Commentary: This health insurance clash is a chance to fix issues in Singapore's healthcare system

CNA

14 hours ago

SINGAPORE: Tensions had been simmering for months, with insurer Great Eastern encouraging its panel doctors and agents to avoid Mount Elizabeth and Mount Elizabeth Novena hospitals and instead seek care elsewhere. Things came to a sudden head on Jun 17 when the insurer announced it was suspending pre-authorisation certificates at both hospitals, citing higher charges with no discernible differences in clinical outcomes.
This was unprecedented in the decades-long history between healthcare payers and providers. It is a game-changing salvo in Singapore's healthcare landscape.
Now, social media is awash with accusations of 'greedy' insurers and 'predatory' hospitals. Doctors and patients scramble to shift care to other facilities for fear of rejected claims later on.
IHH, the operator of the two hospitals and by far the largest private healthcare group in Singapore, argued that the Mount Elizabeth Hospitals 'house facilities and equipment that allow specialists to manage patients and perform surgeries that are not available at other hospitals' and catered to more complex patients, thus justifying higher charges.
The Ministry of Health (MOH) stated it was seeking clarification from Great Eastern, cautioning that the insurer must ensure 'policyholders continue to be able to access the full benefits of their policies in accordance with the terms and conditions for claims, as stated in their policy contracts'.
What should we make of all this? There are two realities to recognise and two next steps to consider.
HARD REALITIES OF SINGAPORE'S HEALTHCARE LANDSCAPE
The first reality is the clear mutual dependence between insurers and private healthcare providers.
Without private providers, there would be no need for private health insurance. Without private health insurance, many may not be able to afford private healthcare. That said, mutual dependence does not mean mutual interests.
Insurers pool risk by collecting premiums from many to cover the claims of a smaller subset, but they cannot simply be passive conduits of our money without value-adding. They seek to optimise value for claims paid out, and managing the fees charged would be expected.
Conversely, private sector doctors and facilities would seek to maximise fees and charges – within ethical boundaries – for example in opportunities to sell branded drugs instead of generics or use the latest equipment when the conventional would suffice for a good outcome. Doctors' fees, traditionally 50 per cent of the total bill, have been moderated after years of insurer interventions, such as encouraging use of panel doctors with pre-agreed fees or imposing fee guidelines.
Facility fees, on the other hand, have largely escaped scrutiny and today can make up two-thirds of the total bill. It is unsurprising that insurers have now turned their attention to these.
The second reality is that healthcare costs are rising unsustainably and left unchecked, this will be bad for everyone.
The cost of healthcare insurance benefits – which is a useful proxy for private healthcare spending – has increased in Singapore by about 12 to 13 per cent every year in the last three years. Minister for Health Ong Ye Kung has stated that the government healthcare budget doubled in the last decade, jumping from S$9 billion in 2015 to S$21 billion this year and is projected to reach more than S$30 billion by 2030.
BETTER PROTECTION FOR HEALTHCARE CONSUMERS
Two actions taken in unison might help with the way forward.
First, strengthen consumer protection. In the ongoing saga, it's surprising that policyholders have not publicly sought more reassurance from the insurer.
While Great Eastern has said policyholders 'can still receive treatment and submit claims as usual with no impact to their benefits', customers may need to pay upfront and be reimbursed some time after receiving care in the affected hospitals. But they will be hardly reassured of their benefits, without knowing if there could be disputes over services rendered and fees.
There should be, at least on an exceptional basis, an appeal process and mechanisms to enable pre-authorisation for patients with more complex needs, so the affected hospitals would still be accessible without worries about advance payments.
Should people be allowed to freely switch insurers? Due to underwriting at enrolment, this is fraught with challenges (particularly if one has been diagnosed with a health condition) and is not realistic in practice. MOH said in November 2024 that it ' does not believe that mandating full portability for IPs is the right solution '.
This leaves customers effectively captive with only two options: exiting private insurance with relying only on MediShield Life, or accepting new policy terms and premium increases, no matter how unjust these are perceived to be. Both are poor alternatives.
The former further stresses an already stretched public healthcare system and increases current and future funding commitments by the government which it may struggle to honour in prolonged economic downturns. The latter worsens public frustration with 'Big Business' and risks fomenting the perception of an elitist government pandering to commercial ahead of citizens' interests.
HELP PATIENTS MAKE BETTER DECISIONS
Second, focus on data and transparency for decision-making. No two patients are the same. Hence to fairly compare across doctors and facilities, multiple other data points are collected for risk adjustment.
Consider two surgeons each with a patient undergoing gallbladder removal surgery: One patient has kidney and heart issues and the other an otherwise healthy marathon runner. They would have very different care protocols and journeys, such as the need for post-operative intensive care, despite going through the same surgery.
With appropriate risk adjustments, policymakers, insurers and healthcare providers can assess and compare the quality and cost-effectiveness of the surgeons and facilities despite them having very different patient profiles.
Customers would really prioritise only three factors for healthcare services: clinical outcome, patient experience such as waiting time and service hospitality, and price. In choosing insurance products, beyond the current terms offered, customers would want to know the historic rates of declining claims, the number of disputes between insurer and policy holder as well as the patterns of premium adjustments over the years.
MOH already puts out comparisons of insurers' lifetime premiums, sample contracts, claims processing duration and pre-authorisation turnaround times. Combining these with clinical data is necessary now.
Surely in a Smart Nation, all this data could be collected, analysed and made available so that all stakeholders can make better decisions.
We all want the best available for the lowest costs, and in finding value, such data would greatly aid customer selection of the insurers that best meet their needs and budgets. Different facilities do have different sophistication and expertise and these should be aligned to the needs of the specific patients.
GOVERNMENT'S ROLE IN TRANSPARENCY
The role of the government deserves re-examination. Singapore traditionally prefers light-touch regulation, opting for market mechanisms instead.
Former health minister Khaw Boon Wan used to describe healthcare as the classic case of market failure and said that when the healthcare market fails, the government should explore how to step in to make the market work better as a first step.
One condition for a perfect market is typically information transparency and the government has a role in enabling meaningful public availability of information.
Strong government encouragement of both insurers and providers (doctors and facilities) to collect data in standardised manners and make it available is essential.
Any data framework and analytics won't be perfect – especially when we first start, but anything would be better than the current 'he says, she says' situation with customers caught in the middle with no way of understanding whose arguments are founded.
Facilitated negotiations would also help tremendously. MOH already has a regular platform to facilitate discussion across insurers, facilities and doctors on industry-wide issues. It is timely to ask how this can be made more effective, perhaps by involving the insurance regulator, the Monetary Authority of Singapore (MAS).
A combined MOH-MAS team with expert knowledge and regulatory powers could convene the stakeholders to find effective solutions, without resorting to heavy-handed policy that could crush innovation and compel the industry into a downward spiral with only pricing as the differentiator.
DON'T WASTE A 'GOOD CRISIS'
The dispute between Great Eastern and IHH is a harbinger of worse things to come if this degenerates into a cesspool of misinformation and wild accusations.
Yes, healthcare costs are escalating beyond society's ability to cope and effective solutions are needed. Yes, all parties seek and will need a fair profit to continue. But the public interest must be paramount.
Insurers and healthcare providers need to recognise the mutual dependence despite divergent interests, and work together. Customer rights must also be better and more forcefully represented to balance the power of the insurers and providers. The government should step in to bring the disputing parties together in constructive dialogue and actionable solutions starting with better data, better analytics and better decision-making.
The pragmatic Singapore way is not to waste a 'good crisis', but seize the opportunity to correct long-festering perversions in the current system. Else, patients and policyholders could get hurt while public confidence in both the healthcare and insurance sectors erodes, to the ultimate detriment of all of us.
Jeremy Lim is a public health physician and author of Myth or Magic - The Singapore Healthcare System.
Taufeeq Wahab is a doctor and senior preventive medicine resident with the National University Health System (NUHS).