In April 2022 I published a post on my blog demanding answers to some questions I had about the Ministry of Health Budget. I pointed out the ten-fold increase in the MOH Budget since 2006 which reached $19 billion in Budget 2022. I calculated this to be roughly $4750 per Singapore resident on the assumption that foreign workers and employment pass holders would and should have to pay for their own healthcare (or have their employers pay). I compared this to a figure of £2600 per person for healthcare expenditures in the UK for 2022/23, about $4150 at current exchange rates of around 1.6 S$ to the £. So SIngapore is already spending substantially more per capita than the UK despite the fact that SIngaporeans have to pay for every doctor’s visit and in-and out-patient procedure and all their prescriptions including for very expensive cancer drugs. By contrast in the UK most healthcare is free at the point of delivery and over-60s and the disabled or those with chronic conditions pay nothing for medicines while the general population’s costs are capped.

I asked the following questions:

1. Why does the Budget only include spending by MOH and not revenues collected, either directly from Singaporeans or through their Medisave accounts or Medishield Life policies apart from the insignificant sum of $93 million? I am perplexed because your website shows that Medisave balances reached $110 billion as far back as 2020 and that Singaporeans used only $1 billion in 2020 to pay for direct medical expenses.

2. On your website it also states that over 90% of the cost of treatment in B/C class wards is covered by Medisave and Medishield (I presume the balance is covered by out-of-pocked expenditures by SIngaporeans). If that means the $1 billion withdrawn to pay for direct medical expenses then why is your Ministry requesting a budget of $19 billion and $17 billion for operating expenditures? It is difficult to believe that the Ministry’s healthcare expenditures per Singaporean resident could be so high and more than in the UK, given that the proportion of over 65s in Singapore is lower (under 16% compared to over 18% in the UK) and the cost of manpower (except possibly doctors) is so much lower.

3. Your Ministry has budgeted $9 billion in transfers to institutions and organisations in 2022. I assume the bulk of this goes to MOH Holdings. Given that Singaporeans pay for the bulk of their healthcare through their own savings, Medisave and Medishield, It seems likely then that MOH Holdings is running a substantial surplus. What is happening to this money? Is it being transferred directly to GIC or Temasek or used to cover losses elsewhere? It should be easier to answer these questions once you send me the accounts for MOH Holdings. 

4. Elsewhere on your website it says that Government healthcare expenditures include spending from endowments and trust funds yet this has not been broken out in your Ministry’s Budget. What contributions came from the Merdeka Generation Fund, the Pioneer Generation Fund, the Eldercare Fund, the Medical Endowment Fund or the Long Term Care Support Fund? Why are these being included in the Expenditure estimates if the money has already been set aside? I have previously expressed my concern that there seems to be double counting. Money is set aside in earlier years but then is expensed against revenues a second time in the Budget. I would be grateful for your reassurance that this is not happening. If this is not a question you can answer perhaps you can pass it your senior colleague Lawrence Wong.

5. I note that the increases in healthcare expenditures in recent years seem to mirror the increases in the Net Investment Returns Contribution. I would be grateful for your reassurance that there is no connection between the two and that the Government is not trying to deceive Singaporeans through matching book entries with no new money actually entering the system.

Needless to say there was a defeating silence from the Health Minister which suggests that the Government is hiding something. It may be using, as I have suggested, the Health Budget, and also possibly the Defence and Education Budgets, to transfer money to Temasek and GIC to cover losses or for other purposes. This would explain why, despite what should be an embarrassment of riches in the reserves of at least $2 trillion and maybe $3 trillion or more, LHL is always complaining that money has to come from somewhere and that taxes need to go up, though of course only on poor and middle-class Singaporeans, never on high earners like himself. Singapore has a high rate of consumption tax, or GST, which is regressive , but is almost unique among developed countries in having no taxes on investment income or capital gains or income from abroad which is why it finds it easy to attract foreign billionaires.

The mystery of the Healthcare Budger only deepened last week when the Health Minister Ong Ye Kung announced the Healthier SG White Paper in Parliament which he is quoted in state media describing as “a fundamental reorientation and reform of the healthcare system”. This is obviously a baby step in the right direction though one that should have been done decades earlier. It also seems to be taking SIngapore closer to adopting the NHS model of GPs acting as gatekeepers and being in a position to monitor their patients’ health over the long term and hopefully better manage or prevent chronic conditions. This is a humiliating U-turn, though of course the Government has not admitted it, and also shows that much of the sycophantic propaganda that was regurgitated in pro-PAP Western media, presumably because of financial inducements in one form or another, about their success at keeping the population healthy while holding down costs was fake. With these changes, patients will no longer be required to co-pay 15% of the cost for drugs for chronic conditions but will be allowed to pay the full amount with their MediSave though it is unclear what will happen if they exhaust it. Will MediFund cover the shortfall or will patients’ relatives be called upon first? Singapore has long had a poor track record in managing chronic conditions such as diabetes with one of the highest rates of limb amputations and at an earlier age than other high income countries. Often visiting HDBs on walkabouts I have had the opportunity to see at first hand how many amputees there are and often people in their 40s and 50s rather than their 70s as in other countries. Some of the residents told me that because they could not afford the medication for their chronic conditions one month because of unexpected expenses they would frequently skip it, a disaster caused by the myopic desire of our health officials and Government to keep costs down where lower income groups are concerned.

The Reform Party has continually advocated for replacing the present system of out of pocket expenditures backed up by excessive but unspendable saving into Medisave accounts and a Medishield insurance scheme that does not insure but is also in substantial surplus with a universal healthcare system like the NHS or perhaps the Canadian, German or French systems. The PAP Government claims it heavily subsidises healthcare but provides no information to verify that fact and hides the money collected from SIngaporeans together with transfers directly from the MOH Budget in the accounts of the Government-owned healthcare companies which it refuses to make available. From there any surplus could be legally transferred to GIC or Temasek or indeed any Schedule 5 company. Also it is unclear whether the spending from the Pioneer Generation and Merdeka Generation Funds is included in MOH’s Budget (in which case it is being paid for twice) or whether it is separate.

Ong said that the Government would be spending about $1 billion over the next three to four years on set up costs and $400 million a year towards recurrent costs for HealthierSG but these relatively small amounts are only about 3% of the MOH Budget of $19 billion and does not explain the mystery of where the money is going. Particularly as Ong said that health expenditures are expected to rise from $22 billion to $60 billion a year by 2030. At that point, assuming the resident population remains about 4 million, they would amount to $15,000 per resident. This is a ludicrous figure as the Government has signaled no plans to change a system in which Singaporeans have to pay for everything from their savings, MediSave account or MediShield.

Ong Ye Kung and Lawrence Wong and their master LHL need to answer my questions about the Health Budget. There is no transparency and every reason to suspect that the Government is using bloated expenditures on health, and quite possibly other ministries such as education and defence, in the Budget to hide transfers to off balance sheet entities such as Temasek and GIC or something more sinister. It would seem the perfect way of covering losses and this would fit with LHL’s constant desire to raise taxes on the less well off. Or perhaps the enormous projected rise in health expenditure is because the Government is planning to double the population to 10 million after all? Either way Singaporeans need to demand answers and representatives in Parliament who are capable of doing the job they are supposed to do of holding the Government to account and scrutinizing the Budget properly.

Published by kjeyaretnam

I'm a Singaporean economist who became an opposition activist. I blog to provide an alternative to the porkies that the Pinkies tell. It just so happens that my alternative is the truth. That's why I've never been sued in any civil or criminal court no matter how hard hitting my criticism. I'm quoted and interviewed and asked to speak across the world but largely censored in Singapore in an effort to silence my political opinions. The left hate me because they think I split their vote and because I eschew their outmoded economic models. Models that don't work. The Right and the Conservatives hate me because I'm a liberal. I'm not sure what the middle think of me. I don't think there are more than a handful of people in the middle, here in Singapore. I'm a Singaporean born and bred, dual heritage, my parents Singaporean established here before the State of Singapore was created. I'm not Eurasian. I read economics at Cambridge and could be broadly described as from the Keynesian school but I believe in interventions. I was formerly a successful hedge fund manager. After economics and politics my greatest interests are history, film and Makan. I run but I run so I can eat like a Singaporean. View all posts by kjeyaretnam