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Singapore responds to the financial crisis

Country: 
Singapore
Partner Institute: 
Department of Epidemiology and Public Health, National University of Singapore
Survey no: 
(14) 2009
Author(s): 
Lim Meng Kin
Health Policy Issues: 
Long term care, Funding / Pooling, Access, Remuneration / Payment, Responsiveness, HR Training/Capacities
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Abstract

Singapore is going through the most serious economic downturn it has experienced since independence in 1965. However, unlike many governments under pressure to cut their health budgets in the face of shrinking resources, the Singapore government?s response has been to set aside more money for healthcare in 2009, including special schemes to help patients tide over the recession. And while there have been job losses across various industries, the public health care sector went the opposite way.

Purpose of health policy or idea

The new initiatives are to help Singaporeans affected by the economic tsunami. In February 2009, the government announced a "Resilience Package" totalling S$20.5 billion, the largest sum that the Government has ever invested in response to an economic downturn. The package includes extraordinary measures to prevent a more severe loss of jobs and lasting damage to the economy. Fortunately for Singapore, the government is able to do this because its prudent fiscal policies in the past have resulted in vast and substantial savings in its national reserves.  

The 2009 health budget received a substantial boost of S$1 billion, raising the original budgeted amount to S$3.7 billion. A total of S$2.7 billion will go towards government subsidies to the public sector hospitals and health care institutions. Of this, S$2.2 billion will be used to subsidise patients' medical bills and the remaining money to recruit and train more doctors, nurses and allied healthcare professionals.  

Healthcare Jobs  

As an immediate step, the Health Ministry created at least 250 mid-career opportunities and provided training for retrenched Singaporeans from other industries, who want to make a career switch to healthcare, working as nurses, therapists, radiographers, pharmacy technicians or healthcare assistants.  

Also announced are 4,500 new healthcare jobs that will be added to the public healthcare sector over the next 2 years, ranging from nurses and pharmacists, to counter staff and telephone operators. Even the number of scholarships for health professionals offered in 2009 was increased to 250, up from 150 the previous year.  

Medisave and Medifund  

From June 2009, the Medisave withdrawal limit was raised for patients who require surgery (from between S$250 to S$7,550, depending on the complexity of the surgery), so that out-of-pocket expenses will correspondingly decrease. For example, the withdrawal limit for cataract operation went up from S$1,400 to S$2,150.  

Despite the recession, the Finance Ministry topped up Medifund with S$100 million. Part of this sum will be allocated to Medifund Silver which was set up in 2007 in public sector hospitals and institutions to help needy patients. The latter scheme was later expanded to include Medifund-approved institutions providing intermediate and long-term care in order to generate more benefit for community hospitals and nursing homes.  

Boosting elderly care  

The Ministry of Health had also been making preparations to meet the healthcare needs of an aging population. It was with this in mind that the government announced the building of new community hospitals to boost capabilities in treating chronic diseases such as stroke, heart and kidney failure, and other age-related conditions such as dementia, while enhancing the capabilities for long-term care, including rehabilitation, home care and palliative services after patients have been discharged from hospitals. It announced a spending of S$500 million over the next five years on these measures to improve long-term care for elderly Singaporeans. Work on 5 new nursing homes will start within 2 years, including a 300-bed home for patients with psychiatric problems to be ready by 2012. It intends to add more than two thousand nursing-home beds over the next five years.  

Information Technology  

An additional S$200 million will be spent to get a nationwide electronic health records system launched over the next two years.  

Infrastructure  

To meet Singapore's growing healthcare needs, the Ministry of health had, even before the financial crisis, been busy preparing a long term plan to boost healthcare infrastructure in Singapore over the next decade (see report  10/2009). It had committed to invest S$4 billion over the next five years in healthcare infrastructure, which will include the redevelopment of older hospitals, medical centres and a brand new hospital, in addition to one that is already in progress and due to open in 2011. The recession (and the stimulus package) was therefore seen as providing the opportunity to step up development projects already in the pipeline and bring forward some of them to capitalise on the cheaper construction costs.  

Also announced are a second national heart center and a second national cancer center, two new general hospitals, and a third medical university (the two existing medical schools produce 310 doctors a year, but this is not enough to meet current demand). The government additonally said it will release from its land bank two plots of land designated for the building of private nursing homes. It would also help two existing homes run by voluntary welfare organizations to relocate to new and larger facilities. Subsidies to intermediate and long-term care facilities (including community hospitals, nursing homes, and hospices) will also be increased to meet growing patient needs.

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual consensual highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low very high very high
Transferability strongly system-dependent system-neutral system-neutral

Political and economic background

Singapore's open and export-oriented economy makes it extremely vulnerable to global economic shocks. It was the first East Asian country to fall into a recession from the current global economic crisis after July 2008, even though its well regulated banks' exposure of to sub-prime mortgage was limited.  

The unprecedented severity of the global financial and economic crisis gave justification for the government to draw S$4.9 billion from past reserves to fund the initiative. Overall, the revised Budget Balance for financial year 2009 is a deficit of S$8.7 billion (or 3.5% of GDP). The Basic Balance (i.e. excluding the transfers to endowment funds as well as the contributions from Net Investment Returns, is a deficit of S$14.9 billion (6.0% of GDP) thus imparting a large fiscal boost to the economy this year.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Initiators of idea/main actors

  • Government
  • Providers
  • Patients, Consumers
  • Media

Stakeholder positions

Everyone was supportive; No one was opposed to the package.

Actors and positions

Description of actors and their positions
Government
Ministry of Healthvery supportivevery supportive strongly opposed
Providers
Public and private providersvery supportivevery supportive strongly opposed
Patients, Consumers
General publicvery supportivevery supportive strongly opposed
Media
Mediavery supportivevery supportive strongly opposed

Actors and influence

Description of actors and their influence

Government
Ministry of Healthvery strongvery strong none
Providers
Public and private providersvery strongneutral none
Patients, Consumers
General publicvery strongneutral none
Media
Mediavery strongstrong none
Public and private providers, General publicMediaMinistry of Health

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Expected outcome

Impact of this policy

Quality of Health Care Services marginal rather fundamental fundamental
Level of Equity system less equitable neutral system more equitable
Cost Efficiency very low very low very high

References

Sources of Information

Author/s and/or contributors to this survey

Lim Meng Kin

National University of Singapore

Suggested citation for this online article

Lim Meng Kin. "Singapore responds to the financial crisis". Health Policy Monitor, October 2009. Available at http://www.hpm.org/survey/sg/a14/1