Everyone, brace yourselves for rocketing hospital bills: Moody’s

An aging society requires more investment in hospitals, care centers.

Singaporeans might just resort to nursing themselves at home, as going to the hospital and getting themselves checked is becoming a luxury instead of a necessity.

The Ministry of Health has doubled its spending from 6.2% in 2005 to 12.6% this year, and spends the most next to education in total social spending, according to a report by Moody’s.

Demographic changes in the city state are demanding for more public investment in healthcare infrastructure, thereby predicting an increase in future healthcare costs. However, there is no need to fret as the overall fiscal impact from an aging society will probably be less pronounced in Singapore when compared with some of its peers.

The CPF serves as a shield, as it is a fully funded, defined contribution pension scheme, which eliminates the fiscal risks stemming from spiraling pension payouts, unlike countries that maintain defined-benefit or unfunded pension schemes, say’s Moody’s.

Annual budgetary spending on healthcare in the city state is supplemented by endowment funds such as Medifund, Eldercare Fund and the recently introduced Pioneer Generation Fund.

Here’s more from the report:

In addition, Singapore’s position as a city state may help to cushion the expected increase in aging related fiscal costs,as there is better scope for a more efficient provision of services, as opposed to countries with larger rural populations. Most importantly, Singapore is in a relatively favorable position for increasing old-age-related fiscal spending without compromising its prudent fiscal stance, given its healthy government balance sheet and accumulated reserves cushion.