Despite having the best economists around to design policies and budgets, Singapore has been slow to introduce measures to cushion low income earners from inflation and rising costs of living due to housing and GST hikes. Warnings of inflation and signs of an overheating economy have been seen since last year, but it’s only until recently that we are seeing some actions geared towards low wage earners rather than businesses and the economy on the whole.

Recent news shows that more attention is being given to part-time workers, the unemployed and needy, with the introduction of co-operatives to help lower income people with their bread and butter concerns. However, it will take time to see if these measures are helpful at all, and it seems that these co-operatives are operating on a limited scale – probably just catering to people in specific neighbourhoods.

Something needs to be done on a wider scale to help low-income groups across Singapore. One good area to look at is healthcare, where low income households get hit the hardest. I remember a saying that supposedly comes from China that goes, “one can be poor but cannot be sick”… because of the high costs of treatment.

While healthcare costs in Singapore are not as high as those in Western countries, one must take into account that Singaporeans don’t earn what people in the N. America or Europe do. Most of my friends from low income households often face the biggest challenges in getting affordable treatment options for their elderly parents who are being treated for chronic conditions such as hypertension, high cholesterol, heart disease, diabetes, etc. Treatment costs often run up to several hundred dollars per month, and that takes a huge toll on their less than $2,000 a month (before CPF deductions) salaries.

Healthcare costs are probably the most pertinent issue for low income families after food, housing, electricity and water. One can be frugal on food, electricity and water but not on healthcare. Despite the ‘heavy subsidies’ that the government often remind us that we are receiving, why do we still see many low income earners trying to avoid treatment because of costs? It must be because the subsidies are ineffective or insufficient for them.

With the government running on record budget surpluses, why can’t we see more generosity towards people in such situations? While I applaud the move to a means-testing system for subsidies, I see it as only effective in reducing the subsidies for higher income patients wanting to stay in heavily-subsidized wards. With reduced subsidies going towards higher income patients, shouldn’t the government consider increasing the subsidy further for low income households?

Although low income people get a maximum subsidy of 80%, the 20% can still be hard for them to swallow, especially since the unsubsidiesd amounts reflected on hospital invoices are based on private patient rates, which I noticed are often more expensive than what private hospitals are charging. The question is, do the amounts reflected on hospital invoices include significant markups already? Say if an invoice is for $200. An 80% subsidy means the patient pays just $40. However, if it cost the hospital only $100 to treat the patient, then the real subsidy is only 60% because the fees are based on ‘market price’ rather than costs. I’m not saying hospitals should charge based on costs, but that subsidies should take into account any significant markups on the actual costs.

I’m not sure if public hospitals in Singapore are actually running surpluses or deficits in their operations, but one thing for sure, the current system of having two operators (SingHealth and NHCG) is inefficient and totally not cost-effective. If they are merged into one single body, I am sure significant administrative and resource cost savings can be achieved. This is not a new issue at all. Many people have raised this before, and this is similar to the inefficiencies in our current transport system with two operators (SBS and SMRT). Instead of looking at how to subsidise patients effectively, why not look at how to cut operating costs in the healthcare system? Cost savings can then translate directly into lower bills for patients, which will be further subsidised.

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