MediShield Zero Dollar Buffet Syndrome Part I:TheProblem– Peter LYE, February 2017

The outcome of the zero-dollar rider plans offered in a big way in November 2015 together with MediShield Life after its first anniversary should surprise no one except perhaps the government and insurance companies. Excuse me for the dry humor.

Patients on such plans wanted and expected a cost no object solution to their medical problem as they felt deserving having paid higher premiums for it.

Specialist doctors (not all) tested the beach heads on how far they can bill for their services for such patients since their insurance are paying.

Insurance companies devised plans to guard their beach heads whilst moderating behavior of customers resorting to “reasonable and customary” clauses in some cases.

Government explored soft intervention whilst busily exploring regulatory and legal options behind the scene to keep health care affordable, progressive qualitatively and waiting periods reasonable.

Supply of specialist is fixed in the short term due to limited the long post grad training periods and limited mentoring slots. For some sub-specialties, the total number in private practice is just slightly north of single digit.

Demand for specialist healthcare is also fixed in the short run though it can change with demographics. Save for aesthetics medicine and certain plastic surgery, normal people are not likely to create new demand for specialist healthcare.

One of the primary reason why specialist doctors can adjust their charges northward with less resistance is the mis-match between the consumer and payer in the short run which are faceless insurance companies with their leverage further weaken by the zero dollar clause. Consumers are cognizant that their behavior is against their interest in the longer run as premiums would rise if such trend continues unabated. The lack of direct impact of their behavior on their premiums is further marred by decaying group think as higher premiums is not a direct result of their own behavior per se but that of the group as a whole.

Perhaps the department of statistics in conjunction with ministry of health and inland revenue authority of Singapore could push the longitudinal per capita of specialists in private healthcare which hopefully will not take zillions man-hours and eons to complete in this day and age of computing capabilities.

Do tune in for my second instalment which will address the options and pros and cons which will be a difficult and treacherous topic.


Peter Lye aka lkypeter
lkypeter@gmail.com Safe Harbor. Please note that information contained in these pages are of a personal nature and does not necessarily reflect that of any companies, organizations or individuals. In addition, some of these opinions are of a forward looking nature. Lastly the facts and opinions contained in these pages might not have been verified for correctness, so please use with caution. Happy Reading. Peter Lye (c) Peter Lye 2014