Calculation of Norm Costs of Running Long-term Care Services

Mr Louis Ng Kok Kwang asked the Minister for Health how does the Ministry calculate norm costs, defined as the Ministry's observed average costs of running Long Term Care services, which tend to be considerably lower than what Voluntary Welfare Organisations (VWOs) claim are the real costs of service delivery, as reported in Lien Foundation's 2018 "Care Where You Are" report.

MOH partners Voluntary Welfare Organisations (VWOs) as well as private and public sector service providers in delivering long-term care services (LTC) for Singaporeans.

To estimate the costs of providing different LTC services, MOH works with the service providers to conduct regular costing exercises. The costs are determined based on service requirements set out for each care service. The average of the costs across the long term care provided by different service providers, the "Norm Cost", is then used as a reference to determine the funding for the services.

As care models, cost structures and productivity vary across service providers, some could have costs that are higher than the norm cost, while others could have costs that are lower.

MOH provides means-tested subsidies of up to 80% for long term care services. Singaporeans who require additional help after the subsidies can apply for financial assistance such as MediFund. Some VWOs provide additional assistance to their clients through charity dollars raised. Some may also choose to provide additional facilities and services using their charity funds. To support VWOs in their fundraising efforts and encourage Singaporeans to give generously, the Government funded Community Silver Trust provides dollar for dollar matching for donations raised in the long term care sector.