Within the next five years, Singapore will build six more general and community hospitals,

four new polyclinics and more nursing homes and eldercare centres across the island.
Expecting the average annual healthcare spending to rise from 2.2 per cent of GDP today to
almost 3 per cent of GDP over the next decade. This is an increase of nearly 0.8-percentage
point of GDP, or about S$3.6 billion in today's dollars. Within the next decade, healthcare
spending is expected to overtake education. The cause of rising healthcare cost in Singapore
could be attributed to:

Advances in Medical Technology: New medicine and supply of newer and better equipment

Increasing ageing population: More dependents to look after while having a shrinking
labour force due to low fertility rate in Singapore

Inefficiency of Medical Services and Procedures: There are too many administrative
procedures. Inadequacy in early prevention and inefficient follow-up as well as high
readmission rates.

How should we then control healthcare cost increases?

1. The government should exercise firmer control over healthcare cost increases
arising from excessive demand

Primary care can become the bedrock of Singapore’s healthcare system, with chronic
conditions managed by a network of general practitioners (GPs), polyclinics and
community organisations, while hospitals are tapped only in more serious cases,
instead of the current hospital-centric model.

When GPs and polyclinic doctors see patients at the start of chronic ailments, they
will be able to delay or prevent the progression of these diseases into more complex
conditions that will cost a lot more to treat in hospital. For example, uncontrolled
diabetes may lead to kidney failure and stroke.

Healthcare costs can be reduced by curbing wasteful practices and eliminating

inefficiencies in existing healthcare provision. Polyclinics in Singapore serve as a
gateway to hospital admissions. This reduces unnecessary medical procedures and
wastage, which helps to contain the demand and rising costs of healthcare.
 There should also be more emphasis on disease management and prevention, which
are less costly than acute treatment.

2. The private healthcare sector should maintain a larger burden of total

healthcare spending.

For instance, Singapore’s health care delivery system is based in individual

responsibility, next family responsibility, and lastly government subsidies. The
private sector (individual, family) should continue to maintain a larger burden of total
healthcare spending, to limit the government’s liability.

Seeing regular family doctors ensures continuity. A closer, trusting relationship

between the patient and a regular team of healthcare professionals will lead to more
personalised management of their various conditions. This results in optimised
treatments and, ultimately, lower healthcare costs.

3. Productivity growth, which causes the cost disease.

Overall productivity gains of the economy ensures income and purchasing power of
the nation can rise sufficiently to keep health care services affordable.

4. The government can also play an important role as the dominant health care
provider and regulator.

The government to influence the supply of hospital beds, the introduction of high-tech
or high-cost medicine, and the rate of cost increases in the public sector sets the bench
mark in terms of pricing for the private sector.

Mean-testing can also help to decide on the level of subsidies for patients, to ensure
that government subsidies are allocated to those most in need. MOH can continue to
invest more in primary care. For example, subsidies under the Community Health
Assist Scheme - catering to lower-and middle-income patients who see private GPs -
have been enhanced over the years.
With ballooning healthcare expenditure due to ageing population, Singapore’s policy makers
are working on policies to contain this inevitable increases. In 2017, the government
launched a programme for nurses to visit patient’s home for follow-up care. As a result,
readmission rate dropped by 60%. A committee was formed to develop medical fee
benchmarks for common clinical procedures, with a view of including less common
procedures like X-rays and MRIs in the longer term.

A scheme where hospitals get funding support to refer stable patients from specialist
outpatient clinics to GP partners was initiated by MOH in 2014. In 2017, it rolled out a
scaled-up primary care network scheme to GPs, after being piloted in 2012. These groupings
allow individual doctors to pool resources and offer services such as health counselling
provided by their nurses, and eye screening for diabetics, which they would not be able to
provide on their own.