Causes of Double-digit Growth in Healthcare Inflation over Last Decade
Ministry of HealthSpeakers
Summary
This question concerns the causes of double-digit healthcare inflation over the last decade as raised by Mr Seah Kian Peng. Minister for Health Gan Kim Yong explained that National Health Expenditure grew by 11% annually between 2006 and 2016 due to an ageing population, increased service utilisation, and capital investments in infrastructure. He highlighted that government healthcare spending increased by 17% annually, raising the state's share of total expenditure to over 40% through subsidies like MediShield Life and the Community Health Assist Scheme. These interventions ensured that the average healthcare inflation for goods and services borne by citizens remained at 2.6%, which is only slightly higher than general inflation. The government continues to monitor these trends to ensure healthcare remains affordable for all Singaporeans.
Transcript
84 Mr Seah Kian Peng asked the Minister for Health what are the causes of healthcare inflation which has seen double digit growth over the past 10 years, far outstripping normal inflation.
Mr Gan Kim Yong: National Health Expenditure, or NHE, is commonly used to track healthcare spending. Between 2006 to 2016, our NHE increased at an average rate of 11% per year. In addition to healthcare inflation, the increased expenditure includes several factors, such as our ageing population, higher utilisation of healthcare services and capital expenditure on the building of more public healthcare facilities in recent years. The NHE figure for 2017 is not yet available.
Over the same period, the Government has provided more support for healthcare. These include the Pioneer Generation Package, MediShield Life premium subsidies and the Community Health Assist Scheme (CHAS). Between 2006 to 2016, the Government’s expenditure on healthcare increased significantly faster by 17% and consequently, the Government’s share of NHE increased from about 30% to more than 40%.
As a result of increased government subsidies, while the growth in our NHE has been high, healthcare inflation, defined as the growth in prices of healthcare goods and services borne by Singaporeans, has been lower. Between 2007 and 2017, Singapore’s average annual healthcare inflation was 2.6% compared to 2.3% for all goods and services.
We will continue to monitor healthcare inflation closely and keep healthcare affordable for all Singaporeans.