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Cablegate: Singapore's Healthcare System: Addressing Costs and Care

VZCZCXRO9952
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0965/01 2750959
ZNR UUUUU ZZH
R 020959Z OCT 09
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 7281
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUEHPH/CDC ATLANTA GA
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAUSA/DEPT OF HHS WASHDC

UNCLAS SECTION 01 OF 03 SINGAPORE 000965

SENSITIVE
SIPDIS

STATE FOR OES/IHB
DHHS FOR OGHA
EAP/MTS - MCOPPOLA
BANGKOK FOR REO HOWARD

E.O. 12958: N/A
TAGS: TBIO SOCI ECON SN

SUBJECT: SINGAPORE'S HEALTHCARE SYSTEM: ADDRESSING COSTS AND CARE

REF: A) 09 SINGAPORE 018
B) 07 SINGAPORE 1844
C) 07 SINGAPORE 371

1. (SBU) SUMMARY: Singapore's first graduate medical school, a
partnership between Duke University and the National University of
Singapore (NUS), opened September 29. The physicians it graduates
will increase Singapore's pool of new doctors and help the island
address increased healthcare demands from an ageing population.
Singapore, like the United States, is concerned about managing the
rising costs of health care, but Singapore's health expenditure as a
proportion of gross domestic product (GDP) remains a fraction of
U.S. healthcare costs, and data show that Singaporeans enjoy longer
life expectancy and lower infant mortality than Americans.
Healthcare contacts credit lifestyle, competition between public and
private health providers, and lower legal fees as key contributors
to Singapore's lower healthcare burden. Singapore is positioning
itself as a medical travel destination while local healthcare
entities are expanding globally. End Summary.

Medical School Opens; Doctors Wanted
------------------------------------

2. (SBU) Singapore's first dedicated graduate medical school, a
partnership between Duke University and the National University of
Singapore (NUS), opened September 29. At the opening ceremony,
Prime Minister Lee Hsien Loong noted that the school, which will
train researchers and medical practitioners, will be an important
step in Singapore's efforts to advance its healthcare system.
Singapore, with a birth rate of only 1.28 and a relatively high
median age of 39 years, must address rising healthcare costs and an
ageing population. Duke-NUS anticipates graduating 50 doctors a
year, increasing the annual pool of new doctors to 350, which will
help Singapore address future healthcare needs. PM Lee indicated
that the GOS will also consider other options to further add to the
number of local doctors.

3. (SBU) Strict rules govern who can practice medicine in
Singapore. New graduates must work in public hospitals when they
begin their careers and new graduates may be subject to a five or
eight-year bond, depending on whether they studied on scholarship,
Dr. Jason CH Yap, Director of Marketing at Raffles Hospital, told
Econoff. Foreign doctors with work experience abroad must complete
a three-year term at a local public hospital before they can go into
private practice, Yap continued. This limits the private sector's
ability to recruit foreign physicians and limits options for medical
professionals living in Singapore temporarily (e.g., qualified
spouses of executives assigned to Singapore for two years cannot
work here).

4. (SBU) Physicians are groomed in the public health system but
usually move to the private sector later in their careers. Doctors
at public hospitals advance quickly and heads of departments can be
in their late 30's. They are allowed to stay in such positions six
to nine years and then must rotate out, Dr. Goh Jin Hian, Group
Senior Vice President for Growth, Innovation and Strategy at private
hospital operator Parkway Health, told Econoff. At that point, most
physicians choose to go into private practice, Goh said. As a
result, there is room for younger physicians to rise through the
ranks, while the private sector often has the most experienced
physicians, he added. However, this rigid system keeps the overall
pool of practicing physicians relatively low.

No Universal Coverage, but Forced Savings
-----------------------------------------

5. (U) Singapore does not offer universal health coverage per se,
rather it makes saving for expenses like retirement and health care
compulsory for individuals. The government administers three
programs to help cover the health costs of its population:
Medisave, Medishield, and Medifund. Medisave was established in
1984 as a mandatory savings program for individuals to meet costs
associated with hospitalization, outpatient surgery and certain
other outpatient expenses. The savings requirement is between 6.5
and 9 percent, depending on age; people 35 or younger must save 6.5
percent of their income, 35 to 45 year-olds 7.5 percent, 45 to 50
year-olds must save 8.5 percent, while those 60 and above must save
9 percent. Employers must also contribute to their employees'
Medisave accounts. Medisave was recently expanded to allow patients
to draw on accounts to cover outpatient services for diabetes,
hypertension, hyperlipidemia, and stroke. For those chronic
conditions, the maximum amount that can be drawn from a Medisave
account is S$300 (US$214) per year but patients can augment that

SINGAPORE 00000965 002 OF 003


with funds from family member accounts. Patients still pay
deductibles of about S$30 (US$21) and then 15 percent of the balance
of outpatient bills.

6. (U) Medishield is a low-cost insurance plan that the GOS
introduced in 1990 to cover "catastrophic" illness or accidents that
outstrip the balances in individuals' Medisave accounts. Private
insurance options are also available to Singaporeans. Medifund,
akin to U.S. Medicaid, is an endowment fund established by the GOS
to help Singaporeans who cannot pay their medical expenses, even
with Medisave and Medishield. Reports indicate that Medifund serves
approximately ten percent of the Singaporean population.

Quality Care is Not Always Equal Care
-------------------------------------

7. (SBU) Traditionally, private healthcare providers handle about
80 percent of primary and preventive healthcare services while
subsidized government hospitals provide 80 percent of the more
costly acute care. There are seven public hospitals in Singapore
and care is tiered based on patients' ability to pay what is not
subsidized. The lowest level "C" is 80 to 85 percent subsidized and
patients are treated in multiple bed wards with communal bathrooms
that often do not have air conditioning, Dr. Yap said. While in the
highest level "A", which is not subsidized, patients might be in
single or double rooms with bathrooms. Dr. Yap said that patients,
regardless of subsidy level, will have access to the same medical
tests, equipment and general care, so the GOS asserts that all
patients receive quality health care. However, Dr. Yap acknowledged
that there are inequalities because C-level patients do not receive
the same individual attention and may be at greater risk of hospital
infection in a multiple-bed setting. Hospitals conduct some means
testing to ensure patients that can pay more are not taking up beds
in the lower-level wards.

Singapore to be Medical Travel Hub
----------------------------------

8. (SBU) Private hospitals like Raffles and those run by Parkway
Health are competing for business from Singaporeans that could pay
to receive A-level care in public hospitals, expatriates resident in
Singapore, and overseas patients. Dr. Yap and Dr. Goh estimated
that approximately 30 to 40 percent of the patients in their
hospitals were from countries like Malaysia, Indonesia and India.
Dr. Goh noted optimistically that a recent amendment to Singapore's
Human Organ Transplant Act (Ref A) that will allow compensation for
unrelated living donors could increase the numbers of transplants
performed at Singapore's private hospitals. Dr. Goh said Singapore
is not a medical "tourism" destination where people go for cosmetic
surgery and recuperate in a vacation setting, like Thailand.
Instead, Singapore is positioning itself as a medical travel
destination that offers high-quality care for serious health issues
at a more affordable price. The Ministry of Health (MOH) Web site
lists average costs for common medical procedures and online sources
comparing medical expenses estimate that procedures like coronary
artery bypass and coronary angioplasty can cost 75 percent less in
Singapore than in the United States. Dr. Goh said that U.S. health
insurers were in discussions with Parkway Health regarding covering
U.S. patients who seek care in Singapore.

Factors Contributing to Lower Costs
-----------------------------------

9. (SBU) Singapore spends approximately 3.4 percent of its GDP on
healthcare, compared to more than 15 percent in the United States.
Yet, Singaporeans have lower infant mortality and higher life
expectancy than Americans, according to World Health Organization
statistics. Dr. Yap and Dr. Goh attributed the lower healthcare
costs in Singapore to a number of factors, including lifestyle,
government controls, competition, and a less litigious society.
Breast and colorectal cancers, heart disease and stroke are still
major killers in Singapore and chronic diseases like diabetes are on
the rise, but widespread obesity is not yet a problem. Compulsory
National Service and the associated military fitness tests may
encourage young men to adopt a healthier lifestyle, Dr. Goh
surmised. Singaporeans are good consumers of preventive care,
spending approximately S$300 to S$400 (US$214-285) annually on
health screening, he estimated. Companies will also pay to have
mobile clinics brought to their locations to screen employees.
Private physicians and facilities are forced to compete for business
with heavily subsidized polyclinics and public hospitals, which
distorts the market but keeps costs low for consumers, Dr. Yap
stated. The average consultation fee at a local polyclinic can be

SINGAPORE 00000965 003 OF 003


as little as S$8.00 (US$5.70), according to MOH.

10. (SBU) Raising polyclinic fees would be a major policy issue, so
the prospect of increasing fees in the public sector is limited, Dr.
Yap stated. To help augment the low consultation fees, MOH allows
physicians to prescribe and dispense medicine, Dr. Goh and Dr. Yap
noted. The pharmaceutical industry would like to see prescribing
and dispensing rights separated (Ref B), but such a change would
take time and careful planning as Singapore would suddenly need 500
more pharmacists, Dr. Yap estimated. The government also controls
which pharmaceuticals are allowed onto the Standard Drug List (SDL),
which restricts the drugs public-sector healthcare providers can
prescribe. (Note: According to contacts at a major U.S.
pharmaceutical company operating in Singapore, the opaque SDL
process described in ref C remains a concern. End Note.)

11. (SBU) Dr. Yap also noted that compared to the United States,
healthcare providers in Singapore do not have the same
administrative and legal costs. He said that there are few
malpractice lawsuits in Singapore and most hospitals try to deal
with a patient issue internally. Dr. Yap indicated that malpractice
awards usually only cover medical expenses and lost income. He said
the highest payout he was aware of was S$2 million (US$1.4
million).

Private Healthcare Providers Going Global
-----------------------------------------

12. (SBU) Both Raffles Medical Group, the parent company of Raffles
Hospital, and Parkway Health are expanding overseas. Raffles is
going global conservatively and currently has three clinics in Hong
Kong, Dr. Yap said. Parkway Health has projects in the Middle East
and India, but Dr. Goh noted that Parkway had been burned in a few
deals, so their overseas operations tend to be consulting or
operations contracts and not capital-intensive projects. Parkway
Health won a bid last year to manage a women and children's hospital
in Abu Dhabi. Neither Parkway nor Raffles have expansion plans for
the United States.

SHIELDS

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