MOH plans new not-for-profit private hospital

It aims to address soaring healthcare costs.

The Ministry of Health (MOH) is planning a new not-for-profit private hospital to offer more affordable care, as private healthcare costs spiral and pressure mounts on the public system.

Health Minister Ong Ye Kung announced the move following Great Eastern’s suspension of pre-authorisation for patients seeking treatment at Mount Elizabeth and Mount Elizabeth Novena hospitals.

The decision affects policyholders under Integrated Shield Plans and highlights growing tension between insurers and private hospitals.

“The current trend is not sustainable,” Ong said in a Facebook post. “Private health insurers and private hospitals have gotten themselves tied up in a knot, to the detriment of all stakeholders, including patients.”

He pointed out that there is a need for more affordable private hospital options, like Mount Alvernia Hospital. “MOH is therefore exploring the possibility of a new not-for-profit private hospital,” Ong said. “However, even if the decision is to proceed, this will take a few years.”

Ong blamed much of the current strain on the design of private insurance products. Generous coverage, especially riders that eliminate nearly all out-of-pocket payments, has led to overuse of services and higher claim sizes.

He noted that patients with riders are 1.4 times more likely to make a claim, and their claims are also 1.4 times larger on average.

As claims balloon, insurers have responded by raising premiums and imposing stricter controls — such as limiting pre-authorisations for high-cost hospitals. This has led to dissatisfaction among policyholders, many of whom are now paying more while receiving fewer benefits. Some, especially seniors, have dropped their riders altogether due to rising costs.

Meanwhile, the strain is shifting to the public healthcare system. While public hospitals account for 80% of hospital beds, they currently handle over 90% of all inpatients.

With more patients turning away from expensive private care, this imbalance is expected to grow.

“No one is happy,” said Ong. “Policyholders, insurers, doctors, and hospitals are all caught in this knot.”

MOH has already taken several steps to address the crisis. Since 2018, the ministry has introduced fee benchmarks to curb overcharging in private care. Today, more than 90% of private surgeon fees fall within benchmark levels. MOH is now looking into extending these benchmarks to hospital charges.

The ministry has also taken enforcement action against a small number of doctors who made errant claims, including requiring refresher courses and suspending access to MediSave and MediShield Life.

Ong also urged insurers to redesign their products, particularly riders. He noted that some companies already offer more affordable rider options with higher co-payment components — often at half the cost of full-coverage riders.

These more balanced products reduce incentives for overuse while still offering protection against large bills.

Financial advisers, he said, must be proactive in helping policyholders choose these more sustainable options.

Although a new hospital may take years to build, Ong stressed that it is part of a broader push to make the private healthcare system financially viable again.

He called on all stakeholders — insurers, doctors, hospitals, and patients — to do their part.

“The recent moves by insurers may be disconcerting, but we need to see them against this broader context and the need to set the private healthcare financing system on a more sustainable footing,” Ong stressed. “Otherwise, everyone loses.”