Parliament: Difficult to create single formula for MediShield Life premium hikes, says Koh Poh Koon

SINGAPORE – While having a single formula to justify increases in Medishield Life premiums is ideal, creating one that can account for the various factors of healthcare inflation is very difficult, said Senior Minister of State for Health Koh Poh Koon.

He was responding to Ms Foo Mee Har (West Coast GRC), who asked if the Health Ministry could develop a transparent framework for MediShield Life premium hikes, similar to the Public Transport Council’s fare adjustment formula for transport fare hikes.

Dr Koh, a colorectal surgeon by training, on Monday (Nov 2) noted the difficulty of predicting what kinds of technologies will drive clinical practice in the future.

He cited how a patient with a head injury would be sent for an X-ray that would cost $15 to $20 in earlier years. However, an X-ray would not indicate if the patient had bleeding in the brain or traumatic soft tissue injury.

Today, it is “almost unthinkable” for a patient with serious head injury to not have a CT scan, he said, adding however that this scan costs hundreds of dollars – a multiple-fold increase in cost compared to X-rays.

The extent to which new medical technologies are used, how pervasive they are and how much they will cost also depend on clinical guidelines as well, he noted.

“As opposed to a transport fare formula, where the parameters and the variables are a little bit more fixed and more predictable, healthcare inflation takes into account many unforeseen kinds of variables that will come along the way,” he said.

Dr Koh added that the magnitude of inflation in healthcare costs cannot be predicted ahead of time. It is also difficult for a single formula to factor in the prevalence of a disease that requires various treatments, he said.

Several other MPs also asked Dr Koh questions about the universal medical insurance scheme, including Workers’ Party MP Gerald Giam (Aljunied GRC), Mr Liang Eng Hwa (Bukit Panjang), Mr Yip Hon Weng (Yio Chu Kang) and Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai.

Mr Giam and Mr Leong asked if the full MediShield Life actuarial report could be made publicly available so independent actuaries can analyse it. Mr Giam also asked if the Government had studied how other countries release such reports for their national health insurance schemes.

Dr Koh said the premium adjustments are proposed and calculated by external actuaries who are independent of the Government.

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The size of the funds collected and paid out are also externally audited and the findings are reported in Parliament annually, he added.

“Over time, we could perhaps engage different consultants to take a look, to challenge the assumptions, to do another calculation at an appropriate time to make sure that we are still on track,” said Dr Koh, noting that the MediShield Life scheme was launched in 2015 and is still new.

“We can also speak to the consultants and see if they are able to publish some of this data in an academic way, but this will not be something that most lay people will understand.”

Mr Liang asked if revised MediShield Life premiums are affordable for lower income groups and how they compare with that of other countries with similar schemes.

In response, Dr Koh cited Hong Kong’s government-backed Voluntary Health Insurance Scheme and said the revised MediShield Life premiums are 76 per cent lower on average, across all age bands.

“Even before subsidies, our premiums for universal coverage – all conditions, for life, no exclusion – is already much cheaper than the one that Hong Kong has,” said Dr Koh.

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He added that MediShield Life is also virtually free for Singaporeans aged 90 and above, who enjoy additional subsidies and Medisave top-ups which can be used to pay the premiums as members of the Pioneer Generation.

Responding to Mr Yip on how the Health Ministry plans to promote awareness of such subsidies, Dr Koh said all MPs should help to communicate information about MediShield Life to their residents.

He said the ministry will also engage the public with case illustrations and through the media.

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