SINGAPORE: Expanding fee benchmarks for private hospitals may bring greater price transparency and modest savings, but authorities must look beyond pricing controls to tackle the root causes of rising healthcare costs, doctors and experts said.
Health Minister Ong Ye Kung earlier this month announced plans to benchmark additional private hospital charges beyond the professional fees already covered, including surgeon, anaesthetist and inpatient attendance fees.
Speaking on CNA's Deep Dive podcast, Mr Ong said benchmarking surgeon fees has proven "quite effective", with most charges now falling within the recommended range. The average annual growth in private surgeon fees has slowed dramatically – from 3 per cent between 2010 and 2018 to just 0.4 per cent from 2019 to 2023.
Besides professional fees, existing Ministry of Health (MOH) benchmarks also cover hospital fees such as room charges, surgical facilities and equipment, and medication.
The ministry now intends to extend benchmarking to other costs, such as consumables like hospital gowns, though Mr Ong noted the "sheer amount of work" involved in data collection and consultation has slowed progress.
Industry observers expect the impact of expanded benchmarks to be mixed.
Mr Joshua Siow, partner and Singapore head of healthcare and life sciences at consultancy Simon-Kucher, said additional benchmarks would help "streamline outlier prices, tighten price ranges and make bills more predictable and comparable."
"Average bills may come down modestly where (price) dispersion is currently high, while the primary benefit for patients will be predictability and reduced 'bill shock'," he said.
"Overall spend will still be driven by utilisation and case complexity, and some streamlining of costs beyond professional fees may not necessarily have that large an impact on the overall bill size for most patients."
Nanyang Technological University (NTU) Assistant Professor Ashkar Saxena said outcomes would likely vary across patient groups.
Patients requiring straightforward, benchmarked procedures without complications may see modest bill reductions.
But those who require complex care or new technologies outside the benchmarks could see higher charges if hospitals shift costs to those areas, said Asst Prof Saxena, who is from NTU's School of Social Sciences' economics division.
"Overall, benchmarking could slow price growth, reduce unpredictable bills, but immediate savings will vary and we should not expect lower fees overnight."
Multiple experts emphasised that benchmarking alone cannot solve Singapore's healthcare cost challenges.
To meaningfully "bend the overall cost curve", Mr Siow said authorities must pursue complementary strategies such as earlier screening and prevention, digital tools that reduce administrative burden, and payment models that "reward outcomes rather than volume".
Asst Prof Saxena added that while benchmarking is a useful "transparency tool", it must work alongside deeper insurance design reforms and greater emphasis on preventive health to address the "unsustainable cost escalation".
Ms Verlene Law of The Reg Consultants, a regulatory service provider for pharmaceutical and medical companies, suggested authorities consider providing more subsidies or support schemes rather than focusing solely on establishing new benchmarks.
"This approach directly addresses affordability while avoiding overly complex benchmarking," she said.
Several doctors, speaking to CNA on condition of anonymity, called for greater scrutiny of both hospital charges and insurance practices.
Rather than just the current upper and lower bound ranges in hospital fee benchmarks, one specialist suggested specific costs for key individual components. This would provide clarity, close loopholes and ensure no mark-ups occur, the doctor said.
The specialist also urged insurers to play a bigger role, proposing that unused premiums in Integrated Shield Plans be partially returned to policyholders to lower overall premiums and create a "balanced ecosystem".
Another surgeon with over a decade in private practice praised initial benchmarking efforts for controlling "black sheep" who overcharge, but questioned whether further benchmarks are necessary.
The surgeon noted that hospital fees are more complex than professional fees due to variability in equipment and consumables used for procedures, even within the same surgical code.
"There's so many variabilities," he said, voicing concerns on whether further benchmarks will result in patients not being able to tap insurance policies for certain treatments or consumables because they fall outside benchmarks.
This could compromise the value of private insurance policies, he said.
Experts cautioned that expanding benchmarks could create several unintended effects.
Once ranges are published, providers currently charging at the lower end may raise prices toward the benchmark, seeing it as a signal that higher fees are acceptable.
"Benchmarks anchor prices and can work both ways," said Mr Siow.
Hospitals may respond to benchmarks by reducing costs in benchmarked areas while increasing charges for non-benchmarked services to maintain revenue.
"Each hospital operates with different cost structures, so while they may align to the benchmark, the cost recovery might surface in other areas," said Ms Law.
Asst Prof Saxena warned of potential "quality trade-offs" if hospitals cut corners on inputs like nurse-to-patient ratios to meet benchmarks.
"Patients may end up with lower nominal price but also lower value," he said.
Mr Siow disagreed that quality would necessarily suffer, arguing that price pressure typically drives operational efficiencies, tougher supplier negotiations and switches to clinically equivalent alternatives rather than compromising care.
"Clinicians and hospitals should still retain the flexibility to use a higher-cost product if it results in better patient outcomes," he added.
Those interviewed by CNA agreed that establishing comprehensive benchmarks will be complex and resource-intensive.
"Authorities will need high-quality, granular data adjusted for case mix, ward class and facility type, plus unambiguous definitions so like-for-like costs are compared," said Mr Siow.
Ms Law identified communication and consistent implementation across private hospitals as key challenges.
Mr Siow also stressed that benchmarks must be regularly updated to reflect inflation and changes in medical practice, and warned against applying them too rigidly.
If benchmark ranges do not fully account for differences in care settings or patient acuity, comparisons become misleading, he said. For instance, items used in an ICU with higher staffing ratios and equipment intensity naturally cost more than the same items in a general ward.
Benchmarks could also be misread as price caps and create friction when legitimate clinical variation pushes costs outside the range, Mr Siow said.
"These are manageable risks, but they call (for) transparent communication, thoughtful design and clear guidance from authorities."
IHH Healthcare Singapore, the country's largest private healthcare provider, expressed support for the initiative.
Chief executive Peter Chow said additional benchmark data on hospital fees would provide "a more comprehensive view" alongside existing data on professional fees and help ensure healthcare cost sustainability.
Raffles Hospital called the move a "positive step that builds on ongoing fee benchmarking efforts".
"We do not foresee any major challenges in its implementation and will be fully supportive," said its general manager Tan Hsiang Lung. He added that the hospital already operates on a group practice model where specialists and units adhere to internal fee guidelines aligned with MOH benchmarks.
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Health Minister Ong Ye Kung earlier this month announced plans to benchmark additional private hospital charges beyond the professional fees already covered, including surgeon, anaesthetist and inpatient attendance fees.
Speaking on CNA's Deep Dive podcast, Mr Ong said benchmarking surgeon fees has proven "quite effective", with most charges now falling within the recommended range. The average annual growth in private surgeon fees has slowed dramatically – from 3 per cent between 2010 and 2018 to just 0.4 per cent from 2019 to 2023.
Besides professional fees, existing Ministry of Health (MOH) benchmarks also cover hospital fees such as room charges, surgical facilities and equipment, and medication.
The ministry now intends to extend benchmarking to other costs, such as consumables like hospital gowns, though Mr Ong noted the "sheer amount of work" involved in data collection and consultation has slowed progress.
WHAT COULD MORE BENCHMARKS ACHIEVE?
Industry observers expect the impact of expanded benchmarks to be mixed.
Mr Joshua Siow, partner and Singapore head of healthcare and life sciences at consultancy Simon-Kucher, said additional benchmarks would help "streamline outlier prices, tighten price ranges and make bills more predictable and comparable."
"Average bills may come down modestly where (price) dispersion is currently high, while the primary benefit for patients will be predictability and reduced 'bill shock'," he said.
"Overall spend will still be driven by utilisation and case complexity, and some streamlining of costs beyond professional fees may not necessarily have that large an impact on the overall bill size for most patients."
Nanyang Technological University (NTU) Assistant Professor Ashkar Saxena said outcomes would likely vary across patient groups.
Patients requiring straightforward, benchmarked procedures without complications may see modest bill reductions.
But those who require complex care or new technologies outside the benchmarks could see higher charges if hospitals shift costs to those areas, said Asst Prof Saxena, who is from NTU's School of Social Sciences' economics division.
"Overall, benchmarking could slow price growth, reduce unpredictable bills, but immediate savings will vary and we should not expect lower fees overnight."
Related:
LOOKING BEYOND PRICE CONTROLS
Multiple experts emphasised that benchmarking alone cannot solve Singapore's healthcare cost challenges.
To meaningfully "bend the overall cost curve", Mr Siow said authorities must pursue complementary strategies such as earlier screening and prevention, digital tools that reduce administrative burden, and payment models that "reward outcomes rather than volume".
Asst Prof Saxena added that while benchmarking is a useful "transparency tool", it must work alongside deeper insurance design reforms and greater emphasis on preventive health to address the "unsustainable cost escalation".
Ms Verlene Law of The Reg Consultants, a regulatory service provider for pharmaceutical and medical companies, suggested authorities consider providing more subsidies or support schemes rather than focusing solely on establishing new benchmarks.
"This approach directly addresses affordability while avoiding overly complex benchmarking," she said.
Several doctors, speaking to CNA on condition of anonymity, called for greater scrutiny of both hospital charges and insurance practices.
Rather than just the current upper and lower bound ranges in hospital fee benchmarks, one specialist suggested specific costs for key individual components. This would provide clarity, close loopholes and ensure no mark-ups occur, the doctor said.
The specialist also urged insurers to play a bigger role, proposing that unused premiums in Integrated Shield Plans be partially returned to policyholders to lower overall premiums and create a "balanced ecosystem".
Another surgeon with over a decade in private practice praised initial benchmarking efforts for controlling "black sheep" who overcharge, but questioned whether further benchmarks are necessary.
The surgeon noted that hospital fees are more complex than professional fees due to variability in equipment and consumables used for procedures, even within the same surgical code.
"There's so many variabilities," he said, voicing concerns on whether further benchmarks will result in patients not being able to tap insurance policies for certain treatments or consumables because they fall outside benchmarks.
This could compromise the value of private insurance policies, he said.
Related:
POTENTIAL UNINTENDED CONSEQUENCES
Experts cautioned that expanding benchmarks could create several unintended effects.
Once ranges are published, providers currently charging at the lower end may raise prices toward the benchmark, seeing it as a signal that higher fees are acceptable.
"Benchmarks anchor prices and can work both ways," said Mr Siow.
Hospitals may respond to benchmarks by reducing costs in benchmarked areas while increasing charges for non-benchmarked services to maintain revenue.
"Each hospital operates with different cost structures, so while they may align to the benchmark, the cost recovery might surface in other areas," said Ms Law.
Asst Prof Saxena warned of potential "quality trade-offs" if hospitals cut corners on inputs like nurse-to-patient ratios to meet benchmarks.
"Patients may end up with lower nominal price but also lower value," he said.
Mr Siow disagreed that quality would necessarily suffer, arguing that price pressure typically drives operational efficiencies, tougher supplier negotiations and switches to clinically equivalent alternatives rather than compromising care.
"Clinicians and hospitals should still retain the flexibility to use a higher-cost product if it results in better patient outcomes," he added.
IMPLEMENTATION CHALLENGES
Those interviewed by CNA agreed that establishing comprehensive benchmarks will be complex and resource-intensive.
"Authorities will need high-quality, granular data adjusted for case mix, ward class and facility type, plus unambiguous definitions so like-for-like costs are compared," said Mr Siow.
Ms Law identified communication and consistent implementation across private hospitals as key challenges.
Mr Siow also stressed that benchmarks must be regularly updated to reflect inflation and changes in medical practice, and warned against applying them too rigidly.
If benchmark ranges do not fully account for differences in care settings or patient acuity, comparisons become misleading, he said. For instance, items used in an ICU with higher staffing ratios and equipment intensity naturally cost more than the same items in a general ward.
Benchmarks could also be misread as price caps and create friction when legitimate clinical variation pushes costs outside the range, Mr Siow said.
"These are manageable risks, but they call (for) transparent communication, thoughtful design and clear guidance from authorities."
IHH Healthcare Singapore, the country's largest private healthcare provider, expressed support for the initiative.
Chief executive Peter Chow said additional benchmark data on hospital fees would provide "a more comprehensive view" alongside existing data on professional fees and help ensure healthcare cost sustainability.
Raffles Hospital called the move a "positive step that builds on ongoing fee benchmarking efforts".
"We do not foresee any major challenges in its implementation and will be fully supportive," said its general manager Tan Hsiang Lung. He added that the hospital already operates on a group practice model where specialists and units adhere to internal fee guidelines aligned with MOH benchmarks.
Related:
Continue reading...