Singapore

Healthcare services: The Ministry of Health (MOH) purchases public healthcare services from Singapore’s three public healthcare clusters: the National Healthcare Group (NHG), the National University Health System (NUHS) and Singapore Health Services (SingHealth). Each cluster comprises various public healthcare institutions (PHIs) including hospitals, primary care polyclinics, specialty centres and community (rehabilitation) hospitals. The MOH therefore acts as the main purchaser of healthcare services and carries out functions of strategic purchasing.

Healthcare goods and support services: In 2018, ALPS Pte Ltd was set up to centralise procurement across the public healthcare clusters and drive costs down while maximising efficiency.  Prior to ALPS, the clusters managed their procurement and supply chains independently through their Group Procurement Offices (GPOs). ALPS fulfils several strategic purchasing functions such as assessing product and service proposals from suppliers to enhance savings; establishing contracts with suppliers; reviewing consumption trends across PHIs for medical, surgical and non-medical supplies to guide purchasing decisions; negotiating with suppliers for lower prices; and monitoring the performance and compliance of suppliers.

Medicines and vaccines (national level)
ALPS
Health Promotion Board
Ministry of Health (Chief Pharmacist’s Office)

Medicines and vaccines (subnational level)
National Healthcare Group (NHG)
SingHealth
National University Health System (NUHS)
Public healthcare institutions (PHIs) including public hospitals, community hospitals, polyclinics
Private healthcare groups, institutions and clinics

Medical equipment and consumables (national level)
ALPS
Health Promotion Board

Medicines and vaccines (subnational level)
National Healthcare Group (NHG)
SingHealth
National University Health System (NUHS)
Public healthcare institutions (PHIs)
Private healthcare groups, institutions and clinics

Healthcare services (national level)
Ministry of Health
Insurers (e.g. MediShield, private)
Health Promotion Board

Healthcare servicees (subnational level)
Private and public healthcare groups and institutions

Healthcare support services (national level)
Ministry of Health
ALPS
MOH Holdings

Healthcare support services (subnational level)
National Healthcare Group (NHG)
SingHealth
National University Health System (NUHS)
Public healthcare institutions (PHIs)
Private healthcare groups and institutions

Public healthcare institutions (PHIs) receive government funding to provide subsidised healthcare services for citizens and Permanent Residents. Hospitals are paid through a hybrid system, on a DRG (Diagnostic-Related Group) basis for inpatient and day surgery and through block grants for outpatient visits. Community hospitals (providing services such as rehabilitation and subacute care) are paid on a per-diem basis. As part of the HealthierSG initiative announced in 2022, MOH is moving toward capitation funding for the three public healthcare clusters (NHG, SingHealth, NUHS). Clusters will receive an annual budget based on the total residents they are in charge of (according to geographical area), with capitation rates set according to historical average care costs and service utilisation rates.

ALPS purchases pharmaceuticals, supplies (medical, surgical and non-medical) and healthcare support services (e.g. home medication delivery, facilities management) for Singapore’s PHIs. Some purchases are still covered by the clusters or individual PHIs rather than centrally by ALPS. ALPS also plays a small role in supporting private General Practitioner (GP) clinics through consortium buying and sharing on best practices.

Beyond ALPS’ work for the PHIs, some goods and non-medical services are directly purchased by MOH and its agencies/subsidiaries.

• MOH Holdings (MOHH) – the holding company for the PHIs – purchases infrastructure development services for PHIs.
○ Integrated Health Information Services (IHIS) purchases IT systems, hardware, software and services for national health projects and provides contract management support for the IT & analytics needs of PHIs.
○ The Agency for Integrated Care (AIC) works with ALPS as the procurement agent for nursing homes, community hospitals, hospices and other eldercare services.

• The Health Promotion Board (HPB) purchases services and equipment for national health promotion activities including the School Health Service, School Dental Service and national screening programmes as well as medical services and equipment used against COVID-19, such as test and vaccination centres.

The Ministry of Health (MOH) purchases healthcare services from Public Healthcare Institutions (PHIs), including public hospitals, which make up 4/5 of total hospital beds in the country. 

ALPS Pte Ltd currently conducts 65% of purchasing for public healthcare institutions while 35% of purchasing is still done at the cluster or institutional level. ALPS manages 90% of pharmaceutical purchases at the national level. 

The private sector (including private healthcare groups, institutions and GP clinics) conducts its own purchasing activities.

Only 1/5  of total hospital beds in Singapore are part of private healthcare institutions. The ratio is different for primary care, as private GPs provide 80% of primary care services in Singapore, with the remaining 20% being provided at public polyclinics.

The Ministry of Health (MOH) purchases healthcare services from the public healthcare clusters on a DRG, block grant or per diem basis and is moving toward capitation funding. ALPS is currently in charge of purchasing 65% of healthcare consumables on behalf of the clusters, while 35% is done directly at the health cluster or institutional level.

The MOH is collaborating with private GPs by subsidising some healthcare services. MOH subsidises private GPs enrolled in Primary Care Networks (PCNs) to manage complex chronic cases and alleviate the burden on public polyclinics; in exchange, participating GPs agree to stipulated clinical requirements. MOH also funds GPs who participate in the CHAS scheme for the care management of Singaporeans of lower- and middle-income status. As part of the new HealthierSG initiative, MOH will move toward additional capitation funding for GPs (from July 2023). Participating GPs will receive an annual service fee for each enrolled resident, supplementing existing funding mechanisms which are largely based on fee-for-service models.

The private healthcare sector manages its purchasing independently. The largest private healthcare group in Singapore is Parkway Pantai, which procures centrally through its scale in Singapore and globally as Southeast Asia’s largest private healthcare provider. From 2022, ALPS is supporting private GPs through consortium buying and guidance on purchasing best practices.

For pharmaceuticals, supplies (medical, surgical and non-medical) and healthcare support services, the aim is to reach an 80-20 level of consolidation across Singapore’s Public Healthcare Institutions (PHIs). 80% of purchasing will be done at the national level by ALPS and 20% at the cluster or institutional level.

Longer-term plans may involve consolidated pharmacy services to support the private healthcare sector, but these have not been set in motion.

• ALPS Pte Ltd (SGD$1.6 billion – 2021)

• Public healthcare clusters: NHG, NUHS, SingHealth

• MOH and its agencies, subsidiaries and statutory boards (e.g. Health Promotion Board, MOH Holdings, Integrated Health Information Systems, Agency for Integrated Care)

• Private purchasers: private healthcare groups, institutions and clinics, with Parkway Pantai being the largest private healthcare group

ALPS decision-making on pharmaceuticals, supplies and healthcare support services is done through 3 evaluation methods: PQ (Price-Quality), TCO (Total Cost of Ownership) or Lowest Cost. Participating clusters and institutions may have different preferences, but the PQ method is most often used whereby Public Healthcare Institution (PHI) representatives work with ALPS to evaluate the PQ of a bid. An award strategy is then proposed at the cluster or institutional level. Other evaluation criteria used by ALPS include product characteristics, source/manufacturer, vendor characteristics and price as well as any specific needs and preferences of the partnering institution(s).

The Ministry of Health (MOH)’s Drug Advisory Committee (DAC) reviews which drugs to add to the Standard Drug list to be subsidised by MOH. The criteria involve 1) whether the drug is essential for the treatment of medical conditions that are important causes of morbidity and mortality; 2) whether the drug offers a major improvement in efficacy and effectiveness compared to existing subsidised drugs; 3) whether there is sufficient evidence of long term safety and cost-benefit. 

The MOH’s Agency for Care Effectiveness (ACE) conducts health technology assessments (HTAs) using various criteria including evaluation against comparator treatments; economic evaluations (cost-minimisation analysis, cost-effectiveness analysis, cost-utility analysis); cost calculation; calculation of health effects through life years gained (LYG) or quality-adjusted life years gained (QALYs); budget impact analysis.

The Ministry of Health collects data on the public healthcare clusters’ operations (e.g. clinical, utilisation, quality, financial) to guide budgeting decisions year-to-year. The Ministry of Health is also subject to Singapore’s Government Policy Framework in governing its public spending and use of funds. 

The Government Procurement Policy Framework is based on three core principles:

1) Transparency: procurement requirements, procedures and evaluation criteria for quotations and tenders are published openly;

2) Open and fair competition: suppliers are given equitable opportunities and access to compete on a level playing field;

3) Value for money: procuring from sources which offer the best value and best meet government requirements. 

The Ministry of Health (MOH) is the main stakeholder involved in health financing and the health system. This involves setting payment systems with public health service providers (for example, with the recent introduction of bundled payments across the public healthcare sector and the ongoing shift to capitation payments for the three healthcare clusters / for private GPs part of HealthierSG).

The MOH is also in charge of how the health system is organised. Legally, public hospitals are corporatised companies owned by the government. The MOH can therefore restructure the public healthcare system easily in a centralised manner (e.g. merging public healthcare institutions into three clusters in 2017 to ensure better care coordination). All public hospitals are managed by MOH Holdings as the holding company for public healthcare assets. Despite this MOH supervision, hospitals are granted legal autonomy to retain market competition among them. Recruitment, remuneration, purchase and service pricing are all managed by individual clusters/hospitals.

The MOH is led by the Health Minister, the Permanent Secretary and senior civil servants. Its two key functional arms are the Policy and Corporate Group (led by two Deputy Secretaries for Health) and the Professional Group (led by the Director of Medical Services).

The Ministry of Health (MOH) decides on the types and volumes of healthcare services provided by hospitals, the guideline fees to be charged and any expensive equipment to be purchased. The MOH is the main decision-maker on costing and funding for Public Healthcare Institutions (PHIs). It considers a set of factors including equipment costs and depreciation, fixed asset costs, cost-recovery ratios for different services and historical cost and utilisation patterns. Funding is increased annually in a manner that still encourages hospitals to spend judiciously.

Various MOH agencies are involved in the different functions of strategic purchasing. The Drug Advisory Committee (DAC) reviews which drugs to add to the Standard Drug list to be subsidised. The Agency for Care Effectiveness (ACE) conducts health technology assessments (HTAs) for treatments, technologies, drugs etc., providing guidance on cost-effectiveness. The Chief Pharmacist’s Office (CPO) works with ALPS on sourcing and contracting for pharmaceuticals.

ALPS conducts strategic decision-making on procurement together with the three public healthcare clusters. Procurement leads and side leads from different clusters/institutions jointly align on work plans with ALPS by considering contract timelines, evaluating products, projecting costs and deciding on best offers. A collective decision is made by the Executive Committee in charge (comprising representatives from ALPS and relevant institutions), most often by considering the Price-Quality score of bids received. The PHIs must endorse the award proposed by the Executive Committee before a decision is finalised.

MediSave (a personal health savings account mandatory for all citizens/Permanent Residents) and MediShield (the national health insurance scheme) are heavily involved in pricing and claim decisions. Both MediSave and MediShield cap what can be claimed for certain procedures; this limits the ability of providers to price higher, as this would lead to higher OOP fees for patients. The MediShield Life Council reviews population coverage trends and gives recommendations to the MOH for premium-setting and reimbursement decisions. MediShield also uses the Agency for Care Effectiveness’ findings on the cost-effectiveness of health technologies (e.g. drugs, devices, services) to guide coverage and reimbursement decisions.

Private insurers also often select doctors to be on their panels based on their charges.

For healthcare goods and support services: ALPS lays out Purchase Order Terms and Conditions which govern all new and existing purchase orders and outline the roles and responsibilities of contractors and suppliers.

For healthcare services: MOH sets out Service Level Agreements with the public healthcare clusters to provide subsidised care to patients in exchange for government subvention. SLA indicators are regularly reviewed and formalise the required performance outcomes in order to receive funding.

The government must not draw on past reserves (i.e. resources accumulated during previous terms of government). This means that deficits in any year must be balanced with surpluses accumulated over other years within one term of office (with a term lasting up to five years). Past reserves can be drawn upon only in exceptional circumstances if both the Parliament and President approve, such as in the case of the COVID-19 pandemic.

The Ministry of Finance (MOF) sets five-year spending ceilings for each Ministry. The allocation of funds within Ministries is conducted by ministries themselves. Funding for ministries takes place through three main mechanisms:

1) A guaranteed baseline budget, which can increase annually by a budget growth factor. Ministries receive a five-year spending ceiling according to the yearly predicted GDP. A yearly whole-of-government meeting takes place to ensure coherence in government budget allocation, avoid duplication and promote inter-ministerial collaboration.

2) ‘Above-the-block’ funding can be given to ministries to fund large additional programmes such as hospital construction for MOH.

3) There is an additional ‘reinvestment fund’ – money from national revenue growth that is centrally pooled for reinvestment. Ministries can bid for these funds from the MOF, which priorities inter-ministerial collaboration in disbursement decisions.

Government procurement is decentralised across individual ministries, departments, organs of state and statutory boards. All must adhere to the Ministry of Finance’s central procurement guidelines. The laws governing public sector procurement are laid out in the Government Procurement Act and its subsidiary legislation, including the Government Procurement Regulations 2014 which lay out tendering and procurement award processes that all contracting authorities must adhere to.

The Ministry of Finance (MOF)’s Revenue Contracting Procedures outline the procedures that all government agencies should follow for revenue contracts. As a default, government procurement is done through open sourcing on the Government Electronic Business (GeBIZ) platform. Exceptions can be made under specific circumstances. For example, emergency procurement procedures such as those utilised during COVID-19 allow government agencies to directly contract with experienced suppliers rather than going through open sourcing.

There are four stages in the typical government procurement process: 1) Sourcing, 2) Evaluation, 3) Approval of Award, 4) Contract Management. Public agencies can source for goods and services in different manners according to the value of the purchase:

• Small Value Purchase: up to SGD$6,000

• Quotation: up to SGD $90,000

• Tender: Over SGD $90,000. Tenders may include open tenders (posted openly on GeBIZ), selective tenders (shortlisting applicants via a pre-qualification exercise for complicated purchases) and limited tenders (by invitation only in exceptional cases e.g. national security matters).

• Public Private Partnerships: PPPs are an alternative form of procurement whereby the public sector acquires cost-effective services from the private sector (rather than only acquiring facilities/equipment from the private sector but directly owning and operating assets). Some possible PPP models include joint-ventures, strategic partnerships, Design-Build-Operate and Design-Build-Finance-Operate.

The Ministry of Health (MOH) follows the national Government Procurement Act, outlining procurement guidelines for public agencies.

ALPS lists upcoming National Sourcing Events on its website such that vendors and suppliers can prepare quarterly. All sourcing events are conducted via the Ariba platform. Companies must be registered in Singapore to participate in ALPS events. ALPS also collaborates with the Chief Pharmacist’s Office (CPO) in MOH on supply chain and purchasing of pharmaceuticals. 

The public healthcare clusters are responsible for ongoing contract management with suppliers once ALPS has helped source the contract. If any major issues appear with pharmaceuticals or medical devices, public hospitals will escalate this to ALPS. ALPS and Ministry of Health Holdings (MOHH) also have whistleblowing policies for the reporting of fraud or wrongdoing.

Issues with providers or suppliers can be flagged to government enforcement bodies. A Government Procurement Adjudication Tribunal under the Ministry of Finance (MOF) handles complaints of non-compliance with the Government Procurement Act.  A multi-ministry Standing Committee on Debarment (SCOD) oversees debarment for defaulting contractors, whereby contractors can be disqualified from being awarded public sector contracts.

For goods and healthcare support services, performance-based awards are given to suppliers on an event-driven basis. These include the Healthcare Supplier Award organised by the National Healthcare Group (rewards productivity, innovation and continuous improvement to encourage strategic purchaser-supplier collaborations and cost-efficiency); and the National Day award and public commendation certificate (given by Ministry of Health- SingHealth and ALPS, whereby group procurement leads nominate exceptional vendors in the areas of market share or performance).

In terms of healthcare services, the Ministry of Health (MOH) uses a mix of incentives and disincentives to encourage good performance. A Pay-for-Performance (P4P) framework was  implemented in 2021 to financially reward the clusters for performing well in key priority areas (e.g. reducing hospital-acquired infections; managing length of stay; minimising waiting time for specialist visits; 30-day readmission rates). Public healthcare staff receive a fixed monthly salary and, usually, a performance-based bonus measured through various criteria.

Performance assessment for healthcare goods is done on a reactive basis. As hospitals and clusters monitor the health outcomes of drugs, devices and medical supplies, any major issues with suppliers are reported to the national purchaser – ALPS – for escalation. Hospitals therefore have the responsibility to highlight issues themselves.

Performance assessments for healthcare support services such as facilities management is more proactive. Key Performance Indicators (KPIs) are written into the initial service contract (e.g. schedules for collecting biomedical waste). If suppliers fall short, the KPIs are enforced through a one- or two- strike policy or liquidated damages may be  imposed.

Performance assessments for healthcare services for public hospitals are conducted by the Ministry of Health through various mechanisms. Healthcare Performance Offices (HPOs) situated within the different hospitals report on clinical  indicators to MOH multiple times a year. The MOH also maintains an annual Public Hospital Scorecard measuring institutional performance covering clinical indicators and patient satisfaction. Scorecard data is used to regularly review Service Level Agreements (SLAs) between MOH and the health clusters on the basis of performance. On an ad-hoc basis, MOH publishes benchmarking studies on specific treatments & services.

For healthcare goods and support services, ALPS maintains high-level relationships with suppliers. New suppliers are engaged through sandboxes and proof-of-concept; existing suppliers may be commended on an event-driven basis for outstanding performance.  

For healthcare services, the Ministry of Health continuously engages the public healthcare clusters by monitoring Service Level Agreements (SLAs) and collecting data on clinical indicators. Healthcare Performance Offices (HPOs) within each institution meet with MOH approximately four times a year to review performance and set targets.

Indicators on accessibility, quality, and affordability of healthcare are tracked and reported as Key Performance Indicators (KPIs) for the Ministry of Health (MOH). The indicators used may vary year-to-year. Data is largely collected from the National Population Health Survey (NPHS),conducted from 2018 onward on residents 18 to 74 years old; from hospital data (including financial data, utilisation data, clinical data); and from other MOH data.

The 2022 indicators included:

Good health outcomes:
• Life expectancy at birth (female and male)
• Infant mortality per 1,000 live births
• Premature mortality rate from cancer
• Premature mortality rate from ischemic heart disease
• Premature mortality rate from stroke
• Proportion of Singaporeans who smoke daily
• Prevalence of obesity
• Prevalence of diabetes
• Prevalence of high LDL cholesterol
• Prevalence of high blood pressure
• Prevalence of poor mental health
• Percentage of children who have undergone vaccination for a) diphtheria and b) measles

Quality:
• Adjusted acute hospital 30-day readmission rate

Accessibility:
• % of patients who waited at least 100 minutes for consultation at polyclinics
• % of patients who waited at least 60 days for new subsidised specialist outpatient clinics appointment
• Doctors per population
• Nurses per population
• Bed occupancy rate (public acute beds)

Affordability:
• Average proportion of bill amount paid by MediSave & MediShield Life for Class B2/C wards
• Average proportion of bill amount paid by MediShield Life for large Class B2/C bills

Outcomes of HealthierSG – a significant healthcare transformation programme launched in 2022 – will be monitored through a similar list of KPIs such as rate of resident and GP enrolment (short term outcome), level of physical activity of residents (medium-term outcome) and prevalence of chronic disease and healthcare cost (long-term outcome).

Health system performance data is aligned with international practices to enable cross-country comparisons. Singapore’s National Health System Scorecard uses indicators from the OECD Healthcare Quality Indicator (HCQI) project. As Singapore is an observer in the OECD Health Observatory, the MOH can compare its performance to OECD countries and close any gaps accordingly.

All Singaporean public health institutions use the National Electronic Health Records (NEHR), an integrated information system to harmonise financial, clinical, administrative and diagnostic data. The NEHR is owned by the Ministry of Health (MOH) and managed by Integrated Health Information Systems (IHIS), the public healthcare sector’s technology agency. While the NEHR is not required in private hospitals and clinics, close to 2000 healthcare institutions – private and public – participate in the NEHR. The 2022 HealthierSG plan involves efforts to integrate private GPs into the NEHR.  Currently, many GPs use independent Clinic Management Systems (CMS) which are not integrated with the NEHR. HealthierSG will allow GPs to submit their patient data to the NEHR through their CMS. This will enable GPs to better review their patients’ health data, and enable the regional clusters to analyse trends, identify coverage gaps and review the effectiveness of protocols from primary to tertiary care.

Currently, supply chain IT systems are not integrated across Singaporean public healthcare. In collaboration with IHIS, ALPS intends to build a stronger IT system  for supply chain matters that is integrated with Public Health Institutions (PHIs).

The Ministry of Finance (MOF) does not impose specific result indicators on each Ministry. However, the annual budgeting process relies heavily on conversations regarding each Ministry’s performance. There are three elements that can inform the Ministry of Health (MOH)’s annual budget. First, Ministries such as the MOH list their desired outcomes and Key Performance Indicators (KPIs) using data on the previous two years, the current year and the expected following year.  Second, the MOH publishes a detailed annual report discussing its performance indicators. Third, the MOF is in the process of implementing a “ministry report card” to be completed by each ministry; in response, the MOF comments on each ministry’s targets and resource management to inform decisions for the following year.

Singapore’s national insurance scheme, MediShield Life, is important in informing purchasing decisions for services and drugs. The MediShield Life Council reviews population coverage trends and gives recommendations to the MOH for premium-setting and reimbursement decisions.

The MOH monitors various purchasing decisions across the public healthcare system. When a new device or capacity (e.g. more hospital beds) is introduced in the health system, the MOH and the regional clusters jointly monitor utilisation to prevent over-servicing and over-consumption. The MOH also conducts workforce planning to determine the number of health professionals required, and to assign places and funding for medical training accordingly.

Different indicators are used by different agencies involved in purchasing decisions. ALPS considers pre-determined quality and operational Key Performance Indicators (KPIs) when assessing the performance of suppliers. MOH considers a range of quality, utilisation and financial indicators to assess the performance of public health institutions (PHIs) and provide funding accordingly.