Insurers have recently voiced their concerns about rising medical costs, and have raised the premiums of their Integrated Shield Plans (IPs) in tandem (Five of seven private health insurers hike IP premiums for existing plans, April 2).

A survey report found that factors influencing healthcare costs in Singapore include an ageing population, increased disease incidence, improved early detection and the long-term management of disease conditions. Other factors include adoption of costly new technologies, treatments and pharmaceuticals, and high operating expenses driven by increasing real estate prices, and salaries due to a shortage of healthcare staff.

There are already measures in place that have successfully controlled some aspects of medical inflation. The Ministry of Health (MOH) introduced fee benchmarks for doctors in 2018, and, since then, doctor fees have remained stable.

MOH also has an enforcement framework to deter doctors from submitting inappropriate claims. IP insurers have also contained costs by steering policyholders to panel doctors who have agreed to charge fees at insurers’ stipulated rates, and also to hospitals that partner with the insurers.

With these measures in place, between 2019 and 2024, IP insurers kept their overall medical loss ratio (MLR) between 69 and 77 per cent. This ratio is the percentage of premium income that insurers pay out in medical claims, and can be used as a gauge of whether insurance premiums are appropriately priced.