Tuesday, April 03, 2007

Singapore Medical Association’s Guideline of Fees (GOF) Withdrawal: Patients now have less protection!

Withdrawal of SMA Guidelines of Fees (GOF)

Singapore, April 2, 2007 – The Singapore Medical Association (SMA) announced at its Annual General Meeting on April 1, 2007 that the Association is withdrawing its Guideline of Fees (GOF) with immediate effect. This decision by the 47th SMA Council was made after it received indications that the SMA GOF might run the risk of contravening Section 34 (2)(a) of the Competition Act and also after the Council had sought advice from five of its seven Honorary Legal Advisers.

The GOF was first introduced in 1987 with the aim to protect patients from being overcharged and to equip them with knowledge on medical procedures in hope that with improved knowledge there would be lesser cases of misunderstandings. It helped doctors with an indication of the current rates and how much to charge their patients. The guideline was the result of the collaboration of the Singapore Medical Association and the Association of Private Medical Practitioners of Singapore (APMPS) in response to the Health Ministry’s call for a guide on medical charges.

To date there have been four editions of the GOF (1987, 1992, 2001 and 2006).

My comments:

Dear Friends,

This is not a sick April Fool’s joke.

I found out about this from an email sent to SMA’s members only last night and it is all in the papers today.

The marketplace

There are various known relationships with respect to suppliers and consumers in the marketplace.

Those familiar with Economics 101 will know of Perfect Competition; Monopolies; Monopolistic competition; Oligopolies and others.

Perfect competition (PC): Eg Salt/sugar. There are many suppliers/ low entry and exit barriers/suppliers are price takers/homogenous products. Ie consumers have much choice and if supplier tries to be funny and raise the price even by 2 %, the consumer will buy from the next guy.

Monopoly: eg Singapore power / PAP govt ( serious!) : Only 1 supplier/price maker/ unique product/high entry and exit barrier. Take it or leave it. I say this product cost $1 million dollars- if you want you got to rob and steal and then buy it from me only.

Monopolistic competition/ Oligopolies: I do not have time to elaborate but these are variations of PC and monopoly.

Others: The doctor and patient relation is under this category.

Asymmetric Information: The doctor (supplier) in the relationship holds all the cards, as he has the knowledge that the patient ( consumer) requires . The patient depends on the advice of the doctor. If the doctor says that he requires a tonsillectomy, the patient usually has to accept it unless he makes an effort to get a second opinion ( or surfs the net).

Hence in a situation where there is unequal power relationship (eg with asymmetric info), self-regulation is crucial or else the consumer will get fleeced.

Self-regulators are usually appointed by or encouraged by the authorities to keep its members in line so that there is no profiteering nor exploitation of the public who do not know better.

The SMA’s Guideline of Fees was formulated for this very purpose. ( see above)

Beside consultation charges, surgical fees are also included in the GOF. The surgery fees are more of less grouped similarly to the Ministry of Health’s Table of Surgical Procedures (TOSP) (Groups A-G vs Tables 1-7) which determines how much of the patient’s Medisave can be claimed for the said procedures and hospital admissions.

Types of surgeries are grouped according to degree of complexity. A range of fee is then suggested for each of these groups. It is not a price-fixing attempt and only serves as a guide. Doctors are allowed to go above or below it.

Implications for patients with withdrawal of GOF

From now on, when asked about charges, doctors can tell their patients with a straight face (and with hand on heart) that there is no guideline.Period. The fee is such and such and that he does not know whether his charges are high or low with respect to other similar specialists.

The patient would then have to decide either to seek a second opinion and then go through the whole process of consultation again or else accept the doctor’s offer for treatment and hope that he has not been overcharged.

In the event that a patient does complain to the Singapore Medical Council (SMC) that he feels that he has been overcharged, SMC is in no position whatsoever to decide whether the charge is reasonable or not, short of surveying all the specialists doing that particular surgery and then get the mean/median or any other statistical method that it feels will help determine the fairness of the charge.

In the past, SMC just picks up the latest GOF and if everything else in the complaint have been dealt with, will usually reply to the patient that yes or no, the fee was unreasonable or reasonable as the case may be.

PTC and other regulatory bodies

Public Transport Council is an example of a regulatory body set out to protect the consumer who is at the mercy of companies who run our public transport system. I know some skeptics who think the PTC behaves like a cartel with official sanction.

Even oligopolies in the communication industry (Singtel/M1/Starhub) are regulated in some ways by their respective regulatory bodies.

Although SMA ( as contrasted to SMC) is a voluntary association of doctors, which de-facto had taken on some self-regulating functions of the medical profession.

With SMA surrendering this role, SMC will be hard-pressed to come up with some measure to assess the fairness of the doctors’ pricing of services.

At the end of the day, I can only say that there is less protection for patients as there is now worse asymmetry of information. Some doctors may be wringing their handsin anticipation, thinking that there is now no longer any need to follow any guidelines and they can charge as high as they think the patients are willing to pay. Maximise the consumer surplus ( as economists will say)

My honest opinion is that the SMA's decision is ill-advised and hasty. And wrong!

( Author's note (7.30 am 4th April)- SMA President Dr. Wong Chiang Yin has clarified in the Today Newspaper: "It was, in effect, a choice of scrap the guideline now — or cough up $200,000 for a decision from the Competition Commission of Singapore that might simply lead to the same result.

Getting guidance alone from the Competition Commission to file paperwork would have cost $20,000, while getting a decision would have cost the non-profit organisation $30,000. In addition, the SMA would have had to cough up some $150,000 in legal fees."

In view of the new fact, I agree that the SMA was between the rock and a hard place and has no choice but to act as it had. The conspiracy theorists are having a field day! More exciting than Kieffer Sutherland's "24"!)

The GOF is not a cartel's attempt at price-fixing. We do not monitor members' pricing policies ala OPEC. There is no collusion and the doctors do not meet in dark alleys and smoky corridors conspiring to fix the consumers. Far from it. The GOF actually serves as a psychological barrier to doctors who want to charge fees far in excess of the guidelines as when they are put under the microscope ( eg SMC/ Insurance companies), they would have to justify why they are an outlier!

Sigh! Try to be good doctor, also difficult. Maybe should just mind my own business and make the big bucks whilst the sun still shines.

Addendum 3rd April 07 9pm:
Ways of resolving assymetric information includes:

1.Mandatory disclosure- useful only if information can be objectively verified
( also not useful if I tell the patient my price for Procedure A is $1000. So what? There is no way to compare unless he goes and call up another 10 doctors to find out their prices)

2.Regulation of conduct- eg "cooling off" period. But we don't force patients to decide on the spot anyway. At least I don't. We are not selling "timeshare" !

3.Regulation by self ( doctors association) or by higher authority- but that is the exact thing that SMA has decided against.

The question is : Can we ask SMC ( being a govt-appointed body) to take over the function of a price watchdog?

Another question: Does the Law Society still have a recommended scale of fees for legal services? So bodies like PTC is ok but SMA's GOF not?

Dr.Huang Shoou Chyuan


theonlinecitizen said...

Hi doc,

We've highlighted your article on the onlinecitizen.

We hope it's ok with you as we feel that it is an issue which needs concerns.

Thanks, doc.


angry doc said...

Dr Huang,

I posted a link to your post on my blog too.


Dr Oz bloke said...

As far as GPs are concerned I am quite certain that most clinics were not charging fees even close to the GOF recommendations.

Personally I think the problem may occur among the specialists where competition is less rampant (it's not like you've got specialists clinics everywhere you turn in the HDB heartlands, and neither do you see specialists often so how to know what is "normal" market price?) but less so among GP clinics.

Most mature HDB estates have so many GP clinics and at least a few of them would be severely undercutting the competition (especially the older clinics)

So my message to the people out there is that you should watch out for the specialist charges whereas for the GP market I think everything will be status quo. In fact GP consult fees have been dropping in my opinion since 2000.

Ned Stark said...

Dr Huang,
I believe there are guidelines to how much lawyers can charge. Of course it also depends on whether ur talking about meeting Mr Davinder Singh or a junior associate.

However i find this move by SMA rather weird. Will this not open the door for more suits against Drs?

Dr Oz bloke said...

The lack of comments here perhaps gives an indication of how this move really affects the public.

Doesn't affect at all. Simple because nobody was even aware that there was this guideline anyway. And for the matter if any GP had actually had the cheek to FOLLOW THE GUIDELINES he would be accused of fleecing his patients!!!! LOL!

Waste time only lah.

Anyway heard that MOH is going to publish "data" on average fees. So that becomes the new defacto "guideline". I'm sure the average bill size would be much lower.

From a legal standpoint isn't that against competition act as well?

nofearSingapore said...

nedstark: It is neutral with respect to litigation against doctors if the suit is about negligence/ ethics etc.
But patients will not be able to claim that there is overcharging so long as the dr. has shown proof that the patient has been told about it ( ie willing buyer willing seller).
Patient will have difficulty if he goes to SMC/CASE or small claims tribunal to complain that the price is too high, as there is now no guideline ( sky's the limit for superstar dr)

Drozbloke: Ya, they will comprain only when the prices go wild. The online data is mainly the GP's charges. Anyway my charges are probably below the mean, so it is good for me. I can adjust it upwards to the mean! haha


Ned Stark said...

Perhaps Dr Huang u could peg it to 2/3s of the mean?
On an unrelated note, ur letter appeared on the online forum instead.

nofearSingapore said...

HI Nedstark:
Ya I know. Dr. Yik wrote a very strong an convincing case for at least 2.2M. I think even 5M, all of us also must give already lah!

My rant only deserves the online forum! haha.

I think from now till 9 April MSM will work very hard! "wink wink"

Yes, since 2/3 is a fashionable fraction, I will peg my prices to 2/3 mean of the top 3 performers of my speciality!


Ned Stark said...

Dr Huang,

Dr Yik convincing? Personally i feel he is merely echoing what YPAP has said. And his talk on Singapore's economy booming has not given due consideration to the fact that people have seen incomes stagnate or decline.

Dr Oz bloke said...

That's the thing.

In companies where the company is deemed to have had a good year, it announces record profits and earnings.

The shareholders and directors pay out hefty bonuses to the CEO and pat him on the back saying "Well done"

But sometimes the measures taken to bring the company their success if by laying off workers and cutting salaries. But of course nobody cares about those workers who say "bloody hell, cut my salary to save cost, work me like mad then when company do well the CEO gets millions, then what about us?"

No one gives a hoot about those workers.

Singapore is run like a company. GDP grows = well done CEO/PM. Pay rise for you.

Rich elite directors pat CEO/PM's back.

Get the idea?

Anonymous said...

I'm not sure whether scrapping the guidelines will actually lead to an increase rather than decrease in charges. When conveyancing charges for lawyers were scrapped, fees went down. For lawyers, overcharging one's clients is considered professional misconduct and renders the lawyer to disciplinary action. Can't a similar mechanism, be put in place for doctors if the concern is overcharging rather than undercharging?

angry doc said...

anon, the question here is: how does one know if one is overcharging a patient?

The Law Academy of Singapore interpretes the Competition Act to say that "[a]n informal understanding between parties may constitute an agreement, even though its terms have not been formally set down in a signed document. Likewise, a gentleman’s agreement that has not been signed by the parties and which amounts to a ‘faithful expression of the joint intention of the parties’ can qualify as an agreement for the purposes of section 34."

Seems to me that any attempt to agree on what a reasonable price is may be construed as price-fixing here.

recruit ong said...

This letter is interesting. link

Anonymous said...

angry doc, if the medical association is not in a position to know when a doctor is overcharging, how di it come up with a guidelines in the first place?

Hee Kyet said...

I think doing away with price guidelines serves us well. In areas where there are ample competition eg. GP services, prices go below the guideline. In areas where competition is less keen, prices will above guideline, resulting in shorter waiting period for the paying patients.

The market price will find its own equilibrium. The solution to keeping medical cost affordable is to open up the medical service sector and have more registered doctors. Price guidelines only distort the market. Imagine the petrol companies coming up with price guidelines!

monash medical student said...

hi there.

i read with interest your posts on this issue.

if you have time, do leave some comments on another post of mine about consultations in singapore not having any guidelines. and that on how much a doctor should earn.

would like to hear what you think.already contains some links to your site as well.


and something related to our medical tourism as well:


many thanks.

monash medical student said...

oops the links didnt come up:



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