01 Apr 2019
Topics Health

The history of Singapore’s healthcare system

Like many other countries in the region, the development of Singapore’s healthcare system is rooted in its colonial past.

Medical services were initially introduced for the colonial governments and their military, and the first public hospital was a wooden shed constructed in the cantonment for soldiers near Bras Basah Road in 1821.

Singapore General Hospital was constructed at the beginning of the 20th century - and by the 1950s, had developed outpatient clinic services, that were decentralised to other areas in Singapore.

Hospital services were provided through a ward class system, with Class A for colonial administrators, Class B for local civil servants, and C Class for the masses.

Based on a British model of health services in which population health was linked to the development of the colonial economy, the government health services were centrally provided and financed by taxation, against a private market and traditional medicine.

Following independence, a major determinant for health in Singapore was housing resettlement in the early 1960s.

Congested living conditions were prevalent, leading to poor sanitation and frequent outbreaks of diseases.

The Housing Development Board (HDB) which through a major public housing scheme, resettled Singaporeans into flats from slums and bad housing.

With better living conditions such as portable water supply, hygienic disposal of waste, and more accessible primary medical care, these instantly reduced morbidity, and had positive impacts on the country's overall health status.

Compulsory vaccination programmes - specifically preventing children from contracting common infectious illnesses, were also developed with a wide network of outpatient clinics built to offer health services.

In Singapore, immunisation is strongly supported by enforcement of the law to reach high levels of immunity.

Mass immunisation against TB began in 1957 - crossing over 80% of the population in just four years, while deaths due to communicable diseases were dramatically reduced with increasing immunization levels.

Important milestones in healthcare over the years

The past five decades saw the government undertaking numerous campaigns to raise awareness on health issues.

Campaigns such as 'Keep Singapore Clean' and promotion of healthy lifestyles were conducted to encourage people to look after both environmental and personal well-being.

These programs targeted causes of diseases and preventive measures in health promotion - serving as an immensely effective means of public education.

Starting from the mid-1960s, maternal and child health services along with family planning were offered to eligible married women to help them make informed decisions about having children.

This, along with a slew of legislations to support population control as well as the enactment of laws that legalised abortion in 1974, helped to reduce fertility rates and given that the Women’s Charter in Singapore for women rights was passed in 1962 to support equal education status for females - an issue Professor Phua considered “an impediment to rising standards of living”.

The Ministry of Health’s Primary Healthcare Services Division integrated outpatient clinics, maternal and child centres, school health services and health education - well before WHO similarly called for Primary Health Care to achieve Health for All.

The Central Provident Fund (CPF) as an employment savings scheme, was first used to supplement taxation as the basis of financing the National Healthcare Plan in the early 1980’s.

This initiative requires a portion of incomes to be put aside as personal mandatory savings.

Within these savings lie a personal Medisave account that is set aside to pay for hospitalization and expensive healthcare, later expanded with a Medishield insurance scheme for costs incurred by individuals and family members.

This encourages Singaporeans to look first to personal and family resources for healthcare, linking the nexus to employment and avoiding the inter-generational problems due to population ageing, found in national health financing from taxation and insurance schemes.

A comparison across developing Asia

In an interview with Professor Phua, he explained that it’s not as simple as an ideological argument, essentially of whether a welfare system or publicly funded system is better or not.

As he says, “What the government needs to do in terms of providing and financing healthcare is to ultimately achieve an equitable, efficient and cost-effective balance.”

Without such optimization of the public and private sectors, maintaining the incentives among stakeholders at different levels of care, and having strong governance, a healthcare system is bound to fail.

Hong Kong for example, has similar colonial histories and economic development rates to Singapore.

Its healthcare system is more welfare-oriented, with public healthcare being offered at extremely low costs.

While this ensures that everyone gets access to healthcare on paper, it has resulted in a public healthcare system that is heavily burdened.

The government in Hong Kong spends more of public expenditure on health services and comes under pressure to spend even more for care provided by the voluntary sector.

It has introduced more private insurance to ease off the demand for higher quality services demanded by a more affluent population.

This means that a welfare system is only sustainable with more rationing and long queues and further taxation amidst an ageing population, and reiterates the fact that financing remains the crux of future healthcare problems.

Changing healthcare needs of the population

Like many other countries in the world, Singapore currently deals with a rapidly ageing population.

This means that there is going to be added demand for long-term care - deeming it crucial for the government to implement schemes adhering to the ever-changing needs of an aged society.

Due to an increasingly affluent population, the demand for more sophisticated services is also on the rise.

Added features in the use of new technology and a higher quality of medical care in hospitals have become incentives for doctors to over-service or overcharge, especially in the private sector, fueled by more liberal ways of paying providers.

The first step to dealing with this is of course, balanced financing to meet both supply and demand.

As with Medisave, the government aims to apply the principle of co-payment as far as possible, whereby individuals and their family are expected to share a portion of the charges whilst the government targets subsidies mainly for necessary healthcare.

On top of creating subsidies for the needy, the role of the financing system has repeatedly stressed the importance of saving for future ageing, as well as the need for good governance and sustainability.

Public-private partnerships are also increasingly becoming necessary to cater to changing healthcare needs.

The Community Health Assist Scheme(CHAS), for example, helps lower-to-middle income families and the elderly population by providing subsidies for medical and dental care provided by practitioners in the private sector.

In addition, the government is also providing greater funding for alternatives to hospitalization and subsidies to volunteer welfare organizations (VWOs) for community care.

Private insurance companies also offer competitive plans to complement the Medishield schemes, but due to rising healthcare costs, fee benchmarks have now been introduced to control payments to providers.

Allocative efficiency as the ultimate goal

As mentioned by Professor Phua, Singapore’s focus should be placed on achieving a balance. He explains, if Singapore were to take a more welfare-centric approach, too much taxation to fund welfare would create its own set of problems.

On the other hand, if too much reliance is placed on the private sector including insurance, this results in market failure if prices are uncontrolled in the hands of private practices.

Therefore, Professor Phua states that the solution is allocative efficiency. He suggests, “When it comes to primary healthcare like treatment for coughs and colds, we could leave these more to the market. However, urgent and more expensive hospital-based care should be subsidized or regulated.”

One issue here is that because current financing mainly covers hospitalization, this may incentivize longer hospital stays.

As lower-income patients may not be able to afford care at home, this may be a reason why lower-class wards see longer lengths of stay. Professor Phua states that newer forms of financial incentives and substitutes for hospitalization will have to be developed as alternatives.

Though Singapore has progressed immensely in terms of development, it is still not immune to emerging and re-emerging infectious diseases and has suffered its share of epidemics such as SARS.

Being a global business centre, Singapore is closely linked geographically and economically to other countries in the region. Therefore, a pandemic could have both devastating direct medical and indirect socio-economic costs.

The government must maintain an outbreak response system through means of contingency business planning and strengthen the public healthcare system by providing appropriate infrastructure and epidemiological vigilance.

Responses to the above-mentioned challenges appears to lie in medical research, maintaining quality assurance and secure protection of intellectual property and healthcare data. This helps to support Singapore as a regional medical hub and attracts healthcare and pharmaceutical companies to operate their manufacturing facilities here.

Singapore’s improved reputation for medical services has boosted medical tourism to the country but is rather controversial as it is perceived to have created greater inequity, unless niche areas are clearly identified with comparative advantages that do not cause inequality or undue concern to less developed sectors.

What can be learned from Singapore’s example?

What are the key takeaways from Singapore’s experience in healthcare? Professor Phua states that a good healthcare system relies on three main pillars: a public-private sector mix; integrated financing schemes of taxation, savings and insurance; and strong governance to maintain the balance between the different levels and sectors.

The government has stated that the right balance of incentives in the system has prevailed as healthcare needs transition along with the country’s development.

Singapore’s success is due to its system that relies on maintaining public-private participation with joint responsibility of citizens, family and community to support themselves through a whole-of-society and not just whole-of-government approach.

While the system may have largely worked so far, longer life expectancy and increasing medical costs means that the challenges can only grow.

The government therefore looks to more healthy investments that will help to offset these expanding costs, like cost-effective means of preventing and treating disease, and greater public-private partnerships between the state, market and voluntary sectors in ways that the healthcare system can be bolstered to meet ever-changing needs.

(Photo: Joey Foo)

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Topics Health