Mr Speaker, Sir, I will take this opportunity to elaborate on several of the key measures contained in the White Paper as well as address some of the points and concerns raised by Members. First, health care financing. Sir, a key element of the Government's health care philosophy is personal responsibility, and this includes each of us putting aside some money while we are economically active to meet our health care needs when we are elderly and after we have retired. Sir, the introduction of Medisave has enabled Singaporeans to save for the future. When patients directly pay for medical services, whether in full or with the help of Government subsidy, they become more aware of the cost of what they are using. They are then more likely to use such services prudently and judiciously. This approach has enabled us to avoid the problems faced by the developed countries. Over there, their health care financing systems are mainly tax-based or insurance-based. And as the medical expenses are paid for by a third party, the patient becomes desensitised from the cost of the services that he is receiving. What is worse is that very often, the patient feels entitled to use as much medical services as he wishes since he has already prepaid in the form of either taxes or insurance premiums. Sir, let me relate to you a personal experience. In the mid-1970s, I was working in the USA on a job training programme. One day an American colleague I was working with told me that he would be away for the next week on holiday. So I was quite surprised. I said, "Well, good. Where are you going?" To my surprise, he gave me the name of a very good hospital down the road. So I was taken aback. "You are going on holiday to a hospital?" He said, "Yes. You know, under my insurance coverage, I am entitled to an annual check-up. This will involve three or four days' stay in the hospital. There is a nice park next to it. Between check-ups, I can go to the park, lie down and have a holiday." So he was entitled to his annual all-expenses paid holiday at the local hospital. I mentioned this story to several people recently, and I said, "Well, luckily, such things have not happened in Singapore yet." To my surprise, one of the people there said, "Well, you will be surprised. One of my managers is in fact already looking forward to his annual check-up in a private hospital, all-expenses paid." It is just as I have described. Sir, the buffet syndrome is not unique to any particular nationality. Already in Singapore, we see it in many of our restaurants when there is a pre-paid buffet available. People load up their plates, and have a good time. It is therefore important that we keep this nexus between the use of, and payment for, medical services utilised. Today, more than 80% of the patients use Medisave to pay for their hospital bills. Medisave balances have been increasing partly because most of the Medisave members are still young and their health care needs are still low. The average Medisave balance in 1984 when the scheme started was $1,750. This increased to $4,400 by the middle of this year. Currently, the Medisave contribution rates are between 6% and 8%, depending on the age group. As health care cost increases, which is inevitabe, the Medisave contribution rate will have to be increased as well. But we should try to delay this for as long as possible. And if the measures to contain health care costs, as laid out in the White Paper, prove to be effective, the long-term Medisave contribution rate may not need to exceed 10%. Secondly, insurance. As the Minister for Trade and Industry had stated in his opening remarks, high Medisave balances also increase the temptation for patients to draw on these balances more than they absolutely need to. That is why we introduced the insurance component in MediShield. MediShield reduces the amount of personal savings needed. Sir, MediShield currently covers one-and-a-half million people or almost 90% of all eligible CPF members. As a catastrophic insurance scheme, MediShield has been able to keep its premiums very low, and each year about 10% of hospital patients, mainly those with serious medical conditions and who require prolonged hospitalisation, receive MediShield reimbursements. We will improve on the system by enhancing and extending MediShield. This will be done in two ways. First, MediShield will reduce the existing deductibles while retaining the current premium rate. This will enable 20% to 25% of hospital patients to benefit from MediShield, instead of the current 10%. Second, we will introduce MediShield II with higher benefits. It will come in two options. Option A covers patients who use A Class or private hospital beds. And Option B, which has lower premiums, will cover those using B1 wards. MediShield II, like the current MediShield, will have deductibles and a payment co-component. It will be a voluntary opt-in system, and Medisave can be used to pay for the premiums. The lowering of deductibles for MediShield and the introduction of MediShield II will take effect from 1st July 1994. The details will be announced in the next few months. Sir, some people have time and again suggested that MediShield should extend its coverage to those beyond 70. MediShield has in fact gone beyond the conventional practice by extending its coverage limit from 65 years of age to 70. We will study the implications carefully before deciding whether to further extend the age limit in the future. Sir, another key cost containment measure is the capping of patient revenue in subsidised hospitals. The patient revenue comprises fees collected from patients and, secondly, subsidies received by the hospitals from the Government. The patient revenue adjusted for workload changes will not be allowed to increase by more than the consumer price index (CPI) plus X percent. That means, it will not be allowed to increase by more than the inflation rate plus an X percent factor. For the next two years, we have fixed the X component at 2%. Sir, this formula of CPI plus X will constrain the rate of cost increases in the subsidised hospitals and, in turn, restrain the increases in the charges imposed on patients. At the same time, this formula will allow hospitals enough resources to maintain the quality of their medical services and to introduce new medical developments that have been proven to be cost effective. The X factor will take into consideration the cost of labour and wage increases. And this is an important factor because in the hospitals, between 60% and 70% of the cost actually are labour costs. So when Singaporeans enjoy a 10% increase in salary, they can expect that the hospitals would have incurred a cost increase of 6%, almost automatically. So, as long as all Singaporeans enjoy good salary increments, the hospital staff will likewise enjoy similar increments and health care costs will increase in proportionate quantum. Sir, if the hospital's actual revenue is higher than the revenue cap, the subsidy from Government will be reduced by the same extent, that means, if hospitals increase their charges by, let us say, in total, $1 million annually, above the revenue cap, an equivalent sum of $1 million will be reduced from the subsidy. So, therefore, there is no incentive at all for hospitals to increase charges more than what they are allowed to under the cap, because any extra charges that they collect will be given back to the Government. The hospitals are also expected at the same time to operate within their revenue collections. With their revenues capped, the hospitals will be constrained to service their patients within a fixed amount of resources and to conform to reasonable service norms. This would discourage the hospitals from ordering unnecessary tests and investigations because all those unnecessary tests and investigations cannot be charged to the patients. It will just be additional costs which the hospitals will have to bear. They will have to be very careful to ensure that whatever they order are necessary and not wasteful. The subsidised hospitals will have to strive to improve the quality of their medical care within the resources available. If they are efficient they will be able to generate cost savings and therefore generate surpluses. They will be able to keep their surplus. It will be an incentive for them to do better. And they can use these surpluses to improve their services or to upgrade essential equipment. Sir, those hospitals which attract more patients, whether they are subsidised or non-subsidised, will generate more revenue from fees as well as from subsidies. There are, therefore, adequate incentives for hospitals to innovate and to improve their efficiency while maintaining a high quality of medical care. Otherwise, they are going to lose all their patients. The revenue cap mechanism will help to restrain cost increases and ensure that patients will continue to receive affordable quality health care in the subsidised hospitals. Sir, but it is not sufficient to have cost containment in only the subsidised hospitals. The public and the private health care sectors are closely linked. If the private sector doctors and other health care workers enjoy a significant increase in income, the public sector cannot afford to lag far behind. Otherwise, they will lose their key staff and jeopardise the care they are providing to the majority of Singaporeans. We must, therefore, apply similar cost containment mechanisms to private sector hospitals and doctors. We propose to do this through the Medisave mechanism. The Government is, in fact, the custodian of the Medisave funds. We have the responsibility to act as a purchaser of medical services for our Medisave account holders. MOH will set limits on balance billing for patients using Medisave in the private hospitals and doctors. Health care providers, who are willing to accept the stipulated rates, will be registered by Medisave and be allowed to take on Medisave patients. However, the providers are free to set their own charges for patients who do not use Medisave and this will include foreign patients. Sir, the limit on balance billing will be implemented in two stages. Stage One will cover operation charges and doctor's daily hospital attendance fee. Stage Two will cover the fees charged by the private hospitals. We expect to implement Stage One by the end of 1994, and Stage Two for the hospitals, by the end of 1995. There are some concerns that the setting of cap on private sector charges may actually result in doctors and hospitals all charging at the maximum allowable rate. Sir, that may happen. But I think what is more likely to happen is that the doctors who are already well-established will charge at the maximum allowable rate and doctors who are junior and who are still trying to establish themselves, will have to compete by charging at a lower rate and also compete by ensuring that they are able to give better service. Some others are also concerned that the quality of medical care may be compromised if charges are controlled. I want to assure Members of this House that the rates set will be fair to both the patients as well as to the doctors and hospitals. Private hospitals and doctors are likely to see a drop in income initially but it will still be a decent income. On the other hand, because their charges will be more reasonable, they may in fact attract more patients who would otherwise have gone to the subsidised hospitals. There will be no need for providers to compromise on the quality of medical care. We expect the doctors and hospitals to compete on price as well as quality within the caps. If a doctor or hospital decides to cut corners, he will risk losing his patients, or, worse, he may even lose the licence to practise. We will step up our medical audits to ensure that the quality of medical care is not compromised. In any case, Sir, the subsidised hospitals will continue to maintain the service quality and remain as a benchmark for medical service. The private sector must continue to compete effectively or they will lose their patients to the subsidised hospitals. The Ministry of Health will work with representatives of the private sector hospitals and doctors to come up with the balance billing limits. In working out the caps, we will consider the existing private sector costs as well as the fees charged by the Government and restructured hospitals. We will be fair to all parties concerned. Sir, let me move on to the points raised by Members. Mr Lau Ping Sum has suggested that we should reduce the number of Class A beds, as those who can afford such beds should be encouraged to use the private hospitals. He also proposed that the community hospitals should only have subsidised beds and not Class A beds. Sir, we should ask ourselves whether the removal or the reduction of Class A beds from our hospitals will be in the interest of the subsidised patients. Non-subsidised patients play an important role as quality controllers. Yes, they can afford to use private hospitals. But by choosing to use the non-subsidised services in a subsidised hospital, they confirm that the medical care in that hospital is of an acceptable quality. The Class A beds also serve as a benchmark for the private sector and help to restrain the cost of private medical care. This, in turn, helps to keep costs down in subsidised hospitals. There is no need for us to force those who are able to pay the full cost of the A Class beds into the subsidised wards. If they cannot get the Class A beds, some of them will actually just move into the subsidised wards. If they do that, this will only reduce the subsidies available to those who truly need these subsidies. Sir, the key is to ensure that there are enough subsidised beds for those who cannot afford to pay the full cost of their medical treatment. My Ministry regularly monitors the occupancy rates of the various ward classes and we adjust the bed composition, when necessary, in line with patient demands. If demand for B2 and C Class beds increases, we will make available more beds. But on the other hand, if demand for Class C beds declines, as has been happening in the past few years, we would also have to adjust the numbers accordingly. In the case of the Ang Mo Kio Community Hospital, only 7% of the beds are A Class beds. The number has been reduced to the bare minimum and there is no need to reduce further. Mr Peter Sung expressed concerns about an over-supply of specialists in the private sector and public sector as well. Sir, my Ministry controls the supply of specialists through the provision of specialist training positions in our subsidised hospitals. We closely monitor the supply and demand for specialist treatment and we allocate trainees according to the need for such specialists. Our aim is to train no more than 40% of each cohort as specialists. The remaining 60% will work as primary health care doctors. I can assure Mr Sung that we share his concerns and we will make sure that we avoid an over-supply of specialists. Sir, Dr Michael Lim stated that the subsidies distort usage patterns. He suggested that we avoid over-subsidising the patients and to educate the public on the true cost of health care. Sir, Dr Lim is correct. It is important that we focus the heavier subsidies on those who genuinely need financial help and that is why we have the different classes of wards - A, B1, B2 and C. This allows us to focus on the subsidies. We also ensure that there is a co-payment element because there is nothing worse than free treatment. It will just generate more demand and cause the standard of health care to decline, as we have seen in countries with free treatment. Of course, for those who are indigent and poor, they will receive free treatment, but after we have ensured that they are genuinely indigent and poor. Dr Lim had stated that some of the tests in his Cardiac Department appear to be too inexpensive, too over-subsidised. Sir, I am not too familiar with the details in his Department but I will ask the CEO in NUH to review what he is talking about and to apply the appropriate subsidy level to those that have been inappropriately priced. Perhaps, Dr Lim may wish to inform the CEO which of those items are involved. Sir, because of the variety of medical conditions, certain patients may occasionally require expensive tests, whether they are in Class A, B2 or C. Our system of subsidy also ensures that for the more expensive tests, we have a cap on the price that we charge for that test. So for those expensive tests, they are only ordered when they are needed and the patient actually receives a higher subsidy rate so that he is not deprived of that needed test. It is up to the doctors to exercise their professional judgment and order those tests only when they are needed. They should not order those tests because the patients demand for them, or because we have heavily subsidised that test and is now so cheap. Tests must never be generated upon patients' demands. They must be generated only upon the professional judgment of the doctors concerned. And if the tests are warranted and helpful, I think the subsidies would have been well spent. Sir, Dr Lim also requested for Medisave to be extended to more outpatient treatments. Mdm Yu-Foo has also made the same request. We are already extending the use of Medisave for outpatient treatments and these apply to those services or procedures that are more expensive and they apply to day surgery cases as well because we want to encourage patients not to be hospitalised if they can. This will help to keep their health care costs down. The guiding principle is that Medisave will be extended to outpatient treatment where the indications for treatment and procedure are clear and there is little risk of a doctor generating unnecessary demand for those services just because Medisave is available. We have to avoid extending the use of Medisave to outpatient treatment too liberally because, firstly, the administrative costs will rise exponentially because there are many outpatient treatments and, secondly, the patient-load can be substantial. Thirdly, it will create demand for more of these services unnecessarily. However, I am prepared to take suggestions from Dr Lim. If he has any item that he wishes to propose, we would definitely review and consider it carefully. Sir, Dr Lim also stressed the importance of educating the public on the true cost of health care. I agree with him. Health care costs are expensive. There is no doubt about that. We cannot hide from that fact. It is better that every Singaporean knows it so that he would take the effort to practise a healthy lifestyle, live a healthy lifestyle, and increase his chances of remaining fit and healthy. Also, when he needs to use the medical services, because he knows that it is costly, hopefully it will make him to be more prudent in the usage. Sir, the education process is a continuing process. We now have financial counselling for all patients upon admission to hospitals. They are told what is the cost if they go to A Class, which is the full cost, and what it will cost them in the other wards. Similarly, the private hospitals are also required to do financial counselling. And in the Government hospitals, every patient receives a bill which shows the full cost of the services received. At the end of the bill, he will also get a statement that he has received so much in subsidies and the actual bill size to him is the full cost minus the subsidy. This tells him two things. Firstly, what it costs the hospital to deliver that service to him. Secondly, if he is in the subsidised classes, it tells him how much of that cost has been borne by the Government. I think these two facts are important for him to appreciate. Dr Lim also mentioned about the difficulties of deciding borderline situations, whether to withhold treatment for a patient who is critically ill, especially one who is terminally ill and especially if the family insists that treatment should be continued. Mr Loh Meng See has also mentioned some concerns about people interpreting the basic health care package as a first step towards euthanasia. Let me strongly stress that we do not practise euthanasia. Euthanasia is the deliberate action of a physician to terminate the life of a patient so as to relieve him of his suffering, eg, by giving him a lethal injection. But we must recognise that death is a part of life, and dealing with death has always been a part of medical practice. Modern medicine has made it more of a dilemma now for doctors, of course. However, the process of death in terminally ill patients should not be unnecessarily prolonged through futile intervention. In trying to help, doctors and family members may actually be prolonging and increasing the patient's suffering. This is something which we all should strive not to do. Doctors are trained to make professional judgment in the best interest of patients. In deciding on treatment, doctors are guided by treatment protocols which set out the standard practice which, of course, vary from patient to patient according to the circumstances. These are the everyday decisions that all doctors have to make, when and how to treat, when to intervene and when not to. When junior doctors are uncertain, they refer to their senior specialist for a second opinion and advice before coming to a joint decision. Medical undergraduates receive lectures on medical ethics. My Ministry also organises a seminar on medical ethics and responsibilities of medical practice for all newly qualified doctors. To assist doctors in borderline cases, all hospitals now have their own ethics committee. My Ministry is now looking into the establishment of a national ethics committee to identify the ethical issues relating to medical practice and to develop guidelines on the ethical code of conduct for doctors. Sir, let me move on to the points raised by Mr Low Thia Khiang. I was truly astonished yesterday when I heard Mr Low speaking in this House. I thought he wanted Singaporeans to be the last of the Mohicans. Every country in the world with a system of socialised medicine is sorely regretting it. And Mr Low was standing there in front of us preaching that the Government should be responsible for an individual's medical costs because no one wants to be sick. Sir, even China has openly declared that free medical care for the masses is now history. I am glad that he subsequently clarified, a bit reluctantly I thought, that actually what we heard was not what he had meant to say. He had meant to say that the Government should only intervene to subsidise those who cannot afford to pay the full cost of medical services. I am indeed glad that Mr Low agrees with the Government's approach to health care subsidies. Mr Low also claimed that the restructuring of hospitals has resulted in higher hospital fees and consequently the poor now cannot afford medical care. At the same time, low income earners are unable to obtain help from Medifund. Perhaps he also did not mean what he said. Sir, let me throw some light on the matter again. Firstly, 75% of all class C bills in our hospitals are below $420. Three-quarters of all the class C bills are below $420. For a person earning $800 a month, this represents only seven months of Medisave contributions. And those who cannot afford to pay even this heavily subsidised bill size, maybe because they have been sick for a long time and therefore unable to work or because of their prolonged sickness they have depleted their Medisave, these people can still apply for a waiver of hospital fees. The waiver process extends not just to the poor but also to the low income earners. With Medifund, the process is even simpler. Each hospital has its own Medifund committee and therefore can process the appeals and applications quickly. Medifund also extends special treatment to those who were born before 1940. It is a very generous scheme. If Mr Low is aware of any person who is not receiving medical treatment because he cannot afford it, I hope he will not hesitate to give me the details and we will definitely arrange for treatment to be extended to that person. Sir, Mr Low also touched on the five sub-specialities in the Singapore General Hospital without C class wards. Mrs Yu-Foo also mentioned this topic. Let me explain again. These five sub-specialities require well-trained staff and they are high cost disciplines. We have grouped them under B2 as a minimum so that we can better contain costs and therefore make it even more affordable for the low income earners. Patients who cannot afford the B2 rates can appeal for their bills to be reclassified to a class C bill. If this is still too high, they can also appeal for those bills to be waived. The hospitals will definitely consider them carefully and if they are genuine cases, they will be obliged. Sir, low income patients who normally would have stayed in a class C ward therefore have the advantage of staying in a B2 ward while paying class C fees. So they are really given the best of both worlds.