MOH introduces hospital fee benchmarks for private sector to manage rising costs

The Health Ministry has also updated existing benchmarks for doctor fees after adjusting for growth.

The Ministry of Health (MOH) released hospital fee benchmarks for the private sector on Wednesday (Jun 14), as part of its efforts to ensure transparency and manage rising healthcare costs. Sherlyn Seah reports.

SINGAPORE: The Ministry of Health (MOH) released hospital fee benchmarks for the private sector on Wednesday (Jun 14), as part of its efforts to ensure transparency and manage rising healthcare costs.

This aims to help patients and insurers make more informed decisions. Previously, only benchmarks for doctor fees were available for the private sector. 

Private hospital bills comprise components that can be classified under two separate categories - hospital fees and doctor fees. Hospital fees refer to items that are billed by the hospital, such as room charges, medication, laboratory tests and the use of surgical facilities and equipment.

Meanwhile, doctor fees refer to surgeon, anaesthetist as well as doctors’ inpatient attendance fees.

The new benchmarks - which are not mandatory - provide a recommended hospital fee range for 29 common surgical procedures and medical conditions. The lower end of the range applies to simple and routine cases, while the upper end is for more complex cases.

Using day surgery for cataracts as an example, the lower limit for hospital fee benchmarks is S$2,600 (US$1,938), while the upper limit is S$4,700. The recommended range for a surgeon's fees is S$2,900 to S$4,400.

The benchmarks were recommended by an independent 12-member advisory committee chaired by Dr Wee Siew Bock, a senior consultant and general surgeon in private practice.

They were set using fee data spanning 2016 to the first half of 2022 from MOH as a reference. About 600 specialists, administrators from all private hospitals and Integrated Shield Plan (IP) insurers’ views were sought over more than 10 consultation sessions.

The full list of fee benchmarks can be accessed here.

During a media briefing on Wednesday, MOH said the new hospital fee benchmarks were developed to address rising private hospital bills.

While the median total private doctors’ professional fee has been on a downward trend since 2015, private hospital fees have continued to rise, contributing to an increase in total private bill sizes.

“Since the publication of fee benchmarks, the surgical fraternity has embraced the benchmarks and the fees in these areas have actually moderated since,” said Dr Wee, chairman of the Fee Benchmarks Advisory Committee.

“But we recognise that in areas like total hospital bill sizes for common conditions and the rest of the surgical fees, it was necessary to start coming up with new benchmarks because fees and charges in that area have also been going up,” he added.

DOCTOR FEES

On Wednesday, MOH also published updated benchmarks for doctor fees - which include surgeon, anaesthetist and doctors’ inpatient attendance fee.

This is to ensure that they reflect current costs and inflationary pressures faced by doctors, said MOH. After adjusting for growth and taking into account factors such as manpower, rental and other operating costs, surgeon fee benchmarks increased by 12.1 per cent, while those for anaesthetist fees went up by 9.9 per cent. 

The benchmarks for doctors’ inpatient attendance fees increased by 5.7 per cent.

MOH said the next review for growth could take place in three to five years’ time, in line with the usual fee benchmarks review cycle or earlier, if necessary.

Besides updating existing fees, the ministry also introduced new benchmarks for surgeon fees for less common surgical procedures.

With this, all 2,100 surgical procedures on the Table of Surgical Procedures (TOSP) - excluding those that are predominantly performed by dentists - will now be covered.

Anaesthetist fee benchmarks have also been rolled out for a total of 500 procedures, covering around 95 per cent of all private cases requiring anaesthesia support.

MANAGING RISING COSTS

MOH said the benchmarks complement other cost-containment measures such as mandating a minimum five per cent co-payment for inpatient bills for new IP riders as well as removing "as-charged" coverage for IP.

During the media briefing, MOH said close to 90 per cent of doctors have been charging within the upper limit of the recommended surgeon fee benchmarks since it was introduced in 2018. This is compared to 80 per cent previously.

Responding to media queries on whether any action would be taken against doctors who continue to charge above the recommended range, the ministry said it would need to take into account factors such as the complexity of the cases.

“When we do see doctors who have repeated patterns of charging way above the benchmarks, MOH will write to them,” said MOH.

“We give them the information and say it looks like you’re charging with this kind of pattern, it appears in the same specialties or procedures ... over time then we start to ask them to explain why they are charging way above.”

“A doctor with many cases above the upper bound doesn't mean he’s definitely doing something wrong. We also have to take a look at the complexity of the cases that the doctor handles,” MOH added.

MOH said hospitals and doctors are each required to provide financial counselling to patients prior to surgery to inform them of the estimated cost of hospitalisation.

It added that those who charge above the fee benchmarks should inform and justify the higher fees to patients and insurers.

IMPACT ON PREMIUMS

Chief Customer and Digital Officer of AIA Singapore, Melita Teo, welcomed the fee benchmarks, saying they promote greater transparency. But they could lead to higher insurance premiums.

“While the revision to the fee benchmark that reflects inflation data is reasonable, it will inevitably have the circular impact of raising bill sizes and higher insurance premiums,” she said.

Even though the benchmarks have allowed for better standardisation of charges, Ms Teo noted the guidelines were not prescriptive, with surgeons and physicians able to exercise discretion and charge higher prices than quoted to ensure that compensation is commensurate with effort. 

“Benchmarks for episodic costing would be useful to both patients and insurers to help us better understand the cost variation of acute healthcare episodes,” she added. 

The Life Insurance Association of Singapore, meanwhile, said it recognises the need to make “fair and necessary adjustments” to the fee benchmarks in view of inflation and changing costs.

“For the life insurance industry, we expect that these benchmarks will provide greater clarity and alignment in negotiations between insurers and hospitals as well as medical professionals. This will ultimately ensure that the pace of premium increase is managed.

“Equally important, the fee benchmarks will empower policy holders to be better informed and aware of the fees charged by their medical providers,” said Dr Yoong Siew Lee, Convenor of the Health Insurance Sub-Committee at the association.

Dr Yoong added that ensuring the continued affordability of healthcare in Singapore by managing rising costs was the collective responsibility of all parties involved, and that the life insurance industry remained committed to being an active participant in this effort. 

This article was originally published on Channel News Asia. Its inclusion on this website is solely for education purposes.