Transcript Singapore: Getting Financing and Purchasing right
Lessons of Singapore:
Getting Financing and Purchasing right
Dr Kambiz Monazzam Tehran - Jan 2007 Most slides are based on Prof Lim Meng Kin
زا رت یلمع زیچ چیه تسین بوخ یرئوت کی
Singapore: Small but!
Singapura, the Lion City, from the Malay words singa (lion) and pura (city).
Iran Singapore
Area 660 sq km Population 2006 4.48 million
Singapore
• • • • • • • • • • • • • • • • • •
Singapore:
Ancient History
late 1300'sp Paremswara settles in Temasik (Singapore). He later moves to Malacca to escape the invading Siamese forces.
1400-1500 Golden age of Malacca as a trading entrepôt.
1511 Portuguese seize Malacca.
1600 British establish East India Company (EIC).
1602 Dutch establish United East India Company (VOC).
1613 Singapore burned by the Portuguese.
1641 Dutch take control of Malacca.
1786 Sir Francis Light takes possession of Penang for Britain.
1795 Malacca transferred from Dutch to British.
1811 Raffles appointed Lieutenant-Governor of Java.
1819 Raffles signs treaty with Sultan Hussein of Johore and Temenggong Abdul Rahman of Singapore to allow British to establish a trading post in Singapore.
1819-1823 Farquhar in charge of British settlement in Singapore (reporting to Raffles in Bencoolen). Singapore thrives as a duty-free trading port.
1823 Raffles oversees transition of Singapore's administration from Farquhar to Crawfurd, then returns to England (and dies there three years later).
1824 Dutch formally recognize British rights to Singapore under Treaty of London.
1826 Penang, Malacca, and Singapore joined to form Straits Settlements.
1825 Value of Singapore's trade double that of Penang and Malacca combined.
1832 Singapore becomes administrative headquarters of Straits Settlements.
1860 Singapore's population exceeds 80,000.
Independent Singapore was admitted to the United Nations on 21 September 1965, and became a member of the Common wealth of Nations on 15 October 1965.
Singapore
:
Recent History
• • • • • • • • • •
1 Ancient times 2 Founding of modern Singapore (1819) 3 Early growth (1819 –1826) 4 The Straits Settlements (1826 –1867) 5 Crown colony (1867 –1942) 6 The Battle of Singapore and the Japanese Occupation (1942 –1945) 7 Post-war period (1945 –1955)
–
7.1 First Legislative Council (1948-1951)
–
7.2 Second Legislative Council (1951-1955) 8 Self-government (1955 –1963)
– –
8.1 Partial internal self-government (1955 –1959) 8.2 Full internal self-government (1959-1963)
–
8.3 Campaign for merger 9 Singapore in Malaysia (1963 –1965)
– –
9.1 Merger 9.2 Racial tension
–
9.3 Separation 10 Republic of Singapore (1965 –present)
– – –
10.1 1965 to 1979 10.2 The 1980s and 1990s 10.3 2000 - present
Chinese 75% Malays Indians Others 14% 7.7% 1.4%
Independent Singapore was admitted to the United Nations on 21 September 1965, and became a member of the Common wealth of Nations on 15 October 1965. On 22 December 1965, it became a republic, with Yusof bin Ishak as the republic's first President.
144 years
GDP per capita (PPP) USD 27,330
Infant Mortality Rate Iran: 26 2.5
Life Expectancy Iran: 70
Health care expenditure trends: 16
OECD countries & Singapore 1965-2000
14 U.S.
12 10 8 6 4 Germany Canada Japan U.K.
Singapore 2 0 1965 1970 1975 1980 1985 Year 1990 1995 2000
Cost-effectiveness Comparisons:
Health Expenditures and Infant Mortality
Taiwan UK Germany Hong Kong Singapore Japan Australia US Health expenditure as % of GDP
Efficiency: WHO Rankings 2000
Health spending as Per capita % of GDP spending
1. France 2. Italy 3. San Marino 4. Andorra 5. Malta 6. Singapore 7. Spain 8. Oman 9. Austria 10. Japan 37. U.S.A. 93. Iran 9.8% 9.3% 7.5% 7.5% 6.3% 3.1% 8.0% 3.9% 9.0% 7.1% 13.7% 4.4% $2,369 $1,855 $2,257 $1,368 $551 $876 $1,071 $370 $2,277 $2,373 $4,187 $108
Singapore Inpatient Care System
Hospitals Hospital Beds Public Hospital beds 80% Private Hospital beds 20% Public Hospital Bed Occupancy Rate Average Length of Stay 24 10500
200-2500 Bed H 60-500 Bed H
Tiered Pricing 80% 5 day
Singapore Inpatient Care System
• Large Important Centers: – Singapore General Hospital
(SGH)
– National University Hospital
(NUH)
•
National Health plan : 1983 1. First Financing 2. Then Hospital Reform
Public – Private Mix Outpatients:
80% go to Private
20% go to Public
Inpatients:
20 % go to Private
80% go to Public
Public vs. private health expenditure Public Private
Taiwan 66% 34% Hong Kong Thailand China Malaysia Korea Japan Indonesia Iran Singapore 54 51 49 48 41 32 25 43
21
46 49 51 52 59 68 75 57
79
Key Health Care Reforms
1983 National Health Plan 1984 Medisave 1985 Hospital Restructuring 1990 Medishield 1993 Medifund 1993 White Paper-Affordable Health Care 2000 Clustering / Eldercare fund 2002 Eldershield
Reasons Behind Reform
•
Demand for Hospital Care is going up
•
Anticipated Tax revenue expected to go down in relative terms
Reform Goals
•
To secure healthy population through active prevention & promotion of healthy lifestyle
•
To improve health system cost – efficiency
•
To meet rapidly aging population growing demand for health care
Reform Threats
•
Complete Dependence to GOV Taxes
•
Moral Hazard
•
Hospital Induced Demand
•
Low People Responsibility
•
Punishing of people who stay healthy
Social Context
Singaporean Values & Famous Proverbs
• •
Self Reliance Strong Family Ties
• •
“Save for rainy day” “Charity begins at home”
100%
Financing reform: 3M system
Public vs. Private financing Singapore 1965-2000 80% 60% 40% 20% 0% 1965 1970 1975 1980
Year
1985 Government Expenditure 1990 1995 Private Expenditure 2000
Singapore ’ s Health Care Financing Philosophy:
Free Market
(open – ended health insurance)
Avoid either extremes
Free Healthcare
(egalitarian welfarism)
“Singapore believes that
welfarism is not viable as it breeds dependency on the government.
It has adopted a policy of co payment to encourage people to assume
personal responsibility
for their own welfare, though the government does provide subsidies in vital areas like housing, health and education .”
Philosophy:
• •
Personal responsibility State as payer of last resort Formula:
Government:
subsidy
+
People:
co-payment
Financing Options
• • • • •
Self pay
(include user fees)
General tax
revenue financing
Insurance:
– Social insurance: Compulsory; Public or private management – Private: Voluntary
Community Financing Individual Savings Account
Reforms in health care financing
3 “M”s
Medisave
Compulsory for working individuals Contributions to personal accounts. Contributions matched by employer Tax exempt
Earns interest
Medisave
• Employer & Employee paid 20% of Wages to Central Provident Fund • X % of employee’s wage go to Employee’s Medisave Account.
X <34
Age
35 - 44 45> Retirement or reaching to a ceiling 20,000 S$ % to Medisave
%6 %7 %8
Medisave
• Employer & Employee paid 20% of Wages to Central Provident Fund • X % of employee’s wage go to Employee’s Medisave Account.
X <34
Age
35 - 44 45> Retirement or reaching to a ceiling 20,000 S$ % to Medisave
%6 %7 %8
Status of Medisave: Payment :
Full Charges of low class wards Partial charges of high class wards Have maximum daily limits In 2001, 262,000 Singaporeans (or
85
per cent of the total number hospitalized that year) used Medisave to pay their hospital bills. On average, each patient withdrew about
S$1,500.
MediShield Can Medisave cover catastrophic health Expenditures?! Why
Catastrophic insurance, covers expenditure for major illness such as: Long HOS stay Cancer Chemotherapy
MediShield Premiums automatically deducted from Medisave / or If people wants to pay separately %0.5 ?
MediShield: Claim limit /Year Claim limit /Person "deductible" coinsurance: 20%
MediShield
Present status of Medishield:
In 2001, MediShield covered
2.02
million CPF members and their dependants.
MediShield paid out
91,000
claims amounting to S$64 million.
Medifund
Endowment fund interest distributed to public hospitals, to pay hospital bills of needy.
Hospital Medifund Committees
appointed by Government
Status of Medifund
In 2001,
156,800
applications (or 99 per cent of all applications) for Medifund assistance amounting to S$26.9 million were approved.
MEDISAVE: compulsory savings plan MEDISHIELD: catastrophic insurance plan MEDIFUND: a health endowment fund
Hospital reform
B - Budgetary Units A - Autonomous Units C - Corporatized Units P - Privatized Units Markets\Private Sector Broader Public Sector Core Public Sector B A P
Hospital Reform Goals
• • • •
Raise efficiency & service standards Improve productivity Cost control Give Management flexibility
Hospital reform
• • • • • •
Select 11 HOS for pilot (6+5) Started with one new HOS Corporatized pilot Hospitals Use commercial accounting Increase Price for Quality Make HCS ( Health Corporation of Singapore ) & Pilot HOS is under it, (HOLDING of HOSPITALS)
Hospital reform
Elements Decision Rights Residual Claimant Market Exposure Accountability Social Functions Delegation of each element Labor, Remuneration, Deployment of labor & other resources Full to their budget + GOV subsidies decreasing over time subsidies decreasing, Less budget allocation, more revenues from “sales” (15% to 55%) accountability to board of directors Internal Cross Subsidization, GOV Subsidies for poor
Hospital reform problems on Implementation
Problems General Resistance Staff Resistance Doctors go to private Extra Demand for not C/E services Solutions Implement over time
3 Options: join 80%, 1 Y Delay, Stay as Civil Servants Increase their earnings 5-6 times greater average wage -
Graded ward subsidy Cross Subsidization Class Subsidy Difference
A 0% 1-2 bedded, air-conditioned, attached bathroom, TV, Phone, choice of doctor B1 20% B2+ B2 50% 65% 4- bedded, air-conditioned, attached bathroom, TV, Phone, choice of doctor 5-bedded, air-conditioned, attached bathroom 6-bedded, no air-condition C 80% >6 beds, open ward
Admissions- Public & Private Hospitals
120 100 80 60 40 20 0 1980 1985 1992
Year
1995 1996
Private A B1 B2 C
Hospital Reform Results
Admissions Go UP Administrative costs increase 5-10% Administrative Staff 1/6 of Cure staff Length of stay decrease but increase in C wards Cost recovery 40-60% Revenue increases more than costs Waiting time decrease
Medishield Medisave Medifund
Example 1:
Example 2:
But 3Ms is not enough … Elderly as % of Population (1997)
United States United Kingdom Japan Hong Kong Taiwan Korea
Singapore Iran
13 16 16 10 8 7
7 5.2
Demographic transition: % population > 65years
30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% 1995 2000 2005 2010 2015 2020 2025 2030
Years (1995-2030)
Hong Kong Japan S. Korea Singapore Indonesia Malaysia Thailand China
Eldercare Fund (2000)
• $200m Initial capital injection; further capital injections from budget surpluses. Interest income to fund operating subsidies to voluntary nursing homes for elderly & other step-down care services. • Goal: $2.5billion capital by 2010 Now: $900 m.
ElderShield (2001)
• National severe disability insurance covering long-term care (home care or nursing home). • Low annual premium from Medisave.
• Cash payout $300 per month up to 60 months.
Summary of financing philosophy:
individual responsibility + risk pooling + government subsidies
Framework for financing healthcare
Medisave:
+ ElderCare Fund
M ediShield:
+ ElderShield
Medifund: “No one will be denied needed health care
because of lack of funds”
- Prime Minister Goh, 1993
Hybrid Healthcare Financing Framework Total Healthcare Expenditure Employer benefits (36%) Medi save (8%) Medi Shield (1.7%) Individual Financing Cash (29%) Medi Fund (0.3%) Government Subvention (25%)
No matter who pays at point of care, whether it is Government Employers, Insurance, Medisave, Out of pocket ultimately, citizens themselves bear the burden
Singapore ’s health care delivery reforms:
• Autonomy - free from civil service constraints.
• Integration – seamless healthcare • Accountability – cost and quality indicators • Competition - clusters
Hospital Restructuring Management Responsibility
MOH HCS Hospitals
1985 1988 1989 1990 1990 1990 1992 1993 1997 1998 1998 1999 2000 2000 National University Hospital Pte Ltd National Skin Centre Pte Ltd Singapore General Hospital Pte Ltd Kandang Kerbau Hospital Pte Ltd Toa Payoh Hospital Pte Ltd Singapore National Eye Centre Pte Ltd Tan Tock Seng Hospital Pte Ltd Ang Mo Kio Community Hospital Pte Ltd National Dental Centre Pte Ltd National Heart Centre Pte Ltd National Cancer Centre Pte Ltd National Neuroscience Institute Pte Ltd Institute of Mental Health Alexandra Hospital
2000: “Clustering”
Western Cluster Tertiary Hospital Regional Hospitals Polyclinics Eastern Cluster Tertiary Hospital Regional Hospitals Polyclinics
National Healthcare Group National University Hospital Alexandra Hospital Tan Tock Seng Hospital Woodbridge Hospital / Institute of Mental Health
•Seamlessness •Synergy
National Neuroscience Institute National Skin Centre NHG Polyclinics NHG Polyclinics NHG Polyclinics NHG Polyclinics NHG Polyclinics NHG Polyclinics NHG Polyclinics NHG Polyclinics NHG Polyclinics
(9 polyclinics)
Rationale behind Singapore ’s Health Care Reforms
Moral Hazard
Problem
Demand-side (Patient) Supply-side (Provider)
Solution
Cost-sharing Medisave MediShield Medifund Quality Utilization Competition
Goals of health care system
• Quality • Access • Cost
Health care expenditure as % of GDP
United States 14 United Kingdom 6 Iran 4.4
Singapore 3
Spending enough?
Iran Singapore UK USA
Public or private?
Provision
Public Private Public Traditional Market Private
New paradigm: Partnership?
Society ’s values
Who?
Private
Private
What?
Self-pay { Private Insurance
Why?
Self Reliance Public
Mixed
Community Financing
Public
Social Insurance { Government Revenue
Risk
}
Pooling
Solidarity
Quality Affordability Access
Lessons of Singapore
Why Singapore Is Successful?
In the hospital organizational reform
1. High Capacity of its Public Administration 2. Political system that are conductive for Structural Reform
Lessons of Singapore
1. Innovative Financing 2. Organizational reform 3. Cross Subsidies in delivery 4. Risk Transfer to people
Lessons of Singapore
1. High Social Capital 2. Disciplinary People 3. Imitate the best but adapt
Any Question?