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MOH to work with insurance companies on medical fee benchmarks

The Ministry of Health (MOH) will work with insurance companies in Singapore to improve and strengthen their claims process in the hopes of ensuring that premiums will be sustainable in the long run. Patients and doctors in Singapore will also have the ability to refer to government-backed medical fee benchmarks next year, so they can get a sense of what’s considered a reasonable fee for care.

Health Minister Gan Kim Yong said in a recent interview that the MOH is looking at how they can move forward with some of the recommendations outlined in the Health Insurance Task Force Report released in 2016. The recommendations put forth by the report all centered around addressing one pressing issue: the large increase in health insurance claim costs in Singapore.

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Today’s article explores the changes to come into effect in 2018, and what this means for patients, doctors, policyholders, and health insurance companies in Singapore.

What are the new medical fee benchmarks?

The new medical fee benchmarks, which was first proposed by a doctors’ body – the Singapore Medical Association (SMA) – in 1987, set out to establish fee guidelines that will be indicative of what doctors should be charging for care. The SMA guidelines, which expanded to cover 1,500 procedures, were dropped in 2007, as it was seen that doctors, themselves, were proposing what they should be charging – something that was deemed anti-competitive.

The MOH has now taken it upon themselves to establish such benchmarks. Health Minister Gan said: “The main concern is about service providers coming together to set fees or guidelines. The SMA was the doctors themselves, but this benchmark will be set by the MOH, which will be independent of the service providers.”

In determining what would be a reasonable fee range for a particular procedure, a number of factors will need to be taken into account, including:

  • The nature of the procedure
  • Varying expertise of medical practitioners
  • Actual transacted fees
  • Distribution of fees

What does the fee benchmark mean for doctors and patients?

The new fee benchmarks are considered a key step to increasing transparency on the cost of care in Singapore. As you are probably aware, prices can vary significantly, especially at private facilities. The Ministry of Health already publishes fees for many different procedures, which highlight the large price differences between various providers in the country. For instance, normal delivery can cost as little as SGD 454 at a public hospital, or as high as SGD 11,267 at a private hospital.

Doctors may also have different opinions about what’s considered a reasonable price. For example, back in 2011, surgeon Susan Lim told her Bruneian royal patient that their cost of intensive treatment would be SGD 100,000 to SGD 200,000 per day. At the high court hearing of the case, expert witnesses quoted three different “reasonable” charges that ranged from SGD 1,000 to SGD 300,000.

Advantages for doctors

To be clear here, the new benchmarks are not a cap on fees, but rather comprehensive guidelines on what reasonable fees should be. Doctors are not legally required to adjust their fees, however the benchmarks can help doctors peg their fees. The benchmark charges will be updated on a periodical basis to serve as a reference for medical practitioners. “With this data, [doctors] can know what most people are charging. That also helps them to keep their fees more reasonable. Hopefully, over time, this will help us to manage healthcare costs,” said Gan.

Advantages for patients

The medical charge benchmark is also beneficial for patients, as they could ask for an explanation if the fees they’ve been paying for are much higher than the guideline price. As prices become more transparent, patients can choose to decide whether they want to continue treatment with a doctor who is charging a price higher than the benchmark fee. Gan stresses that if a doctor is charging a higher price, it may not always mean that they are overcharging. “It all depends on the complexity of the case, the experience, the skills and circumstances”, Gan commented.

What about health insurance companies in Singapore?

Besides helping patients discern how much is a reasonable price to pay for treatment, and helping doctors decide what is a reasonable fee to charge for care, the new benchmarks will also help insurance companies identify the reasonable reimbursement rates for various procedures.

By knowing the reasonable reimbursement rates, insurers should, in theory, be able to better identify and clamp down on health insurance fraud and abuse; both key drivers of health insurance inflation in Singapore and across the globe. Additionally, if the gaps between fees charged at various facilities narrow, the amount an insurance company will need to pay for claims will be more “predictable”, and less risky. This predictability can help create favorable conditions for insurance companies to offer more competitive premiums to customers.

Will it have an impact on my Singapore health insurance premiums?

As highlighted in our 2017 Cost of Health Insurance Report, Singapore has replaced China to be ranked as the third most expensive country for international health insurance in the world, with an average premium of USD 10,732 in 2017!

While premiums will inevitably keep going up, the new fee benchmark, if implemented successfully, could keep a lid on ballooning healthcare costs and, subsequently, health insurance costs. As reimbursement rates become more predictable, health insurance premiums may also inflate at a more stable and less fluctuated rate, meaning less nasty surprises for policyholders.

Do you have any questions? For the best health insurance coverage, some impartial advice, or a quote, contact the helpful team at Pacific Prime Singapore today!

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Content Strategist at Pacific Prime Singapore
Jessica Lindeman is a Content Strategist at Pacific Prime. She comes to work every day living and breathing the motto of "simplifying insurance", and injects her unbridled enthusiasm for health and insurance related topics into every article and piece of content she creates for Pacific Prime.

When she's not typing away on her keyboard, she's reading poetry, fueling her insatiable wanderlust, getting her coffee fix, and perpetually browsing animal Instagram accounts.