Wednesday, 14 March 2018

"Buffet Syndrome” leading to rising healthcare costs

Update 11 Jun 2018: MOH to probe alleged insurance fraud involving physios, doctors and others 
Some medical doctors are paid commission fees of 20% to 30% of the physiotherapy bill if they refer their patients – such as those who require rehabilitation due to injury or illness – to private physiotherapy clinics

Dodgy practices have emerged in the healthcare industry, involving doctors, physiotherapists, insurance agents & third-party administrators (TPAs) splitting money from inflated insurance claims among themselves via a referral and commission system, TODAY has learnt.

Responding to queries, the Ministry of Health (MOH) said it has received feedback on such practices, & will be looking into the matter.

“MOH takes a serious view of any attempts to defraud the healthcare system at the expense of Singaporeans,” a ministry spokesperson said. “Fraudulent behaviour such as unnecessary referrals & false claims for services not rendered raises the overall costs of healthcare in Singapore, and leads to Singaporeans paying more for their healthcare services and insurance plans.”

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The buffet metaphor for integrated shield plan riders only goes so far
There are limits to the buffet syndrome metaphor when it comes to dealing with integrated shield plans with zero co-payment coverage, says one observer from the Lee Kuan Yew School of Public Policy

If someone pays S$100 for a buffet, would you be surprised if that person proceeds to load up on as much food as possible? Or empties the dishes with the most expensive or delicious items?

What about when he or she picks up that last piece of lobster on the table, depriving others behind in the queue?

In this metaphor, the restaurant copes by pricing the buffet to make a profit even if there are people who consume much more than usual. Some people are happy, some get angry & stressed, and others simply give up and skip the buffet.

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Co-payment mandated for new IP insurance riders in bid to curb 'buffet syndrome'
To curb the over-consumption over-servicing & overcharging of healthcare services, the Ministry of Health says IP riders must now incorporate a co-payment of 5 per cent or more. Reuters File foto

To curb the “buffet syndrome” among healthcare consumers who do not have to pay out-of-pocket for their hospital bills, new Integrated Shield plan riders must feature co-payment of at least 5%, the Ministry of Health announced on Wednesday (March 7).

New riders incorporating co-payment of 5% or more will be available by April next year.

In the meantime, insurers can still sell existing rider plans, some of which are full riders that cover the entire co-payment sums for hospital bills. But the insurers must inform new policyholders that they will transit to new riders with co-payment from April 1, 2021, said Senior Minister of State for Health Chee Hong Tat in Parliament on Wednesday (March 7).

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MOH takes 13 years to discover zero co-payment policies encourage “buffet syndrome”


On Wed (7 Mar), Health Minister Gan Kim Yong told Parliament that co-payment in healthcare plays an important role in ensuring that the healthcare system is sustainable.

However, he noted that some private insurance policies had offered zero co-payment coverage. He said that this encourages a "buffet syndrome" in patients.

"They are called full riders," Gan explained. "Such riders encourage a buffet syndrome as patients do not need to pay anything for their treatments. It undermines the co-payment principle and dilutes the personal responsibility to choose appropriate and necessary care." "This will encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us," he added.

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Why change policy on co-payment for Integrated Shield riders only now?

If you are just about sign up for a new rider to your integrated shield plan, you will not be able to find a rider that covers the entire co-payment amount, so that you don’t have to pay anything regardless of the bill size. Instead, you will have to pay at least 5% of your medical bill. There will be a cap on the co-payment amount each year. If you already have one of those “full riders”, you may or may not affected. It depends on whether your insurer changes the terms of your existing policies. So… if you already have one of those “full riders”, don’t get too worried… yet.

Even with full-riders, you still pay for your medical treatments - A lot of people who read that news got quite angry. They ask: Why is the government squeezing Singaporeans? Medical treatments can be very expensive. Without those full riders, Singaporeans might end up having to pay huge medical bills. Has the government no heart?!

But that’s the wrong way to think about it. There’s no such thing as free medical treatment. EVEN with “full riders” where you don’t need to co-pay, you are still paying for your medical treatment. Huh? How come leh? Because you have already paid all that premium. And also, the moment you claim, your premiums go up. Today’s payout for your claims is tomorrow’s premium.

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Patients with new Integrated Shield plan riders will have to make co-payment

This will encourage responsible behaviour by patients and healthcare providers, Health Minister Gan Kim Yong says

Patients with new Integrated Shield Plan riders will have to bear some of their healthcare costs, Health Minister Gan Kim Yong announced on Wed (Mar 7).

Private insurers offer some policies with zero co-payment coverage. These policies, which are known as full riders, “encourage a buffet syndrome” as patients do not need to pay anything for their treatments, said Mr Gan during his ministry’s Committee of Supply debate.

Such riders undermine the co-payment principle and dilute the personal responsibility to choose appropriate & necessary care, he added.

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5% co-payment for new Integrated Shield Plan riders to help address over-consumption of medical services
New riders will have a cap on the co-payment amount each year, with most insurers planning new riders with an annual cap of S$3,000

Patients must bear a minimum 5% co-payment for new Integrated Shield Plan riders, Senior Minister of State for Health Chee Hong Tat announced on Wed (Mar 7).

Policyholders will have a cap on the co-payment amount each year, Mr Chee said during his ministry’s Committee of Supply debate, adding that most insurers are planning to launch their new riders with an annual cap of S$3,000.

This places an upper limit on the risk exposure for policyholders, to protect them against very large bills, he said.

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Health Minister is mistaken that patients overly consume healthcare services because its free: ex-NTUC insurance CEO


In a thorough explanation on why the government is wrong to blame patients for a “buffet syndrome”, Tan Kin Lian asserted:
  • “The health minister used the term “buffet syndrome” to describe the unnecessary and over-consumption of health care services. He blamed the patients for this behavior. He thinks that the patients like to consume the services because it is free, i.e. paid by insurance or largely subsidised by the government.
  • “The minister is mistaken. I am not referring only to the current minister, but to the previous ministers. This mistaken belief had been prevalent for three decades.
  • “I have not found any evidence of patients who like to consume health care because it is free or largely subsidised.
  • “The over consumption is largely due to doctors and hospitals. They are running a business. If they can get the patients to consume more, they earn a larger income or profit.
  • “Some doctors and hospitals will prescribe more treatment to generate the income and profit. I am not suggesting that all doctors and hospitals behave in this manner. But the anecdotal evidence does suggest that this is quite prevalent.
  • “To overcome the over consumption, attention should be focused on the doctors and hospitals, rather than the patients.
  • “The patients do not have a choice. They depend on the doctors for advice on what is necessary. Even if they ask for a second opinion, it does not help much in most situations.
  • “Asking patients to make a co-payment does not solve the problem. Most patients will buy insurance, known as a “rider” to cover the co-payments.
  • “Restricting the scope fo the rider will also not solve the problem. Most patients are not able to make the sensible choice.
  • “To stop the over-consumption and explosion of health care cost, the ministry of health has to step in. They have to set system to prevent the over consumption of services and the over charging for these services.

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Absurd that S$1000 Treatment Cannot Claim Health Insurance but S$10,000 Treatment Can Claim


The report says all this (making co-payment mandatory for full-rider health insurance) is because people abuse the scheme but a lot of times, the insurance company policy is what causes this to happen.

Take my real life example. My child is sick with very high fever and virus infection. I bring my child go see PD (paediatrician). I was given 2 option by the doctor”:
  • Bring home and monitor and come back next day for review and blood test - cannot claim insurance and pay per visit a few hundred (expected at least 3 trip)
  • Admit the child into hospital for observation - 100% claim eveything back by insurance
As a parent, if possible we would all want option 1 because we don’t want to let our child stay in hospital and would like to bring them home and take care of them on our own but with the cost of treatment, we are forced to choose option 2. Insurance companies should re-look into their own policy.

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Why is the Government Penalising Consumers while using Kid’s Gloves on Rogue Doctors and Insurance Firms?

At one point of time, the government was even touting the benefits of buying Integrated Shield plans with full riders so you don’t have to pay a cent if you need medical treatment. Today, it appears to have backtracked on that “don’t have to pay a cent” part and mandated that all new hospitalisation policies will have a 5 percent co-payment component, capped at S$3000.

The reason, according to the Health Ministry, is because policy-holders are indulging in “buffet syndrome” and abusing their health insurance policies by going for more expensive/more extensive treatments than they should, and hence pushing up healthcare costs. On the sidelines of that explanation, rogue doctors are getting off the hook by recommending more expensive/more extensive treatments than required (because you got insurance what, don’t need to pay a cent).

And, all 6 insurers offering rider policies are underwriting losses for 2016. So why is the government only penalising the public for this “buffet syndrome”?

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Cut Healthcare Costs by Making Patients with Insurance Pay Part of their Bill

So you’ve bought an insurance plan that covers your entire medical bill. Congratulations, a task force set up to rein in healthcare costs has recommended that you should now have your policy tweaked so that you’ll need to fork out money to pay part of the medical bill. The 11-member task force includes members from the Life Insurance Association of Singapore, Ministry of Health and Monetary Authority of Singapore.

They found that the cost of healthcare in the private hospitals is higher than what private patients in public hospitals pay, and one of the reasons is more people are signing up for insurance that pays the whole cost of their treatments. The number of people who have bought riders, which cover their entire medical bill, has gone up from less than one in five residents in 2011 to one in three today. These patients with riders generally incur bills that are 20-25 percent higher than those who have to bear a share of the cost. Because increasing insurance payouts, people have to pay higher premiums.

So, the task force has suggested the six insurance companies offering IPs tweak their products so patients pay a share of the bill to prevent the “buffet syndrome” which occurs when patients are “insulated from the cost”.

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Deductibles and co-insurance

It is common to find a “deductible” and “co-insurance” condition in medical expense insurance policies. These conditions help to keep premiums affordable but the policy may not fully cover expenses.

You should find out how these conditions apply to all covered expenses in your policy. It may be that for each policy year, an annual deductible and co-insurance condition will apply. A deductible is the initial amount you need to pay yourself for claim(s) made in a policy year, before any policy benefits are paid out. Usually, you only need to pay the deductible once in a policy year. Co-insurance is the amount you need to co-pay or share after you pay the deductible, and it is usually expressed as a percentage.

The amount of expenses after subjecting it to the claim limits, deductible and co-insurance, will be covered by the policy. You can use Medisave to pay for the remaining portions not paid by your insurance policy, up to the prevailing Medisave limits.

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New integrated shield policyholders will have to pay part of medical bills: Gan Kim Yong
Health Minister Gan Kim Yong. PHOTO: AFP

Under revised Ministry of Health guidelines that take effect on Thursday (8 March), those who buy new Integrated Shield plan (IP) riders will be made to pay part of their medical bills, said Health Minister Gan Kim Yong in Parliament on Wednesday.

The revision requires that insurers’ new IP riders incorporate a co-payment of at least 5 per cent but places a cap on the payable amount for treatments that are pre-authorised or provided by doctors on insurers’ approved panels. Gan noted that some private insurance policies offer zero co-payment coverage called full riders, which encourage what he called a “buffet syndrome” as patients do not need to pay anything when they receive medical treatment.

“It undermines the co-payment principle and dilutes the personal responsibility to choose appropriate and necessary care. This will encourage unnecessary treatment, leading to rising healthcare costs, not only for those with such riders, but for all of us,” said Gan

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Tan Kin Lian 8 March at 16:21



The health minister used the term "buffet syndrome" to describe the unnecessary and over-consumption of health care services. He blamed the patients for this behavior. He thinks that the patients like to consume the services because it is free, i.e. paid by insurance or largely subsidised by the government.

The minister is mistaken. I am not referring only to the current minister, but to the previous ministers. This mistaken belief had been prevalent for three decades.

I have not found any evidence of patients who like to consume health care because it is free or largely subsidised.

The over consumption is largely due to doctors and hospitals. They are running a business. If they can get the patients to consume more, they earn a larger income or profit.

Some doctors and hospitals will prescribe more treatment to generate the income and profit. I am not suggesting that all doctors and hospitals behave in this manner. But the anecdotal evidence does suggest that this is quite prevalent.

read more

Health Minister is mistaken that patients overly consume healthcare services because its free: ex-NTUC insurance CEO

Former NTUC Income CEO Tan Kin Lian has sharply criticised Health Minister Gan Kim Yong for blaming patients for overly consuming healthcare services because it is free

Gan had said in Parliament this week that co-payment in healthcare is important as it ensures the sustainability of the healthcare system. Noting that some private insurance policies offer zero co-payment coverage the Minister said that such coverage “dilutes the personal responsibility” of patients. He added that this prompts a “buffet syndrome” in patients, in which they overly consume services just because they are free:
“They are called full riders. Such riders encourage a buffet syndrome as patients do not need to pay anything for their treatments. It undermines the co-payment principle and dilutes the personal responsibility to choose appropriate and necessary care. This will encourage unnecessary treatment, leading to rising healthcare costs not only for those with such riders, but for all of us.”
That same day, Senior Minister of State for Health Chee Hong Tat announced that patients must bear a 5 per cent minimum co-payment for new Integrated Shield Plan riders with immediate effect. Only new policy holders will be affected by the policy, not those who have already bought zero co-payment insurance policies.

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