Nurses to get 20 % pay rise by 2014

Even more reason to smile when they jab that needle into you.

The government announced that a new salary framework will be introduced to retain manpower in the public sector.

This is in line with the Government’s health care road map unveiled on March 6 which targets additional 3,700 hospital beds and 20,000 healthcare workers by 2020.

The additional 20,000 workers represent more than 50% of the current total healthcare manpower.

The government also aims to Lease capacity from private healthcare operators, namely Parkway East Hospital and Raffles Hospital, to treat subsidised patients, to ease the tight capacity in the short term.

Care to know the implications? Here’s from Andy Sim, analyst at DBS Group:

Short term positive, but metrics still being ironed out. The measures to lease beds/ capacity from private hospital operators will be positive in terms of operational utilisation, and could create some initial euphoria in share prices of private healthcare operators.

However, the financial metrics of how this will be done are still being ironed out. For example, patient charges, level of subsidies to be provided by the government, and the level of take-up rates (if based on patients' preference), etc.

Furthermore, we believe there is a limit to the number of beds each operator is able to lease to the public sector given that this could compromise its service level if the public partnership saps too much resources.

Fight for manpower issues a longer term challenge.With the increase in public sector remuneration, the bar by private operators to attract healthcare workers is likely to be raised. This comes at a time when capacity is increasing in the private sector.

These are Parkway's Mt Elizabeth Novena Hospital, Singapore Health Partners' Connexion One (at Farrer Park), Adam Road Hospital by Fortis Healthcare, and Raffles Medical Specialist Medical Centre at Bideford Road and 30% increase in GFA at its hospital. Essentially, both public and private healthcare sector will need additional manpower resources. Staff cost accounts for about 49% of revenue at Raffles Medical.