More benchmarks on private hospital fees help, but may not bring down costs: Doctors, healthcare experts

POTENTIAL UNINTENDED CONSEQUENCES

Experts cautioned that expanding benchmarks could create several unintended effects.

Once ranges are published, providers currently charging at the lower end may raise prices toward the benchmark, seeing it as a signal that higher fees are acceptable.

“Benchmarks anchor prices and can work both ways,” said Mr Siow.

Hospitals may respond to benchmarks by reducing costs in benchmarked areas while increasing charges for non-benchmarked services to maintain revenue.

“Each hospital operates with different cost structures, so while they may align to the benchmark, the cost recovery might surface in other areas,” said Ms Law.

Asst Prof Saxena warned of potential “quality trade-offs” if hospitals cut corners on inputs like nurse-to-patient ratios to meet benchmarks.

“Patients may end up with lower nominal price but also lower value,” he said.

Mr Siow disagreed that quality would necessarily suffer, arguing that price pressure typically drives operational efficiencies, tougher supplier negotiations and switches to clinically equivalent alternatives rather than compromising care.

“Clinicians and hospitals should still retain the flexibility to use a higher-cost product if it results in better patient outcomes,” he added.

IMPLEMENTATION CHALLENGES

Those interviewed by CNA agreed that establishing comprehensive benchmarks will be complex and resource-intensive.

“Authorities will need high-quality, granular data adjusted for case mix, ward class and facility type, plus unambiguous definitions so like-for-like costs are compared,” said Mr Siow.

Ms Law identified communication and consistent implementation across private hospitals as key challenges.

Mr Siow also stressed that benchmarks must be regularly updated to reflect inflation and changes in medical practice, and warned against applying them too rigidly.

If benchmark ranges do not fully account for differences in care settings or patient acuity, comparisons become misleading, he said. For instance, items used in an ICU with higher staffing ratios and equipment intensity naturally cost more than the same items in a general ward.

Benchmarks could also be misread as price caps and create friction when legitimate clinical variation pushes costs outside the range, Mr Siow said.

“These are manageable risks, but they call (for) transparent communication, thoughtful design and clear guidance from authorities.”

IHH Healthcare Singapore, the country’s largest private healthcare provider, expressed support for the initiative.

Chief executive Peter Chow said additional benchmark data on hospital fees would provide “a more comprehensive view” alongside existing data on professional fees and help ensure healthcare cost sustainability.

Raffles Hospital called the move a “positive step that builds on ongoing fee benchmarking efforts”.

“We do not foresee any major challenges in its implementation and will be fully supportive,” said its general manager Dr Tan Hsiang Lung. He added that the hospital already operates on a group practice model where specialists and units adhere to internal fee guidelines aligned with MOH benchmarks.