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 Affordable Excellence CHAPTER 3 Helping Patients Pay  The success of healthcare in Singapore today is largely due to the government ’s creative use of the Central Provident Fund.The CPF’s medical savings component, called Medisave, makes it possible for Singaporeans to pay for much of their own medical care. Medisave is, in essence, a compulsory savings account.The government sets contribution rates for workers and their employers as a percentage of wages. Once in their accounts, the money may be used to pay for personal and family healthcare—always along carefullyestablished guidelines. As mentioned in Chapter 1, the Central Provident Fund was first introduced under British colonial rule and functioned as a simple, mandatory retirement savings plan. Workers contributed five percent of their wages into the Fund, and their employers matched the amount.1 The nest eggs grew through these combined contributions plus interest paid on the balances. When participants reached 55, people could begin withdrawing the money to help pay for retirement. Soon after independence, the government expanded the scope of the CPF and turned it into a vital factor in improving the lives, living conditions, and health of Singaporeans. It was determined early on that compelling health savings would play an increasingly larger role in the lives of the people, and it became a central part of long-term planning. Changes to the Fund were to be introduced in small doses over the years, so as not to cause concern and confusion among the population and to make them more acceptable. As wages rose, so too did the percentage of the salary contribution to the CPF. However, the increases were carefully calibrated so that an increase in wages always meant a net increase in take-home pay.2 The first significant step was taken in 1968 when, for the first time, in addition to retirement expenses, workers were allowed to use a portion Affordable Excellence combined t38 38 3/21/2013 7:12:59 PM Helping Patients Pay  of their CPF to help purchase apartments built by the Housing and Development Board. Since then, the rules governing the Fund have been changed to allow workers to use their savings to also pay for healthcare, approved insurance schemes, and education. When employed Singaporeans and their employers make their monthly contributions, the money is dispersed into three accounts: Ordinary Account: to be used to buy a home, pay for CPF insurance against death and disability, investment and education; Special Account: for old age and investment in retirement-related financial products; and Medisave Account: to be used for healthcare expenses and approved medical insurance. The mandatory allocation among the three accounts changes according to the age of the participant. 30-year-olds see their total contribution divided as follows: 23 percent of wages to the Ordinary Account; six percent to the Special Account; and seven percent to Medisave. For 50-year-olds: 19 percent to Ordinary; eight percent to Special; nine percent to Medisave. The “percent of wage” figures represent the combined contribution of employee and employer. I will focus on the Fund’s healthcare components and the central role they play in maintaining the health and wellness of Singaporeans. The component parts that impact healthcare include: medical care savings programs (Medisave); supplemental catastrophic, chronic, and long-term care insurance programs (MediShield); as well as funds for paying healthcare costs for the poor (Medifund). Together, they are known as the 3Ms—Medisave, MediShield, and Medifund—and I believe they play an integral role in the success of the system. Private insurance plays a limited role, and I will examine it as well. What Patients Pay For The government provides access to a basic level of care and subsidizes most of its cost so that no one goes without fundamental healthcare. However, as I have discussed, the system is designed to make sure patients do contribute to the cost of their care. In addition, as part of the system’s choice initiative, patients are allowed to spend their own money on care beyond the basic level, including amenities in public hospitals, private hospitals, private doctors, and other services. They pay the costs using their own money, Medisave funds, and approved health insurance within the limitations established by guidelines, which I will explain in this chapter. No one, then, is obligated to stay with the publicly subsidized programs if they are willing to pay for some things beyond what they offer. Affordable Excellence combined t39 39 3/21/2013 7:12:59...

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