Criteria for Inclusion of Medical Specialists into Insurer's Panel for Integrated Shield Plans

Ms Ng Ling Ling asked the Minister for Health with regard to the Multilateral Healthcare Insurance Committee (a) whether it will be made transparent to the public, the criteria for inclusion of specialists into an insurer's panel for its Integrated Shield Plans; (b) whether there will be a more controlled rate of premium increase for such plans to safeguard the public's ability to sustain such plans as they age; and (c) what is the expected timeline for the Committee to complete its review and recommendations.

Mr Yip Hon Weng asked the Minister for Health (a) whether empanelling of specialist doctors for Integrated Shield Plans will result in anti-competition; and (b) whether the Ministry has considered the possible impact on patients having to switch doctors mid-treatment due to this practice of empanelling doctors.

Dr Tan Wu Meng asked the Minister for Health (a) over the last five years how many Singaporeans relinquished an existing Integrated Shield Plan; and (b) what is their median age; and (c) of the above, how many did not later purchase a new Integrated Shield Plan and how many were subsequently admitted to public hospitals.

Dr Tan Wu Meng asked the Minister for Health what measures are there to protect Integrated Shield Plan policyholders in the event of an Integrated Shield Plan insurer exiting the market.

Dr Tan Wu Meng asked the Minister for Health whether the Ministry has studied the regulation of private health insurance in overseas jurisdictions and the possible learning points for Singapore, in particular the feasibility and implications of requiring Integrated Shield Plan (IP) insurers to accept policyholders intending or forced to switch from another IP provider, such that existing covered conditions are not permanently excluded from future coverage.

Mr Pritam Singh asked the Minister for Health (a) whether the Ministry actively tracks and compares the itemised bills of Integrated Shield Plan (IP) patients who use public and private healthcare institutions respectively; (b) what strategies has the Ministry embarked on over the last 10 years to address the problem of overtreatment by some doctors; and (c) what role does the Ministry envisage patients playing to address the problem of over-treatment.

Mr Gerald Giam Yean Song asked the Minister for Health what proportion of Singapore residents are current policyholders of an Integrated Shield Plan (IP) for (i) standard IP for public hospital Class B1 coverage (ii) Class B1 coverage (iii) Class A coverage and (iv) private hospital coverage.

If I may continue, Sir, MediShield Life can be used in both public and private healthcare institutions, and coverage is sized to be sufficient for subsidised care. The Government provides means-tested subsidies for MediShield Life premiums and MediSave can be used to pay for premiums to keep them affordable.

Individuals may choose to purchase an Integrated Shield Plan, or IP plan, which provides additional benefits beyond MediShield Life to provide more coverage for private healthcare services. MediSave can be used to pay for IP premiums, subject to withdrawal limits, to help defray the cost of private insurance. Currently, less than 1% of Singapore residents have a Standard IP plan, 10% have a class B1 IP, 20% have a class A IP and 40% have a private hospital IP.

In addition, some individuals may also purchase riders on top of their IP plans, if they prefer additional coverage and can afford the premiums. Riders commonly cover the deductible and co-payments portion of the bill. Riders are fully private insurance products that must be paid by cash and MediSave withdrawals are not allowed for rider premiums. Less than half of Singapore residents have riders.

Let me just summarise this part. In essence, MediShield Life is universal, it is sized to cover the bulk of the large hospital bills for subsidised care. IP plans stay right on top of this, to provide for private hospital bills. And riders go even further on top of the IP plans, to cover for the deductibles and the co-payments. So, you can see it as a three-tier thing.

MOH does track and monitor the bills from both public and private healthcare institutions. Private healthcare costs have been rising rapidly in Singapore. Between 2007 and 2019, private hospital bills among IP cases grew at 4%, twice as fast as unsubsidised bills in public healthcare institutions. In both private and public hospitals, investigations, surgeon fees, treatment services and operating theatre facility fees were key drivers of cost growth for private patients.

In 2016, the Health Insurance Task Force (HITF) comprising members from the Singapore Medical Association (SMA), Life Insurance Association (LIA) Consumers Association of Singapore (CASE), MOH and MAS had recommended various measures, such as panelling and Fee Benchmarks, to help contain claims and healthcare cost escalation. MOH has been working to implement the HITF recommendations. Fee Benchmarks have been rolled out since 2018, along with appropriate care guidelines.

One of the recommendations from the HITF was to introduce a minimum co-payment requirement, as IP riders that fully covered deductibles and co-payment had contributed to rising private healthcare cost. The co-payment ensures what we call "skin in the game", to encourage patients and their doctors to make careful and deliberate decisions on the choice of treatment and the type of care they need.

MOH, therefore, introduced a minimum 5% co-payment for all new private riders in 2018.

The IP insurers have also extended this requirement or alternative claims-based pricing from April 2021 to their existing policyholders with riders. While this is not a requirement imposed by MOH, the Ministry supports the move as it will help to encourage appropriate care. To provide some assurance to policyholders who were concerned with potentially large co-payments, MOH therefore allowed insurers to apply a $3,000 co-payment cap for treatment from panelled doctors with negotiated fee arrangements with insurers. This would mean that bills above $60,000 are capped at $3,000 co-payment. To put things in perspective, less than 3% of inpatient bills in private hospitals today exceed $60,000. So, the vast majority of inpatients bills do not actually hit the $3,000 co-payment cap.

This co-payment cap could not be applied to all claims, as it would negate the effect of co-payment once the $3,000 cap was reached. Let me explain.

Take for example, if the co-payment applies to all claims, policyholders may choose a treatment which costs $100,000 instead of another equally effective treatment at $70,000. This is because the policyholder would pay the same amount of $3,000 for either option once they breach the $60,000 limit, where the $3,000 co-payment cap has been reached. The additional costs would then be borne by the insurer and this eventually translates to higher premiums for other policyholders. Therefore, the cap was applied to panelled doctors, where there are established fee arrangements to ensure that appropriate and cost-effective treatment is provided.

Some have raised concerns with regard to the use of panels. Questions have been raised on whether limited panel sizes are in the best interest of the patients and whether such practices are anti-competitive in nature or if there are medical ethical concerns around such practices.

The use of panels was recommended by the HITF. Internationally, panels have been used by some countries to keep healthcare costs more predictable, to reduce variation in practices and charging. These practices do not contravene the Competition Act as any decision to empanel doctors is made by individual insurers independently with the doctors, on mutually acceptable terms. Such practices do not restrict insurers from competing with one another on their prices, insurance products, or choice of doctors. Nevertheless, MOH has encouraged insurers to make their panel selection criteria more transparent, a move which is also supported by LIA in its "Panel Good Practices Guide" to all insurers.

On the issue of medical ethics, the Singapore Medical Council's Ethical Code and Ethical Guidelines stipulates that doctors should have the best interests of their patient at heart when treating them. This includes prescribing appropriate and cost-effective care that best meets the needs of their patients. Access to medical care and clinical judgement should therefore not be influenced by empanelment nor any other financial constraints or pressures inherent in any health system. Should doctors find that the conditions of being on a panel would impose constraints on their ability to care for patients, they may decide for medical ethical reasons to not participate in such panels.

We want to emphasise that patients can make claims for all treatments covered under their IP, regardless of whether the specialist is on the panel or not. Nonetheless, some doctors have expressed concerns that IP panels do not have an adequate number of specialists, restricting referrals to the appropriate specialist who may not be on the panel, and therefore, limiting the continuity of care. Patients have also raised concerns that the doctor they are comfortable with, or are familiar with, is not on the panel of their IP insurer and they may not enjoy the additional panel benefits such as the $3,000 co-payment cap.

To address this, MOH has encouraged all insurers to grow the size of their panels and some have already increased the number of specialists on their panels by more than 40% since August 2019. Today, more than 70% of private specialists are on at least one IP panel.

Some have asked insurance panels to be expanded to include all doctors, so long as they do not have a poor track record with the Singapore Medical Council, or SMC. However, some doctors may choose not to be empanelled as they may already have a sufficient pool of patients. So, the doctors do have a choice to not be on panels. This is especially the case for areas where there are very few specialists locally. Hence, MOH encourages IP insurers to enhance their pre-authorisation processes, to give approval for hospitalisation or treatments and their associated costs beforehand. With pre-authorisation, insurers are able to assess treatments for medical necessity and fee arrangements and appropriateness, including for doctors who are not on their panel. And patients can also have greater peace of mind knowing that at least a significant portion of their bill will be covered by their IP. With pre-authorisation, the risk of runaway bill sizes would then be minimised. Hence, some insurers have extended the co-payment cap to pre-authorised claims for treatment by non-panel doctors to provide policyholders with greater assurance, and we certainly encourage more to do so.

While policyholder benefits may differ, depending on whether they see a panel doctor or a non-panel doctor who is pre-authorised, these benefits should not differ to the extent of prohibiting patients from seeing non-panel doctors or influence patient choices in an undesirable way.

MOH recognises that some policyholders may wish to switch insurers, whether for more competitive premiums or for better benefits, such as access to more panel doctors, but are unable to do so because of pre-existing conditions. IPs are commercial products, and their features and pricing are, ultimately, determined by private insurers. MOH will study whether IP insurance can be made fully portable, including looking at examples abroad. However, insurers may potentially need to increase the premiums significantly for all policyholders to price in the increased risk they assume for portable IP that covers pre-existing conditions. This is why MediShield Life is designed as a scheme to cover all Singaporeans for life with no exclusions and covers all pre-existing conditions to give reassurance to all Singaporeans should they choose to relinquish their private IP plans, for whatever reasons.

Over the last five years, about 5% of IP policyholders relinquished their IP per year on average. This could be because they may have opted for different coverage, after considering the cost of the premiums, their financial resources and their different healthcare needs. Their average age was 34. Data on the number of policyholders who did not subsequently purchase a new IP or were later admitted to public hospitals is not available.

Consumers should understand their IP terms and conditions when choosing their IPs. Insurers offer policyholders enhanced policy benefits, such as the co-payment cap, lower deductibles or a longer period of pre- and post-hospitalisation coverage for panel treatments. All this must be made known to the policyholder prior to policy purchase and at least 30 days before any changes in policyholders' benefits. Policyholders must be properly advised at the point of purchase or renewal about their coverage, so they can make informed choices about their IP and choice of doctors and care setting.

Some have asked if insurers can simply use MOH's Fee Benchmarks to determine all insurance payouts. As Fee Benchmarks are designed to be reasonable ranges of fees for the large majority of cases, insurers can, generally, take reference from the benchmarks for most payouts. Doctors do charge below and above the benchmarks, depending on the nature and the complexity of the cases. However, insurers also need to take into account the medical complexity and specific clinical circumstances, and deviate from the benchmarks for justified and exceptional cases. According to LIA, between 5% and 15% of IP claims for surgeon fees were approved above the upper bound of the Fee Benchmarks, depending on the insurer.

Claims scrutiny by insurers may have been perceived as challenging a doctor's professional judgement. Insurers scrutinise claims to ascertain whether treatments were medically necessary and charged appropriately. This actually protects the interests of policyholders who may otherwise see their insurance premiums rise should claims be paid out indiscriminately. MOH recognises that this is an important process for the integrity of the healthcare system and is a common practice internationally. It is, nonetheless, important that the process be handled professionally and efficiently by each insurer. Insurers should not make the process onerous and ask for unnecessary information unrelated to the claims, imposing a heavy administrative burden on the doctors. The questions and information sought for common conditions can be standardised and streamlined so it will not be perceived as questioning the decisions and judgement of the doctors. If a particular claim is justified, insurers should pay according to the policy benefits. We will be looking more into this issue.

Dr Tan Wu Meng has raised concerns with the risk of IP insurers exiting the market. To ensure that insurers remain financially sound and are able to meet their obligations to policyholders, MAS exercises regulatory oversight over the insurers' financial standing, risk management and governance. This is accomplished through measures, such as establishing regulatory capital requirements and setting corporate governance and risk management requirements and guidance, which are, in turn, reinforced by regular onsite inspections and close engagement with the boards and senior management of insurers. MAS also takes action against insurers whose practices are found to be wanting or where there are breaches of MAS' regulations.

An insurer may decide to exit the IP market because of commercial reasons or due to insolvency. In the event that an insurer exits the IP market, the insurer or the liquidator will seek to arrange for the IP policies to be transferred to another insurer for continuity of coverage. MAS will ensure that the existing insurer and the insurer taking over the IP policies properly account for policyholders' interests.

The various initiatives covered above will take time to bear fruit. However, we are confident that these measures will help to keep healthcare costs more sustainable. Looking ahead, the refinement of various IP features will continue to be a multilateral effort between MOH, hospitals, doctors and the insurers. To support these efforts, MOH appointed a 12-member Multilateral Healthcare Insurance Committee (MHIC) in April this year to provide a platform for healthcare providers, payers, consumer representatives and the Government to work on these issues related to health insurance. The MHIC comprises representatives from the Academy of Medicine, Singapore (AMS), the Consumers Association of Singapore (CASE), the Fee Benchmarks Advisory Committee (FBAC), the Life Insurance Association (LIA), the Singapore Medical Association (SMA), private hospital representatives and with MAS as an observer.

For a start, the Committee will prioritise four specific workstreams. First, panels and pre-authorisation, including streamlining the processes I spoke about earlier; second, issues pertaining to improving transparency across the board, including providing more detailed and itemised information about healthcare bills and publishing data on claims and premiums, so that insurers, providers and policyholders can make better informed decisions; third, establishing a claims complaints process supported by AMS and LIA so that stakeholders have an avenue for recourse should they feel unfairly treated, such as where insurers or patients may wish to raise concerns about over-servicing or over-charging, or if doctors have concerns about certain insurer practices; and, fourth, examining the issues from a patient and consumer-centric viewpoint to ensure that the patient and public interests are best safeguarded. On this particular last issue, CASE will be leading a sub-committee to the MHIC to deal with the matter comprehensively.

As these issues are complex, some time will be required for the Committee to develop and agree on practical solutions. Processes within the institutions, hospitals and clinics may also have to be adjusted to make it more seamless and streamlined. The Committee has already begun its work with the first meeting held on 27 April. MHIC will share its recommendations progressively as they are ready and is working towards a first round of recommendations in the next few months.

The issues surrounding IPs are multi-faceted and require thorough discussions as well as careful balancing of various considerations, to find solutions that best benefit policyholders and patients. With continued healthy dialogue through the MHIC, MOH will work together with all stakeholders towards developing sustainable solutions for policyholders, payers and providers alike.

Thank you, Deputy Speaker. I thank the Senior Minister of State for the extended comments on this issue. The recent public exchange between the Singapore Medical Association and the Life Insurance Association of Singapore has put into focus the role of the regulator, namely, MOH. Even as I acknowledge the Senior Minister of State's establishment of the MHIC, which has been set up to look into some of these issues, I have, nonetheless, two supplementary questions for the Senior Minister of State.

Firstly, would MOH, as the regulator, be amenable to setting up a database transparent to both doctors and insurers to allow parties to compare and assess their bill sizes with a view to better manage medical inflation in the public interest?

The second supplementary question is in conjunction with the first, which is, together with the establishment of the database, would MOH, as regulator, consider setting up an independent panel of assessors under its purview which would be accessible to patients, doctors and insurers to resolve disputes about fees and the necessity of medical procedures?

Sir, I thank Mr Pritam Singh for his questions. In fact, these two items are already being done.

The first, on the database for bill sizes, when we have the Fee Benchmarks Advisory Committee, in fact, the database on fees that are charged across a diverse range of procedures across various institutions are already available for the Committee, which comprises practitioners and insurers, to collectively deliberate on what the kind of benchmarking ought to be. So, yes, the database is available and I think that will provide some scrutiny by the relative stakeholders to ensure that, whether it is payouts or benchmarking, they are considered fair to the policyholders and to the payers as well.

The second issue on independent assessment, as Members have heard from my reply earlier, we will be setting up a Claims Complaints Panel that comprises the insurers plus also the Academy of Medicine of Singapore who are specialists in the respective fields. So, that provides some degree of independence from the professional side or of both the stakeholders to really look at any areas, whether it is insurers or doctors, which have got some unhappiness over the way payments are done or the way a certain case is being assessed by either party. So, yes, there will be an independent panel that is going to be in the works.

Thank you, Deputy Speaker. Let me thank the Senior Minister of State for his answer. Limiting the choice of doctors for patients and insured individuals, personally, I feel that, definitely, this is to the disadvantage of the patient. I cannot understand how this is not anti-competitive. Limiting choice to the patient will limit the patient's ability in terms of choosing the right doctors, unless you are telling me that the panel itself comprises more than 50% of all doctors in Singapore, to make sure that each insurer must have a certain percentage of doctors on it.

Secondly, if the purpose of the empanelment is to control fees, do the Fee Benchmarks not do that already? With the Fee Benchmarks in place, can we then remove the panel completely? That is something that we have to consider.

Last of all, I also wish to echo the question by the Leader of the Opposition whether MOH will be coming up with a ranking of the insurers because MOH will be seen as a neutral party, that is, in order to protect the consumer.

Sir, I thank Dr Lim Wee Kiak for his questions. The issue of whether the limited size of panels of certain insurers, as I have said in my reply, it will be very difficult to say that we make the panels include 100% of all doctors, because doctors have a choice not to be on panels as well.

I think the more important way to look at this is how can we make sure that care is accessible to our patients, whether the mechanism is empanelment or otherwise? I think the key is to make sure patients have access to any doctor they want to see, which is why I think the better way to go for is to look at pre-authorisation. With pre-authorisation, the doctor puts in his diagnosis, gives a certain quote on the treatment cost that is needed and the insurer has a chance to see whether this cost is fair and whether the type of treatment that is proposed is reasonable for the kind of diagnosis that is being put forth. In that sense, the patient can then have access to any doctor, subject to a pre-authorisation, if they are not on the panel.

This is a mechanism that is already available today. But, what we need to do is to make sure that the process is much more streamlined and seamless, so that there is not too much administrative burden on the clinics and the patient does not have to wait too long for this process to be completed before they can have access to care by a different doctor, by a different specialist.

In terms of ranking of insurers, I think what is important is to have information on how each insurer price its policies and what benefits it has transparently so that patients or policyholders themselves can make a comparison and take a look.

It is very hard to say which insurer ranks number one or which is ranked at the bottom because they may have product differentiation that meets different persons' needs. And for a person where the product meets his needs, it could be number one, as an insurer, but if the other product meets the other person's needs better, that could be number one in the other person's eyes. I think it is very hard for MOH to decide from one person to the next which is the best product to suit the person's needs. What we should do is to put more information so that patients and policyholders can make the right informed choices.

Mr Deputy Speaker, I thank the Senior Minister of State for his detailed answer. I would like to raise supplementary questions along two themes: patient voices and patients' ability to negotiate in the market.

On the issue of patient voices, Mr Deputy Speaker, can the Senior Minister of State assure us that MOH's proposed dispute resolution mechanism will actively involve the patient's perspective and the journey experienced by patients, whether as existing policyholders navigating the IP system or potential policyholders or former policyholders who may feel excluded.

My Clementi residents who are on Integrated Shield plans (IPs), some of them, they tell me of the challenges involved in making a claim, despite having been with the same firm for many years, despite the full support of the doctor looking after them, whether the doctor is in the private or public sector.

On the second question, Mr Deputy Speaker, that of the bargaining power of patients, policyholders and consumers. The Senior Minister of State earlier spoke about the scenario of what happens if an IP insurer exits the market. He said that there would be a negotiation or discussion between the agencies and the insurance provider about ensuring that patients are covered. But I ask the Ministry, in the event of an IP insurer exiting the market, is there a mechanism to ensure that patients who already have existing conditions will be appropriately covered and recognised in a way that does not disadvantage them if the insurer exits the market?

I furthermore would like to ask MOH, whether MOH would consider establishing some kind of regulatory backstop to protect patients? Because once you have a mechanism in policy to protect patients when an insurer exits the market, to allow these patients to transit in a way that is non-discriminatory, not unfavourable, to another insurer, I put it to the Ministry that that can be the beginning of a mechanism to allow patients to transition between insurers.

And I suggest to the Ministry that once patients have the option of transiting with the potential for having pre-existing conditions covered to some extent, as is the case in other regulatory jurisdictions like Australia, there is better bargaining power for the consumer and that leads to a better functioning market as well.

Sir, I thank Dr Tan for his clarifications and questions.

His first question pertains to patient voices should there be a dispute by the policyholder against the insurer and what mechanisms are there today to address some of these grievances. Actually today, FIDReC, the Financial Industry Disputes Resolution Centre already has a mechanism in place to address any policyholder's concerns pertaining to whether it is policy terms or unfair treatment by an insurer. So, FIDReC is a mechanism that is already available.

But we do feel that with better patient and public education, that will raise the awareness of consumers' rights and when they think that their rights, under the policy terms, have been violated. So better patient education, better policyholder education is another important thrust to get this done.

We welcome the fact that CASE will be forming a sub-committee under the MHIC to further study this issue, and also to look at how they can better represent the voices of consumers, policyholders and patients.

The second issue is about what would happen if the insurers were to exit the financial sector. If an insurer fails and undergoes winding up processes under the Insurance Act, the appointed liquidator is required to endeavour as far as possible, and reasonably practicable to sell, or transfer the whole or part of the insurance business to another insurer before considering other options.

The Policyowners' Protection Scheme, or PPF Scheme, is also in place which aims to provide coverage for policies which are commonly purchased by consumers, and/or cause significant impact of destruction to policyholders should the insurer fail. This would include accident and health policies such as IP plans, which will be fully covered under the PPF scheme, in an event that the insurer fails. The PPF Scheme does not merely provide compensation of crystallised claims when an insurer fails, but also seeks to ensure continuity where possible for the effective policyholders in the event of an insurance failure.

For example, you could also fund a transfer or run-off of the IP portfolio business to another IP insurer to ensure continuity of coverage for the affected policyholders, if necessary. In Singapore, what is useful for Singaporean citizens, is to always know at the back of their minds that they have a safety net called MediShield Life. Should all else fail, MediShield Life will be here to cover you universally with no exclusion on all your pre-existing conditions for life.

Mr Deputy Speaker, Sir, I thank the Senior Minister of State for his reply. I just have one supplementary question, which is whether this method of empanelling doctors will impact patients, who may need to change doctors halfway during their treatment for whatever reasons?

Sir, I think this is also in the same vein as expanding the panel of doctors. Which is why in one of the work streams that the MHIC endeavours to do, as one of their earliest priorities, is to look at how they can further expand and streamline the pre-authorisation process. Once we can get a more seamless and streamlined, pre-authorisation process, it effectively opens up access to care by all doctors. And the patient, then do not have to really worry so much about whether doctors are panelled or non-panelled.

The difference, of course, is in some of the benefits of panel and non-panel doctors. But today, any IP-insured patient can actually have access to non-panel doctors through pre-authorisation. So, at the moment, there is actually no restriction of care, but there is some friction in the process. With pre-authorisation, hopefully we can make this much more seamless and reduce a lot more anxiety for patients going for treatment, when they have to go beyond a panel to access a specialist outside the panel.

So, I hope that will help Members understand that the MHIC will prioritise this as one of the key streams they want to work at.

Sir, private hospitals house less than 17% of hospital beds in Singapore and the Senior Minister of State just replied to my question and said that 40% of Singaporeans hold an Integrated Shield Plan for private hospital coverage. This points to a rather high proportion of voluntary downgrading by patients, meaning that they are eligible to seek treatment in private hospitals but end up going to public hospitals.

Does the Senior Minister of State think that Singaporeans are over insured for private insurance, which they do not use? And secondly, other plans to better educate Singaporeans about their options of different Integrated Shield Plans, so they do not get all the information from insurance agents who are trying to sell them private hospital plans?

Sir, I thank the Member for his questions. I think the second question is easier to answer. We will just put as much information as possible, whether it is on MOH website, whether it is on the LIA website. And of course, CASE can play a stronger role in patient and policyholder education as well.

But I think, for his first question, he is conflicting two different numbers together which do not quite necessarily gel. Just because there are only 17% of hospital beds, it does not mean 40% of people cannot buy insurance for private sector. It does not mean that everybody who buys a policy, gets sick and gets admitted to the hospital all at the same time.

So, it is a choice to buy, it does not necessarily mean that they will necessarily have to consume. It does not necessarily mean that the size of the number of beds we have should then limit the amount of policy coverage a particular segment of population goes for. I hope that helps him to understand why the numbers should not necessarily be conflicted together.