Dr Phua Kai HongAB cum laude SM (Harv), PhD (LSE) Lee Kuan Yew School of Public PolicyNational University of Singapore

Financing Old Age Needsin Singapore

Overview

• Introduction• Financing health and long term care

needs in Singapore• Financing the continuum of long term

care and integrated health services• Towards an optimum balance to integrate

financing policies for old age needs? • Conclusion

ADVERSELIFESTYLE

• Cigarette smoking

• Physical inactivity

• Poor diet• Alcohol overuse

HIGH-RISKDISEASES• Hypertension• Diabetes• Hyperlipidemia• Obesity

END-STAGE ORGAN DAMAGE

• Heart attack• Stroke• Peripheral artery

disease• Chronic renal

disease• Eyesight failure

GENETICFACTORS• Age• Family history

DISEASE ETIOLOGY IN AGEING POPULATION - The Need for Medical Action or Prevention

Source: Goh LG. MOH, CPG, 1/2011

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Singapore’s Hybrid System: An Optimum Public-Private Mix?

Seeks to avoid either extremes Welfare StateTax-funded/Social insurance- ‘Free’ services- Low quality- Inefficiency

Free MarketFee for service Private insurance - Moral hazard - Adverse selection - Inequity

Health Care Financing Strategies

Instill personal and family responsibility(Cost-sharing)

+Ensure future sustainability with ageing

avoid inter-generational problems(Savings)

+Enhance risk-pooling and social protection

(Insurance)+

Target subsidy and equitable distribution(Taxation)

Medisave

Medishield

Medifund

PRIMARYCARE

ACUTECARE

CATASTROPHIC CARE

FinancingMethod

PrivatePayment

CompulsorySavings

Social/PrivateInsurance

PUBLIC SUBSIDIES

Source: Dr. Phua Kai Hong

Taxes PUBLIC HEALTH SERVICES

Eldershield

Eldercare fund

Health and Long Term CareFinancing in Singapore

(Eldersave?)

The Public-Private Mix in Health and Long Term Care Facilities

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Primary Prevention Primary Care Acute CareStep‐down 

care/ Rehabilitation

Community/ Home Care Palliative Care

Continuum of Intermediate and Long Term Care Services –

How to Pay for Integrated Care?

Community hospital Day rehabilitation Social day care with rehabilitation servicesHome careNursing homesDementia day care Hospice care

LTC Funding - How to Pay?

Current Health and Long Term Care Financing Schemes

3 M frameworkMedisaveMediShieldMediFund

EldershieldSevere disability insuranceSeverely disabled persons (> 3 of 6 ADLs)Monthly cash payout of $400 for up to 72 months

Interim Disability Assistance Programme for Elderly (IDAPE)$100 or $150 per month for up to 72 monthsIneligible for Medishield due to age or pre-existing disability

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Source: Ministry of Health

(What is the Optimum Level?)

Medical Means Testing in 2009

• To achieve allocative efficiency and equity- Target subsidies to the poor- Shift well-off from subsidized services

• To recover costs of public expenditure

Prices based on income/wealth- Linked to tax and employment data- Proxy by housing type

Government Subsidy PolicyILTC Subsidy Framework

- Means-tested

Monthly $120 FDW grant

- Households with frail or disabled elderly

- Per capita monthly income cap of $2,200

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Source: Ministry Of Health

Integrating Health Care by Levels of Care

Faezah Shaikh Kadir. Singapore Family Physician 2011; 37(3):15

Integrated Care in Action

Faezah Shaikh Kadir. Singapore Family Physician 2011; 37(3):15

http://www.aic.sg/silverpages/default.aspx

Regional Long Term Care Health Services

Source: Ministry Of Health

Recent Issues in Financing Eldercare• Inflation and higher costs of care • Widening disparities in incomes/wages • Inadequate coverage of financing

- higher deductibles and co-payments- unadjusted low claim limits and benefits

• Adverse selection in private insurance- ‘cherry-picking’ by insurers/providers- mandatory coverage in Medishield (2006)- opting-out of risk pools (Eldershield)- impact of private Integrated Shield Plans?

The Unfinished Agenda –Long Term Care Financing?

1983 Blue Paper – National Health Plan1984 Medisave1990 Medishield1993 Medifund1993 White Paper - Affordable Health Care2000 Eldercare Fund2002 Eldershield2006 Enhanced Medishield/Private Insurance

? Enhanced Eldershield/Private Insurance

An Integrated Approach to Financing Care in Old Age

Long Term Care in the Future: Integrated Care in Integrated Resorts?

Sin Taxes in SIN City ?