“Here in Singapore, despite being forced to buy health care insurance, many poor families still [cannot] afford the medical bill.”

Talk of Singapore’s debilitating healthcare costs has once again raised its head after a post about a man’s hospital bill was shared on Facebook.

The man in question was Malaysian Razali Raihayu, who shared that the total bill of his late father's radio-therapy treatment at a Malaysian hospital was more than RM11,000 ($2,550). But he said: "we were so broke that month. [I had] only RM100 in my pocket (and [RM]0 in [the] bank)."

When he later found out that after deducting for subsidies, he only needed to pay a final bill of RM31.80 or less than 0.3 percent of the actual bill, he "cried on the spot, and thank[ed] all the officers there for helping [him]." His post went viral after it was shared by Alzamani Mohammad Idrose, an emergency physician at Hospital Kuala Lumpur in Malaysia

A report from broadsheet The Straits Times fuelled emotions in Singapore – there were more than 2,200 reactions to its post on its Facebook page at the time of writing.

On the post, Dave Tan made the comment highlighted at the start of this article which at the time of writing had the most likes – 167 likes.

Another commenter, Aha Oio, remarked: “Malaysia definitely [has] one of the most people oriented healthcare in the world. Shame on our Singaporean system. First world just [in…] name.” Her comment garnered the second-most likes with 43 likes.

But it is not just the healthcare seekers who are worried. It seems that even the healthcare workers themselves are as well.

At a May Day commemoration event earlier this month, Professor Paul Tambyah, a senior consultant at the National University Hospital (NUH), said: “I can tell you this, even in my own field, the junior doctors tell me this, and I don't know how true it is.

“They say that every time they complain about conditions in a public hospital, they are told, ‘Oh, you know, complain lah, you know we can hire somebody from South or Southeast Asia who is willing to work for $3,000 a month,’” he added.

Tambyah added: “And you know if even doctors are feeling this kind of thing, you can imagine what other professions are facing.”

This resulted in a strident rebuttal from the Senior Minister of State for Health Chee Hong Tat two weeks later.

Chee said that, “it begs the question why Tambyah repeated serious allegations regarding his healthcare sector colleagues when he did not know if these were true.

“Instead of clarifying the facts with the junior doctors or surfacing his concerns to the management, he chose to repeat unsubstantiated allegations at a public conference,” Chee added.

In reply, Tambyah said: “Academics and professionals have a duty to support the ‘system’ when it is doing the right thing and to raise our concerns when it is not, and to do so not just behind closed doors but in the public square.”

Tambyah is a highly respected senior consultant in infectious disease medicine and is a professor at the National University of Singapore.

In return, Chee offered the following clarification: “For the record, the foreign doctors whom Tambyah mentioned are under Temporary Registration, they currently make up less than 4 percent of our doctor population in the public hospitals.”

But social activist filmmaker Martyn See pointed out on Tambyah’s post the contradictions in Chee’s rebuttal.

See dug out a Straits Times article from 2015 which reported, “more than a quarter of the doctors in the public healthcare sector are foreigners,” or about 25 percent.

Chee had said: “foreign doctors […] currently make up less than 4 percent of our doctor population in the public hospitals.”

It was Chee’s word against The Straits Times.

Murky picture

In fact, the statistic that Chee provided was suspect – it was not the full picture.

In January this year, the Minister for Health Gan Kim Yong revealed that, “locals made up about 75 percent of the healthcare workforce in 2015,” which meant that foreigners comprised the other 25 percent.

In March, Senior Minister of State for Health Amy Khor disclosed that, “currently, foreign doctors and nurses make up 16 percent and 33 percent of our total medical and nursing workforce respectively.” For the foreign doctor population, it was even higher in 2012 – between 18 and 19 percent, she added.

(No, you are not seeing double – there is a Minister for Health, a Senior Minister of State for Health, and two Ministers of State for Health in Singapore.)

But opposition parliamentarian and the Worker’s Party Chairperson Sylvia Lim managed to pry deeper and forced Minister Gan into admitting that, as at 31 Dec. 2012, even though foreign nurses made up 26 percent (or around 4,950) at the public healthcare institutions, this was excluding Malaysians, which meant the total foreigner population would constitute a much larger proportion.

Gan added: “While we have expanded local nursing intakes over time, we will continue to need foreign nurses to supplement the local workforce to meet the healthcare needs of Singaporeans.”

So, what was it that Chee said again?

More glaringly, one thing that Chee did not mention was the salaries of doctors – which was Professor Tambyah’s main concern.

Even as Chee claimed that Tambyah was making “serious” and “unsubstantiated allegations,” Chee did not provide any “substantiated” statistics to back himself up either.

A JobStreet study in 2013 helps to shed light on the matter.

It found that in 2013, entry-level doctors earn an average starting pay of S$3,095.

This seems to back what Tambyah said – he suggested that junior doctors were competing against depressed salaries of S$3,000 a month.

As a comparison, the median gross monthly starting salary of all university graduates in full-time permanent employment grew by only S$50 from S$3,000 in 2011 to S$3,050 in 2012, and remained stagnant at S$3,050 in 2013, before growing to S$3,200 in 2014 and then by just another S$100 in 2015 to S$3,300.

The issue could have been easily resolved if Chee had produced statistics on the starting salaries of Singapore’s doctors and its trend over time. One wonders why Chee – who is the Senior Minister of State for Health – did not do so when he could have easily done so, but instead chose to lambast Tambyah with his own accusations.

Where Chee hit out at Tambyah as making “serious” and “unsubstantiated allegations”, and asked Tambyah to “clarify the facts”, the irony is that it should be Chee who should be the one providing the updated figures which his ministry would have.

But it is not just the statistics of the salaries of doctors that is hard-pressed to be found.

Even with basic statistics like that of Singapore’s health expenditure, it took opposition parliamentarians to keep prodding for statistics to be revealed.

In a comment on The Straits Times’ post, Charles Aw had this to say about Malaysia’s health subsidy: “That's what you call medical subsidy. Here in Singapore if the medical cost is $1, you'll be shown a bill for $5 then after subsidy, a final bill of $2.” Aw made the remark in half in jest, but what do the statistics really say?

In 2013, opposition parliamentarian Gerald Giam from The Worker’s Party managed to elicit the statistics from Health Minister Gan Kim Yong the breakdown of Singapore’s total health expenditure.

How it works

Singapore’s health expenditure is broadly made up of government subsidies, and the two medical schemes – Medisave and MediShield Life (previously MediShield). The Ministry of Health (MOH) explained that Medisave is “an individual medical savings account” while MediShield is “a low-cost basic medical insurance scheme”. Both are used mainly to “pay for […] hospitalization bills” and while they can be used for outpatient treatments, the use is restricted. Medisave can only be used for the treatment of 19 chronic conditions, for example.

The main difference that you should know is that MediShield Life is risk-pooled but Medisave is not.

Now, Singaporeans currently have to contribute a whopping 8 to 10.5 percent of their monthly wages into Medisave.

You would imagine that paying a contribution of 8 to 10.5 percent of wages into Medisave would effectively net Singaporeans free healthcare, but this is not the case.

Tambyah and past President Scholar Nigel Fong, took the statistics that Giam managed to pry out and wrote in top medical journal The Lancet that, “the so-called 3Ms (Medisave, Medishield, and Medifund) finance less than 10 percent of the total national health-care expenditure.” (Medifund is an “endowment fund […] to help needy Singaporeans that only covers 0.7 percent of total health expenditure.)

Specifically, the duo calculated that Singaporeans pay 8 to 10.5 percent of their wages into Medisave but of the total health expenditure in Singapore, Medisave only covers for an average of 5.5 percent from 2002 to 2011.

But compare this with what the other countries pay and it will put things into perspective for you.

Very few other countries pay more than Singaporeans do into healthcare, as a percentage of wages – in fact, Singaporeans pay one of the highest proportion of their wages in the world into social security for health (both Medisave and health insurance count as social security). So if you look at the Austrians, they contribute 7.65 percent of their salary into social security for health, and the compulsory health insurance that they pay covers for 45 percent of total health expenditure. Croatians, Estonians, the French, Germans and Slovenians contribute between 13 percent and 15 percent into social security for health but the health insurance that they pay covers for between 66 percent and 78 percent of total health expenditure.

Singaporeans pay 8 to 10.5 percent into Medisave but get back only a paltry 5.5 percent of total health expenditure.

(Another way to look at it is in Finland, where compulsory health insurance only covers for 13 percent of total health expenditure in Finland, and therefore citizens need only pay 2.94 percent into social security for health. And since Medisave only covers for 5.5 percent of total health expenditure, this means that Singaporeans should only need to pay less than half of what the Finnish citizens pay to obtain the same level of coverage – Singaporeans should only need to pay less than 1.5 percent of their wages into Medisave (if risk-pooled), and not 8 to 10.5 percent.)

As such, using these other countries as a benchmark, Singapore’s Medisave should be able to fund at least half of total health expenditure if risk-pooled, and not just 5.5 percent.

Instead, Singaporeans have to pay extra – by paying out-of-pocket to fund this more-than-half of total health expenditure – 55 percent in 2014 to be exact, according to the World Health Organisation.

But this puts Singapore on par with developing countries such as Pakistan, Egypt, Niger, Eritea, and South Sudan, where their out-of-pocket expenditure constitutes 54 to 56 percent of total health expenditure. Again, in few countries do citizens have to pay more than 50 percent out-of-pocket for health expenditure.

Over-paying

Compared to the other high-income countries, Singaporeans are over-paying in terms of out-of-pocket expenditure for health. The average in these countries was only 21.2 percent in 2014. Singapore’s was 55 percent.

So, the first point you need to know is that, in countries where citizens pay between 7 to 15 percent of their wages into social security for health, what they pay covers for 45 to 80 percent of the country's total health expenditure. But in Singapore, Singaporeans pay a similar 8 to 10.5 percent of their wages into Medisave but it only pays for 5.5 percent of total health expenditure. But when taking the other countries as benchmark, Singaporeans' Medisave should be risk-pooled and should instead pay for more than 50 percent of total health expenditure.

Granted that there are some who point to how Medisave is a medical savings account (MSA) and is not a public health insurance scheme, but Singapore is the only country in the world which has implemented a nationwide MSA (Medisave) scheme. No other country has deemed it fit to introduce a similar scheme on a national level. There are small-scale city-level schemes in China and MSAs in America and South Africa are operated privately on an opt-in basis. But MSAs are problematic.

A World Health Organisation (WHO) discussion paper wrote as far back as 2002 that, “there is no clear evidence that Medisave has significantly reduced consumer moral hazard and thereby contributed to containing costs.” In fact, “Singapore's health spending continued to grow after the adoption of the MSA system.”

A 2010 WHO report followed up with an analysis by explaining that, “MSAs may actually be widening rather than filling the coverage gap.” The report goes on to say how, “there appears to be an erosion of solidarity as one proceeds from social health insurance to private health insurance to MSAs.” A study published by the LSE Research Online last year also concluded that, “country experiences with MSAs indicate the schemes have generally been inefficient and inequitable and have not provided adequate financial protection.”

The study surmised that, “the lack of interpersonal risk pooling in MSAs is a key limitation.” WHO made a similar conclusion in its 2010 report: “eliminating risk pooling in favour of individual inter-temporal pooling raises issues to policy-makers of trading equity for efficiency.” Moreover, WHO opined: “But is it efficient? Time-pooling fails in situations where individuals do not require healthcare where individuals suffer from chronic conditions and are unable to adequately access healthcare.” This is what a World Bank publication which compiled the proceedings of a World Bank Conference in 1997, said as well, that "having households pay more out of pocket at the point of service could raise already high barriers for low-income families to fully participate in the health care delivery system,” as the Singapore healthcare system has shown.

In short, the main and critical problem is that Medisave, as a MSA, does not have a risk-pooling mechanism and therefore exacerbates inequality. Where healthcare costs are constant regardless of the salary of a patient, but where the adequacy of Medisave contributions for healthcare payments is dependent on the salary of the worker, Medisave is by design regressive and would mean that low- and middle-income earners lose out, as their Medisave savings would be sapped away faster, by virtue of them earning lower wages and therefore having lesser Medisave contributions that can be used.

The fundamental problem with Medisave is that it is not a health insurance scheme when it should be one – the question you have to ask is, why the Singapore government chose to introduce a MSA which no other country in the world has seen it appropriate to implement a similar MSA system on a national level, even though Medisave has been rolled out since 1984 (for more than 30 years), and why Singapore chose to structure the Medisave in a similar way to the Central Provident Fund (CPF) pension system, and to also park it under the CPF such that even as Singaporeans today feel that their CPF pension monies are stuck inside the CPF, so has their Medisave monies, as you would see later. But Singapore's first Deputy Prime Minister Toh Chin Chye tried to warn Singaporeans in parliament in 1983. His warning was not heeded. (It is a common refrain by Singaporeans that their CPF pension monies are “stuck” inside the system and has been extorted from them by the government.)

From the end-user perspective, regardless of the definitions between a medical savings account and health insurance scheme, the very fact of the matter is that when workers pay a certain proportion of their wages into social security for health, they would expect adequate coverage, but where the Medisave deprive Singaporeans of this, because of the inequitable wages in Singapore and a lack of risk-pooling, the huge surplus that Medisave accumulates therefore incurs others costs for the end-user – as you would see later.

As Tambyah and Fong also said, “Singapore’s health system uses co-payments. This promotes individual responsibility, but, because there are no limits on co-payments, many Singaporeans are worried about catastrophic expenditures, despite the existence of a safety net (Medifund) for the poorest individuals.”

Moreover, the reason why the co-payments (or what you have to pay by yourself) have no limits is because there is instead a limit as to how much Singaporeans are able to withdraw from their Medisave accounts – not being able to withdraw enough Medisave mean Singaporeans have to pay high co-payments by themselves. According to the MOH, the claim limit for medical / surgical inpatient cases is only S$450 per day, and for outpatient treatments and other health screenings and vaccinations, the claim limit is S$400 for the whole year, and there is a restricted list of these health services that can be assessed by Medisave. Not only that, there are claim limits for MediShield Life as well, and these claims can only be made after Medisave or cash have been deducted for co-insurance. Claim limits for MediShield Life are S$700 per day for the charges at a normal hospital ward and S$200 to S$2,000 for surgical procedures.

In comparison, in all the other Asian Tigers (Hong Kong, South Korea and Taiwan) and Japan, their governments do not put a limit on what the citizens can claim but instead help to relieve their citizens’ burden by putting a limit as to how much they need to pay for their healthcare bills instead.

On top of that, if Singaporeans run out of Medisave, Health Minister Gan said that “they can use the Medisave of their family members to pay”, meaning for low-income families, the healthcare burden can potentially wipe out the entire Medisave savings of the family, leaving them vulnerable to catastrophic expenditures.

The defense

There might be some who might will themselves to insist on defending the Medisave, by claiming that Medisave is a “personal healthcare savings account” and is therefore money that belongs to individuals, and how they want to use it. First, this is patently false because there is a restriction as to how much Singaporeans can withdraw from Medisave. In fact, in 2012, 3 percent of subsidised patients had already used up the annual $400 limit that they are allowed to withdraw from their Medisave accounts for outpatient care, and by 2014, it increased to 5 percent who have used up the limit, or about 10,000 patients (out of 200,000 patients). There are no corresponding statistics on this for outpatient treatment. Second, Singaporeans can only withdraw any unused Medisave savings when they die. However, of Singaporean CPF holders aged 65 or older who passed on in 2012, half of them only had about $2,700 or less. And in fact, one-third of them had less than S$1,000 inside their Medisave. In other words, these “savings” that they have, there was not much left – which begs the question why Singaporeans have so little savings inside their Medisave after they die, when Medisave has an estimated 98 percent in surplus.

As both WHO and World Bank had said, Medisave as a MSA is a flawed medical scheme because the “barriers [are high] for low-income families to be able to fully meet their healthcare needs, and preventing Medisave from being risk-pooled means that Singaporeans are “unable to adequately access healthcare”.

In any case, in a paper from the Lee Kuan Yew School of Public Policy, Medisave is categorized as a social insurance scheme in the school’s comparison with the other Asian Tigers and Japan. “It carries Lee Kuan Yew’s name,” so it cannot be that bad, right – if you know what I mean?

Costs are so high that it was found that in 2012, from Giam’s prodding of the government, that over 2,400 MediShield policyholders paid over $10,000 each by themselves for their hospital bills co-payments.” In fact, when Giam followed up on the question in 2013, it was found that this number has been increasing over the years. In 2010, 1,800 policyholders had to pay more than S$10,000 in co-payments. But this increased to 2,200 in 2011 and by 2012, it has increased to 2,400. Not only that, there were 5,100 policyholders who had to pay more than $6,000.

But Medisave and MediShield have huge surpluses – there is no reason why Singaporeans have to pay such high co-payments.

By 2015, the Medisave has accumulated S$75.9 billion in balance from the wage contributions of Singaporeans but when you look at how much Singaporeans were able to withdraw, Singaporeans were only able to withdraw a minuscule S$905 million in 2015, or only 1.2 percent of the total balance.

The other more than 98 percent of Medisave’s balance has not been disbursed for healthcare.

Another missing statistic that the Singapore government does not provide complete information on is how much Singaporeans pay into Medisave on an annual basis.

If we were to do some simple calculations – Singaporeans pay a minimum of 8 percent (and up to 10.5 percent) of their wages into Medisave. Medisave is paid as part of the contributions that Singaporeans pay into their Central Provident Fund (CPF) public pension fund – Singaporeans pay 37 percent of their wages into CPF. In 2016, Singaporeans contributed S$35.8 billion into the CPF. Estimating based on the baseline of 8 percent (out of 37 percent) contributions into Medisave, Singaporeans would have paid at least S$7.8 billion into Medisave. Where Medisave contributions starts increasing to 9 percent for workers aged 35 to 45 years old, and to 10 percent for workers aged 45 to 50, and 10.5 percent for workers above 50, and where 69.7 percent of the labor force were aged above 35 in 2016, a proportionate estimation could put Singaporeans’ Medisave contributions in 2016 at more than S$9 billion (which when comparing with the annual Medisave withdrawals of S$905 million, would mean that only 10 percent of Singaporeans’ annual contributions are withdrawn by Singaporeans for healthcare while the rest or 90 percent go into the Medisave balance, and is not used for healthcare.).

Now, compare this with what Singaporeans pay out-of-pocket – according to the World Health Organisation, Singaporeans paid US$8.3 billion (S$11.6 billion).

If it is not immediately apparent, this is what it means: what Singaporeans pay into Medisave on an annual basis is almost equivalent to what they pay into out-of-pocket expenditure. So, here’s the thing, what Singaporeans pay into Medisave in total is enough to pay for more than 50 percent of the total health expenditure if risk-pooled (but it only pays for 5.5 percent). And expenditure that Singaporeans pay out-of-pocket therefore have to make up for 55 percent of the total expenditure, so putting two and two together, Singaporeans should not actually have to pay any out-of-pocket expenditure as Medisave should have been adequate to cover for the spending shortfall when risk-pooled, using other similar countries as benchmark.

In other words, Singaporeans are paying about twice as much as what they need to pay for healthcare every year in total (or possibly more when taking into account what they pay into taxes and private health insurance). With what Singaporeans already pay into Medisave (and MediShield), they should be able to receive what is considered as free healthcare in other countries.

Comparisons

What makes it more difficult to stomach is that the out-of-pocket expenditure per capita that Singaporeans pay, at US$2,219 is actually the highest in the world, on a purchasing power parity basis. Switzerland is second at US$1,734, and the United States is ranked a distant third, at US$1,039. For those who champion Singapore's healthcare model as one that America should follow, this is the statistic that they should take note of. No, Singapore has not been able to keep costs low. The cost burden has instead been transferred from the government to Singaporeans, and cost duplication has been exacted on the citizens.

Where in 1984, “then Deputy Prime Minister Goh Chok Tong promised that Singaporeans would achieve a "Swiss standard of living" by 1999,” as The Straits Times reported, this is perhaps the closest that Singaporeans can get to the “Swiss standard” – the high costs. Singapore has moreover been ranked the most expensive city in the world for the fourth year in a row now by The Economist. But the difference is that, in Switzerland, they have higher wages.

Where Singaporeans would be paying enough into Medisave to cover for the out-of-pocket expenditure, when including for interest earned – again, there are no public statistics on this, then the estimated 90 percent of Medisave contributions that is not used for healthcare each year is surplus money kept by the government.

When you look at MediShield, it was found that from 2005 to 2012, a total of S$2.5 billion was collected in MediShield premiums but only S$1.6 billion million in claims were paid. Minister Gan also admitted that, “between 2005 and 2012, on average, about 65 percent of the MediShield Fund comprised reserves,” or money that remains inside MediShield but is not withdrawn to pay for healthcare. This means that on average Singaporeans were able to claim only 35 percent for healthcare purposes.

As a comparison, the Belgians are able to claim 69 percent of the premiums they paid. And in Finland, France, Portugal and Slovenia, citizens are able to claim 78 percent to 87 percent. In the Netherlands, claims are as high as 96 percent. Their government only keeps 4 percent. In Singapore, the government keeps 65 percent.

But Minister Gan said: “MediShield operates on a not-for-profit basis.”

Funnily, Minister Gan also said that, “our public healthcare institutions are not-for-profit organizations. While the drug prices include a margin, this is to offset overheads and operation costs. Therefore they are not profit margins, they are just margins to cover part of the operation costs”

But opposition parliamentarian Giam tore his claim apart: “The minister finally acknowledges, after questioning by Mr Low Thia Khiang [Worker’s Party Secretary-General], that public hospitals do indeed make money from selling drugs to patients. (This is couched in confusing economic lingo - as non-profit organizations, there will never be a "profit margin" line item in their books.)”

Giam opined: “while Singaporeans may have grown to accept that cost recovery is necessary for sustainability, are we prepared to let hospitals "make a margin" at the expense of low-income patients?

So, the second point you need to know is that, in some other high-income countries, of the health premiums that their governments collect, they return 69 to 96 percent in health expenditure back to its citizens. Their governments keep only 4 to 31 percent. In Singapore, the government instead keeps an average of 65 percent in MediShield. It returns only an average of 35 percent to Singaporeans for their healthcare. For Medisave, the government does not risk-pool it and returns only about 10 percent. It keeps an estimated 90 percent as surplus.

In other words, it can be argued that the Singapore government is profiting very heavily from Singaporeans’ payments into healthcare.

The Medisave and MediShield Life, which are part of the CPF, are funneled into one of Singapore’s two investment firms – GIC – for investment. The GIC today ranks as the 8th largest sovereign wealth funds in the world.

However, where Medisave collects one of the world’s highest social security contributions for healthcare, it gives back the lowest comparative returns in terms of healthcare expenditure, and where Singaporeans therefore have to pay the highest out-of-pocket expenditure in the world, to cover for the shortfall. The 90 percent of unused contributions that go into the Medisave balance is comingled with other government revenue, and which go to the GIC.

Singapore’s unique healthcare financing scheme has, therefore, resulted in an exorbitant healthcare cost burden that its citizens have to shoulder.

And this has led to headline stories in the national newspapers that talk about how “some kidney patients refuse treatment and choose to die […] because they cannot afford it,” in The Straits Times, and where because, “the elderly poor are prioritising their basic needs over their health [and…] can’t even afford three meals a day,” that Singapore's elderly poor are “lonely and 'waiting to die'”, as Singapore’s cable television news Channel NewsAsia reported. Singapore’s hospital might look modern and futuristic but many of its citizens might be unable to afford using any of them.

'Can see but cannot touch'

In Singapore’s vernacular speak, Singapore’s healthcare facilities “can see but cannot touch”.

What compounds the issue is that on top of Singapore’s high healthcare costs, its citizens also earn comparatively low wages.

Singapore’s current GDP per capita puts it at one of the highest in the world, if not the highest, but 8 percent of its residents still earn below S$1,000 (EUR 650) a month.

As Tambyah also noted, Singapore does not have minimum wage – and it is one of very few countries in the world not to have one.

As such, this means that there are 8 percent of Singapore residents who earn even lesser than the minimum wages of Spain (EUR 708 a month) and Slovenia (EUR 805), and which puts Singapore on par with Greece (EUR 664). In comparison, other high-income countries have minimum wages two to three times higher than what low-income Singapore residents earn – in Luxembourg, minimum wage is EUR 2,308, it is EUR 1,578 in Belgium, EUR 1,531 in The Netherlands, EUR 1,498 in Germany and EUR 1,467 France. Yet on a per capita basis, Singapore’s GDP per capita is higher than all of them, which makes it very clear why Singapore has the highest income inequality and rich-poor gap among the developed countries.

In fact, where 39 percent of Singapore residents earn lower than S$2,500 (EUR 1,613), this means that close to 40 percent of Singapore residents earn less than or just about the minimum wages of these other high-income countries. Or if you look at the 50 percent of Singapore residents who earn less than S$3,500 (EUR 2,260), they are earning less than the minimum wage in Luxembourg, and the minimum rate in the construction industry in other high-income countries like Norway (EUR 3,027), Sweden (EUR 2,622) and Denmark (EUR 2,425). Australia’s minimum wage is around S$3,000. And for Singaporeans' personal favorite – in Switzerland, the “minimum wages in various low-pay sectors were […] 3,000 francs (S$4,255) – and more than 60.9 percent of Singapore residents earn lower than S$4,000. You would remember that Singaporeans pay the highest out-of-pocket expenditure for health in the world, on a purchasing power parity basis while Switzerland comes second – the wage disparity between the two is massive.

When comparing how Singaporeans earn such comparative low wages but pay the highest per capita out-of-pocket expenditure for health and also one of the highest social security contributions for health in the world whilst not receiving the commensurate returns – and noting that Singapore is the most expensive city in the world for the fourth year running, it is not difficult to see how harsh lives can be for a significant segment of the population.

Where are the all the doctors?

While the profiting of Medisave is a large part of the story, still it is not the only part.

Singapore has one of the lowest physician density among the developed countries, or one of the lowest number of physicians per 10,000 population and training to become a physician is also expensive in Singapore – Singapore ranks among the top 10 most expensive countries in the world to obtain a university education.

But where Singaporeans pay the highest out-of-pocket expenditure for health, it begs the question why they are not able to receive the corresponding returns on their payments back – why are there not more medical resources?

Moreover, even as there could be an estimated 90 percent in unused Medisave contributions every year that is not spent on healthcare, the government would strangely introduce other subsidiary schemes to subsidize the healthcare needs of low-income Singaporeans. These amounts, as well, are paltry.

In 2015, Medifund (which as mentioned is provided for “needy” Singaporeans) only disbursed S$155.2 million, of which the average assistance provided was only $1,529 per inpatient treatment and $77 per outpatient treatment. As such, Tambyah and Fong calculated, Medifund payouts only accounts for 0.7 percent of total health expenditure.

Another fund, the Community Health Assist Scheme (CHAS) which is meant to allow “lower- to-middle income households to receive subsidies for medical and dental care” only disbursed S$169 million to 685,000 Singaporeans last year, which amounts to only S$247 per person. At slightly higher an amount than what was disbursed by the Medifund, the CHAS payouts would barely make 1 percent of total health expenditure as well.

But with “about 1.3 million Singaporeans [who] are eligible for CHAS,” this makes up 38 percent of the population which have to rely on these subsidies. You would be reminded that 39 percent of Singaporeans earn lower than or about that of the minimum wage of other high-income countries.

In fact, when you add what Singaporeans pay into Medisave and out-of-pocket expenditure in a year, what Singaporeans pay in total is just about how much the total health expenditure in the country is, which makes you wonder if the 'subsidies' that the government provides are actually subsidies at all.

As social commenter and past president of Singapore’s Society of Financial Service Professionals Leong Sze Hian wrote on his blog, “from a cashflow perspective – does it mean that the Government may still not be spending a single cent on healthcare.” But he uses a different calculation to explain this point.

Moreover, it is important to note that on top of paying one of the highest social security contributions for health in the world, and the highest out-of-pocket health expenditure in the world, this is still not enough for Singaporeans to pay for their hospital bills, and they therefore have to buy private insurance (Integrated Shield Plans). But 40 percent of Singapore residents do not buy private insurance, possibly also due to inadequate wages. Also, where Pacific Prime has ranked Singapore as having the 5th most expensive health insurance of 94 countries in the world for expats, it provides a gauge as to how expensive private insurance in Singapore is – on the whole, Singaporeans are paying for one of the world's highest social security contribution, private health insurance and out-of-pocket expenditure for health, on a per capita basis, while earning comparatively lower wages than other high-income countries.

Logically speaking though, where citizens pay for high social security contributions for health out of their wages, they therefore pay low out-of-pocket expenditure for health, as the examples of Austria, Croatia, Estonia, France, Germany and Slovenia, has shown, and vice versa. But in Singapore, the financing system flies in the face of such logic – citizens pay both high social security contributions and high out-of-pocket expenditure, in effect paying twice as much as necessary. You really can't beat that.

Indeed, the paper from the Lee Kuan Yew School of Public Policy also showed that, “the lower out-of-pocket payments in the other developed Asian economies are the result of the introduction of more universal health insurance (UHI). Though co-payments also feature in these UHI systems, out-of-pocket amounts are capped for insured services, reducing the patient’s exposure to the risk of unpredictably high out-of-pocket payments.”

But in Singapore’s case, “as a result of cost and risk-shifting policies, the Singapore government’s share of total health expenditure fell from 50 percent in 1965 to about 39 percent in 2012.”

The need for reform

So, the third point you need to know is that, in other countries where citizens pay a high proportion of their wages into social security for health (such as from 7 to 15 percent in the countries listed above), they only need pay low out-of-pocket expenditure for health (7 to 23 percent). However, in Singapore, Singaporeans contribute a high 8 to 10.5 percent to Medisave, but they still have to pay a very high 55 percent of total health expenditure. Singaporeans are paying both very high contributions for social security for health and very high out-of-pocket health expenditure – one of the world's highest – when they should only need pay a high amount for either one of them, and not both.

But all these create a very perplexing health financing system in Singapore where citizens pay enough annually into a social security (Medisave) which should be able to cover for more than 50 percent of the nation’s total health expenditure if risk-pooled but which the government restricts its use for healthcare and make Singaporeans pay out-of-pocket to supplement the shortfall instead, and yet where there could be an estimated 90 percent in surplus every year from the Medisave contributions which could be used to pay for the medical needs of Singaporeans, the government instead introduced other schemes (Medifund and CHAS), which pay miserly amounts anyway, and where the government then funnels the Medisave surplus into one of its investment firms – which the Singapore Prime Minister Lee chairs – which has become one of the largest sovereign wealth funds in the world, but where a segment of Singaporeans still cannot afford healthcare – with more than 30 to 60 percent earning lower wages than the minimum wage of other high-income countries – and where Singaporeans have to pay the highest out-of-pocket expenditure for health, on a purchasing power parity basis, all these becomes a convoluted mess which probably only the planners at the very top understand but which the population becomes ignorant to.

All these make for a very elaborately and purposively-planned system which the Singapore government clearly profits from but which a huge swath of the population is languishing, with some missing out on their healthcare needs.

But the healthcare proposal from the Singapore Democratic Party (SDP), which Tambyah stood in the last election with, proposed to change that – to streamline the healthcare schemes into one, by “do[ing] away with the “3M” system (Medisave, Medifund and Medishield) and pay for all health-care expenses through a single pool of funds.”

The SDP proposed that Singaporeans “will pay an average of $400” to this single pool, which it said would be a “fraction of what we currently pay into our Medisave accounts,” and where “individuals who earn less than $800 a month, are unemployed or on social welfare will not be required to contribute.”

Instead of the current cap on how much Singaporeans can withdraw from Medisave and MediShield, the SDP proposed that it is the hospital bill that should be capped – at S$2,000 per year, which would put Singapore in line with best practices in the other developed countries.

“Low-income, unemployed or welfare recipients will not have to make payment,” the SDP said.

To this end, the SDP explained: “currently, poorer segments of society do not get proper medical treatment because they cannot afford it. […] The present profit-oriented system treats the sick like customers. But when we fall ill, we should not have to live in fear that treatment is going to ruin us financially. The present profit-oriented system treats the sick like customers.”

But “health care is a human need, not a commodity to be traded; the rich should not be able to buy immediate and better treatment while the poor have to wait months on end to receive basic medical care,” the SDP said.

Indeed, when Tambyah was interviewed by The Straits Times when he ran in Singapore’s general election in 2015, he was reported as saying that, “he believes strongly that access to healthcare is a basic human right, and that it is a shame to have healthcare treated like a commodity, with some treatments available only to those who can afford them.”

Singapore’s healthcare system has become unnecessarily complicated but it can be reformed to provide more equitable healthcare and give its citizens peace of mind, but if not for a lack of political will that seems to resist change, even if such change would be for the betterment of its citizens.

Perhaps former Deputy Prime Minister Toh Chin Chye had the foresight to recognize what would become of Singapore’s healthcare system. Toh was also the former chairman of the current ruling People’s Action Party which has held its grip on power for nearly 60 years. When the then-government introduced the Medisave scheme in 1983 after Toh stepped down as the deputy, he said in parliament: “The propaganda put out by the two Ministers for Health is that medicine is a commodity that is consumed. I think it is a very dangerous assumption to believe that persons love to fall ill, that they go around shopping for sicknesses in the supermarkets, or that they like to spend their weekend in a hospital as if the hospital is a hotel. Or that the food served in the hospital is a la carte or buffet. That is perverse propaganda.

“And, therefore, Medisave is now being treated as a consumption tax. This makes it difficult for one to support the arguments that have been put forward for Medisave,” he added.

“This [Medisave] Scheme,” Toh said, “it is a taxation, and it is a recessive tax for the simple reason that those who are at the lower income level, because their CPF contributions are lower, will have to pay the full amount, whereas those with higher incomes do not pay the full percentage of their income towards the CPF because there is a ceiling. It is recessive. I feel that all this is a very short-sighted myopic view. As payroll costs rise, so also prices must increase. And this will have an escalating effect on the cost of living and demand for more wages, and more contribution to CPF.

But Toh did not mince his words. He did not hold back: “has the Minister for Health, who was in the Ministry of Trade and Industry, who was in cahoots with the Minister for Finance, taken the trouble to investigate how he is going to get the money to run his Ministry? The first responsibility of the Minister for Health is to ensure the availability of health care services. That is his first responsibility, that he must go round and nag at the Minister for Finance for the money. But he is taking on the job of the Minister for Finance.

“I totally disagree with the approach of Medisave,” Toh said.

But Toh added, “as a former Minister for Health, I share with these two Ministers for Health their concern for preserving the existing standard of health care; preserving - I am not saying improving, the emphasis is "preserving".”

Toh was the Minister for Health from 1975 to 1981. Medisave was introduced in 1983 – after Singapore’s first Prime Minister Lee Kuan Yew, and father of current the Prime Minister, asked Toh to step down.

In the book, "Singapore Politics Under the People's Action Party," it was said that, "Lee Kuan Yew writes that he left Toh out of the Cabinet ‘as a clear signal’ to the old guard that renewal was irreversible."

The book added: “Toh stayed on in Parliament as a backbencher, mainly because he might have run as a formidable independent in 1980 and 1984 if the party had tried to remove him.” The electoral boundaries were redrawn in 1988 and Toh's “long-held constituency” was taken from him.

As has health been taken from Singaporeans.

Editor: Edward White