The Health Insurance Task Force (HITF) has recommended that insurers consider instituting preferred healthcare provider panels among several proposals to curb rising medical claims costs.
The HITF, formed in February 2016, made four broad recommendations to better manage the escalation of claims in Integrated Shield Plans (IPs). IPs, which provide cover to two-thirds of Singapore’s residents, comprise two components: the basic government-run health insurance plan known as MediShield Life and additional private insurance coverage offered by private insurers.
The average IP claims incidence rate has been growing at approximately 9% per annum, and the overall average bill sizes incurred by IP insurers has increased at approximately 0.6% to 8.7% per annum depending on the medical provider chosen. Statistics show that IP insurers paid out claims amounting to S$488 million (US$352 million) in 2014 alone.
The HITF recommendations, which involve all relevant stakeholders, are:
- Introducing medical fee benchmarks or guidelines
- Clarifying existing process to surface inappropriate medical treatment
- Enhancing insurance procedures and product features
- Educating consumers to help them in their healthcare decision-making.
The taskforce notes that insurers have access to extensive health insurance claims data and are well placed to identify potential anomalies in medical treatment through their review of claims. Insurers can refer cases to the Singapore Medical Council (SMC) if there are concerns over over-charging and inappropriate medical intervention amounting to professional misconduct.
The HITF recommends that the Ministry of Health work with the Singapore Medical Council (SMC) and the Life Insurance Association, Singapore (LIA Singapore) to clarify and refine the existing process for insurers to raise cases of inappropriate and excessive medical interventions to the relevant authorities while keeping the impact on affected policyholders to a minimum.
The HITF also recommends that insurers consider the use of preferred healthcare provider panels, where appropriate, to manage medical costs. Such arrangements should be made known to the policyholders.
Co-insurance and deductibles
The introduction of as-charged IPs and IP riders that result in zero co-payment coverage may have contributed to the escalation of IP claims, said the HITF. It recommends that all life and general insurers offering medical insurance consider co-insurance and/or deductibles in their product design, to encourage consumers to play a more active role in managing their medical care costs as they are then more acutely aware of the medical charges incurred.
The 11-member HITF is chaired by Ms Mimi Ho of Regulatory Professionals Pte Ltd with representatives of the Consumer Association of Singapore, LIA Singapore, and the Singapore Medical Association. HITF is supported by the Ministry of Health and MAS.
Dr Khoo Kah Siang, President of LIA Singapore: “This is a step in the right direction, breaking down silos and bringing together different parties along the healthcare value chain to find even better ways to manage increasing claims costs. In the long-term, this will also result in improved efficiencies and cost savings within the healthcare eco-system.”