How will Singapore cope with its aging population?

Issues for providing healthcare arise as one in five Singapore residents are predicted to be 65 years old or over by 2030.

Healthcare is an important sector in most developed countries, and Singapore has one of the widest varieties of services available at various levels of affordability. The Ministry of Health believes in ensuring quality and affordable basic medical services for all, in conjunction with the promotion of healthy living and preventive health programmes, as well as maintaining high standards of living, clean water and hygiene,to achieve better health for all. Currently Singapore’s healthcare system is designed to ensure that everyone has access to different levels of healthcare in a timely, cost-effective and seamless manner, but there is a general acknowledgement that the capacity of healthcare needs to expand, particularly within the healthcare sector.

Healthcare expenditure in Singapore can be categorized into public expenditure and private expenditure, where public healthcare is managed through the Ministry of Health.

There are eight public hospitals comprising six general hospitals, a women’s and children’s hospital, and a psychiatry hospital. General hospitals provide multi-disciplinary inpatient and specialist outpatient services, and 24-hour emergency departments to residents. Six national specialty centres provide cancer, cardiac, eye, skin, neuroscience, and dental care. Public dental services are also available through the National Dental Centre and in some polyclinics and hospitals.

Public healthcare funding in Singapore originates from tax collection and other government income, and the majority is channelled to the Ministry of Health through annual budget allocations. Private healthcare expenditure is composed of three major components, namely out of pocket expenditure, private health insurance, and contributions from non-profit institutions. SingHealth manages the largest number of public medical institutions, followed by the National Healthcare Group, and citizens and permanent residents are entitled to basic medical services at government polyclinics and public hospitals, where rates are regulated and subsidized.

Expansion of healthcare facilities

With one of the highest and most rapidly ageing populations in the world, Singapore’s healthcare sector is facing some of its most demanding challenges. According to Alson Goh, Chief Operating Officer at the National Heart Centre in Singapore, it is projected that by 2030, 1 in 5 Singapore residents will be 65 years old or over. “The country’s healthcare sector faces a challenge in manpower – they don’t have enough healthcare professionals which causes issues for providing healthcare for the population. To meet increasing healthcare needs, the government has been increasing healthcare capacity.” Dr Loke Wai Chiong, Director of Global Healthcare Centre of Excellence at KPMG in Singapore agrees, emphasising that the government is doing just that, having announced plans for at least three new hospitals, up to 14 new polyclinics, and more than 100 additional eldercare facilities to be built over the next couple of years. “In comparison, growth in the private healthcare sector may be slower as overall resources, especially medical specialists, are limited, and is likely to be driven by inbound medical tourism,” Dr Chiong says. 

Dr Janson Yap, Regional Managing Partner, Enterprise Risk Services and Life Sciences & Healthcare Industry Leader at Deloitte in Southeast Asia, has a similar view with regard to the rapidly ageing population. However Dr Yap believes that Singapore is unique among developed countries in terms of their healthcare. “Healthcare reform in Singapore is being translated from the policy level to continuing changes on the ground with regards to the supporting healthcare infrastructure and capability.”

Healthcare providers

Additionally, private insurance companies have gained entry into the market with the liberalization of insurance policies, leading to increased competition, lower premiums and broader coverage. This is according to Senior Vice President of Healthcare at Frost & Sullivan, Ms Rhenu Bhuller. She says that more policies have resulted in an increase in funds for private healthcare services, driving more patients towards private hospitals, advising that between 2006 and 2010, private insurance expenditure increased from S$581 million (US$366 million) to S$964 million (US$707 million) at a CAGR of 13.5%, as private insurance provides patients with more flexibility to choose their healthcare service levels and locations.

However regulation is still an issue. “The problem is that rates at private clinics and private hospitals are not regulated, and subject to market forces of demand and supply,” says Bhuller. “Within public hospitals, 80% of the public hospitals’ beds are heavily subsidized, with the remaining 20% with lower subsidy at 20% for class B1 and no subsidy for A class wards.” Parkway, Singapore’s largest private healthcare provider, Parkway has four hospitals, providing a wide range of high-level private healthcare services, with Raffles Hospital considered the other major private hospital. They operate under an employed physician model and have a significant number of primary care clinics around Singapore, which provide services from a primary care perspective. 

Bhuller also says the healthcare provider has further plans to expand its outpatient presence. Regional Health Systems (RHS) such as the Eastern Health Alliance and the Alexandra Health System, set up in 2009, have also been forming partnerships among GPs, community hospitals, nursing homes and other stakeholders to care for their patients within specific designated zones.

Dr Chiong says that new care models, such as Community Health Centres (CHCs) and Family Medicine Clinics (FMCs), have been introduced so that private GPs can relieve the load of polyclinics in terms of delivering care to patients with chronic ailments.

Other contributing factors

In 2012 The AIA Bloomberg rated Singapore as the world’s healthiest nation. Ms Ho Lee Yen, Chief Marketing Officer of AIA Singapore, says that such pleasing results are due to the positive efforts and policies of the Singapore government, as well as the dedication of the people of Singapore. But, she says, whilst these results are encouraging, there are other factors that Singaporeans should be aware of in order to keep this healthy rating. “Singaporeans should continue to ensure that they close their protection gap by having adequate insurance coverage,” Yen says. The Singapore government has made it no secret that the national agenda will address the future demand for intermediate and long-term care and to look into providing high-quality and cost-efficient health services to meet the demand of the people/the growing elderly population. 

According to Maybank Kim Eng, the healthcare measures announced by the Prime Minister in his recent National Day rally speech have been encouraging and support a positive view on the private healthcare sector. Maybank reported that, the private healthcare sector will play an increasingly significant role in this reform. 

In particular, the extension of Medisave usage, and the removal of the minimum age limit of 40 years under the Community Healthcare Assist Scheme Scheme. Overall, despite the challenges ahead, Singapore is actively taking steps to manage this future population through early health intervention programmes and provision of services beyond the hospital. As the reputation of Singapore is medical excellence grows, medical tourism should be seen as a key driver of the private healthcare market.