Monday, 13 July 2015

The day I realised the cost of surgery

By Dennis Chan, Deputy Money Editor, The Sunday Times, 12 Jul 2015

The importance of health insurance coverage for children was brought home to me starkly last year when my then 13-year-old daughter underwent surgery to treat her scoliosis.

A year earlier, an X-ray of Yanrong's back had shown a 35-degree curve in her spine. That was considered borderline severe.

Left untreated, it could progress to a life-threatening condition if the spine continued to curve and began to press against the lungs and heart. As a first line of defence, the doctor recommended hard bracing, in which the patient is corseted in a hard plastic casing for 18 to 20 hours a day.

Yanrong wore it faithfully but to no avail. Two subsequent check-ups less than a year later showed an aggressive progression of the curve to about 52 degrees.

Discovering that Yanrong had a serious medical condition was traumatic enough. Finding out that treatment would be quite expensive brought on an additional worry that I could do without.

The outpatient costs alone from several visits to the clinic were not cheap. Charges for consulting a spinal specialist and X-rays to monitor the spine came up to a hefty sum, even with government subsidy. The brace, which cost $600, ended up becoming an expensive memento as it failed to arrest Yanrong's condition.

But that was small beer compared to the cost of surgery and hospitalisation. Prior to admission, an arrangement was made for me to attend a financial counselling session. That was when I realised that the cost of surgery for scoliosis was among the highest, even at public hospitals.

It is classified as a 7C procedure, which allows for the highest Medisave withdrawal limits.

The estimated bill for a nine-day stay in a Class A ward was $57,633. If my daughter opted for B2, which was the highest ward level that still qualified for a government subsidy, the estimated bill was $33,503. An initial payment of $25,000 was required upon admission.

These were mind-boggling sums to have to cough up.

I remembered signing up for a portable medical insurance policy 10 years ago that also covered my children. Since then, the changing landscape of hospitalisation insurance as a result of the introduction of MediShield had prompted me to convert the portable plan into an Integrated Shield plan. Complimentary coverage for my children remained. At least that was my impression. I wasn't absolutely sure as I don't usually pay much attention to insurance details. To my relief, the papers were in order and premium payments were up to date.

Still, there was a deductible and a co-payment of 10 per cent to reckon with as I hadn't bought a rider, which would have covered the entire hospitalisation bill. Having a rider on an insurance is something to consider as a hefty medical bill can translate into significant out-of-pocket expenses.

I am rather ambivalent about the availability of a rider. On the one hand, a rider offers full financial protection for the patient. On the other hand, it may encourage him to seek the costliest treatment since he will not be hit in the pocket. There is a price to be paid for profligacy. If a large number of patients opt for the costliest hospital care simply because it is fully paid for, the cost of medical insurance will surely escalate rapidly. Everybody will be much poorer for it as premiums charged by insurers will consequently rise sharply.

This is already happening.

Recent disclosures by the Life Insurance Association Singapore showed that the claims payout from five insurance companies providing integrated MediShield plans rose 12 per cent annually for the past few years for public hospital Class A and B1 bills.

For private hospital bills, the increase was 17 per cent.

I opted for a Class B2 ward for my daughter after satisfying myself that the quality of treatment would be no worse in a lesser ward. I figured the lack of privacy in a six-bed ward was not such a big issue for a 13-year-old girl in a hospital that caters only for women and children. Her surgeon reassured me that Yanrong would receive the same implants and quality of care regardless of the ward type we chose.

And he was right. In fact, I'd consider Yanrong's hospitalisation to be better than expected.

Coincidentally, there was another patient one year older in the next bed who had the same condition and had undergone surgery a day earlier. My wife and I formed a rapport with her mother and we took turns to lift the girls' spirits. Make no mistake, the recovery process was truly painful, even with the support of the nurses and physiotherapists.

Yanrong shed buckets of tears just to do ordinary tasks like sitting up, standing and walking. Their predicament was made more bearable when one girl could see the other making progress and getting cheers of encouragement from their loved ones and even strangers.

I remember a mother of a child two beds away congratulating Yanrong when she got up from bed and took tentative steps around the ward. The kindred spirit within the general ward was heartwarming. I am not sure Yanrong would have recuperated as quickly if we had cocooned her in the privacy of a Class A ward.

Yanrong was discharged after an eight-day stay. The total bill, after government subsidy, amounted to $16,799.93. Thanks to my Integrated Shield plan and a separate contribution from my company's group insurance plan, the amount billed to me was $522.69, which was fully deducted from my Medisave account.

The plan also covered pre- and post-surgical expenses up to 90 days, which was beneficial as she had to undergo an expensive MRI scan prior to admission.

This experience has demonstrated the indispensability of health insurance. With the imminent introduction of universal health insurance coverage in MediShield Life, all Singaporeans can soon be assured that costly hospitalisation bills will not break the bank.

As MediShield Life covers only up to B2 ward in a public hospital, those who want a more comprehensive coverage in terms of higher-class ward or treatment in private hospitals should seek extra cover from private insurers.

But please help to keep premiums low by not opting for the best of everything when undergoing medical treatment.

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