FROM last week, Singaporeans and permanent residents have been able to use their Medisave to pay for treatments in over a dozen hospitals in Malaysia.

This move by the Health Ministry (MOH) follows requests from middle-income patients who felt that their compulsory health savings could go further if it could be used outside Singapore where private health-care costs are cheaper.

The possibility was first raised during a dialogue Health Minister Khaw Boon Wan had with union leaders in 2008. They expressed their fears that rising health-care costs could mean poorer care for their union members in their old age.

A suggestion by a unionist that they be allowed to use their compulsory Medi- save savings for treatment overseas, was met with tremendous support from other participants in the dialogue with the minister. The idea was then floated at other dialogues and was met with similar enthusiasm from members of the public.

The cost of private medical treatment in Malaysia and Thailand can be half or even a third of the cost of similar treatment here. The quality of care in these countries has also improved significantly over the years, with many of their doctors now trained in the United States, Australia and Europe.

After studying the matter for over a year, the Health Ministry agreed to the proposal, with certain provisos to ensure that there is no abuse.

It does not mind people getting cheaper care overseas, but does worry that some might want to cheat the system by claiming for treatment they never received. As these overseas hospitals will be beyond MOH's jurisdiction, control will be difficult if not impossible.

So MOH insists that patients must have a referral from a doctor in Singapore. This doctor will also have to take care of them before and after their treatment overseas, and will do their Medi- save application for them.

What both the ministry and the people urging the freeing up of Medisave perhaps did not take into account is the need for MediShield to also be similarly freed up. Unless that is done, this scheme will not take off.

This is because someone treated here can claim against MediShield, and use Medisave to pay the rest of the bill. But across the causeway, he will not enjoy insurance coverage. MediShield, which covers about three million people, can be used overseas only in cases of emergencies.

There is really no reason why this should be so. The purpose of Medisave and MediShield is to provide people with enough insurance coverage and savings to take care of their large hospital bills.

The only reason such treatments were limited to Singapore was the difficulty of controlling or administering the system if patients sought care overseas.

But the safeguards imposed by the ministry on the use of Medisave abroad has effectively solved this problem. Tying MediShield claims to the same stringent rules will prevent abuse.

Such a move will give Singaporeans a wider choice. With health-care costs being cheaper overseas, it will stretch their medical insurance and savings.

No matter where the treatments are done, the same insurance and Medisave caps will apply. So insurers will not suffer.

But patients may be able to buy themselves a higher class of service abroad, given the good exchange rate the Singapore dollar enjoys with the Malaysian ringgit. As the scheme matures, the use of both Medisave and MediShield could be extended beyond Malaysia.

Will the health-care industry in Singapore suffer as a result of such liberalisation?

Unlikely.

The well-heeled are not likely to want the hassle of crossing the border for treatment. Those who believe that doctors and hospitals here are better will continue to patronise private hospitals here.

The few patients private hospitals might lose as a result of this liberalisation are people to whom cost matters.

Perhaps freeing up the use of both Medisave and MediShield could lead to more competitive pricing here.

In fact, the ones most likely to be affected are subsidised wards in public hospitals, rather than private hospitals.

Now that patients in public hospitals are means-tested, well-off patients who opt for a B2 class end up paying 50 per cent of the bill - or about the same price they would need to pay in Malaysia.

Permanent residents stand to benefit even more, since they get a lower subsidy than Singaporeans. By July next year, their subsidy in a B2 ward could be as little as 30 per cent.

Rather that pay 70 per cent of the bill, these patients might prefer to cross the causeway where private care would actually cost less than B2 treatment at a public hospital here.

If both MediShield and Medisave were allowed, patients should be able to cover more of their bills in Malaysia than if they received subsidised treatment in Singapore.

Even better, the waiting time for treatment for all will probably get shorter.

All in all, having more patients seek treatment in Malaysia would not be a bad thing at all. Public hospitals are currently stretched to breaking point.

Easing the load on them would result in a win-win situation for patients, hospitals and the ministry.

If fewer patients need to get subsidised care here, the subsidy money can be used to help truly needy patients even more.

salma@sph.com.sg