Mean Testing in Hospital

Definition of Mean Testing

From Barron's: Principle that holds that Social Insurance programs should be for the benefit of lower socioeconomic segments of society and not for that segment of society that does not require financial assistance.

From Wikipedia: The term means test refers to an investigative process undertaken to determine whether or not an individual or family is eligible to receive certain types of benefits from the government.

The "test" can consist of quantifying the party's income, or assets, or a combination of both.

Current Hospital Susidies

Class A Patients (1-2 Bed) - 0%

Class B1 Patients(4 Beds) - 20%

Class B2 Patients (6 Beds) - 60%

Class C Patients (8-10 Beds) - 80%

There are occasionally very rich and well-off individuals opting to stay in lower wards for heavy subsidies. As a result, the government had subsidises the wrong group of people and the poor are deprived of a bed in hospital due to the higher demand.

After Mean Testing

Patients are expected to be asked more questions with regards to their Personal Income and Housing Type if they are expected to stay in Public hospital for X number of days or more. Patients are then grouped into four bands depending on income, with subsidy levels at 25, 50 and 75 per cent. The well-off get no subsidy.

My Comments

1) Healthcare cost rose 30% in 2006 and expected to go up further. This is a good measure to prevent those who take advantage of the heavy subsidies, especially to the rich who deprived the poor of hospital beds.

2) I believe the above group are relatively small. I don't think there are many rich people prefering to stay in C wards. However, this measure will help prevent an increase of such people.

3) The implementation is expected to be on a limited scale and not too drastic. Hence should not affect the Middle Income people too much in the short term.

4) The people have more than enough time to buy adequate insurance for higher wards such as B1. Whose fault it is for those who don't?