Singapore’s healthcare system balances government subsidies, individual savings, and insurance to ensure affordability and discourage overuse, rather than offering free healthcare funded entirely by taxpayers. Rising costs prompt ongoing efforts to expand capacity, improve efficiency, and right-site care.
Singapore’s healthcare system is globally recognized for its high quality and longevity outcomes, but rising costs and an ageing population have raised concerns about its future affordability and accessibility. In an extensive interview with The Straits Times, Deputy Prime Minister Gan Kim Yong (GKY) and Health Minister Ong Ye Kung (OYK) addressed 10 pressing questions on the sustainability of Singapore’s healthcare model.
1. Why Doesn’t Singapore Provide Free Healthcare Like Some Developed Countries?
GKY: There is no such thing as free healthcare; ultimately, taxpayers bear the cost. Singapore uses a comprehensive system known as S+3Ms-government subsidies plus MediSave, MediFund, and MediShield-to ensure affordability while promoting responsible use and right-siting of care to moderate costs.
OYK: Free healthcare systems, such as the UK’s NHS, often face overwhelming demand and long waits. In contrast, the US system offers accessibility for those with insurance but is unaffordable for many. Singapore deliberately chose a middle path, balancing affordability, accessibility, and sustainability through co-payment and risk-pooling mechanisms
2. Why Are Healthcare Costs Rising Faster Than Inflation, and Can the Government Do More to Contain Them?
GKY: Healthcare is manpower-intensive, so rising wages drive up costs. Ageing increases demand, and new technologies, while effective, are expensive. The government works with healthcare clusters to increase efficiency and right-site care, focusing on keeping Singaporeans healthy to reduce demand and targeting subsidies to those who need them most.
OYK: The COVID-19 pandemic intensified manpower shortages and wage pressures. Unlike other sectors, innovation in healthcare often leads to higher-not lower-costs due to the willingness to pay for better outcomes. Insurance dynamics, especially when patients are insulated from costs, can also drive unnecessary treatments and higher expenses
3. Can Public Hospitals Prevent the “Buffet Syndrome” of Over-Treatment?
OYK: Over-servicing is controlled in the public subsidized sector through clinical discipline. The “buffet syndrome” is more pronounced in the private sector, especially for patients with insurance riders that cover nearly all costs. Data shows those with riders are significantly more likely to make claims and have higher bills, doubling overall healthcare costs compared to those without riders
4. Was the 2018 Co-Payment Mandate for Insurance Riders Too Light-Handed?
GKY: The introduction of a minimum 5% co-payment (capped at $3,000) was designed to moderate costs while maintaining affordability. This threshold will need periodic adjustment as costs rise. The aim is to balance assurance for patients with sustainability for the system.
OYK: The proliferation of riders was driven by insurers competing for market share, leading to unsustainable premium hikes. As premiums rise, especially for seniors, many drop their riders, highlighting the need for industry reform and better-designed insurance products
5. Are Riders Necessary for Private Sector Treatment, and Are They Sustainable?
OYK: MediShield Life and Integrated Shield Plans (IPs) offer significant protection, especially in private hospitals. However, riders become prohibitively expensive in old age and often don’t justify their cost. The industry must rethink riders to offer more disciplined, lower-priced options with some co-payment.
GKY: Insurance is about risk pooling; as claims rise with age, so do premiums. Individuals must weigh the value of maintaining riders as they age. Riders should be restructured to ensure long-term sustainability and avoid fuelling overuse
6. Can Subsidized Healthcare Remain Accessible Amid High Bed Demand and Ageing?
OYK: The ageing population and post-pandemic shifts have increased demand and length of hospital stays. Infrastructure expansion is underway, with new hospitals and thousands of new beds being added. Beyond hospitals, Singapore is investing in community care, transitional facilities, and home care to right-site patients and manage capacity. Attracting and training healthcare manpower remains a priority
7. Can the Public Sector Cope if More People Drop Private Insurance as They Age?
OYK: If more people turn to public healthcare, capacity must expand accordingly. Subsidized care will always involve queues, but triage ensures urgent cases are prioritized. Singapore’s system strives to balance quality, affordability, and accessibility, with MediFund as a last-resort safety net
8. Will Younger Generations End Up Subsidizing Older People’s Healthcare?
OYK: Healthcare expenditure is rising rapidly, projected to reach $30 billion by 2030. Government subsidies form a large part of spending, but the system also relies on individual savings (MediSave) and insurance. While subsidies can be cross-generational, insurance is designed for each generation to pay its own way, making the system more sustainable as long as the economy grows
9. Will the Definition of Basic Healthcare Be Scaled Back in the Future?
OYK: The definition of basic healthcare has continually expanded with advances in medical science and rising expectations. Recent reforms include coverage for advanced therapies like cell, tissue, and gene therapy products under MediShield Life, despite their high cost. The government uses rigorous health technology assessments to ensure only cost-effective treatments are included, and expects costs to fall as technology matures
10. Can the Government Address High Private Sector Treatment Costs?
OYK: Singapore’s variegated healthcare system offers choice, including more expensive private care for those who desire it. The government’s focus is on right-siting care and expanding affordable options in the community, ensuring the public system remains robust while respecting patient choice in the private sector
Conclusion: Singapore’s healthcare model is built on a balance of individual responsibility, government support, and market mechanisms. The S+3Ms framework ensures affordability while discouraging overuse. Rising costs, driven by demographics, technology, and insurance dynamics, are being addressed through efficiency, capacity expansion, and careful subsidy targeting. The government remains committed to enhancing the definition of basic care and expanding access, but continued vigilance and adaptation are required to keep the system sustainable amid demographic and economic shifts
