Singapore Plans to Expand Private Hospital Charge Benchmarking

Singapore’s Ministry of Health (MOH) aims to strengthen the regulation of private hospital charges by expanding its benchmarking efforts beyond professional fees. Health Minister Ong Ye Kung announced this initiative during a recent episode of the CNA’s Deep Dive podcast, released on October 17, 2023. The goal is to guide pricing and mitigate the risk of inflated medical bills. According to Minister Ong, benchmarking surgeon fees has already shown effectiveness, as most fall within the established range.

The expansion, however, faces delays due to the extensive work involved in data collection and consultations. “Every benchmarking exercise is a lot of consultation, a lot of data collection, a lot of communication,” Ong stated. He acknowledged that while it may take a couple of years, introducing more benchmarks for other costs—such as consumables like hospital gowns—is a priority for the MOH.

Earlier this year, in July, Minister Ong indicated that the MOH was exploring the possibility of extending its benchmarking framework. This was highlighted in the context of insurer Great Eastern‘s suspension of pre-authorization certificates for admissions to Mount Elizabeth hospitals. Great Eastern explained that this move was part of ongoing efforts to manage rising healthcare costs and ensure affordability for policyholders. The insurer noted that certain private hospitals have been charging significantly higher rates for similar treatments.

Since 2018, the MOH has published over 2,800 doctor fee benchmarks that healthcare providers and insurers reference for fee setting and reimbursement reviews. As a result, the percentage of cases falling within these benchmarks has increased from 80 percent to 90 percent. Moreover, the average annual growth in private surgeon fees has moderated significantly, decreasing from 3 percent between 2010 and 2018 to just 0.4 percent from 2019 to 2023.

Despite these improvements, Ong cautioned that benchmarks might not be sufficient to resolve the complexities of the healthcare market. He expressed concern that regulating one area could lead to cost increases in others. “You regulate here, the cost pops up somewhere else,” he remarked, emphasizing the need to address underlying market distortions.

Ong pointed out that while insurance riders are designed to provide consumers with peace of mind, they often result in higher claims, subsequently driving up premiums. He noted that this pursuit of absolute peace of mind has become increasingly expensive, making it essential for consumers to understand their healthcare needs and the associated costs.

Minister of State for Health Rahayu Mahzam also contributed to the discourse on healthcare insurance last month, noting that further regulation could worsen trends such as escalating costs and premiums. She clarified that the current unsustainable state of private healthcare insurance is not due to collusion or anti-competitive behavior but rather excessive competition leading to market failures.

On the podcast, Ong reiterated the government’s commitment to easing the complexities between policyholders, insurers, doctors, and hospitals. He stated that while the government would implement policies to expand the healthcare system, individuals and families also play a critical role in maintaining their health. “We all still have very bad health habits,” he said, advocating for basic health practices like regular screenings.

In concluding his remarks, Ong highlighted that while the government provides a safety net through public health subsidies and insurance schemes like MediShield Life, the most effective safety net is simply staying healthy. He emphasized that investing in health early on can yield substantial benefits later in life, encouraging people to seek financial advice tailored to their specific healthcare needs.