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Medisave Withdrawal

Partner Institute: 
Department of Epidemiology and Public Health, National University of Singapore
Survey no: 
Lim Meng Kin
Health Policy Issues: 
Funding / Pooling
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no yes no no no no
Featured in half-yearly report: Health Policy Developments Issue 2

Purpose of health policy or idea

Currently, the amount of Medisave a person could withdraw, and MediShield a person could claim, is based on the length of stay and the type of procedure  undergone. For instance, for medical / surgical inpatients, the current Medisave withdrawal limit is now subject to a maximum of S$300 per day + surgical fees according to a fee schedule. And for approved day surgeries, Medisave withdrawal limit is subject to a maximum limit ofS$150 per day + surgical fees according to a fee schedule.

It is felt that a formula based on casemix (DRG), which has been implemented in Singapore's public sector hospitals since 1999, and is now used for reimbursement by the government, would offer greater flexibility and fairness than a per diem basis, since it takes into account the complexity or severity of a patient's medical condition. The more serious the medical condition or the more resources are utilized (based on DRG classification) the more patients should be able to withdraw from Medisave.

To prepare the public for the impending changes, the Ministry of Health has published a representative table of 26 medical conditions ranked in order of severity, to illustrate the range of maximum allowable limits being proposed. For example: 

Severity level, Medisave Withdrawal and Health Conditions (1,  500 Sing$, Minor head injury), (10,  4000 Sing$, Complicated venous thrombosis), (15, 8000 Sing$, Hip replacement with complications) and finally (22 - 26, 25000 Sing$ for Transplant of heart, lung and liver), respectively.

A worked example for Angioplasty with stent procedure shows the impact of the change more clearly.  The current Medisave withdrawal limit for this treatment is computed as follows:

Average lenght (ALOS), most common table of operations and total medisave withdrawal limits (For patients undergoing this procedure, 4 days, 4A), Medisave Withdrawal Limit calculation (4 days x $300 per day for daily hospital charges= $1200, Medisave Limit for Table 4A= $1400 = $1200 + $1400= $2600).  

Bill Sizes for this treatment. The range of B2 bill sizes for this treatment are as follows: (average B2 bill size ($) 4425), (High-end B2 bill size ($) 6997).

The changes to Medisave withdrawal limits under the new system: (Medisave withdrawal limit computed using current methodology, 2600*), (Medisave withdrawal limit based on Severity Levels, 7000*)

*Note: Amount that can be withdrawn from Medisave is either the Medisave withdrawal limit or the actual bill size, whichever is lower.

The changes being proposed will only affect Medisave withdrawals for inpatient hospitalization and day surgeries in all public and private hospitals. Medisave withdrawals for outpatient treatments and step-down care will still continue to be calculated on a per treatment or per day basis. The new Medisave Withdrawal Limits are generally sufficient to cover most of the hospitalisation expenses incurred in the Class B2 or C wards in the restructured hospitals. For hospitalisation expenses incurred in private hospitals and Class A and B1 wards of restructured hospitals, some out-of-pocket for part of the bill would probably be necessary.

The following newspaper report explaining what difference it might mean to an actual patient, would aid in understanding the impact of the proposed changes:

"WHEN 63-year-old Mr Ng Tong Leong (picture) was discharged from the National University Hospital in December last year, he had chalked up $4,486 in medical bills, almost enough to make him sick again. "We didn't expect the bills to run up so high, although I had an angioplasty with stent operation," said Mr Ng. The operation is a heart procedure in which a small wiremeshn tube is used to open up blocked arteries. "At the time, the doctors talked to my son and I just left it to them."

Like many HDB heartlanders (N.B.: HDB stands for Housing and Development Board, and this local term refers to those living in housing built by the government), Mr Ng and his wife come from a humble middle-class background. A cleaning supervisor taking home some $850 monthly, Mr Ng was previously a school cleaner and odd job worker."

Hospital bill (B2 Class) = $4,486

• Medisave withdrawal limit under the current system: $600 (2 days x $300/day) for hospital charges + $799 for surgical operations = $1,399

• MediShield Basic payout: $1,240

• Out-of-pocket cash payment $4,486 - $1,399 - $1,240 = $1,847


• Medisave based on severity levels: up to $7,000*

• Total B2 bill may be covered by MediShield and Medisave

(* The new $7,000 Medisave withdrawal limit for this procedure (angioplasty with stent) is an indicative figure.)

The Ministry of Health has also taken out advertisements and comic strips in the press to make the changes simpler to understand (see News page on this website)

  • Medisave represents 6 to 8 % of wages (depending on age) sequestered from the individual's CPF account for paying hospitalization and acute-care medical expenditures, as well as convalescent hospitals, hospices, and certain expensive outpatient treatments like day-surgery, radiotherapy, chemotherapy, renal dialysis, in-vitro fertilization and hepatitis B vaccination.
  • Medishield is a low-cost catastrophic illnesses insurance for which Medisave can be used to pay the premium.
  • A graded hospital ward system (ranging from 1-bedded ("A") rooms to open dormitories with 8 or more beds ("C") of public sector hospitals, with preferential targeting of subsidies for the lower classes of wards, such that patients pay more for higher levels of service, comfort and ward amenities, but there is no difference in the standard of health care they receive. Such price-discrimination allows full costs to be recovered from patients in A and B1 class hospital beds compared to patients in B2 and C class who enjoy government subsidies ranging from 20% to 80% of cost.
  • For classes A and B1, a cash deposit is collected at the time of admission.
  • Mandatory financial counseling sessions before or at the point of admission, serves to channel patients to the appropriate classes of wards, based on the anticipated hospital bill size the patient can afford or is comfortable with.

Table 1

Groups affected

Singaporeans with more serious medical conditions

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Characteristics of this policy

Degree of Innovation traditional neutral innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal rather marginal fundamental
Public Visibility very low neutral very high
Transferability strongly system-dependent system-dependent system-neutral

Political and economic background

No major change in political direction. The change arises from the realization that introduction of Diagnosis Related Groups (DRGs) to the public health care system in 1999 allows the resetting of Medisave withdrawal limits and MediShield claimable limits to be based on DRGs, to reflect the resources needed to treat the different medical conditions.


Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no yes no no no no

Origins of health policy idea

Idea is generated by Ministry of Health, in response to feedback from the public that in view of a recent increase in hospital charges, the claims limits should be reviewed to allow for higher quantum of Medisave withdrawal where necessary.

Stakeholder positions

Look at the following cartoon to understand media coverage.


Influences in policy making and legislation

Legislation not needed. All government needs to do is to make a policy announcement.

Adoption and implementation

This is a modification of an existing scheme. It is perceived as an enhancement of the scheme and is not expected to be controversial.

Expected outcome

Change is timely and likely to be welcomed


Author/s and/or contributors to this survey

Lim Meng Kin

Suggested citation for this online article

Lim Meng Kin. "Medisave Withdrawal". Health Policy Monitor, October 2003. Available at