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Subsidy still generous
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Wed, Mar 05, 2008
The Straits Times
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GE | NEROUS to a fault, but could not be any less in inflationary times and reduced purchasing power. This is our verdict on the scaling of subsidies for patients' public-hospital care, when means testing takes effect next year. The reduction of 15 percentage points for C and B2 wards at their cut-off base - to 65 per cent and 50 per cent respectively - is not brutal. State treatment support at these levels is still considerable for a nation that loads heavily on the user-pays principle. In salary terms, the $3,200 qualifying figure and the cut- off sum of $5,201 will pull in 40 per cent of the workforce who will receive progressively reduced subsidy, according to Health Ministry projections. Six workers in 10 still receiving full subsidy of 80 per cent and 65 per cent is a generous concession, but necessary to allay disquiet that means testing could amount to price scalping. If a watchful labour-lobby MP like Halimah Yacob could express relief at the high level of dispensation, this had to be a gentle start to means testing by Health Minister Khaw Boon Wan. Not likely for long, though. The public purse could not allow it.
The probability which the people should prepare themselves for - NTUC, do take note - is that subsidies will have to be reduced further over time as the galloping cost of diagnostics, drugs, bed- space premium and doctors' charges must outpace the rate of increase in subsidy budgets. One should then ponder anew the interests of the taxpaying lower-middle and middle-income earners. They are the most vulnerable of the 40 per cent having to pay more. The top 20 per cent of earners are recession- and inflation-proof, whereas the 60 per cent spared the cuts have got all the policy consideration. In adjusting salary qualifying bands relative to subsidy levels in future exercises, this is the group the ministry ought to focus on.
Beyond this, additional insurance cover is the only means by which this squeezed group, and even the higher-income group of $12,000-plus earners, can preserve their ability to not get bankrupted by large hospital bills. More so if they choose care in B1 and A classes over private hospitals, with their super-high pain thresholds. Will means testing, a mental leap for most people, induce patients and hospital doctors themselves to consume with care? Fewer tests, scans and less exploratory surgery, for example. Knowing the answer is crucial to its proper intended working. The ministry's evaluation will be a complex exercise. It will not only have to digest numbers but also ascertain the intangible factor of whether long years of subsidising treatment have bred a dependency.
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