical Officer for strategy and operations consultancy firm Oliver Wyman’s health and life sciences practice. This is one lesson that can be gleaned from missteps in the system of the United States, in which higher healthcare spending (US$2.7 trillion, or S$3.4 trillion, in 2011) has not led to better outcomes, he said at a talk at the National University of Singapore yesterday.            

Singapore’s system of care delivery is similar to those of the US and many places in the world, with a focus on symptomatic treatment and acute care instead of prevention and “longitudinal” care, said Dr Bonnette. Without changing care delivery, “you won’t control premium costs”, he said.

However, one component of the US Affordable Care Act (or Obamacare) that Singapore can consider in enhancing MediShield is a limit on the difference in premiums paid by the oldest and youngest policyholder. American insurers can adjust premiums based on one’s age and whether one smokes, but they cannot charge their oldest policyholder more than three times that of their youngest, or vary rates based on someone’s health history.

Healthcare expert Jeremy Lim, who chaired the session, felt the concept should be part of MediShield. “I think that, for a national scheme run by the Government on a not-for-profit basis, it has to be,” he said.

Members of the MediShield Life Review Committee — chaired by member of the Council of Presidential Advisers of Singapore and accountancy-trained Mr Bobby Chin — will be announced today. MediShield Life is expected to be implemented in 2015 and will be an enhanced version of the current MediShield insurance scheme, which helps policyholders and their dependents with large hospital bills but does not cover certain groups, such as those above age 90.

Dr Lim said the scope of the review could be widened. Successful IT projects transform a company’s business and “in the same way, I think MediShield Life is probably the most fundamental opportunity to transform the way we deliver healthcare”, he said.

Dr Bonnette advocated a shift to patient-centred care managed by multidisciplinary teams. Physicians’ duties that can be performed better and more cheaply by team members, such as social workers and nutritionists, should be delegated, he said. Although this is a “difficult sell” to some doctors initially, he has found that they end up “much happier with the way they practise”.



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