Health care costs have been rising like a helium-filled balloon on a windless day, and look set to double every 8 years, give or take a few months.
That is, if increases in Medical Cost Inflation (MCI) persist at their current rate of 10% per annum. Singapore’s MCI clocked in at 10% for 2018, and is expected to hit 10.1% for 2019, according to a report by Mercer Marsh.
Between 2007 and 2017, private health care costs have risen 9% annually like clockwork, according to MOH.
For comparison, the Consumer Price Index for 2018 and 2019 were 0.4% and 0.6% respectively. (Source: Department of Statistics, Singapore)
This was why since 1st April 2019, MOH mandated that all IP Riders come with a compulsory co-payment, ostensibly to curb runaway consumption.
But all is not lost – because we have the power
Are we going to put the days of over-consumption, over-servicing and over-charging behind us? Here’s a medical practitioner’s take on why costs have been increasing:
“In other sectors, people buy less when the economy is bad. But in healthcare, the demand never goes down and tends to increase with ageing, rising rates of chronic disease, the availability of new treatments and, most importantly, health insurance.”
Professor Eric Finkelstein from the Duke-NUS’ Health Services and Systems Research Programme
We can attribute this in part to our instincts of self-preservation – everyone just wants to recover, and since we have the medical advances necessary, why not?
Add to this a layer of robust health insurance, where all costs were taken care of and we’ve found the root for all that runaway inflation.
To which former Senior Minister of State for Health Chee Hong Tat cited a salient example of a woman who had run up a bill of more than $70,000 to remove a small breast lump. The procedure generally costs $5,000 in the private sector.
How to fight Game Theory
So there is a choice to be made by all of us consumers, but it is not always an easy one.
Unabated consumption of medical services simply because “Insurance pays for it” will (already has) increase prices for everybody, and it leads to a slippery slope. (“Since everyone is consuming all they can, I will lose out if I don’t”)
Classic Game theory on display here, which also happens to explain the toilet paper rush which happened during the early COVID-19 stricken days.
Yet it is hard to blame someone who wants the very best of medical care, especially in situations of serious illness or hospitalisation. After all, YOLO.
What then is a good solution?
How Aviva lets you have your cake – and eat it too
If getting affordable and quick access to medical care is the game, then Aviva has some pretty good news for you.
With a curated panel of medical specialists on their list, policyholders of Aviva’s MyShield Plan 1 can have priority access to these specialists within 3 working days. (Plan 2 and 3 customers who choose to go to these private panel specialists will be subject to pro-ration factors as these plans are not meant to cover costs for private hospitals)
Not only that, here are other benefits MyShield Plan 1 customers get to enjoy.
The end result: A faster, more streamlined experience that costs less for everyone involved, without giving up top-notch medical services that we’ve grown accustomed to, especially in Singapore.
Clearly Surely Weighs In
Introducing co-payment helps, because it discourages unadulterated consumption.
But a more effective measure would be to ensure only the most responsible of health care specialists and providers thrive.
What we would like to see, is that this panel gets expanded upon over time: to as many specialists as possible.
A reminder from us too that these specialists are all private specialists, so shield plans that are designed to cover costs up to restructured hospitals may not be able to enjoy the full benefits (or simply fork out more since their bill is pro-rated).
And now, you act
All the analysis in the world is not going to be beneficial unless you act upon it. If you are looking to protect yourself from large hospitalisation bills, or enjoy health care benefits in a socially responsible manner, you can check out Aviva’s MyShield here.
If you are already properly covered, then please do a socially responsible act today and share this article with those around you.
Because much like combating Covid 19, we can only bring health care costs down if we all work together. #instaquoteworthy
www.ClearlySurely.com aims to eradicate the knowledge gap between consumers and Life Insurance. Our Vision is that one day, every Man, Woman, and Child will be properly insured.
We thank Aviva for inviting us to write this article.