Saturday 22 September 2012

Life with or without medical fee guide: Comparison is already possible

THE Singapore Medical Association (SMA) withdrew its Guideline of Fees in 2007.

For us on the SMA Council then, it was a painful decision.

Many negative consequences of the withdrawal that we foresaw then have come to pass.

We withdrew the guideline not because we thought it was the right thing to do for patients' interest, but because the association had to obey the law.

Mr Joshua Seet's arguments ("Why medical fee guides don't help most patients"; Wednesday) against the guideline centre on three points: There is price convergence; medical prices are sufficiently transparent and accessible while information search costs are very low; and the patient has a choice.

Does the health-care market have the necessary milieu for Mr Seet's theoretical framework to work?

The editorial in this newspaper 30 years ago ("Time now for a guideline"; Jan 20, 1982) stated: "A sick person often has neither the time nor the inclination to shop around to determine what a reasonable price should be."

Even in the Internet age, health care is an example of market failure because of information asymmetry - time now is an even more precious commodity than before, and patients' lack of inclination has not changed dramatically.

Associate Professor Burton Ong ("Fee guides: Focus on patients, real charges"; Monday) suggested publishing actual data on median charges.

This was what we did in 2008 after we conducted a survey of specialist fees.

We published the mean, median, 10th and 90th percentile data.

Typical of voluntary surveys, our response rate was low (51.3 per cent).

The guideline of fees had some 1,500 fee recommendations for consultation, procedures and such.

Our survey had 44 fields. Surveys cannot achieve the guideline's granularity and there are practical difficulties in data collection.

The guideline existed from 1987 to 2007. We therefore have experience of life with and without the guideline (20 years versus five years).

The guideline increases were rather modest for the 20 years it existed, and probably lagged health-care inflation over the same period.

Putting dogma and theories aside and given this past experience, the pragmatic questions we should be asking are whether patients are better off in terms of fee increases versus inflation, and whether they are better informed and protected against overcharging with the guideline (1987-2007), or without it after the guide was abolished in 2007.
Dr Wong Chiang Yin
Singapore Medical Association, 2006-2009

Associate Professor Chin Jing Jih
Singapore Medical Association, 2012-2013
ST Forum, 21 Sep 2012

Why medical fee guides don't help most patients
WHILE fee guidelines sound attractive as a way to keep patients informed so they know when they are overcharged, such guidelines may ultimately lead to higher prices for everyone ("Fee guides: Focus on patients, real charges"; Monday).

Higher prices will happen because the guidelines will lead to convergence of prices. The Competition Commission of Singapore ruled that the Singapore Medical Association's (SMA) fee guidelines were illegal because they resulted in a majority of medical practitioners matching the recommended fees.

Statistically, SMA admitted that at least 75 per cent of private practitioners charged within the guidelines during the period they were in force.

After the guidelines were revoked, the commission found that there was greater variation in prices.

Evidently, scores of doctors who charge lower prices will use a fee guideline to justify hiking prices to match the guide price.

Perhaps more damagingly, this convergence enables them to predict the pricing policy of their competitors with reasonable certainty, harming competition in the market and making it easier for medical practitioners to act in concert to raise prices.

While the article suggests that a median market price should be used as the recommended price, this suggestion misses the bigger problem of higher prices resulting from price convergence. Further, fee guidelines are largely unnecessary in Singapore because medical prices are sufficiently transparent and accessible to patients.

Patients who seek medical treatment for common ailments like diarrhoea and cough do not need the protection of a fee guideline; they can easily discover if they were overcharged by inquiring with the next-door general practitioner's clinic.

If they are unhappy, they can easily switch doctors. Patients requiring more complicated treatment in public hospitals have little need either for fee guidelines because the Health Ministry already publicises the bill size of every public hospital for these patients to cross-compare.

The only ones who stand to benefit from fee guidelines are the small number of wealthy patients who seek medical treatment in private hospitals.

It is only in these private hospitals that pricing information is more opaque and the risk of being overcharged is higher, thus warranting fee guidelines.

With only the private hospital patients substantially benefiting from fee guidelines, we should not risk higher prices for everyone else just to protect this small number of private hospital patients.

Let us stick with the status quo and continue to be suspicious of fee guidelines.
Joshua Seet
ST Forum, 19 Sep 2012

Fee guides: Focus on patients, real charges
By Burton Ong, Published The Straits Times, 17 Sep 2012

THE issue of medical fees - and when these should be regarded as sufficiently excessive to warrant disciplinary action - was recently back in the spotlight.

This came after the Singapore Medical Council suggested there was an "ethical limit" to doctors' fees which was breached by Dr Susan Lim, who faced disciplinary action for a $26 million bill to treat the sister of Brunei's Queen for seven months before the patient died in August 2007.

If overcharging patients is deemed a serious form of professional misconduct by the Singapore Medical Association (SMA), then greater clarity is needed on what constitutes an acceptable level of fees against which significant deviations can be meaningfully assessed.

Otherwise, doctors will end up with the added task of monitoring what their colleagues are charging patients - devoting time that is better spent treating their patients - to ensure their medical fees are not too high.

Without objective numerical benchmarks of what is a fair or reasonable fee for the various medical services performed by doctors in private practice, allegations of overcharging will be practically impossible to substantiate.

It may thus be timely to revisit the SMA's Guidelines on Medical Fees, which were withdrawn in 2007.

Objections to those guidelines can be gleaned in a Competition Commission of Singapore (CCS) 2010 decision, affirming the view that such fee guidelines amounted to anti-competitive price recommendations that contravened the Competition Act.

The CCS took the view that the SMA had acted out of doctors' self-interest in promulgating these fee guidelines as they sought to set out what doctors believed to be a "reasonable remuneration" for their services, as well as giving young doctors who had just entered private practice an idea of how much they should (or could) charge their patients.

It needs to be emphasised, however, that while the CCS took issue with the legality of the SMA's Guidelines on Medical Fees, it did not condemn all professional fee guidelines per se.

Its decision turned on how these fee guidelines were presented, what they communicated and what impact they had on the pricing decisions of medical practitioners.

Presented here are a few ideas as to how such medical fee guidelines may be restructured and repackaged to avoid violating the competition rules:
Data on fees actually charged, not recommended prices
One problem the CCS had with the SMA's guidelines was that it contained fee recommendations of what individual doctors thought they, and their colleagues, would or should charge for different medical services.

Instead of price recommendations based on opinions of medical practitioners, which can be seen as an attempt to influence other clinics' prices, a revised set of fee guidelines could be based on data gathered from the professional service fees actually charged by doctors for each type of medical procedure within a specific reference period.

This is akin to the factual information about actual hospital bill sizes currently published by the public sector hospitals.
Median prices rather than recommended price ranges
Another CCS objection was the fact that the SMA's guidelines were expressed as a range of acceptable fee levels, with the lower end of the fee range being viewed by clinics as a minimum price.

One way to address this objection is to release the median price charged by clinics, or perhaps the fees charged by clinics in the 40th and 60th percentiles, for the different medical services available to patients, with perhaps a short explanatory statement of the key factors associated with individual cases that may alter this figure upwards or downwards.
Fee guidelines for patients rather than for doctors
While the original intent of the SMA's guidelines was to protect patients against overcharging, this objective could have been better met if the guidelines were conceived differently - as guidelines for patients, not doctors.

Drafted in a manner accessible to non-doctors, these guidelines can give patients information on fees for different medical services and procedures, providing a useful reference guide to actual fees charged.

Rebooted, restructured and reconfigured, version 2.0 of these medical fee guidelines could substantially serve the same purposes as those withdrawn in 2007, reducing the information asymmetry inherent in the market for medical services.

Armed with good data, patients will have convenient access to reliable price information without needing to "shop around", something which someone afflicted with a serious illness is obviously not in the best position to do.

Patients of private practitioners will have accurate ballpark figures to help them estimate their medical expenses. They can also compare fees with those in the public sector.

Such detailed guidelines help clarify expectations between doctors and patients on how much doctors should charge for their professional services.

This could then serve as an objective and rational benchmark for ascertaining when, and if, doctors should be sanctioned for overcharging their patients.

The writer is an associate professor at the National University of Singapore's Faculty of Law.

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