Sunday, December 12, 2010

Healthcare cost and Singapore's medical hub aspiration....

There is one reason why Peter Lim, Singapore's most astute investor, has offered to takeover Thomson Hospital at a huge premium (62%) over market price of the company traded on the stock exchange of Singapore[Link]. It is the same reason why an Indian company Fortis and Malaysian Khazana were fighting over Parkway Holdings[Link] which owns 3 private hospitals in Singapore. Singapore's aspiration to be a medical hub for the rich in the region will generate huge and growing profits for these hospitals. These rich folks will pay top dollar for Singapore's limited medical resources and ordinary Singaporeans who get sick and need medical care will increasingly have to compete with the richest in the region for health. We have began to the see the effects of this "profits over people" policy of the PAP earlier this year when public hospitals ran out of hospital beds (Read : Bed crunch in hospitals forces hospitals to put patients in corridors) and public hospitals are losing specialists to private sector (see article below). Earlier this year during the US Healthcare debate which was tracked by my blog, one of the lessons learnt in countries with problematic healthcare systems hit by cost spirals is that allowing market forces to dictate the allocation of healthcare resources will lead to cost escalation - resulting in a large segment of the population finding healthcare cost burden unbearable. This is especially so in countries where the income inequality is high and healthcare resources are disproportionately allocated to those who can pay and not to those who needs it most.

A few years ago, Parkway bidded $1.2B a piece of land near Tan Tock Seng hospital. This land could have been used to build a public hospital for ordinary Singaporeans and provide affordable medical care for Singaporeans. Parkway used this land to build Novena Hospital at a cost of about $2B which will be opened in 2011. How will Parkway get back its investments? This is done by selling private luxury suites at the hospital for around $3500 per square foot[Link]. These suites will lock up more of our healthcare resources in the private sector to serve medical tourists.

As cost escalates due to the pursuit of profits in the healthcare sector, the govt shifts the burden of rising costs to sick Singaporeans and their families by implementing means testing at hospitals and cutting subsidies. The rising cost has resulted in adequacy of many of the earlier schemes such as Basic Medishield. Check the claim limits in amount for surgery, ICU, etc[Link: you better have a good look and be familiar] which were set when the healthcare cost was much lower is no long sufficient today as a protection against catastrophic illness - you are told to upgrade your insurance plan, however, for many they are not able to do so because of the higher cost or pre-existing medical conditions have emerged since they signed up for the previous scheme. Many Singaporeans are unaware of what is going on and the inadequacy of the schemes they are on because they have not been seriously ill and the govt keep pushing home the message that the 3Ms (Medishield, Medisave, Medifund) are comprehensive and sufficient. As medical costs keep rising, a situation similar to what have seen for housing will emerge - what do you expect the govt to do? They just simply insist it is still affordable, that it is due to reasons not within their control and they have already subsidizing you, your expectations are too high etc - they will never admit it is due to their lopsided policies.


09 December 10 The Strait Times
by Salma Khalik, Health Correspondent

Public hospitals lose more specialists

SINGAPORE is facing possibly its largest-ever exodus of specialist doctors from the public to the private sector, as the robust economy gives them the courage to leave secure jobs.

In the first half of this year, 68 specialists left the public sector, compared with 63 the whole of last year.

Among them were five cancer specialists, seven general surgeons, seven orthopaedic surgeons and seven diagnostic radiologists.

If this trend continues for the rest of the year, it will be the biggest outflow of specialists the public sector has ever seen. The previous high was a loss of 87 specialists in 2007. The Health Ministry could not provide more up-to-date figures for this year.

Industry observers say doctors are feeling confident enough to leave their safe jobs for private practice because of the booming economy.

A highly successful specialist in private practice can make up to 10 times what he was drawing in the public sector. These top doctors earn more than $1 million a year, with some reputed to rake in more than $5 million.

In the public sector, consultants earn between $12,000 and $60,000 a month, based on their seniority and specialty.

Even less successful private sector doctors would make about the same pay they were getting in the public sector, but with a much lighter patient load.

Not all who go private set up their own practice. Some find it easier to join an existing group practice, where their pay may not be as high but is regular.

Among them are about 20 specialists in seven specialities who have joined the Healthway Medical Group this year.

One is colorectal surgeon Adrian Leong, who is in his early 50s. He left the National University Hospital (NUH) in July to take on the role of group medical director.

He said the group pays more than the public sector, but 'not multiples' of what they were receiving.

Some specialists who have left said that pay is not the whole story.

Cardiothoracic surgeon T. Agasthian, 49, said there were many factors behind his decision to leave the National Cancer Centre in October to open his own practice. They included the desire to continue working beyond the retirement age.

'You can't start a practice at 62. It takes time to set up a private practice,' he said.

He added that while some very senior people are still around in public hospitals, not everyone is given the option to stay.

Dr Agasthian said he would have stayed on if he had been given a teaching post, since teaching the next generation is one of his passions. He added: 'To stay on in the public sector, we need to feel useful.'

Professor Leong, who holds an adjunct teaching role at the university, was also planning for his future when he left.

He said: 'You usually take about five to 10 years to make a significant impact in a particular arena. The time was about right to start on something new before I got too old.'

But he added that some of the new specialists at the group moved to private practice 'to get a better quality of life'. They now work part-time and choose their own working hours.

The Health Ministry has always maintained that it is the role of public hospitals to train doctors for the country. At the end of last year, Singapore had 3,180 specialists, of whom 1,927 worked in the public sector and 1,253 in the private sector.

There were then 42 oncologists in the public sector and 25 in private practice. With at least five moving out of public practice this year, the equation changes significantly.

Cancer is the top killer in Singapore, with more than 9,000 people diagnosed each year. The majority seek treatment at public hospitals.

Cancer patient Ananda Pereira has had two of his specialists leave for private practice this year, and is unhappy with the changes. Said the retiree: 'Patients often put their trust in their doctors. And when the doctor changes, it can affect their confidence in the treatment.'

Prof Leong said: 'I do feel sorry about some patients who wanted to continue to see me, including a very nice old lady who was crying in my NUH clinic when she was told.'

But hospitals said they have no problems coping with the losses.

The National Cancer Centre said its number of doctors is increasing and 'there is also no significant change in the waiting time for patients to see doctors'.

Tan Tock Seng Hospital, which lost nine specialists in the first six months, said the 'vacancies were quickly filled'.


Anonymous said...

"Don't ask what the state can do for you, ask what you can do for the state"??

"Don't ask if people can afford it, just ask how much money you can make"!!

"Don't ask if people can survive (e.g. with S$1,000 income per month), ask only how you can become richer & richer".

"Don't ask whether you are contributing, just ask how you can increase your salary and "beat" others".

These have become the mentality of many.

Anonymous said...

Should I invest in medical stocks? Healthway? Thomson?

Anonymous said...

I read that a knowledgeable insurance fellow mentioned in his blog that the risk the public hospital do not have the doctor to treat your illness is low and there should be adequate facility to be treated in our public hospital.

He also said that all doctors, young ones included, are qualified, but if the case is complicated it will be referred to a senior doctor anyway.

Also if your case is very serious,
a doctor in private hospital may not be able to help much too.

I tend to believe this, or else why would the life span of the rich and poor not much different?

So the concerns by Lucky Tan may not fully happen.

Anonymous said...

how u conclude that the life span of rich and poor are similar? any data to back up?

Anonymous said...

"how u conclude that the life span of rich and poor are similar? any data to back up?"
Anon 12/12/10 09:16

Simple. There were rich and powerful who died at 60, 70, 80 or 90 and beyond. And even if they do live longer, their health and quality of life is so bad even with quality care and treatment. I am sure you have heard of such cases. Some would rather be dead than alive, if they can make a choice.

There were the poor and not so rich who died similarly too.

Anonymous said...

the poor will always be here to slave, the middle class will migrate and the rich will enjoy the policies made by pigs.

Anonymous said...

Anon 09:40,

Medical care is a limited resource. If, as you wrote, "their health and quality of life is so bad even with quality care and treatment," then Lucky is right that the current system is pricing many people out of (essential) medical care.

I think Lucky meant to say "Profits Above People" ;)

Anonymous said...

The vacancies are quickly filled by doctors from Phillipine and India. These doctors are ever so ready to take up even polyclinic postings.

Anonymous said...

In Singapore, if you don't have a heart attack, by the time you are in your forties, you are not a successful man. Just look at your ministers, how many of them have cancer, hypertension and suffer from balding.

Anonymous said...

today's SG under the LHL regime is hardly recognisable from the one 15 years ago.

everything is about unscrupulous profits above all else, ethics and long term vision are flushed down the drain.

Anonymous said...

This is a piece of news which is nothing new. However, we have to give some thoughts on why this news is published. I think they will use this reason to ask us to pay more. They are trying to push the blame to the doctors, but I think ultimately it is the board of directors and the policy makers who will make the most profit.

kimirai said...

Sadly I think what Lucky is saying will come true.

The welfare of the people is definitely not high up in this govt's priority list.

Anonymous said...

"Anonymous said...12/12/10 08:49
So the concerns by Lucky Tan may not fully happen."

Wait till one of your close family members is being warded in a public hospital for a serious medical condition and if you will can still say the same, then I salute you for the same view you hold true for both pre- and post-experience.

SG Girl Next Door said...

"the vacancies are quickly filled." Hope they are filled by our locals.

Hang Seng Parasite said...

Reading the article here, i came up with a good idea for investments. Lets say if we can buy bed space or private rooms in hospital for investment, how great would that be? Just like real estate, it is about location, facilities and demand/supply. It would also guarantee a bedspace or room for me in an exclusive hospital if i was to fall sick.

It should go like this.

1. Private hospital sell hospital rooms to investors. (eg 2k/sq ft)

2. Investors now owns the room, he can rent it out to patients who need a room. Hospital can take a commission for being the middlemen and charge a monthly maintenance fee.

3. lets say demand is overwhelming for certain top hospitals surgery, rental rate will fluctuate to reflect the demand. this will be a better pricing model instead of the flat fee most private hospital charged. beside by selling away the beds and rooms (they can keep some rooms for their own control), they get a huge one off gain and they do get revenue stream for being a middlemen and monthly maintenance fee. patients need to secure a room before they can proceed for surgery

4. this model is sure to work. In fact i expect yield to be of 11% or more. Not to mention capital gain on selling your room if healthcare cost escalate up up and away. your room space might double in value. As for the hospital owners, they take a huge one off gain, ensure 100% occupancy rates if all the beds are sold, they will make from the management fee and the potential income of doing broking for beds. Banks will make a roaring trade as well by financing a sure fire investment, get it graded AAA, securitized it and get hedge funds to buy. small investors can participate if the concept was develop into a reit as well.

Selling the concept of a defensive indusry based developed world ageing population and need for quality healthcare is a bulls eye to investors of all kinds.

Governments could privatize their hospitals and let market forces dictate the cost. to satisfy all those troublemakers, all we need is some good PR and a showcase fund to help subsidized those in need. just 10% of the annual rpofits will be more than enough to fund those needy.

Remember you heard it first from the parasite

Hang Seng Parasite said...
This comment has been removed by the author.
Government doctor said...

Hey folks,
A few comments here from a doctor in the public sector.
1. Many of my colleagues do not leave for money alone. They are fed up with being messed around by the admin staff (e.g. the guy from TTSH who said "the vacancies are quickly filled" - what a lack of insight into the problem)
2. The vacancies have not been quickly filled. My colleagues, who are left behind, and I have to do more work and spread ourselves more thinly between patients.
3. We have lots of new colleagues, who are "non-traditional source". You may like to find out what this means.
4. Besides the issue of worsening doctor:patient ratios in the public sector, there is also a problem about supervision and training of junior doctors. No point bringing in tons of junior doctors if you do not have someone senior to teach them the ropes.
5. For those who do not know that the richer tend to live longer and enjoy better health, you may like to google this because all the data from large-scale studies have been published and is out there for everyone to see. Just google and you will find the answers

Anonymous said...

"February 4, 2010 -- The national health expenditures are projected to have risen to $2.5 trillion in 2009, or 17.3 percent of the Gross Domestic Product, boosted by spending on public health programs amidst a deepening recession, according to a new government study published Thursday..."
All this money for third world life expectancy statistics???

Singapore seems enamored with US healthcare model with high tech privatized medicine.

This will be a big mistake, we need to evolve our own models and healthcare philosophy.

Death is inevitable and we need to be wise in our consumption of healthcare. Listen to some of the doctors who have gone to the "darkside" equating cost, procedure and technologies with curative outcomes. Like naive investors and immoral bankers, the fool and his money is soon parted through fear, lack of information, guilt and false hope. This is especially through in oncology, some of specialist in private practice are racking in $100K per day!!! Talk about productivity and skills - is there a difference between your banker who screwed you in the past few years and the doctor who promises a cure for a price.

Anonymous said...

Something is very wrong with the system in Singapore. For junior doctors, the macho and paternalistic culture here is so pervasive that the system here has problems attracting Singaporeans who went to Med school in the UK and Australia BACK home.
My colleague who went back to Singapore to "try out" for a year or so couldn't wait to resign her Registrar position to head back to Australia and I am sure there are more similar stories to hers.

That is why we are taking in more and more " non-traditional" sources of doctors.

Anonymous said...

"3. We have lots of new colleagues, who are "non-traditional source". You may like to find out what this means."

And in their haste and desperation to replace the good docs that left, I wonder how many of these ftrash are quacks and charlatans with fake degrees and experience?

Anonymous said...

a friend who wanted to start a family, asked if she could work part-time. she was told it's full-time or nothing.

forced to, she left, and set up her own practice, which is doing very well thank you.

then she was asked to go back to teach the juniors at the hospital...

soojenn said...

Singapore Healthcare affordable? for who? Khaw Boon Wan?

The A&E charges S$84 irrespective of what they do? like just putting a plaster on your feet? They will dispense with the x-rays, etc.. because the patient answered their questions that they do not feel pain, even after a traffic accident?

HK charges only HK$100 (or lss than S$20) for the A & E, and this was only this amount because the system was abused before.

There is a sign that is indicating that patients will be attended to in 30 mins to 3 hours.

You can forget about the 30 mins becuase it apparently never ever occurs. Most of the time, it nears the 3 hours. If you are lucky and have someone hassle and push the nurses in registering the patient, maybe you can get to see the doctor if you have not died by then, in 1 hour. The nurses at the station has also exclaimed that "1 hour is very fast"? when asked why it take an hour to see the doctor?

I also understand that when you are not allowed to use the medisave fully and have to pay a few hundred dollars before they allow you oto use it, and if you really need to use this fully, that you have to be prove (means testing?) that you have almost no money in your bank accounts. They even go to the stage of stripping down the person's diginity to have him provide copies of all his bank accounts.

Isn't medisave belonging to the citizens? What a joke that they have to prove pverty before they can use their own money in medisave when they need in most.

This goes the same for the CPF where the incumbent party is prolonging and withholding the people's money when they need it most, to help? them save for the future? What's the use when the person cannot live as long as old man and die before even becoming able to use his CPF money due to him, and when he needs it most, for subsistence.

Old man has millions, spare a thought for the poor, barely having means to support ttheir daily existence with such predatory rules which is denigrating the citizens.

Anonymous said...

I heard docs from india and philippines are well-trained. So I guess no worries.

Anonymous said...

One or 2 years ago I already told u we gone past cost into quality issue. Do u believe now? But why would a millionaire blogger care? You dun really do u?

Ps: obamacare has no public option. We will become no 2 again( from bottom) when it takes effect with support from the republicans.

Anonymous said...

If u looks around, so many people jobless or under-employed.
Why unemployment rate at 2.1%????
Just unbelievable!!!

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Anonymous said...

You mean why so many people freed from the rat race? Isn't that a good thing?

Anonymous said...

It is now clear that "the problems" ill be swept under the carpet, and nobody seems to be interested in them any more.
e.g., since the unemployment rate is only 2.1% , why bother?
But is it true?? who bother?
you suffer yr business?

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