The tiny island nation of Singapore is very rich, with an average per capita income of $60,000 in 2012. This places it ahead of countries like the U.S., the U.K., Germany and Japan. But even more importantly, Singapore’s economy is still growing, despite the global economic slowdown. With a 2011 GDP of $260 billion, the Singaporean economy is bigger than that of Portugal, Israel and Ireland — even with a much smaller population than any of those countries.
Healthcare expenditure in Singapore was approximately $11.7 billion in 2012, and it is expected to reach $22.3 billion by 2018. Per capita spending on healthcare is second only to Japan among Asian countries, reaching $1,800 in 2011. High levels of wealth and healthcare expenditure make Singapore’s medical device market very attractive.
The market for medical devices in Singapore is $535 million and growing. In order to succeed, foreign medical device companies would do well to understand Singapore’s healthcare system.
Primary care in Singapore is dominated by private providers, who cover nearly three quarters of the market. On the other hand, public providers dominate the acute care sector. Nursing homes, hospices and community hospitals are generally serviced by voluntary welfare groups funded by Singapore’s government.
A network of almost 2,000 private medical clinics covers about 80 percent of all primary healthcare services in Singapore. Remaining coverage is provided by 18 public sector polyclinics. Polyclinics treat patients after they are discharged from hospitals, and they provide outpatient care. In addition, they provide immunization, health screening, health education and pharmacy services. Citizens over 65 and school children are eligible for discounts of up to 75 percent if they use these polyclinics.
Of Singapore’s seven public hospitals, five are general hospitals, while one is devoted to psychiatry and another is devoted to children’s and women’s health. The general hospitals have 24-hour emergency units and they provide general and specialist services for inpatients and outpatients.
Singapore is also home to six national specialty centers. The centers specialize in different fields ranging from cardiac to dental to neuroscience treatment. There are also centers for cancer care, skin care and eye care. These specialty centers and public hospitals cover more than 80 percent of Singapore’s secondary and tertiary healthcare needs. Private hospitals cover the remaining needs.
There are several systems of reimbursement for medical devices in Singapore. The government provides large subsidies, which it supplements through programs like Medisave, MediShield, ElderShield and Medifund. The subsidies make up the first of four tiers for healthcare reimbursement, covering almost 80 percent of expenses in Singapore’s acute hospital wards. These wards are accessible to every citizen in Singapore.
The second tier in healthcare reimbursement is Medisave, a medical savings account plan that covers each individual Singaporean. This plan is mandatory for all citizens. Both employees and employers contribute a percentage of workers’ monthly salaries to the accounts, which are portable to other jobs. Money in the accounts is to cover future medical costs, and they can still be accessed after retirement.
Medisave covers the following hospital costs:
- Daily ward charges
- Doctor’s compensation
- Surgical procedures
- Inpatient charges for medicines, medical supplies, medical treatments, rehabilitation services and implants and prostheses that are introduced during the course of surgery
The following hospitalization expenses are also covered by Medisave:
- Approved surgeries: daily hospital charges of up to $250 per day, including a maximum $25 for the doctor’s daily attendance fees. Also, a fixed limit for each table of surgical operation.
- Psychiatric treatment: daily hospital charges of up to $120 per day, including a maximum $40 for the doctor’s daily attendance fees. Patients can receive up to $4,045 in benefits per year.
- Approved community hospitals: daily hospital charges of up to $200 per day, including a maximum $25 for the doctor’s daily attendance fees. Patients can receive up to $4,045 in benefits per year.
- Approved convalescent hospitals: daily hospital charges of up to $40 per day, including a maximum $25 for the doctor’s daily attendance fees. Patients can receive up to $2,425 in benefits per year.
- Approved hospices: daily hospital charges of up to $130 per day, including a maximum $25 for the doctor’s daily attendance fees.
- Other approved cases: daily hospital charges of up to $365 per day, including a maximum $40 for the doctor’s daily attendance fees.
The third tier in healthcare reimbursement is MediShield, an inexpensive, risk-pooled catastrophic medical insurance plan. MediShield covers major illnesses that are problematic for insurance policies, through a co-payment and deductible system. Nearly 80 percent of significant medical bills receive coverage under MediShield.
The fourth tier of healthcare reimbursement is ElderShield, a risk-pooled severe disability insurance that covers financial costs associated with severe disabilities. Subscribers can also gain higher disability coverage by purchasing supplements to the ElderShield program.
Finally, Singaporeans who cannot afford their medical bills even after these subsidies may take advantage of the Medifund medical endowment. This is the ultimate safety net for Singapore’s poor.
Those citizens who want to may add to their healthcare coverage by purchasing private insurance policies. However, they must first be MediShield subscribers. The practice of purchasing additional insurance is common among middle and upper class Singaporeans. The overall structure of the industry maintains a national risk pool, while keeping very healthy Singaporeans out of the private market.