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Page 1: SDP National Healthcare Plan Executive Summary

S I N G A P O R E D E M O C R A T I C P A R T Y

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THE SINGAPORE DEMOCRATIC PARTYNATIONAL HEALTHCARE PLAN

2012

CARING FOR ALL SINGAPOREANS

EXECUTIVE SUMMARY

FOR PUBLIC CONSULTATION

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FOREWORD

Just weeks after the general elections in May 2011, the Singapore Democratic Party put together an Healthcare Advisory Panel compris-ing several medical doctors and healthcare professionals who had come forward to help us during the elections. Under our Policy Unit headed by Dr James Gomez, the Panel got down to work on an alternative healthcare plan for Singapore. This was an extension and an elaboration of the healthcare programme we had proposed during the elections.

Nine months, several meetings and countless exchanges of emails later, a document emerged that we are proud to present to this nation. For the first time in Singapore's political history, an opposition party has come up with a comprehensive and detailed programme to chart the future for healthcare in this country. It is a plan that is in line with SDP's vision of fostering a compassionate and egalita-rian Singapore. It puts forth policies that coalesce around the idea that a healthcare system must take care of anyone and everyone who needs medical assistance.

Equally important is that our plan looks at the question of sustainability. It builds in effective cost containment measures to prevent health expenditure from spiraling out of control and bankrupting the system. Our proposals also ensure that the system is: One, easy to manage as it has only one level of administration instead of the present complex Medisave, Medifund and Medishield schemes; two, transparent and accountable as it does away with questionable subsidies that the government claims to give; and three, minimises the use of our Central Provident Fund savings.

I want to thank the Panel members for their scholarship and erudition, not to mention the hours of hard work that they had put into this massive project. What is most significant, however, is the compassion that these professionals demonstrate. Convicted by their sense of right and wrong, they have been moved to write their vision of a healthcare system that takes care of all. With Singaporeans like them, there is hope yet for our nation.

For a long time, Singaporeans know that healthcare is extremely expensive and many, if not most, find it unaffordable – especially if one, or one's loved one, meets with a catastrophic or chronic illness. But they do not know what an alternative system looks like and what the government should do to make medical care people-centric rather than profit-oriented. Now there is a plan that shows the Singaporean people what they have been missing all these decades, it opens the window to a whole new system that Singaporeans never realised was possible.

We have striven to make ours a caring and financially sound plan. But we would like to make it an even a better one by consulting you and inviting you to give us your input. To this end, we present to you The SDP National Healthcare Plan: Caring For All Singaporeans.

Chee Soon JuanSecretary-GeneralSingapore Democratic Party

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ACKNOWLEDGEMENTS

The SDP Healthcare Advisory Panel would like to express its heartfelt gratitude to Mr Ansari Abudeen, healthcare economist and doctoral candidate at the University of New South Wales, who gave invaluable advice to the panel during the policy formulation stages on the economic aspects of running a healthcare system, with especial attention to managing healthcare costs and the positive impact of universal healthcare coverage on economic growth. His constant exhortation for us to measure our policy against the best healthcare systems in the OECD inspired us to strive towards a healthcare plan that will be the touchstone by which all future policies are measured.

Many thanks also go to Dr James Gomez, Head of Policy Unit, SDP, who was instrumental in adding a political thrust to our policy paper through his frequent inputs and painstaking edits to the draft. He dedicatedly supervised and co-ordinated the group’s activities in the lead-up to the publication and launch of the plan.

Ms Tan Ee Lyn has been especially helpful in providing a critique of the paper and playing the devil's advocate to help us prepare for the launch of a groundbreaking policy paper such as this. We appreciate your help, Ee Lyn.

To all the SDP members who turned up for the internal presentation of this paper, we say a big thank you. Your robust feedback was much appreciated, and major revisions to the draft were made in the light of your recommendations as well as misgivings. We are also grateful to Mr Tan Jee Say, who stood as an SDP candidate in Holland–Bukit Timah Group Representation Constituency in General Election 2011, for his thoughtful and encouraging remarks at the presentation. His National Economic Regeneration Plan played a pivotal role in re-orientating us to the importance of allocating adequate resources to infrastructural and manpower development in a balanced and sound healthcare policy.

Through all the months of hard work put in by the entire team into this project, we would be remiss not to mention the loving support given us by our spouses and families. These are the unnamed people who are an inestimable source of moral strength and comfort behind the completion of every monumental task. To them we owe an immense debt of gratitude.

We would also like to express our utmost appreciation to a few close friends and associates who would wish to remain anonymous for offering their unstinting advice on how to make a good healthcare plan even better.

Finally, this project would not have taken off if not for the active advocacy of our party leader, Dr Chee Soon Juan. His calibrated idealism and compassionate vision of a better world for all, from beginning to end, have provided the impetus behind the formation of this advisory panel and the launching of this landmark project. Under his nurturing guidance and mentorship, the group gelled together and achieved a singular focus on delivering a healthcare plan that any political party in the world would be proud to call its own. From the bottom of our hearts, we thank you, Dr Chee.

The SDP Healthcare Advisory Panel9 March 2012

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THE SDP HEALTHCARE ADVISORY PANEL

Dr Ang Yong Guan graduated from the National University of Singapore in 1979 with a medical degree and did his post-graduate training in psychiatry at the University of Edinburgh from 1984 to 1986. Upon his return from Edinburgh, he served as a psychiatrist with the Singapore Armed Forces (SAF) for 17 years. Dr Ang is currently in private practice as a Consultant Psychiatrist. He was the President of the Singapore Psychiatric Association and Chairman of the Chapter of Psychiatrists, Academy of Medicine. He is the founding and current Chairman of the Action Group for Mental Illness (AGMI). He is also a member of the Clinical Advisory Committee for Chronic Disease Management

Programme on Mental Illness 2009.

Dr Cheng Shin Chuen, Consultant Surgeon, read Medicine at the University of New South Wales, Australia and graduated in 1998. He completed his basic and advanced specialty training in General Surgery in Singapore in 2006. He was a senior Clinical Fellow in Vascular and Endovascular Surgery in Prince of Wales Hospital Sydney in 2007. Dr Cheng was the Head of Vascular and Endovascular Service at the department of General Surgery, Tan Tock Seng Hospital, Singapore and adjunct Assistant Professor, Yong Loo Lin School of Medicine, National University of Singapore. Dr Cheng has also been invited overseas to supervise or proctor complex surgical procedures.

Ms Eveline How is a corporate communications and marketing manager at a utility company. Her interest in healthcare stems from her being the main provider for her immediate family members’ medical expenses. Other than healthcare, she is also an animal welfare advocate. She graduated from the National University of Singapore with a Bachelor of Business Administration and a Graduate Diploma in Law.

Dr Patrick Kee, MBBS (S'pore), M. Med (Int Med) S'pore, FRACP (Aust), FAMS, GDGM. Dr Kee is a specialist in Palliative Medicine who has been caring for the terminally ill for the past 10 years. He is currently working part time with the HCA Hospice Care and is a director of TLC Home Medical Services Pte Ltd.

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Dr Leong Yan Hoi obtained his M.B.,B.S. from the National University of Singapore in 1988. He subsequently obtained his Designated Factory Doctor registration in 1997. Dr Leong has been practising as a General Practitioner in an HDB clinic for the past 15 years.

Dr Neo Eak Chan graduated from the University of Singapore in1968. He subsequently became a private practitioner running his own clinic. In 2000, he organised and ran Ezyhealth, a public-listed health provider company. In 1991, he was also in the Committee of the Singapore Medical Association that submitted its views to the National Health Review Committee. He was also a former Chairman of Ayer Rajah CCC. Dr Neo believes that the best healthcare is preventive health and any good healthcare system should focus on primary health as its main priority.

Associate Professor Paul Ananth Tambyah is a graduate of the National University of Singapore's Medical School where he obtained both the MBBS and MD degrees. After completing his national service, he did postgraduate training in Infectious Diseases at the University of Wisconsin, USA. He returned to Singapore and has served on a number of national and international committees including the Board of the Society of Healthcare Epidemiology in America and the Council of the Western Pacific Committee on Clinical Microbiology and Infectious Diseases. He is currently in academic medical practice at a major teaching hospital in Singapore.

Dr Tan Lip Hong obtained his M.B., Ch.B. from Leicester University, U.K. in 1988, and returned to Singapore for his clinical training. He subsequently obtained his M.Med. (Occupational Medicine) from the National University of Singapore in 1994. Dr Tan has worked as a General Practitioner in the heartlands for the past 17 years.

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Dr Toh Beng Chye obtained his M.B.,B.S. from the National University of Singapore in 1988. He subsequently obtained his Designated Factory Doctor registration in 1997. Dr Toh has been practising as a General Practitioner in an HDB clinic for the past 16 years.

Dr Wong Wee Nam graduated with MBBS from the University of Singapore in 1972. After his housemanship, he served as a medical officer with the Singapore Armed Forces and, subsequently, the Ministry of Health. Over the years, he has published many letters on Health issues in the Straits Times. In May 1991, he submitted a paper to the Health Review Committee that was formed by the government to look into the problems of healthcare at that time.

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Executive Summary

Healthcare is a basic right as enshrined in the Universal Declaration of Human Rights. It is not a commodity, therefore market forces have no part to play in the financing or delivery of basic healthcare to the people in Singapore. The World Health Organisation’s Alma Ata Declaration (1978) reiterates that health – a state of complete physical, mental and social wellbeing – is a fundamental human right and that ‘governments have a responsibility for the health of their people which can be fulfilled only by the provision of adequate health and social measures.’

Investing in healthcare has also been shown to have a positive impact on GDP growth. A healthier and wealthier citizenry in turn bolsters social stability, which in turn facilitates democratic governance, promotes innovation and grows the economy.

While healthcare’s status as a basic human right is not in question, it cannot be over-emphasised that for any healthcare system to remain workable and functional, society must recognise that a nation’s health has to be the shared responsibility of the people, the government and the healthcare providers. We do not advocate ‘welfarism’ but rather espouse co-operation and sharing as fundamental tenets underpinning the quest for social justice and societal well-being.

In the process of devising an equitable and just national healthcare plan, the Singapore Democratic Party (SDP) has identified key weaknesses and pitfalls in Singapore’s current healthcare system:

• In the 1950s through the 1970s, healthcare in Singapore was viewed as a basic human necessity and was largely funded by the government. This helped spur the development process in Singapore by raising the health standards of the population and eliminating childhood diseases and many contagious illnesses. However, the commercialisation of healthcare in Singapore has expanded apace since the 1980s when the government embarked on a programme of massive healthcare privatisation. It converted public healthcare institutions and hospitals into privatised (‘restructured’) entities which function as for-profit centres responsible for their own bottom-line. Healthcare in Singapore has now been turned into a profit-driven industry, and is no longer viewed by the government as a public good.

• Although Total Healthcare Expenditure (THE) in recent years has hovered at 3–4% of Gross Domestic Product (GDP), much lower than the average of 11% of GDP in high-income countries, in absolute terms THE has been increasing steadily from $0.1 billion in 1961 to $5 billion in 2001 and $12 billion in 2011. Containing cost pressures is a key policy challenge not just for Singapore, but for high-income countries around the world. Budget 2012 tacitly recognises this inexorable rise in healthcare costs in Singapore. But instead of addressing the cost issue decisively and comprehensively right now, the PAP government has responded with the tepid solution of spreading additional funding over the next five years.

• Government Healthcare Expenditure (GHE) at 1–2% of GDP is the lowest in the developed world; it constitutes only about a third of THE (cf. 61% for high-income nations). This is not projected to change significantly with the proposed gradated increase in spending in Budget 2012 which merely acknowledges Singapore’s high rate of healthcare inflation. The result is that two-thirds of healthcare expenditure

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(about $8 billion) is borne by the private individual and corporations in the form of mandatory contributory schemes and out-of-pocket spending (70% in total – the highest in developed East Asia).

• The extremely low government healthcare expenditure has resulted in inadequate access to decent healthcare for low-income groups, gross inequities in the delivery of healthcare services, and insufficient hospital beds. Currently there are 21 hospital beds per 10,000 resident population, less than half the average figure of 58 beds per 10,000 in high-income countries. It is hardly surprising that corridor beds and over-crowded emergency rooms are now the norm in many public hospitals.

• The 3Ms – Medisave, Medishield and Medifund – underpinning the current healthcare system have proven to be woefully inadequate in delivering affordable, decent healthcare to everyone and in rising to the challenges of escalating healthcare costs and increasing demands of an ageing population. Recent changes introduced by the Health Minister by way of Medifund and Medisave top-ups and enhancement of Medishield coverage are at best piecemeal and do not address the fundamental flaws of the current system.

Instead of piecemeal measures, a bold and radical overhaul of the current system is needed. Although this government has not displayed the political will to do so, the SDP believes our alternative system can set the tone for change when delivered in partnership with healthcare providers and the general public.

The SDP National Healthcare Plan

The SDP proposes a National Healthcare Plan that will address the aforementioned flaws in the current system. It builds on SDP’s Shadow Health Plan released during the General Election 2011 and aims to:

• Provide universal, affordable healthcare coverage to all Singaporeans while giving adequate choice in healthcare providers and services for the patient.

• Improve on healthcare delivery and outcomes through heavy investments in infrastructure and human resources.

• Meet the healthcare challenges of an ageing population by focusing on chronic long-term illnesses and acute illnesses at the tertiary level, devoting more resources to intermediate and long-term care as well as preventive medicine, health education and directed health screening.

• Contain rising healthcare costs by implementing cost-effective medicine, tightening medical audit and compliance, instituting tort reform and mediation, and rigorous measures to control the costs of drugs, medical devices and investigations.

Proposed National Healthcare Programme

We propose a single-payer universal healthcare system in which the government manages a central fund, the National Health Investment Fund. This fund will be run along the lines of a government-subsidised public insurance scheme to finance compulsory basic health, accident and pregnancy (for women) coverage for all citizens and permanent residents (PR) residing

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here for more than 6 months a year.

• Based on GHE of $4 billion (about 1.4% of GDP) against THE of $12 billion in 2010, we recommend that the government increase its current annual healthcare spending to $10.5 billion (about 3.2% of GDP) immediately rather than towards the lower target ($8 billion) over five years as proposed in the Budget 2012. Our recommendation stands in stark contrast with the government’s conservative projection of GHE to rise to 3.5% of GDP by 2030, as mentioned by Finance Minister Tharman Shanmugaratnam during the Budget debate in Parliament. We have detailed alternative revenue sources in the main paper to finance this extra $6.5 billion in government spending. They include a gradual reduction in defence spending to about 2% of GDP within the next 5 years; introducing a luxury tax; imposing a property sales tax on foreign buyers of private residential property; and increasing corporate tax rates by 1–2%.

• We propose that the $10.5 billion be paid into the central fund by the government, while the remainder will be funded by annual contributions by citizens/PRs through deductions from their Central Provident Fund (CPF) or bank accounts. These individual contributions serve to pool risks so as to provide for catastrophic illness coverage. The government will subsidise this annual premium in part or in full for those who cannot afford the full contribution.

• The 3Ms will be scrapped and the Medisave monies will be returned to the CPF Ordinary Account of all account holders. Singaporeans will then have more control over how their CPF money is spent, such as investing their CPF savings to build up their retirement nest egg.

• This fund will be used to operate both public and private healthcare institutions as well as pay for all healthcare services.

We have devised a 3-tiered scheme of contributions based on earned income to introduce an element of social equity and redistribution to healthcare financing, as laid down in Table 1.

• Based on available demographic and income distribution information, this would result in an average contribution rate of approximately $427 per person per year or less than $40 a month and a total contribution by all Singapore residents of approximately $1.31 billion to the Healthcare Fund.

• A Healthcare Benefits Smart Card will be issued to all residents upon payment of annual premium. This card entitles the holder to a 90% subsidy on healthcare services except treatment for acute primary and secondary care illnesses, which will receive a fixed subsidy of $10 per visit.

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Table 1: Summary of Payment Schemes Under the National Healthcare Plan

Adults Scheme Annual Contribution Co-payment Annual Cap

Singaporean PR Acute Illness Chronic Illness Chronic Illness Chronic Illnesses requiring Expensive Long Term Treatment

- Single: Income >$1500 - Married: Total family income >$3500

Normal $600 $700 $10 Subsidy per visit

10% $2000 $2000 1st Year.$1000 2nd Year. $500 subsequently.

- Single: Income $1500 - >$800- Married: Total family income $3500 – >$2000 - Full-time Tertiary Students: Parents’ combined income >$3500

APS $300 $400 $20 Subsidyper visit

10% $500 $500 1st Year. Full subsidy subsequently.

- On Unemploymenta or Social Welfarea

benefits- Single: Income ≤$800- Married: Total family income ≤$2000- Full-time Tertiary Students: Parents’ combined income ≤$3500b

FS Full subsidy Full subsidy Full Subsidy Full Subsidy Full Subsidy Full Subsidy

a. Under proposed SDP benefit schemes.b. Subjected to restrictions under SDP benefit schemes and the FS scheme.c. For particular illness and treatment. Overall cap remains.

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Minors Scheme Annual Contribution Copayment Annual CapSingaporean PR Acute Illness Chronic Illness Chronic Illness Chronic Illnesses

requiring Expensive Long Term Treatment

Parents’ combined income >$4000 APS $300 $400 $20 Subsidyper visit

10% $500 $500 1st Yr. Full subsidy subsequently.Parents’ combined income $4000 -

>$3000$150 $200

Parents’ combined income ≤$3000b FS Full subsidy Full subsidy Full Subsidy Full Subsidy Full Subsidy Full Subsidy

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Table 2: Additional Partial Subsidy (APS) and Full Subsidy (FS) Schemes

Beneficiaries SubsidiesAdditional Partial Subsidy (APS) Scheme1. Single: Income $1500 to >$8002. Married: Total family income $3500 to >$20003. Full-time Tertiary Students: Parents’ combined income >$35004. Minors: Parents’ combined income $4000 to >$3000

1. Annual Contribution: $300 ($150 for minors)2. $20 subsidy per Acute illness visit.3. 10% co-payment for Chronic illnesses. Cap per year of $500.4. Chronic illnesses requiring expensive continuous/recurrent treatment: Full Subsidy after 1st year.

Full Subsidy (FS) Scheme1. On Unemployment* or Social Welfare* benefits2. Single: Income ≤$8003. Married: Total family income ≤$20004. Full-time Tertiary Students: Parents’ combined income ≤$35005. Minors: Parents’ combined income ≤$3000

1. Annual Contribution: Full subsidy.2. All acute and chronic illness medical treatment: Full Subsidy.

*Under proposed SDP benefit schemes.

• A co-payment fee of 10% will be charged for treatment of all other illnesses at the point of utilisation to discourage the moral hazard of over-consumption for minor conditions up to a cap of $2,000 per year.

• For chronic illnesses requiring expensive long-term treatment, e.g. dialysis, we propose an annual co-payment cap of $2,000 in the first year, $1,000 in the second, and $500 from the third year onwards.

• We also propose that contributors in the bottom two income tiers receive additional subsidies for both acute and chronic illness treatment, in addition to a lower cap or total waiver of co-payment, as set out in Table 2.

• All ward differentiation will be removed, leaving a single ward class. Operation waiting times will be the same for all patients, and prioritized not on the basis of ward class but on clinical indications.

Healthcare Cost Containment

Healthcare costs have been spiralling in many developed nations. They are driven primarily by hospital fees, physicians' remuneration, pharmaceutical expenses and technology.

Total healthcare spending in 2010 was about $12 billion. We project this to increase to about $14.7 billion by the time the Healthcare Plan is implemented (including about $1.5 billion spending on additional infrastructure and manpower):

• National Health Investment Fund of $11.8 billion comprising $10.5 billion from government contribution, and $1.3 billion from private annual contributions;

• Co-payment amount of about $600 million;

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• Private healthcare spending of about $2.3 billion.

Our plan proposes the following measures to contain healthcare costs:

• Co-payment scheme at point of utilization to discourage over-consumption.

• Re-issuing the Singapore Medical Association (SMA) Guidelines on Medical Fees and putting in place a system of audit and compliance to reduce over-treatment and over-charging by physicians.

• Reducing the costs of drugs and medical devices through tenders and aggressive negotiations with manufacturers and pharmaceutical companies. This would be accomplished through the single-payer national health insurance policy.

• Invest in the local manufacturing of generic drugs as well as medical devices.

• Regulating and enforcing the practice of cost-effective medicine through clinical practice guidelines, standardised tariff tables, redistributing talent more equitably between the private and public sectors, as well as increasing investment in health education, preventive healthcare and early detection, and clinically proven screening tests.

• Instituting mediation and tort reform to reduce malpractice litigation and damages.

• Re-nationalisation of all restructured hospitals into public, not-for-profit institutions.

• Setting aside a Healthcare Contingency Fund of $20 billion, to be financed from our national reserves and managed conservatively for an average return of 6% per annum, to handle future increases in the healthcare budget.

Conclusion

The SDP National Healthcare Plan is one that emphasises healthcare as a basic human right and a public good that all Singaporeans can access equally. Our proposal is a social insurance–based system with no exclusions and an affordable premium that will be fully subsidised for those who cannot pay. Because it is a single-payer system, audits and formularies can be controlled to ensure that only the best and most effective treatments are provided for Singaporeans rather than unproven and expensive technologies.

We are cognizant that some will question the issue of healthcare as a basic human right. There will be others, including a few healthcare professionals and providers, who may believe we should commodify healthcare and extract profits from needy citizens. In presenting this report, we are of the other view that doctors have a duty to care in a compassionate way for the sick, and that no one should be denied medical care regardless of his or her ability to pay for it.

In sum, the existing private healthcare system which is world-class will be retained and strengthened while the embattled public healthcare system will be supported, improved and strengthened. Elimination of Medisave, MediShield and Medifund will result in considerable administrative savings and ensure that all Singaporeans receive the best healthcare that they need as a basic human right.

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