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In her article (“TPA fees not key reason for rising healthcare costs”; Dec 22), senior health correspondent Salma Khalik queried why the Singapore Medical Council (SMC) is trying to upset the apple cart “if the companies, the TPAs (third-party administrators), the doctors and the patients are not complaining”, and opined that the SMC should not “fix what ain’t broke”.
Ms Khalik also made an observation that according to the recent Health Insurance Task Force (HITF) report, “the biggest driver for spiralling healthcare costs is surgeon’s fees – not the cost of hospitalisation or TPA fees”.
The SMC agrees that TPA fees are not the only reason for rising healthcare costs and that, as pointed out in the HITF report, there are other factors driving healthcare cost inflation.
However, contrary to Ms Khalik’s suggestion, the SMC has received much feedback and many complaints about the fees charged by TPAs.
Indeed, in the same report which she referred to, “the HITF noted recent concerns and feedback raised by the medical community and the media regarding TPAs, specifically certain fee arrangements between TPAs and general practitioners or specialists”.
The SMC recognises that TPAs provide a useful service and can benefit doctors and patients.
However, where the fees charged by TPAs are not premised on the actual work done by the TPAs in handling and processing the patients, but on the work done by the doctors, healthcare costs will necessarily increase and patient care may be compromised if doctors become compelled to under-service or over-service patients in order for their practices to remain financially viable.
In that same vein, the HITF observed in its report that “these referral service providers (including TPAs) serve a useful purpose in linking patients and healthcare providers and in efficient claims management. At the same time… the layering of additional costs arising from such referral fees may lead to an inflation of medical costs which may be passed on to insurers through claims, and ultimately result in increased pressure on insurance premiums”. It concluded that “the SMC’s new guideline is a timely and positive measure in ensuring the suitability of financial incentives”.

Tan Ser Kiat (Professor)
Singapore Medical Council

Published in the Straits Times on 28 December 2016