Singapore - Ministry Of Health Stops Public Hospitals From Continuing Foreign Patient Referral Contracts.
Legal News & Analysis - Asia Pacific - Singapore - Regulatory & Compliance
24 October, 2018
The Ministry of Health (MOH) has ordered that public hospitals must terminate all contracts with foreign agents who are engaged to refer patients from overseas to hospitals in Singapore.
According to a Sunday Times article published on 30 September 2018, the hospitals found to be engaging in such practices were the National University Hospital (NUH), Singapore General Hospital (SGH) and Changi General Hospital (CGH). The hospitals involved have said they will comply with the MOH's directions by the end of next month. These agents assist prospective patients in obtaining any information required, and recommend the most suitable hospital for the patient to attend. The agents will also help to arrange for specialist appointments.
In exchange for such services, the agents may receive a certain percentage of the patient's hospital fees. For example, an Indonesian agent who had a contract with NUH would be paid 8 percent of the patient's bill, excluding doctor's fees. If the fees of the patient referred went above SGD 500,000, the agent would get an additional 2 percent for each dollar above that sum, and an additional 4 percent for every dollar above if the patient's fees exceeded a million dollars.
MOH objects to such agents on the basis that the priority of public healthcare institutions is to serve the needs of Singaporeans, and that such hospitals are not allowed to actively market themselves to foreign patients. While the agents were not tasked to market the services of the hospitals, MOH has nevertheless mandated that the hospitals involved halt the practice so as to prevent the possibility of misinterpretation and misrepresentation.
Under the Singapore Medical Council's (SMC) ethical code and guidelines, doctors themselves are not permitted to participate in 'fee sharing', by offering payments or other rewards for patients referred to them by another.
Thus, the SMC notes that the issue lies not in the fact that public doctors are treating foreign patients, but that by virtue of the higher fees paid by foreign patients, such a referral system potentially creates a financial incentive for doctors to give preferential treatment to foreign patients over subsidised patients. Certain industry members have also noted that the scheme of providing a 'referral fee' to such agents is unethical, and that the commission paid was considerably large.
MOH's decision to stop all public hospitals from engaging in foreign patient referral schemes is in line with the SMC's guidelines that strictly prohibit third party referral agreements. This is consistent with the SMC's firm stance against the payment of referral fees to third parties, which are based on a percentage of the doctor's fees. In a December 2016 advisory letter to doctors prior to the implementation of the 2016 SMC Ethical Code and Ethical Guidelines (the 2016 ECEG), the SMC clarified its concerns on this issue, stating that such a practice of referrals may lead to cost escalation for the patients. Pursuant to Guideline H3(7) of the 2016 ECEG, doctors are prohibited from "fee splitting" and are also prohibited from paying third party fees that are based primarily on the doctor's fees, or fees which render doctors unable to provide the requisite standard of care.
Hospitals, clinics, medical professionals as well as other relevant stakeholders alike need to be cognizant of the SMC's firm stance towards any potential conflicts of interest and their emphasis on a practitioner's professional duty towards patients. Thus, when considering plans with regards to the development of a hospital's or clinic's business, the relevant stakeholders need to consider any possible financial conflicts of interests or ethical concerns that may arise, and if they are contrary to the guidelines laid down by the SMC and/or healthcare regulations.
For further information, please contact:
Andy Leck, Principal, Baker & McKenzie.Wong & Leow