Lessons of Singapore: Getting Financing and Purchasing right

1. Lessons of Singapore: Getting Financing and Purchasing right Dr Kambiz Monazzam Tehran - Jan 2007 Most slides are based on Prof Lim Meng Kin

2. هیچ چیز عملی تر از یک تئوری خوب نیست

3. Singapore: Small but! Singapura, the Lion City, from the Malay words singa (lion) and pura (city).

4. Iran Singapore

5. Area 660 sq km Population 2006 4.48 million Singapore

6. 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.

7. 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

8. Chinese 75%Malays 14%Indians 7.7%Others 1.4%

15. 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.

18. 144 years

19. GDP per capita (PPP) USD 27,330

20. Infant Mortality Rate Iran: 26 2.5

21. Life Expectancy Iran: 70

22. Health care expenditure trends: OECD countries & Singapore 1965-2000 U.S. Germany Canada Japan U.K. Singapore Year

23. Cost-effectiveness Comparisons:Health Expenditures and Infant Mortality Taiwan US UK Germany Australia Hong Kong IMR/1,000 Singapore Japan Health expenditure as % of GDP

24. Efficiency: WHO Rankings 2000 • Health spending as Per capita % of GDP spending • France 9.8% $2,369 • Italy 9.3% $1,855 • San Marino 7.5% $2,257 • Andorra 7.5% $1,368 • Malta 6.3% $551 • Singapore 3.1% $876 • Spain 8.0% $1,071 • Oman 3.9% $370 • Austria 9.0% $2,277 • Japan 7.1% $2,373 • 37. U.S.A. 13.7% $4,187 • 93.Iran 4.4% $108

25. Singapore Inpatient Care System

26. Singapore Inpatient Care System • Large Important Centers: • Singapore General Hospital (SGH) • National University Hospital(NUH) • National Health plan : 1983 • First Financing • Then Hospital Reform

27. Public – Private Mix Outpatients:80% go to Private 20% go to Public Inpatients: 20 % go to Private 80% go to Public

28. Public vs. private health expenditure Public Private

29. 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

30. Reasons Behind Reform • Demand for Hospital Care is going up • Anticipated Tax revenue expected to go down in relative terms

31. 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

32. Reform Threats • Complete Dependence to GOV Taxes • Moral Hazard • Hospital Induced Demand • Low People Responsibility • Punishing of people who stay healthy

33. Singaporean Values & Famous Proverbs Social Context • Self Reliance • Strong Family Ties • “Save for rainy day” • “Charity begins at home”

34. Financing reform: 3M system Public vs. Private financing Singapore 1965-2000

35. Singapore’s Health Care Financing Philosophy: Avoid either extremes Free Market (open–ended health insurance) Free Healthcare (egalitarian welfarism)

36. “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.”

37. Personal responsibility State as payer of last resort Philosophy: Formula: + Government: subsidy People: co-payment

38. 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

39. Reforms in health care financing-3 “M”s

40. Medisave • Compulsory for working individuals • Contributions to personal accounts. • Contributions matched by employer • Tax exempt • Earns interest

41. Medisave • Employer & Employee paid 20% of Wages to Central Provident Fund • X % of employee’s wage go to Employee’s Medisave Account.

42. Medisave • Employer & Employee paid 20% of Wages to Central Provident Fund • X % of employee’s wage go to Employee’s Medisave Account.

43. Payment :Full Charges of low class wardsPartial charges of high class wardsHave maximum daily limitsIn 2001, 262,000 Singaporeans (or85 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. Status of Medisave:

44. Catastrophic insurance, covers expenditure for major illness such as:Long HOS stayCancer Chemotherapy MediShield Can Medisave cover catastrophic health Expenditures?! Why

45. MediShield:Claim limit /YearClaim limit /Person "deductible" coinsurance: 20% MediShield Premiums automatically deducted from Medisave / or If people wants to pay separately %0.5 ?

46. MediShield

47. In 2001, MediShield covered 2.02 million CPF members and their dependants.MediShield paid out 91,000 claims amounting to S$64 million. Present status of Medishield:

48. Endowment fund interest distributed to public hospitals, to pay hospital bills of needy. Hospital Medifund Committees appointed by Government Medifund

49. 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.

50. MEDISAVE:compulsory savings plan MEDISHIELD:catastrophic insurance plan MEDIFUND:a health endowment fund