Subsidy - the cure for all woes?

Thursday, May 12, 2011 |

The problem with the 'subsidy mentality' is that after a while, it becomes so ingrained that people begin to look at 'subsidy' as the solution to what we perceive to be a social problem. Now, it seems that a doctor (dentist?) is calling for doctors and dentists to be subsidised too!

GPs and the elderly bear brunt of foreign doctor influx

HEALTH Minister Khaw Boon Wan believes that his ministry's current 3M (Medisave, MediShield and Medifund) health-cost strategy facilitates even expensive procedures such as a heart bypass with minimum cash outlay ('Opposition has strange ideas on health care: Khaw'; last Wednesday).

Regarding doctors, Mr Khaw's present strategy seems to be to leave market forces to equilibrate. This means that doctors are left to fight for their survival, causing many general practitioners (GPs) to practise aesthetic medicine to supplement their income.

The influx of foreign doctors to fill places in government hospitals and polyclinics has resulted in a communication breakdown between elderly patients and their doctors. Our health-care system is in a lose-lose situation in which doctors and patients suffer.

Such a fire-fighting strategy could be avoided with proper planning. Our health-care system is well-developed, so why have health-care needs for the next 10 or 20 years not been forecast?
The full social impact of the influx of foreign doctors will be felt in a few years but local GPs and elderly patients are already feeling the pain.

As GPs cope with rising costs, the cost of medical care will rise with inflation. Lowering medical fees artificially will only result in poorer quality of care.

To help GPs contain operating costs, the Government should consider offering subsidised rentals in Housing Board neighbourhoods.

GPs and dentists must now compete with the likes of cellphone traders and bubble tea sellers for the same shop space. Which is a greater public service? Is return on investments more important than health-care affordability?

Dr Ng Yong Kheng


Now the thing is, if you fail to identify a problem correctly, you are not likely to come up with the correct treatment for it. Or even worse - if you begin by deciding on a treatment and then go back and try to frame the problem so it fits your treatment...

The first misconception here is that GPs do aesthetics to make ends meet. While GPs may initially go into or dabble in aesthetics to "supplement their income", my experience is that they soon find it so lucrative it becomes the main source of their income. I have had colleagues who started doing aesthetics "out of interest" or to "supplement income" or whatnot, and for a while even as they expanded their aesthetics practice they continued to keep a foot in primary care "as a form of social responsibility" or "to stay in touch with the basics" - but now they are in full-time aesthetics, operating out of full-fledged aesthetics clinics. Ask yourselves this: You have seen 'normal' GP clinics turn into 'aesthetic clinics' or the 'aesthetic branch' of a clinic chain - has the reverse occurred? Has a clinic ever turned from being an aesthetic clinic to a 'chronic disease clinic'? Have you ever had a doctor refuse to take on another botox case because he has made enough for his rent this month, and would rather spend that time slot looking after a patient's diabetes?

GPs may start aesthetics to supplement their income, but they do not stop once the overheads are all covered. The resources, in terms of training and equipment, once invested, just makes it economically more sensible to convert one's entire practice into aesthetics.

So will lowering rental for clinic spaces make GPs turn from aesthetics to primary care? Well, as I asked in the comments section of a previous post: if you are selling tea for $2 a cup when HDB halved your rent, and people are still willing to pay for your tea at that price, will you lower the price to $1?

And that brings us to the next point Dr Ng brought up when he asked: Which is a greater public service - GPs, or cellphone traders and bubble tea sellers?

I think the question to ask instead is this: Does the average Singaporean spend more on primary care each year, or more on handphones and bubble tea? What about cigarettes and alcohol? Hairdo, nails, spas? Now the fact that all these service providers can compete for the same shop spaces as the GP tells you something - they can turn a profit at the same rental. And the reason why they can do it is because Singaporeans are willing to spend money on what they have to offer. Granted the people whom we normally associate with spending on such things may not be your typical picture of a patient with chronic diseases, but you cannot deny that many will become such, and that the money not spent on those discretionary expenditures now can be saved to pay for one's healthcare needs later in life. If Singaporeans are willing to spend as much on primary care as they do now on all these things and on aesthetics, will GPs have any incentive to go into aesthetics or to let their spouse run a bubble-tea stall out of the same shop space? The players in this equation are not just the landlords and the tenants, but also the consumers. The consumers' choices determine to a large extent whether a business model is successful or not - just ask any Luohan fish seller.

I believe that this 'problem' of GPs doing aesthetics rather than primary care cannot be 'solved' if we continue to deny the economic realities, which is that patients help create that market by the choices they make, and they make those choices because of the perceived value of primary care to them, and because our subsidised healthcare system allows them to abdicate responsibility for their own healthcare.

13 comments:

Fox said...

There may be some doctors who are actually more inclined to do GP work but resort to aesthetics for income. However, if you subsidize their costs, their income from GP work would rise sufficiently for them to do more GP work.

Alternatively, we can subsidize GP treatment, maybe by not charging GST for it.

If you are so deeply opposed to subsidies in general, I will like to seek your opinion on taxes on cigarettes and alcohol. Sales taxes are merely negative subsidies and vice versa. Are taxes on cigarettes more palatable than subsidies on healthcare? Why?

Downhere. said...

I don't really understand how your last paragraph follows from your argument. ??? Market forces dictate rental, so patients are ultimately responsible for Aesthetic practice, and their own poor health? And subsidy produces irresponsible patients???

angry doc said...

Simple, Downhere.

GPs do aesthetics because "patients" are willing to pay for aesthetics rather than primary care. If patients value their health more than their looks, and would rather spend money of the first rather than the second, then GPs will not find aesethtics lucrative.

For the second part, subsidy distorts the true cost of healthcare and allows patients to transfer the burden to the tax pool rather than to pay for it themselves. And because they don't have to pay the entire bill themselves, they don't make it their duty to put aside their own money to pay ofr it. To make other people pay for your own healthcare needs is irresponsible.

Get it?

Anonymous said...

1.If people really value their health and gets healthier, would the “industry” of GPs as a whole benefit in terms of income? –maybe that is why they need “none traditional” source of income.

2.When people do “become” a patient, will he or can he still decide or having trouble deciding where to spent his money? ie between health and looks ? – maybe only healthy patient will go for aesthetics.

3.There are many things a “patients” are willing and can pay but the doctor are not willing or cannot do, no matter how lucrative they are, therefore, GP doing aesthetics must (a) first be allowed by law and (b) the doctors themselves decide they want to do it (either to make ends meet or build up his golf fund or to realize the dream of having a yacht parked in front of his/her mansion instead of an MX5.)

4.How many would tell his parents, grandparents or anyone who raised, protected, nurtured, educated or defended them when were little, helpless or growing up, that it is irresponsible not to put aside “own money” for their healthcare needs when they are old?

Downhere. said...

Well I think we've discussed this in the other thread and agreed to disagree. I guess you are right, that making other people pay for your own healthcare needs is irresponsible because if you knew what it would cost, then you would set aside money for that.

Still, you would know best how much medical bills cost. As a layperson I may not know how much to set aside, and how much my risks were. Following your argument, you should also set aside some money for guns in case war breaks out, some money for fire extinguishers in case your house/neighbouring flats catch fire, some money to buy bottled water in case Singapore's water supply gets cut off.

If you were well informed, and knew your risks, then I agree that it is irresponsible to not set aside money for that. But if you don't know your risk, I can't see why paying someone else to manage that risk is terribly unfair.

angry doc said...

1.If people really value their health and gets healthier, would the “industry” of GPs as a whole benefit in terms of income?

Well, there will be the category of people who are healthy who need very little and spend very little, those who are pre-disease who may need to spend more, and those who are under treatment who need to spend even more, but still have a high functional state. We won't know how big (in terms of dollars) the market it until we remove some of the price-suppresing factors from the market...

2.When people do “become” a patient, will he or can he still decide or having trouble deciding where to spent his money?

Yes. There are COPD patients who still choose to spend money on smoking. My argument is that a subsidised healthcare system which does not hold them accountable for their choices allow them to do so. As long as you have a system that is willing to help them pay for healthcare regardless of their own responsibility, people will abdicate their own responsibility.

3.There are many things a “patients” are willing and can pay but the doctor are not willing or cannot do, no matter how lucrative they are

Correct. But if doctors offer aesthetics, but patients do not take them up, then... it takes two hands to clap. If you ban GPs from doing aesthetics, they will just find something else lucrative to offer - something "patients" are willing to pay for.

4.How many would tell his parents, grandparents or anyone who raised, protected, nurtured, educated or defended them when were little, helpless or growing up, that it is irresponsible not to put aside “own money” for their healthcare needs when they are old?

That's the problem. isn't it? We can't rely on individual responsibility, which is why I am calling for a review of the subsidised healthcare system.

angry doc said...

"As a layperson I may not know how much to set aside, and how much my risks were."

Is it too much to ask that a layperson see a GP for that? Risk assessment and healthcare advice? Isn't that what we all rather GPs do than aesthetics?

"you should also set aside some money for guns in case war breaks out"

If they were legal, I will have a couple in my house right now. And lots of ammunition. Not just for war - there is also the threat of a zombie attack.

"some money for fire extinguishers in case your house/neighbouring flats catch fire"

Don't you already have a fire extinguisher in your house? Your car? Why do you think fire insurance is compulsory? Car insurance? In a subsidised healthcare system, your own health is not just your business - it harms other people because it takes resources away from a pool.

"some money to buy bottled water in case Singapore's water supply gets cut off"

Water, canned food, fuel, torchlight, batteries, first-aid kit. Check. All in the HDB-mandated bomb shelter. Only missing guns and ammo.

"But if you don't know your risk, I can't see why paying someone else to manage that risk is terribly unfair."

Which is what is NOT happening here (I don't know if it is in Australia). How many people have a "family physician" looking after him even during the "well" stage? Most people have a company doctor who does an annual health screening paid for by the company (who doesn't act on the results because anything other than the health screening is not covered by the company), and who makes sure that his cost for the visit does not exceed $8 because that's what the HMO pays him per visit, or a polyclinic where he visits to get MCs because his company only accepts polyclinic MCs, and a TCM guy whom he visits when he has aches and pains. And when something serious happens, the subsidised healthcare system and tax-payers are supposed to catch his fall. Well done.

Anonymous said...

(1)so mathematically, the income of a GP is inversely proportional to the number of people becoming “patient” … correct ? - one possible explanation of GPs going into none traditional “business”?

(2)Problem potentially caused by a small group, eg smokers, person with risky sexual preferences etc, shouldn’t justify a blanket system for everyone, especially those type of ailments whose possible causes or that could make it worst, a person in SG has no meaningful control over, eg air pollution, water, high-density living, food, small land space, ways of making a living etc, especially when they and some of their decedents, still have to shoulder a life long responsibility regardless, of what make possible this country is and can be today --- security.

(3)Assuming the art of “medical aesthetics” is not like some craft which essentially involve a mere spread of limbs, but intensive training, expensive equipment, persistent advertisement, retaining staff etc …is it not a Himalayan task compared to patients who merely walk in and spent the money? – seems like someone had taken all the trouble (scale over mountains and crossing ocean), just to come “clap hands” with patents …really ?

(3.1)And what’s with GPs these days? die-die also need to “find something else lucrative to offer", cannot be doctor like the “old days” ? …what give ? less income or more “out-come”?


(4) If “can’t reply on individual responsibility”, then perhaps “pool” and share this responsibility, like many things in SG, eg share scare land by living in super high rise buildings, share teachers with 39+ other students, share safety and security services, share ”misery” by some so that interns can become doctors etc … the very reason why a bunch of people come together to give themselves a common label, eg Singaporean? … and for some basic necessity, the form of sharing might be called “subsidy” ?. Otherwise, why would anyone bother?

angry doc said...

(1)so mathematically, the income of a GP is inversely proportional to the number of people becoming “patient” … correct ?

Not really. You can go for the high margin-small volume trade, or the low margin-high volume model.

(2)Problem potentially caused by a small group, eg smokers, person with risky sexual preferences etc, shouldn’t justify a blanket system for everyone

I would say that blanket systems exist almost invariably to deal with a small group. How many murderers do you know personally? Yet I can't own a gun in case zombies attacked? Have you actually seen someone disable an MRT train door with chewing gum? Yet I can't walk and chew gum?

Regardless of "accountability", I think healthcare is still a personal "responsibility". Everyone requires healthcare, so why shouldn't everyone pay for his own?

(3) seems like someone had taken all the trouble (scale over mountains and crossing ocean), just to come “clap hands” with patents …really ?

Well, for one thing, the patient's other hand is holding a lot of money. If there was no money, far fewer doctors would have scaled those heights.

(3.1)And what’s with GPs these days? die-die also need to “find something else lucrative to offer", cannot be doctor like the “old days” ?

You want to be an "old days" GP, go ahead - no one is stopping you, right? You really think we should have the right to tell doctors which evidence-based treatment which they are properly trained for they cannot provide to informed patients who are willing to pay for them?

(4) for some basic necessity, the form of sharing might be called “subsidy” ?

Because the so-called "sharing" now imposes unequal burden on some, and confers less benefits to some than others. How is taking $1000 from you and then "sharing" $100 back to you good for you?

jun said...

maybe in your next entry, explore ways to bring personal responbility back with respect to healthcare. i think such decisions would be extremely unpopular politically.

angry doc said...

Undoubtedly, jun.

I think the way to increase a person's sense of personal responsibility in his health is to decrease subsidy and hence increase his potential "out of pocket" expenditure - when you have to bear the consequences of not looking after your own health yourself, you will take better care of yourself and save to pay for it; and if you didn't, well at least the rest of the tax payers are not made to pay for you.

Now you can argue that reducing subsidy will merely cause people to neglect their health when they perceive healthcare as beyond their reach anyway - I say the result s something difficult to predict and is influenced by the state of our public health and eventual cost of treatment, and until we start to reduce subsidy and observe the effects, nobody can be sure how people will behave.

It is politically unpopular, since most people see themselves as beneficiaries rather than "victims" of subsidised healthcare, and the very people who benefit most from subsidised healthcare are the ones who pay the least taxes. But right now means-testing ensures that it is the very people who pay the most taxes who benefit the least from subsidy - is that fair?

I do not imagine that my arguments will result in MOH changing their policy overnight, but I think I am drawing attention to the issue and challenging people to rethink healthcare subsidy. I also know I am not alone in looking at the issue this way. This blog spreads awareness (even as my fellow blogger calls for the opposite - debate is healthy), and awareness is the second step to change.

Anonymous said...

Let market forces dictate:

- No subsidy.
- No quota to medical school.

Perhaps, the state at equilibrium will be more acceptable.

angry doc said...

"However, if you subsidize their costs, their income from GP work would rise sufficiently for them to do more GP work."

Really, Fox? Would you like to give us a few numbers to substantiate your view? How much does a GP who does aestehtics make a month? How much would the average "GP patient" have to pay per visit to make a GP's income "sufficient".

"Alternatively, we can subsidize GP treatment, maybe by not charging GST for it."

If you think that the difference between incomes of GPs who do aesthetics and GPs who don't is a mere 7%, then you obviously haven't had aesthetics treatment...

"Are taxes on cigarettes more palatable than subsidies on healthcare?"

I have no problem with the government not taxing cigarettes if we do not have subsidised healthcare - a man may smoke as much as he wants; as long as he does not make the resultant ill-health the burden of other people, what right do I have to penalise him for his chocies?