Some good may come out of uproar over health insurance pre-authorisation: Opinion

Singapore Law Watch

3 days ago

Some good may come out of uproar over health insurance pre-authorisation: Opinion
Source: Straits Times
Article Date: 24 Jun 2025
Author: Salma Khalik
Great Eastern's move to suspend issuing of certificates for admission to Mount Elizabeth hospitals has created an opportunity to sort out sources of rising healthcare costs.
Great Eastern has decided to suspend pre-authorisation of treatments for policyholders using Mount Elizabeth Hospital (MEH) and Mount Elizabeth Novena Hospital (MNH). The reactions seem to have been a bit over the top when, in fact, the move could pave the way for much-needed discussion on healthcare costs.
Some doctors and patients have claimed that GE's move restricts their choices, despite the high premiums they pay for treatment at private hospitals. Even the Ministry of Health (MOH) has chipped in to say that it is engaging GE to better understand the impact of its decision.
But let's be clear. GE's decision to stop pre-authorising treatments does not mean that the insurer will stop covering patients who choose to get treatment at these hospitals. It merely means that it is not giving blanket approval for those treatments, but rather, will reimburse valid claims when they are submitted.
So patients are still free to choose whichever hospital they prefer.
It's not even the case that GE has done something unprecedented.
In fact, two of the seven insurers offering Integrated Shield Plans (IPs) – Income and Singlife – do not pre-authorise treatments for policyholders. So why the disquiet over GE's move?
One reason is that many are reacting without fully understanding the situation on the ground. Another is possibly because GE's move affects only two private hospitals, which it claims are significantly more expensive than the rest.
First, let's look at what pre-authorisation serves.
The practice surfaced here less than a decade ago, following recommendations in 2016 by the Health Insurance Task Force.
Pre-authorising a treatment lets insurers assess the cost and medical necessity of treatments before they are carried out; it gives patients peace of mind knowing their treatment will be covered; and it offers greater clarity to hospitals and doctors on insurance coverage.
In 2019, Life Insurance Association Singapore came up with a standard form for the pre-authorisation of hospital and surgical bills.
It is also worth noting that pre-authorisation is different from getting a letter of guarantee (LOG), where the insurer tells the hospital it promises to pay the full, partial or a set amount for the treatment of its policyholders. Having an LOG means patients will not need to place a deposit on admission.
GE has assured that the two hospitals can still request electronic letters of guarantee for their patients, 'ensuring that there is no upfront cash deposit of up to $50,000'.
Reasons behind the move
So if GE is willing to provide LOGs, why stop pre-authorisation?
One reason could be that GE wants to steer its policyholders towards the other seven private hospitals where total bills tend to be lower. The insurer said it has been tracking bills for procedures done at MEH and MNH and found that, for similar procedures, the charges are typically 20 per cent to 30 per cent higher than at other private hospitals.
Perhaps GE hopes that the fear of losing patients might lead the two hospitals to lower their total bill sizes.
The move also gives GE more wiggle room, when disputing claims.
The Straits Times understands that often, in applying for pre-authorisation, hospitals just give a broad estimate of the potential charges. It is only when claims are made that a breakdown surfaces.
But having pre-authorised the treatment makes it difficult for insurers to dispute the claim. Pre-authorisation, after all, is meant to give patients peace of mind and the assurance that their bill will be paid.
Although Mr Yong Yih Ming, chief operating officer of IHH Healthcare Singapore, said that there are occasions where insurers may still dispute claims despite pre-authorisation, insurers enter these negotiations at a disadvantage if they had given prior approval. Without it, they can more easily scrutinise bills and query charges that appear higher than the norm.
GE told The Straits Times: 'In the last few years we have observed that certain private hospitals have been charging significantly more than others for the same treatment, same clinical outcome, similar level of complexity, as well as for procedures that are less complex.'
The GE spokesman added that the higher total bills arise not because doctors at these hospitals are charging higher fees, but rather because of charges by the hospital, such as for the use of its operating theatres and wards, as well as for consumables.
He said: 'Doctor fees are unlikely to be the cause for the increase in the total bill size as it is consistent across the board and benchmarked to MOH fees benchmark. We have observed that the same doctors providing the same treatment at different hospitals can result in different bill sizes, which could imply that it is resulting from hospital charges.'
Another major IP provider, Prudential Singapore, gave similar views: 'Generally, private hospital charges are higher than public hospitals. At the same time, we also observe that the median claim costs at certain private hospitals are higher than others for similar procedures.'
It, too, tries to steer policyholders to certain hospitals and doctors by offering no claims-based increase in premiums for riders for those who choose one of the 1,700 specialists (including all in the public sector) on its panels, and have the procedure done at its partner hospitals in the private sector, which does not include any IHH hospital.
What happens next?
Associate Professor Jeremy Lim of the Saw Swee Hock School of Public Health said he was disappointed by GE's move, as 'unilateral, arbitrary decisions announced at short notice' are unhelpful.
He said: 'Payers and providers are mutually dependent and work in a partnership of mutual respect and open communication. Without private providers, there would be no need for private health insurance, and without private health insurance, many of us would not be able to afford private healthcare.'
However, in fairness to GE, Prof Lim added that it's understandable that the payer – in this case, the insurer – seeks to maximise the value of the money it pays out. He said: 'Whilst doctors' fees have been moderated as a share of total bill size, facility fees have escalated. Every effort should be made to manage down this portion of the fees.'
According to both GE and IHH Healthcare Singapore, which owns four private hospitals here including MEH and MNH, the two parties have been in discussion for some months. Where they differ is that IHH said it had been given no inkling of GE's move, while GE said it had informed IHH of its decision and rationale.
Perhaps GE moving so quickly to cut off pre-authorisation could have been handled better. On the other hand, if it manages to get the two hospitals to align their charges with others in the private sector, it can only be a good thing for patients, while moderating overall healthcare costs.
Now that the problem has been spelt out and made the headlines, perhaps MOH should engage not just GE, but also all the IP insurers as well as private hospitals in a discussion on their charges. IHH would then have the opportunity to either show that the charges at the two hospitals are not excessive, or justify why they are. If it can't do this, it may have to rein in the charges.
Escalating healthcare cost is a major concern, and the current brouhaha opens the way to possibly nipping some of the push factors in the bud.
Salma Khalik has been covering health issues for over 20 years.
Source: The Straits Times © SPH Media Limited. Permission required for reproduction.
Print