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Posts Tagged ‘Healthcare’

Integrated Shield Plans? Waste of money? Cont’d

In CPF, Financial competency, Financial planning on 19/08/2014 at 4:30 am
When TRE republished my piece on S’pore overinsuring their healthcare that pointed out, But seven in 10 armed with IPs that target Class A wards in public hospitals chose to stay in lower ward classes when hospitalised. Only one in 10 from the same group chose private hospitals.Echoing a similar trend were those with IPs that target private hospitals – six in 10 chose lower ward classes in public hospitals. The committee noted twice in its report that many Singaporeans want medical treatment beyond that provided in Class B2/C wards but have “over-stretched themselves to buy the most expensive product for higher protection”.,
two responses stood out, one rubbishy (but which I suspect explains why many gold plate and gem encrust their Medishield plans) and the other sensible.
But both imply that because the money’s there in the Medisave a/c so spend it leh (a major point of my piece was that the ltd uses of Medisave “encouraged” gold plating and gem encrusting medical insurance. Btw, an actuary tells me that insurers don’t really make much money from such plans, but admits that it could be because they are inefficient.):
Ace:

This analysis by Cynical Investor is too simplistic. There are many consideration for buying a medical insurance.

In an emergency, for example if you faint at Tanglin Shopping Centre, the nearest hospital is Gleneagles Hospital which is a private hospital. If you are NOT covered under the highest plan and you go to Gleneagles Hospital, you will need to pay much higher out of pocket. You can of course go to SGH where you can be fully reimburse for the charges but it is further away and you may not have the luxury of time in an emergency.

For non-emergency cases, you can plan which hospital to be admitted but the fact is that the waiting time for admission to B2 or C wards for such cases can be as long as up to 9 months. Can you take the pain for so long and do you want to wait?

Hence most people would opt to buy the most expensive plan when they are young since the full premium can be paid by Medisave. When you are older, you can still downgrade to a lower plan if premium is an issue.

Singaporeans are not as stupid as the report make us up to be. We may be Kiasu but we are definitely not DAFT.

 

spiny dogfish:

One reason why people buy the most expensive plans is because of the very rapid escalation of hospitalization costs. That and the fact that the insurer has an obligation to renew your plan but is NOT obligated to allow you to upgrade.
When i bought my first shield plan the benefits were enough for a private hospital. When i got hospitalized this year the benefits had not changed as i had naively not upgraded my plan for years. The benefits were only marginally enough for B1 ward. The benefits do not change but the costs keep rising.
And i was told that had my conditon been a chronic one like say cancer or heart disease, it was possible that should i wish to upgrade my plan i would either suffer loading or that very condition would be excluded. BUT i could renew my plan, no problem.

After that you bet i’ll take the highest plan i can afford. In 5 years who knows what this plan will be good for. Just take it as front loading. The real issue is rising medical costs. Dealing with the insurance is treating the symptoms not the disease.

Setting straight SPH’s tale on WP “discontent”

In CPF, Political governance on 01/08/2014 at 4:39 am

I refer to this “Discontent among WP’s old guard” in the New Paper. Typical of “constructive, nation-building” media. When the PAP changes members of the management team, the media praise it  for” self renewal”, “New blood”. when an Oppo party does the same thing the emphasis is on “discontent”, splits of the losers, malcontents.

I was going to deconstruct the article, given that I’m not too well-informed on the WP’s internal workings (My Morocco Mole has his agenda when telling me stuff. And he had a howler ). But my FB avatar came across a detailed analysis (deconstruction and factual) on FB by a WP member. As we didn’t ask permission, I will not name the person. But if she wants to be named, I will amend this piece to give credit where credit is due.

The New Paper published a report masquerading as a factual analysis of the dynamics at this year’s Organising Members Conference held at the Workers’ Party HQ on 27 July 2014. The article was mischievous and misleading. But more importantly, errors were aplenty. The following are my brief comments.

1. A binary between veterans and younger members who hold degrees was constructed. Supposed “facts” were thrown into this binary framework to create a seamless understanding of what has transpired and to provide analysis of and/ or an account of the situation.

In the article, John Yam and Somasundaram are conveniently labelled as part of the “old guard”. In that case, it appears that both of them were labelled as such due to their physical age in relative to the previous council members who were voted out, such as Ng Swee Bee and Koh Choong Yong who are in their 30s and early 40s respectively, rather than their experience in the Party. If the journalist had done his research, he would have realised that John Yam and Somasundaram joined the Party in 2009 and 2006 respectively. They are in no way “veterans” alluded to by the journalist as being “around for more than 15 years.” In fact, Swee Bee has been in the Party for the last 10 years, longer than John Yam and Somasundaram.

In listing down the reasons for the unhappiness of the “veterans”, he cited that “newer and younger members who hold degrees are preferred over veterans. In that case, the two “older members” who were elected does not in any way fit this caricature. Dr. John Yam holds a PhD and Mr. Somasundaram holds a Masters degree. Swee Bee on the other hand, for the longest time since she joined the Party in 2004 did not have a university degree, but she has been holding the position of Organising Secretary for many years.

The journalist also pointed out that former members, “Mr. Mohamed Fazli Talip and Sajeev Kamalasanan” were veterans of the Party. They were not. Fazli joined the Party in and around 2009/ 2010 and Sajeev joined the Party in 2006. To put it into perspective, Swee Bee and Choong Yong joined the Party in 2004 and 2006 respectively. This binary of “veterans”/ “old guard” vis-a-vis the younger and educated members is clearly misleading and in his attempts to construct a “Other” in the Party, does more harm than good in helping readers of The New Paper understand what had transpired at 216G, Syed Alwi Road on 27 July 2014 and more importantly, the implications/ significance of the new Council in the lead up to the next General Election.

The fundamental point is this. The journalist contradicted himself with the use of the terms “old guard” and “veterans” to mean the same group of people or to construct a faction within the Party from thin air. As he writes on, even he became confused.

2. The journalist displays his lack of understanding of the operations and functions of the Workers’ Party. He did not bother to do his research and check his facts.

The Workers’ Party do not and would not parachute in their candidates. In the article, it was pointed out “candidates are parachuted in, despite not having walked the ground.” Anyone with a basic understanding of the Workers’ Party knows that this is not true at all. The journalist would also be interested to note that the Workers’ Party fielded an ITE graduate at the 2006 elections.

The reasons for Dr. Poh Lee Guan’s sacking, Mr. Eric Tan’s resignation (why Mr. Gerald Giam was made NCMP ahead of Mr. Eric Tan) and the earlier resignations of Mr. Fazli Talip and Mr. Sajeev were made clear to members, cadres and non-cadres at the annual members seminar of the Party. In particular, Mr. Low had explained to the entire membership the reasons as to why candidates were not guaranteed a cadreship. This point was consistently explained to the membership whenever it was brought at internal meetings. For the case of Dr. Poh Lee Guan, Mr. Low had made the reasons clear in his interview with the press after the nomination of Mr. Png Eng Huat during the 2012 Hougang by-elections.

Thus, the journalist was simply mischievous in attempting to illustrate a lineage of discontent and dissatisfaction in the Party. He accepted the comments of these former members at face-value, without trying to better understand the respective motivations/ intentions of these former members. Not too sure whether this is journalism or gossip.

3. “How bad was it?” / “Is there a split?”

In situating his piece in the context of an election drama and an internal party split, the journalist tried his utmost to fit his analysis with the gossip and rumours he picked up with members at the coffeeshop under the party’s headquarters. He had no intention to put up a accurate report.

4. The journalist do not understand the historical context behind Sylvia Lim’s statement.

Sylvia Lim told the cadres that the “WP could not afford to have internal problems or disunity.” Any responsible political party with an understanding of the period in Singapore’s political history (1991 – 1997, Singapore Democratic Party) would make a similar appeal to its members. A quick search would also find Lee Hsien Loong emphasising party unity to his members.


If a political party was nothing but a monolith, with the entire membership parroting the leadership, then I guess something is really wrong. It probably would be inherently broken. As a member of the Party, I am glad to say that this is not the case. The Workers’ Party is growing, its membership is growing and with that will come more competitive internal party elections. Different individuals with different views, ideological inclinations and backgrounds and experiences join the Party at different junctures in their lives. This can only be good for the long term development of a Party. As the case of Mr. Yaw Shin Leong and Dr. Poh Lee Guan had clearly shown, no one is above the institutions and standing orders laid down in the Workers’ Party. WP is a professional organisation and a well-oiled political machinery.

By the way, I attended the conference last Sunday. There were more cadres than the physical space at HQ would allow. It was packed, very packed. No wonder WP needs a new HQ for its continued growth and development. I like to think that this is not very newsworthy for The New Paper.

BTW, I’m sure that TRE ranters who call me a PAP mole, ISD person will say this post confirms what they have been saying, ’cause it sides with the WP. For the record, I think the SDP has the best policies for S’pore, 10-15 yrs into the future. It’s the only party that talks about

De-couple housing and healthcare from CPF.

The major reason why Singaporeans are left with insufficient retirement funds is because the PAP gives Singaporeans no choice but to use what is their retirement money to pay for their HDB flats and hospital expenses.

The SDP plan ensures that HDB flats are sold without the inclusion of land cost (see here) and that the Government stops profiting from healthcare (see here) In this way, our CPF savings are left unmolested for retirement.

Solving the problems around retirement, public housing and healthcare require solving all three issues together.

Yes, yed, I know that in the long term, the SDP’s retirement and healthcare policies will be very expensive for S’poreans but

The long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again.

Here’s an explanation of what Keynes meant:by Simon Taylor

Keynes wrote this in one of his earlier works, The Tract on Monetary Reform, in 1923. It should be clear that he is not arguing that we should recklessly enjoy the present and let the future go hang. He is exasperated with the view of mainstream economists that the economy is an equilibrium system which will eventually return to a point of balance, so long as the government doesn’t interfere and if we are only willing to wait. He later challenged that view in his most important work The General Theory of Employment, Interest and Money (1935). arguing that the economy can slip into a long term underemployment equilibrium from which only government policy can rescue it.

 

 

 

Medishield: Totful tots on loss ratio to determine premiums

In Financial competency on 14/07/2014 at 5:26 am

With regards to the use of  incurred loss ratio to determine the level of premiums, I don’t like it for a few reasons:

  • A lot of premiums is collected upfront and Medishield ends up having a lot of money to invest, which might not be its core expertise.
  • It is not easy to determine future liabilities and brings another uncertainty to the calculation of the loss ratio.
  • With Medishield Life going to be a compulsory scheme, there is even less of a need to collect too much surplus as it is possible to adjust the premiums accordingly whenever overall claims go on a sustained uptrend. As a nationwide scheme, the pool is also huge and total claims will be less volatile and predictable.
  • Private health insurance that has a smaller pool will have claims that are more volatile and cannot easily raise their premiums without the risk of their customers leaving and making their pool even smaller.

http://www.martinlee.sg/medishield-reserves-loss-ratio/

From an honest financial planner. Feel safe to buy second-hand car from him. Smart guy too. Given that he has a masters in engr from NUS, I once asked him why was he wasting his time selling insurance. Never got a gd reply.

Check out his other articles explaining Medishield. Under insurance, healthcare.

Daft Sinkies? Dishonest insc agents? Or Medisave sucks?

In CPF, Financial competency, Financial planning on 08/07/2014 at 4:29 am

I was shocked to read in BT on Saturday that the MediShield Life Review Committee highlighted something that should never have been allowed to happen by a truly nanny govt or a govt that cares for its people:

 [O]ne issue has stuck out like a sore thumb: the overbuying of Integrated Shield Plans (IPs).

In the clearest indication that something is amiss, the committee’s report released last Friday stated that about three in five Singaporeans covered under MediShield purchased IPs.

But seven in 10 armed with IPs that target Class A wards in public hospitals chose to stay in lower ward classes when hospitalised. Only one in 10 from the same group chose private hospitals.

Echoing a similar trend were those with IPs that target private hospitals – six in 10 chose lower ward classes in public hospitals. The committee noted twice in its report that many Singaporeans want medical treatment beyond that provided in Class B2/C wards but have “over-stretched themselves to buy the most expensive product for higher protection”. (Emphasis mine)

So S’poreans fork out premiums to stay in the best (OK most expensive) wards, but then don’t use them ’cause no money? Presumably the insurers are laughing when they see their bank statements.They pay out less than what they are prepared to pay for.

Shumething is clearly wrong.

BT as part of the constructive, nation-building media tries to avoid blaming S’poreans. insurers and their agents, or Medisave.

Having said that, it qualified that this typically happens during the working years, when premiums can be paid entirely or mostly through Medisave, the national medical savings scheme used to foot hospital bills, among other things.

A quick comparison of the IPs offered by the five insurers – AIA, Prudential, Aviva, NTUC Income and Great Eastern – showed that premiums for the first 40 years of an individual’s life were priced suitably low to gain market share.

For example, existing private IPs for Class B1 in public hospitals range between $78 and $207 annually, according to the comparison provided by the Ministry of Health’s website. The amount payable doubles to about $297 to $410 when the consumer is between the age of 41 and 50. It rises to between $425 and $921 for those aged 51 to 65, and for those who are 66 to 90, the yearly costs go up to between $888 and $4,245.

It calls for more education rather than pointing out that Medisave nudges S’poreans towards over-insuring despite describing the process of nudging (for the daft: the last three preceding paras).

While information is relatively accessible and most people understand that they have to pay more as they get older, only a small number of people truly realise the exponential spike in IP premiums from age 60 onwards, not to mention the accumulated lifetime costs.

All these point towards a poor comprehension of the workings of IPs – a point that the committee also made sure to reiterate throughout its report. This is why there is a pressing need for the government to educate the wider public of its entire healthcare financing system, as well as the things to look out for in choosing an IP if required, so that the individual can make an informed decision.

But it ignores the T Rex in the ward, Medisave: this typically happens during the working years, when premiums can be paid entirely or mostly through Medisave, the national medical savings scheme used to foot hospital bills,

The answer to the title of this rant?

All three with Medisave the catalyst. It worsens the stupidity (or financial incompetency) of many S’poreans and the dishonesty of agents, by nudging via skewed incentives money in Medisave cannot be touched except for illnesses and medical insc premiums, so might as well buy the more expensive coverage)). It’s our money in MediSave, but we can only spend it in the right ways, one of which leads to bigger profits for insurers..

 

 

One ranking PAP govt and media will never publicise

In Uncategorized on 25/05/2014 at 4:42 am

One ranking PAP govt will not be proud of: see where we stand in diabetes ranjing 11in world. But S’poreans have to take responsibility for diabetes, can’t rely on govt. Govt has never explained why basic diabetes medication can be bot in JB at close to polyclinic charges. Subsidy? What subsidy? It’s a subsidy only to what the private sector charges.

Graphic truncated for those above us. For full pix http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-15

No $ needed: Three fixes to show the PAP really cares

In Political governance on 03/03/2014 at 5:00 am

Prime Minister Lee Hsien Loong said Singapore has to strike a balance between maintaining its competitiveness and caring about the less well-off as it strives to reduce the income gap. (CNA report a few weeks ago: More extracts at end oif article).

And the Budget statement and the spin that the conastructive, nation-building media has been putting on it esp the Pioneer package is along the same lines.

We all know that an election is coming round the corner and we know the PM (remember the 2011 “Sorry”, followed after the GE with massive tpt breakdowns and the population white paper, the latter issued juz before NatCon?)

So PM and the PAP has to walk the walk, not juz talking the talk.

The benefits for the pioneer generation are a gd, if a belatedly and niggardly start. Still got to start sometime and somewhere. It helps the pioneers and their children.and grandchildren who are caring for them**. Here are some things that PM can do to show the govt cares. They cost nothing going by what ministers said when defending these rules.

–Scrap the Medisave limit. It doesn’t cost anything as a minister has admitted but will give S’poreans peace of mind.

Since the inception of Medisave-approved Integrated Shield Plans (IPs) in 2005, no IP policyholder has reached his lifetime claim limit.

Health Minister Gan Kim Yong said this in a written reply to a Parliamentary question from Hougang Single-Member Constituency MP Png Eng Huat about the number of Singaporeans who are no longer insurable under MediShield or Medisave-approved Integrated Shield Plans.

This could be due to exhausted benefits and claim limits upon diagnosis of major illnesses.

Mr Gan said that the MediShield lifetime limit was increased in 2005, and more recently in March last year from S$200,000 to S$300,000. (CNA sometime back)

– Fix the flaw in CPF Life Plans

There is a provision in the law governing the CPF Life Plans which states that payouts are contingent on the Plans being solvent. This is because premiums that are paid in to get the annuities are pooled and collectively invested. If the plan you chose doesn’t have enough money to pay out, you die. This is unlike the [Minimum Sum] scheme, where account holders are legally entitled to the monies in their CPF accounts … (http://atans1.wordpress.com/2011/12/03/best-cpf-life-plan/). Even if the rules to access these monies make a mockery of the ownership, at least (so far) the beneficiaries can inherit the monies. (Remember that when Roy Ngerng again asserts (as he regularly does) that CPF contributions should be classified as a social security tax. He would wouldn’t he? He thinks the PAP is oppressing us, even though as a critic and  self-outed gay, ISD is ignoring him.)

The government has said the provision on solvency is only a precaution unlikely ever  to be used. If so, why have it? Again, this is a peace of mind issue. It was again Gan who made this assurance when he was MoM.

Finally,  the PM should apologise for VivianB’s sneer at the elderly poor all those yrs ago

Or make him make a fulsome apology.Even ex-Red Guards are apologising for their actions in the Cultural Revolution.

Even if … made amends for selfish or political reasons, their words and gestures are still important, says [a historian]. “It is still better than those who refuse to repent until they die. The conflict and hatred should be solved. The nation must move forward.”

(http://www.economist.com/blogs/analects/2014/02/apologising-cultural-revolution)

Why, I am I not asking him to be sacked? He is actually a gd environment minister. For starters, there are no more 50-yr floods***. Secondly, in my area (Marine Parade, East Coast), there are now regular cutting of shrubs and grass at empty plots of land and along pathways. There is also an attempt to ensure that in spots where ponding regularly occurs after the rain: attempts are made to fill in the spots and re vegetate them. Yaacob and his French cook of a chef never bothered.

And Vivian did get the Indons to do something about the haze by practicising megaphone diplomacy http://atans1.wordpress.com/2013/07/05/haze-pm-silence-is-not-a-solution/. Yaacob was sensitive to Indonesians’ attitude to S’pore and kept quiet: he always liddat. Took PM to rebuke his dad on Malay integration. Yaacob muttered, “Worse case scenario”.

*He made the comment in an interview with China’s New Century — a magazine by Beijing-based media group Caixin — which was published a few Mondays ago.

Mr Lee said there is a need to keep a balance between the yin, which he described as caring for one another, and the yang, which is the “competitive element that drives the society forward”.

“If you go too much towards competitiveness, you lose that cohesion and sense of being Singaporeans together,” Mr Lee said.

“If we go… the other way and say, well, we don’t compete… I think we will all be losers.”

He acknowledged that the competitive environment in Singapore is getting fiercer and conditions are getting more challenging for middle and lower-income groups in many societies.

Alluding to the concept of yin and yang, he said Singapore needs to do more to “tilt the balance towards the yin side” — the element of care and concern for others.

This means greater help for the low-income groups as well as keeping society more open, so that the people who have talent can move up and will not be daunted by the gaps in incomes between the rich and poor, which is what Singapore has been doing, he added.

In reply to a question, Mr Lee acknowledged that while the income gap in Singapore is wider than most other countries, it was not as wide when compared to other cities.

But rather than bringing those in the higher income bracket down, he said it is important to focus on levelling-up the wider population.

He also said Singaporeans have to stay connected to the rest of the world, particularly the Asian region as it offers many opportunities.

Describing Singaporeans as hardworking and talented, he said: “I think the best way to make use of their talents and their abilities is not just to confine (them) within Singapore, but to connect to what’s happening around us.

“So if a company sets up an operation in Singapore, it’s not just for our market, but for the region.

“And if our people have abilities as managers and leaders, they can be managers and leaders not just in Singapore, but they can go out and there are many operations, many companies all over the region which will find a good Asian executive a very considerable asset.”

Prime Minister Lee believes as society changes, so too will Singapore’s political structure, as he cited how it has evolved over the years.

He said: “I think as we go forward, we will probably have to make further adjustments, surely, because our society will change.

“I believe that there will be a greater degree of competition, there will be a greater desire of Singaporeans to participate in the political process. And we ought to accommodate that, because it’s good that Singaporeans care about the affairs of the country and which way Singapore is going.

“But whatever we change, we still want a system where you encourage good people to come forward — you encourage voters to elect people who will represent their interests well, and you encourage the government to act in a way which will take the long-term interests of the country at heart.

“And that’s not easy to do.”

**A constructive suggestion: “Will eldercare be as common as childcare?” (BBC Online)

***OK it hasn’t been raining.

PAP listening to SDP?

In Infrastructure on 11/03/2013 at 6:22 am

Err didn’t the govt rubbish the SDP’s idea of lowering the cost of HDB flats by making it a condition of getting cheaper flats that they be resold to HDB?

And didn’t Khaw just say that this idea will be studied? But didn’t credit the SDP for suggesting it?

As an oldie using SingHealth, here’s hoping the SDP’s healthcare ideas be adopted* and that Paul A** gets co-opted to become Health minister.

——

*Never mind if it bankrupts S’pore as healthcare costs in the US and UK are bankrupting these nations, I’ll be dead.

**He was a possible SDP candidate for Punggol-East. Gd that he didn’t stand because he couldn’t claim to be born poor: even s/o JBJ claimed that although born in a pram made of gold, silver and ivory, he became poor when his dad took on the PAP. He dared make this claim even though he went to very expensive ang moh schools. JBJ became so poor that he could send his son to expensive schools? Come on, man who doesn’t know the Pledge, pull the other leg, it’s got bells on it.

 

Typical S’porean way

In Economy, Humour, Political economy, Political governance on 21/11/2012 at 6:29 am

In a 2010 paper in the journal Tobacco Control, a group of Singapore-based cancer specialists proposed phasing-out tobacco by denying access to tobacco for anyone born from the year 2000 onwards. The researchers said their idea introduced the concept of tobacco-free generations that would “never legally be able to take up the harmful habit of smoking, at any age”

So very S’porean.

I came across the above when I read Should you need a licence to smoke?  This is something experts in the West are now thinking of recommending.

S’pore’s juz the place to introduce it, less draconian than banning youngsters from smoking.  We got licences to own cars (COEs) , licences to drive into the city (ERP charges),  licences to buy “subsidised” public housing (got to have marriage licences first), and local media journalists need licence to think (juz kidding).

And the govt could introduce the mandatory death penalty for smoking without licences. Shan could justify it on the grounds that smokers are all going to die one day, anyway.

Bearish news for First Reit?

In Indonesia, Property, Reits on 31/08/2012 at 9:59 am

Background info

Lippo Karawacial is First Reit’s financial sponsor: “On 11 December 2006, Lippo Karawaci became the first company in South East Asia to list a Healthcare REIT on the Singapore Stock Exchange with Indonesian assets. Assets in the First REIT includes the Siloam Hospitals Lippo Village, Siloam Hospitals Kebon Jeruk, Siloam Hospitals Surabaya, Siloam Hospital Cikarang, Mochtar Riady Comperhensive Center and The Aryaduta Hotel and Country Club Karawaci, and four Singapore based properties.”

http://atans1.wordpress.com/2012/07/20/first-reit-nav-revision-bonus/

Now the bearish news

One of the sources told Reuters that first-round bids were below expectations, but the sale process will continue to give the buyers an opportunity to bid higher. It wasn’t clear how much the bidders had offered for the stake in the first round.

 Blackstone, Bain Capital, KKR & Co and Dubai’s Abraaj Capital have been shortlisted for the second phase of an auction of a fifth of private Indonesian healthcare operator Siloam in a deal that could fetch as much as $300 million, sources said.

Seller PT Lippo Karawaci is seeking a valuation of more than 20 times Siloam’s forward core earnings for the stake, they said, declining to be named as the discussions were private. Siloam is the country’s biggest private hospital firm.

“Lippo may be back in the market next year if the valuation disparity is too big,” said one of the sources.

Lippo plans to sell a minimum 20 percent of unit Siloam Hospitals for between $200 million and $300 million, but could increase the stake to 49 percent if the price is right. It hired Bank of America Merrill Lynch to run the auction, sources have told Reuters earlier.

http://www.nytimes.com/reuters/2012/08/27/business/27reuters-lippo-privateequity.html?_r=1&src=busln&nl=business&emc=edit_dlbkam_20120827

So there may be no revision of First Reit’s NAV http://atans1.wordpress.com/2012/07/20/first-reit-nav-revision-bonus/

Might even be revised downwards. But Global buyout firms are keen on Indonesia’s consumer and healthcare sectors despite steep valuations, as they are betting on the country’s fast-growing economy.

Indonesia has one of the world’s lowest healthcare spending-to-GDP ratios, but its rising middle class – which represents more than half of its population of 240 million – is expected to sharply increase its medical spending and drive growth in the sector over the coming years.

“The healthcare sector still continues to remain the darling of private equity. Even with rich valuations it is easy to find bidders for this sector,” said Krishna Ramachandra, head of corporate finance and investment funds at law firm Duane Morris & Selvam LLP.

But a growing number of investment banks are advising clients that south-east Asian rivals such as Malaysia and Thailand now look more enticing than Indonesia. Morgan Stanley and Credit Suisse say the Indon economy is overheating. Barclays is relaxed abt the “problems”.

First Reit: NAV revision bonus?

In Indonesia, Reits on 20/07/2012 at 6:25 am

Indonesia’s PT Lippo Karawaci may sell as much as 49 percent of its unit Siloam Hospitals in a deal that would value the firm at more than $1 billion, drawing a slew of private equity firms to the sale as they bet on growth in healthcare spending in Southeast Asia’s biggest economy, sources said. Reuters

There is plenty of US private equity market sloshing around the region as article explains. And the IHH IPO and the coming one by Fortis (Religare Heath Trust) will ensure that the animal spirits of these investors remain bullish.

The Indon co is First Reit’s financial sponsor: “On 11 December 2006, Lippo Karawaci became the first company in South East Asia to list a Healthcare REIT on the Singapore Stock Exchange with Indonesian assets. Assets in the First REIT includes the Siloam Hospitals Lippo Village, Siloam Hospitals Kebon Jeruk, Siloam Hospitals Surabaya, Siloam Hospital Cikarang, Mochtar Riady Comperhensive Center and The Aryaduta Hotel and Country Club Karawaci, and four Singapore based properties.”

Kinda painful for me as I didn’t buy this Reit. Really dumb as I kept waiting price to correct. I aim to buy a Reit that is trading at a big discount to published NAV. The discount was smallish and now has disappeared. Big premium in fact.

See healthcare productivity from patient’s perspective

In Political governance on 16/03/2012 at 10:34 am

So the SDP says healthcare should be a “right not a commodity” while the WP’s Chairman (and a MP) points out, “Singapore’s total expenditure on healthcare as a % of GDP was far lower than international standards. More importantly, the government or public expenditure on healthcare is also far lower than elsewhere. Singapore’s government expenditure on healthcare is about 1.6% of GDP; nearly 4 times lower than the 6.1% global average in 2009″.

Here’s an interesting perspective from Jeremy Lim, a private sector healthcare manager, that appeared in BT sometime ago. The headlines sums up what I as a 50-something “new poor” but financially responsible voter want from a public healthcare system: not money being thrown at the system but

See healthcare productivity from patient’s perspective

Does their health improve in the shortest possible time at the lowest possible charges?

BUDGET 2012 reaffirms the government’s commitment to raising productivity and signals in no uncertain terms the stance that some short-term pain faced by companies is necessary for the longer-term good. However, even as we re-examine processes and traditional practices, it is timely also, especially in very tightly regulated sectors such as healthcare, to explore whether our rules and regulations encourage and reward productivity efforts.

In some instances, in the name of safety, do we actually stifle productivity and ‘kill’ innovation?

Funding is another key driver of behaviour – does the way we reimburse healthcare paradoxically reinforce inefficiency?

Healthcare trade-off

Healthcare is often characterised as ‘finite resources, infinite demand’. There is never enough to satisfy everyone and difficult choices balancing cost and effectiveness have to be made.

This necessitates that at the system level, clinical quality and patient safety are relative concepts.

Imagine a graph plotting ‘Cost’ on one axis and ‘Effectiveness’ on the other. The resulting 2 x 2 matrix conveniently categorises all healthcare interventions into one of four possibilities: ‘Less Expensive and More Effective’, ‘More Expensive and Less Effective’, ‘More Expensive and More Effective’, and ‘Less Expensive and Less Effective’.

The first two are easily dealt with: Do the first; it is a no-brainer, don’t do the second; another no-brainer.

If ‘More Expensive and More Effective’, then the pivotal question is ‘Is it worth the extra costs?’

For the ‘Less Expensive and Less Effective’ category, which we will focus on, the key question to ask is ‘Is it good enough?’

Over-specified standards

Singaporean readers old enough will remember the dental hygienists of yesteryear scaling and polishing teeth, especially of children. These hygienists were, compared to dentists, less well educated ‘technical staff’ and trained specifically in scaling and polishing, leaving diagnostics and more complicated dental procedures to properly qualified dentists.

As Singapore advanced up the economic ladder, the dental hygienist faded away and dentists dominated the landscape.

In recent years, the hygienist has made a comeback. With increasing recognition of the desperate shortage of dentists, dental hygienists are now resurgent. Of course a dentist should be more skilful in polishing and scaling teeth, but is a hygienist good enough?

Think about the MinuteClinic in the United States. Starting with a modest single clinic in 2000, the chain now has 600 locations across the US proudly proclaiming: ‘Our practitioners have seen more than 11 million patient visits, with a 95 per cent customer satisfaction rating’.

These practitioners are supported by sophisticated computer algorithms, treating only specific symptoms and conditions, and are priced much lower than traditional practices. Oh, retail clinics are run by nurses and physician assistants. Is that good enough?

Prescribed nurse-to-bed ratios are entrenched in healthcare regulations in many countries and a cheap and easy regulatory instrument. However, these may be an over-specification and penalise innovative organisations which embrace technologies to increase an individual nurse’s efficiency. Tele-health initiatives may permit offsite and even out-of-country monitoring, thus enabling fewer nurses to care for more patients.

But hospitals have little incentive to invest or even think about such possibilities if the ratios are rigid and allow for no cost savings from reduced manpower.

Dollars and sense

Years ago, some patients would be admitted to hospital overnight for an MRI. These otherwise well patients occupied a bed for one night so as to be eligible to use Medisave dollars to pay for the MRI! Today, while such blatant examples of ‘abuse’ are less common, Medisave, by design, is still biased towards hospitalisation payments. Choosing between a day surgery and an inpatient option for a minor surgery, say, a laparoscopic gall bladder removal, the sharp patient would note that Medisave claims for hospitalisation go up to $450 a day but only $300 for day surgery coverage.

Between two nights in a hospital with room rate claims of $900 and an outpatient procedure followed by hiring a day nurse for post-operative home care for which only a total of $300 is claimable, which would patients choose?

Are we inadvertently fostering prolonged admissions at a time when Singapore is furiously playing catch-up to the tune of 1,900 hospital beds?

Patients today resist moving from subsidised wards in public hospitals to community hospitals as the subsidy schemes are more generous in the public hospitals. Furthermore, half the patients would not qualify for government subsidies.

Finance Minister Tharman Shanmugaratnam announced in this year’s Budget that ‘all patients in community hospitals will now qualify for government subsidies . . . The middle-income group will receive the largest increase in subsidy rates, getting a subsidy of 20 to 50 per cent when they previously did not receive any’.

This is a step in the right direction to ensure a coherent financial gradient and, hopefully, will result in better use of very scarce hospital beds.

Productivity in healthcare needs to be reframed as value creation from the perspective of the patient and not simplistically as output for a given input, which is a common technical definition.

The hospital which has its doctors seeing a hundred patients a day may not be better than the hospital whose doctors treat on its premises only 30 patients a day. What matters to patients is whether their health improves in the shortest possible time with the least possible inconvenience at the lowest possible charges.

This engagement with the healthcare system may be in an institution, like a hospital, or in the home setting, offered by a doctor with over a decade of intense specialisation or a technician with two years of vocational training – it doesn’t matter.

What matters is the outcome and it is not simply a matter of productivity.

Governments have a role to play not just in doling out incentives to spur productivity and innovation, but in fostering an eco-system where smart regulations drive genuine value creation, and reversing payment perversions that result in inefficiency and wastage.

The writer is CEO, Fortis Healthcare Singapore

DBS: HR costs of private healthcare sector to rise substantially

In S'pore Inc on 14/03/2012 at 9:12 am

Last week DBS Securities came out to say that costs in the private healthcare sector will go up as a result of the government’s plans to spend more on the public healthcare system. What FTs and foreign medical tourists have to pay more to get treated here? Can’t be right can it? This is not PAP policy which is FTs and foreigners first. Juz kidding.

Seriously this increased spending has implications for Parkway’s pending IPO. And for Raffles (see DBS report below) and the micro healthcare counters listed on SGX.

DBS VICKERS SECURITIES, March 7

The Singapore health minister unveiled a healthcare roadmap in Parliament yesterday, focusing on three goals: 1) Singaporeans to receive health care when needed; 2) healthcare services will be of good quality and effective; and 3) such services will be affordable to Singaporeans.

To achieve the above objectives, the government will be increasing hospital beds and manpower. These are: a) addition of 3,700 hospital beds by 2020; b) addition of 20,000 healthcare workers (+50 per cent) by 2020 and; c) lease capacity from private healthcare operators, namely Parkway East Hospital and Raffles Hospital, to treat subsidised patients, to ease the tight capacity in the short term.

Raising healthcare workers remuneration by 20 per cent. A new salary framework will be introduced to retain manpower in the public sector. On average, healthcare workers’ total compensation will increase by about 20 per cent by 2014*, with the first adjustments by April 2012. The measures to lease beds/capacity from private hospital operators will be positive in terms of operational utilisation, and could create some initial euphoria in share prices of private healthcare operators.

However, the financial metrics of how this will be done are still being ironed out. For example, patient charges, level of subsidies to be provided by the government, and the level of take-up rates (if based on patients’ preference), etc.

Furthermore, we believe there is a limit to the number of beds each operator is able to lease to the public sector given that this could compromise its service level if the public partnership saps too much resources.

Fight for manpower issues a longer term challenge: With the increase in public sector remuneration, the bar by private operators to attract healthcare workers is likely to be raised. This comes at a time when capacity is increasing in the private sector. These are Parkway’s Mt Elizabeth Novena Hospital, Singapore Health Partners’ Connexion One (at Farrer Park), Adam Road Hospital by Fortis Healthcare, and Raffles Medical Specialist Medical Centre at Bideford Road and 30 per cent increase in GFA at its hospital.

Essentially, both public and private healthcare sector will need additional manpower resources. Staff cost accounts for about 49 per cent of revenue at Raffles Medical.

Maintain hold on Raffles Medical. Despite some near-term boost from the public partnership to lease beds, the details are yet to be finalised and the financial impact is uncertain. Over the medium term, the challenge lies in managing costs, namely manpower.

As Raffles Medical is trading at about 22.2 times FY12F price-to- earnings (P/E), above its mean of 21 times and 60 per cent premium to the overall market, we believe the valuations have already factored in the positive outlook. Our target price stays at $2.48, based on 24 times FY12F P/E, a +0.5 standard deviation above mean.

*Bet you SingHealth charges will go up. PAP caught in vicious circle. Improve healthcare but have to charge more, and lose votes; or don’t recover costs and make a profit and become like West.

Healthcare: Who is subsidising whom?

In Political economy, Political governance on 12/10/2011 at 8:30 am

So, we the people, are going to get more help from the government; and in particular the Health Ministry will do more to help those suffering from chronic illnesses. My friend who suffers from a chronic illness will be hoping the government walks the talk.

He tells me that the cost of buying “unsubsidised” medicine in Johor Bahru is more or less the same as the same “subsidised” medicine bought from SingHealth via a polyclinic. As the price of the medicine bought from SingHealth is roughly half that charged by a private clinic here, he thinks that is why the govmin claims it is “subsidising” the medicine bought from SingHealth.

He thinks maybe the government’s medicine procurement policies are inefficient. How come a profit-making M’sian pharmist chain can match SingHealth’s prices? Or maybe that the government is paying the drug makers more so that they will make pills here and invest in R&D facilities here.

In other words, are polyclinic patients subsidising rich MNCs so that the government can boast of its success in attracting drug companies to set up pill-making plants and R&D facilities here? Their presence here, incidentally, boosts GDP growth and, indirectly, the bonuses of ministers and senior civil servants.

S’poreans have long asked where’s the subsidy in public housing? The government ties itself in knots, trying to explain where is the subsidy. So much so that many S’poreans don’t believe that there is such a subsidy.

So here’s another “subsidy” that should be queried by the public.

On a wider point, ordinary S’poreans should join the Opposition and activists in querying how the government defines any “subsidy”. We are unlikely to get straight answers, but the questioning ensures that they know that we are not daft.

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