The new healthcare insecurity

My parents, both getting on in years, make regular visits to clinics and hospitals. It's so much a part of their lives that often my weekly dinner conversation with them consists of Tales from the Waiting Room. Many are of rudeness and inefficiency, but some are poignant observations by my father -- who, despite his age has never ceased to be a social critic and never quietly accepted the status quo -- of the impact of failing health and rising costs in people around him.

Tonight's tale was unusually heart-breaking:

The old man asked the pharmacy clerk if he could take just a quarter of the medicines prescribed. The young woman said no, that would be foolish. The old man said, but I've no choice, I don't have enough money. The prescription is $600, and all I have is less than $200.

As everyone in Singapore knows, medical and hospitalisation costs are soaring faster than the space shuttle. There is widespread grumbling but no one thinks anything can be done, "because the government always gets its way," as a friend said just the other day.

The government saw the prospect of rising health costs about 10 years ago, when the UK's National Health System became headline news. Our previous system of heavily subsidised health care would suffer the same structural problems if left untackled, i.e. enormous cost inflation, with no abatement of demand. There would be serious pressures on the government budget.

So, picking up the Thatcherist mantra, a policy of privatisation was put in, and the former state-wide health system was broken into a few healthcare groups. Each group had to pay its own way and balance its own budget. At the same time, the policy of getting people to pay a bigger part of their medical bills so that they would moderate their own demand, was preached.

Well, the result is all around us. $65 ambulance calls, $100 injections, $250 per night hospital stays, when the average blue-collar worker earns $1,000 to $1,500 a month. 

And the worst part is, we have no clue how much more prices will have risen by the time it's our turn to be old. Four-fold? Eight-fold?

I honestly don't know what the solution to rising costs is. All I know is that it's unrealistic to expect costs to stay still if we want steadily improving healthcare services.

It costs fortunes to develop new drugs and to test them rigorously for safety and effectiveness. We cannot deny that drug companies must have reasonable prospects of recovering their costs and making a profit, otherwise where's the motivation to develop new cures?

It is also true that new diagnostic and surgical techniques often require state-of-the-art equipment, and these seldom come cheap.

Moreover, healthcare is labour-intensive and requires its practitioners to be well-trained. This is yet another ballooning cost factor.

The problem is compounded by the fact that consumption of healthcare tends to be irrational. Because it's a matter of life and death, pain and distress, people will not easily be persuaded to consume less than what is available, by mere pricing. And if we restrict access to only those who can wave wads of cash, moral questions arise.

As I said, I honestly don't know what the solution is. All I know is that an anecdote like what my father recounted tonight felt like a kick in the gut.

* * * * *

Perhaps, we're in a transitional phase, and by this, I mean things look gloomy because we happen to be at a point when the old system has fallen apart, and the new system isn't up yet. We are left feeling insecure with past experience useless as a guide to the future.

What was the old system? The old system was one of heavy subsidies such that the individual didn't have to pay much himself. But this system was based on

1. A low ratio of older people to younger tax-payers in the population. Thus there would be more people making a net contribution to healthcare costs than people drawing upon the common pool.
2. Relatively low expectations of healthcare quality.
3. A state of medicine where there were more acute illnesses and quick death; fewer chronic illnesses or life-prolonging treatments with their long-term costs.

As the average age of the population increases, chronic illnesses become more common, and as expensive options to prolong life (e.g. after a transplant) become the norm rather than the exception, the whole financial model must change. The government has been very quick to change the operational rules, but people take a lot longer to absorb the altered scenario.

Consider the question, what does "a lot" mean, when we're talking about the cost of a visit to the clinic? It's relative. It hinges on what we expect it to cost. Many of us still think in terms of 1 or 2% of our disposable income to be spent on healthcare, when the new reality may be 5 – 10%.

Another thing that is clearly necessary is health insurance, in order to even out the uncertainties. From my observation – I may be wrong because I haven't recently looked at what is on offer in the market – health insurance plans are confusing, full of intimidating exclusionary clauses, and generally as expensive as paying the hospitals directly. Perhaps the health insurance market is immature, for until very recently who needed it when there were generous government subsidies? Hopefully, more comprehensive options will be available soon; at the same time, better explained to consumers.

The changes have come too quickly. Old men like the one my father saw at the pharmacy have not saved enough. They never foresaw that their life-long expectation of 1-2% of disposable income for healthcare would vanish overnight. Insurers offer no help to people above a certain age, in fact the very ones who need help most. Our charity organisations are puny and underfunded – the reasons for that are intertwined with our materialistic culture, and our political model that frowned on independent civic action.

As if the economics were not bad enough, we still have yet to acknowledge the moral question: what do we do when our world is so dominated by American capitalism with its gulf of income disparity, but when our conscience tells us that all humans must be accorded equal dignity? What should be the role of government, as an agent of our social conscience, in healthcare provision and access?

© Yawning Bread 

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