Medical Savings Accounts: The Singapore Experience
Monday, April 01, 1996
by Thomas A. Massaro, M.D., Ph.D. and Yu-Ning Wong
Table of Contents
- Executive Summary
- Singapore?s Economic and Social Welfare Systems
- The Central Provident Fund
- Financing Medical Care in Singapore
- Government Subsidies for Health Care
- Physician Services
- The Hospital Sector
- Evaluation of the Singapore System
- Can Medisave Work in the United States?
- About the Authors
Government Subsidies for Health Care
In 1992 the total amount of subsidized care in Singapore was approximately S$360 million, equivalent to 19 percent of the total health care expenditure, or 0.7 percent of GDP.
A key component of the government's policy is a tiered structure of subsidies based on the setting in which care is delivered and the amenities provided with it. In the public hospitals, the five classes of wards receive varying degrees of subsidy, while private hospitals are unsubsidized.
"Medical social workers advise patients that it is their responsibility to choose a ward class they can afford."
In principle, individuals are free to choose among the five levels. Medical social workers provide financial counseling to everyone at the time of admission into the public hospitals. They advise patients that it is their responsibility to choose a ward class they can afford and to cover their expenses through a combination of subsidy, Medisave, Medishield and personal funds. If necessary, patients can draw on their spouse's, children's or parents' Medisave accounts.
Class A wards have no subsidy and compete with private sector hospitals, offering private rooms with such amenities as air-conditioning, television and VCRs, in addition to the government's list of basic services. Care delivered in the remaining four wards - B1, B2+, B2 and C - is supported by varying levels of government allowances. For example, the subsidy level in a class B1 ward is 20 percent of the total charges. Patients are responsible for the remaining 80 percent, which may be covered by Medisave, Medishield and/or personal resources. The fraction paid directly by the government increases incrementally, reaching 80 percent for class C, with the patient responsible for the remainder. As the subsidies increase, the amenities decrease. B1 wards have four beds to a room; B2 patients do not have choice of physicians; class C wards are unair-conditioned, open wards.
In addition, Medishield pays a greater fraction of the hospital charges for poorer patients and those who elect to receive their inpatient care in the subsidized hospital settings.18