The Raffles Medical Group has come a long way. When it was set up in 1976, it had only two clinics in the CBD. Today, the group operates a network of more than 60 clinics throughout the island. Against a backdrop of "solo practices" in the local private healthcare sector, with each doctor managing a broad spectrum of conditions, Raffles pioneered the institutional model in Singapore. It provided team-based, integrated multidisciplinary care for patients with multiple medical problems. With its flagship Raffles Hospital, the group’s activities now span the entire spectrum of healthcare services, ranging from primary healthcare to specialised tertiary care. It also provides ancillary healthcare services including health screening and diagnostics, international medical assistance and healthcare management consultancy.

Raffles Medical Group exemplifies the role which the private sector plays in the healthcare industry in Singapore. We run a mixed healthcare system, involving both the public and private sectors. This gives Singaporeans a wider range of choices. It is more flexible and responsive to changes in the industry. It also creates more incentives for healthcare providers to be cost conscious and to run efficiently, compared to a fully nationalised system.

The Government plays a major, active role in ensuring that all Singaporeans, especially the lower income groups, have access to good and affordable healthcare. The Government operates a network of 17 polyclinics, and has plans to expand and improve this network by building new polyclinics in new towns and redeveloping old ones. We are collaborating with the private sector to improve delivery of primary healthcare to lower income Singaporeans, through programmes like the Primary Care Partnership Scheme, where the Government pays private sector GP clinics to provide subsidised medical services to the elderly poor at polyclinic rates. In addition, the restructured hospitals provide quality, broad-based medical care at affordable prices.

At the upper end of the industry, private sector healthcare providers like the Raffles Medical Group are an important complement to the public sector. They provide medical services to Singaporeans who prefer and can afford personalised care in a private setting. 20 per cent of acute hospital beds in Singapore, for example, are provided by the private sector. In specialised areas like obstetrics, the private sector takes up more than 50 per cent of the market. Our private hospitals and clinics also service a substantial number of foreign patients who come to Singapore each year to seek medical care.

Looking ahead, I envisage the private sector playing a growing role in our healthcare industry. The Government will continue to push for greater collaboration with the private sector. We recently extended the Primary Care Partnership Scheme beyond the 9 pilot sites to the rest of Singapore, and expanded its coverage to include dental services. To date some 500 GPs and 200 dental clinics have signed up for the scheme. The two public healthcare clusters, Singapore Healthcare Services (SingHealth) and National Healthcare Group (NHG), are also building up their networks with GPs. Under SingHealth’s GP Empowerment Programme and the NHG’s Partners’ Club Programme, affiliated GPs can refer patients to the clusters’ hospitals and specialist outpatient clinics directly and more quickly. Both clusters are also trying to promote closer and more formal professional links between GPs and hospital specialists through continuing medical education and shared care programmes.

Exportable healthcare services are also generating some excitement for the private sector healthcare industry in Singapore. On the face of it, the industry shows promise. Countries within a 7-hour flying radius from Singapore are witnessing the rapid emergence of a sizeable affluent middle class, who will demand higher quality healthcare services. It will take time for these countries to develop their own healthcare services, to meet this rising demand. Meanwhile we have a window of opportunity to establish ourselves in this market segment.

We are well-placed to do so. We have a good brand in Asia, based on a reputation of excellence, trust and credibility. We have a good track record, and our facilities are excellent. When we say that blood in hospitals for transfusion is free of Aids and Hepatitis, it is. When we say our injection needles are disposable, they are.

Promoting healthcare services to tap the growing regional market and serve a patient pool much bigger than our domestic population, however, will not be straightforward. There are challenges and fundamental issues which we must address.

Competition, for example, is growing. The attractive regional market for healthcare services has not escaped the attention of players in neighbouring countries. They too have seen the opportunities, and have been actively upgrading their capabilities and growing their market share. An article in Asiaweek last November summed it up aptly:

"Until five years ago, Singapore virtually had the market to itself…luring well-heeled patients from Indonesia, Malaysia and other Southeast Asian countries. But ultramodern facilities in lower-cost Thailand and Malaysia have made major inroads into Singapore’s niche by offering comparative procedures – from life-saving heart bypasses to cosmetic surgery – in comparable comfort at savings of up to 90%…The price cutting has taken a swipe at Singapore’s dominance."

In healthcare services, as in other sectors of our economy, therefore, we need to consciously manage our costs, upgrade our medical capabilities, and move up the value chain to carve out new market niches for ourselves. Players must take a long view of the industry, and set fees which are sustainable over many years, and will not push patients to search for alternatives elsewhere. They must cultivate their clientele, and render them professional advice and service, so that we strengthen our reputation for competence, reliability and trustworthiness.

More importantly, we need to consider the impact that a large private healthcare industry would have on our domestic healthcare market. The economic benefits of becoming a leading medical hub are real. But in pursuing them, we must not inadvertently increase domestic healthcare costs, and put quality healthcare out of the reach of ordinary Singaporeans. This could happen. For example, increased demand for experimental and high-tech medicine may push up healthcare costs. An expanded healthcare market would also mean greater demand for medical manpower, including doctors, nurses and other para-medical professionals. This would raise healthcare manpower costs, unless we can correspondingly increase the supply of medical manpower.

Realistically, healthcare services by themselves are unlikely to grow into a major component of our economy, and replace say the electronics industry. We will also need to promote the growth of other promising services, as well as continue to upgrade the manufacturing sector and move into higher value added, knowledge intensive activities. But we must address the issues related to developing the healthcare industry, and remove impediments wherever feasible, to get the maximum out of this sector.

The Economic Review Committee's Subcommittee on Service Industries, chaired by Mr Khaw Boon Wan, is studying ways to promote healthcare services as a leading growth sector in Singapore, the implications of such a move, and how we can address the various issues of concern. I invite Singaporeans to contribute your views and ideas to this process. In particular, inputs from private sector players in the healthcare industry, with their unique perspective of the market situation on the ground, will be invaluable in helping the ERC to assess the potential of the industry, and find creative ways to maximise it without undermining our other objectives.

I am happy that Dr Loo Choon Yong, Executive Chairman of the Raffles Medical Group, is playing his part, by chairing the Healthcare Services Working Group. He has roped in others from the healthcare industry including Dr Lim Cheok Peng, Managing Director of Parkway Group Healthcare and Professor Tan Ser Kiat and Mr Tan Tee How, CEOs of Singapore Healthcare Services and National Healthcare Group. They are making a concerted effort to explore the possibilities of growing our healthcare industry and propose the direction forward. If the success and growth of the Raffles Medical Group is anything to go by, I am sure the working group, under Choon Yong’s leadership, will come up with refreshing and practical recommendations.

It gives me great pleasure now to declare the Raffles Hospital open.

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