Significance of Healthier SG's Capitation Model on Healthcare Financing and Mechanisms to Ensure Long-term Fiscal Sustainability

Mr Kenneth Tiong Boon Kiat asked the Coordinating Minister for Social Policies and Minister for Health (a) whether the shift in model from the Community Health Assist Scheme's means-tested co-payments to Healthier SG's capitation model signals a departure from the Ministry's philosophy of shared responsibility in healthcare financing; and (b) without market-based price signals to moderate demand under the capitation model, what specific mechanisms will prevent buffet syndrome and ensure Healthier SG's long-term fiscal sustainability.

What the Member might be asking is why many preventive care services under Healthier SG are fully subsidised, while other healthcare services, including those under the Community Health Assist Scheme (CHAS), require co-payment by patients.

The key reason is that we want to encourage cost effective preventive care. Hence for preventive care services, where we hope that as many people take it up as possible under Healthier SG, we have given full subsidies to the target population segment. Subsidies for all other healthcare services, including acute hospital care or chronic care, continue to be means-tested and require co-payment, to instill some discipline in healthcare provision and consumption, because unnecessary consumption of healthcare and over-servicing can lead to rapid cost escalation, a financially unsustainable healthcare system and poorer health outcomes in the long term.