Kwong Wai Shiu – 100 years old but will it survive?

This article was written and published on 6 April 2010, when I was with The Online Citizen. I co-authored it with Leong Sze Hian. On 5 October 2012, the government announced that Kwong Wai Shiu will be conserved. (See here.)

One hundred years ago, in 1910, a group of Cantonese merchants founded the Kwong Wai Shiu Hospital (KWSH) to provide their Cantonese comrades with free medical care. Originally, the hospital only served Cantonese members. In 1974, however, its constitution was amended and it admitted anyone from any ethnic or racial group.

The hospital, located along Serangoon Road and which came about from an agreement between the British colonial authorities and the merchants, was built on a 6 hectare piece of land with a 99-year lease. The British government charged it a nominal annual rental of S$1.

Fast-forward to 2010.

Kwong Wai Shiu Hospital and Nursing Home has 14 buildings within its compound. Its facilities include an In-patient Department (IPD), an Out-patient Department (OPD), a Day Rehabilitation Centre (DRC) and a Traditional Chinese Medicine (TCM) Centre. It also operates a 350-bed nursing home facility which is dedicated to the care and treatment of senior citizens who need daily treatment on a long term basis.

When its 99-year lease expired in February this year, the land was returned to the Singapore government. After discussions with the Ministry of Health (MO) and the Singapore Land Authority (SLA), the hospital was granted a new 5-year lease – till 2015 – and had its rental increased from the nominal S$1 to S$1.4 million.

When The Online Citizen visited the hospital, we found out that the hospital’s licence to operate as a private hospital and clinic was only for a two-year period – from 01 January 2010 to 31 Dec 2011.

It has been reported by the media that the MOH, under the new agreement, “has agreed to substantial increase in subsidies” for the hospital. These subsidies could be up to S$1 million to pay its rental of S$1.4 million and a further S$4.8 million for its annual expenses. These figures are, however, just speculation as the government has not made any such agreement public. Even the hospital’s management doesn’t seem to know exactly how much the government will provide.

Inevitably, such non-disclosure by the government throws up many questions.

As a non-profit community hospital which has been running as a charity since 1910, and which depends on patient fees and donations, why is the hospital’s rent being raised 1.4 million times, from $1 to $1.4 million?

It is puzzling that the SLA would raise its rental to S$1.4million and then for MOH to say it will subsidise the rental by up to S$1 million. Even if that were so, its rental would still rise by $400,000 – in one fell swoop, without any explanation by the SLA or the MOH.

It is even more curious if you consider that last year, and according to the Straits Times, “four of the six community hospitals here raised their charges, some by as much as S$50 a day” and the MOH did nothing to help them with the costs of operating the hospitals.
Why the sudden ostentatious generosity towards KWSH now?

In conjuction with KWSH’s rental being increased, we now know that MOH only gave $170,000 last year to KWSH, which is only about 1.5 per cent of the hospital’s annual expenses.

I find it puzzling that KWSH was able to maintain prices for the last 16 years with just $170,000 from MOH. Now, however, under an agreement with MOH last September, the ministry said it would provide as much as 40 per cent of the hospital’s annual expenses – expected to be some $4.8 million. Even with this infusion from MOH, KWSH now says that it does not rule out the possibility of raising prices next year.

So, previously with just $170,000 (which is just 1.5 per cent of its annual expenses), from MOH, the hospital did not have to raise charges, for 16 years.

Now, even with $4.8 million (which is 40 per cent of its annual expenses) from MOH, the hospital may raise charges?

What gives?

We would like to suggest that the agreement be made public, so that we may try to understand why KWSH may have to increase prices, despite a 28-fold increase in MOH funding.

Will the other community hospitals receive similar substantial increase in funding too?

The MOH said, in response to a Straits Times query, that “funding to community hospitals was on a need basis”. What criteria exactly does the MOH use to determine the amount of funding?

Since the agreement was in September last year, why is it taking so long, as about six months have lapsed already, for KWSH to extract financial and patient records for MOH to determine the size of the subsidy funding, as reported by the Straits Times?

Also, as a result of the agreement, KWSH has begun means testing to decide the level of subsidy that each patient should get.

What this means is that a Singaporean patient whose family income is as little as $1,440 (based on a family of four) may have to pay 25 per cent of the cost, rising gradually to 100 per cent for higher income families up to $5,600, in accordance with MOH’s subsidy scale.
This is a departure from KWSH’s 100 year-old tradition of fulfilling its mission of giving free care to anyone, and serving patients without the stress of having to be means-tested under MOH procedures.

In this connection, at least one Voluntary Welfare Organisation (VWO) had opted out of means-testing in the past, to spare its beneficiaries the stress of the process for the critically ill.

Since KWSH had a operating surplus of $1.4 mllion (which coincidentally is what they have to pay for rental now) for the last financial year, perhaps maintaining the status quo without any increase in rent or funding may turn out to be better from the perspective of patients.

As a charity 50-bed community hospital, 350-bed nursing home, out-patient clinic, day rehabilitation centre and traditional Chinese medicine (TCM) centre, we understand that its charges are probably the lowest in Singapore, and most of its patients are the poor and lower-income.

For example, its TCM general consultation with 1-day prescription at $2 and out-patient doctor consultation (inclusive of standard medication) from $8 to $12, are even lower than what the polyclinics charge.

With a staff strength of more than 250 employees plus volunteers, its annual operating expenses of $11.5 million is arguably the most cost-efficient healthcare facility in Singapore.

To encourage more charity healthcare institutions like Kwong Wai Shiu Hospital, the Government should give it more financial assistance, instead of raising its rent.

After all, as we understand, Singapore’s healthcare spending at less than four per cent of GDP, and public healthcare spending at about two per cent of GDP, is already one of the lowest in the world.

Finally, the future of KWSH is uncertain. The hospital’s board members have expressed hope that it will remain as a hospital and nursing home when its current lease expires in 2015. However, a Singapore Land Authority (SLA) spokesman said that it would depend on the outcome of discussions and consultations with MOH and other government agencies.

How different will the KWSH of the future be, after its agreement with MOH for funding?

Perhaps we will only know when its lease ends in 2015.

“My heart was full of pain,” said Ms Ling Bee Sian, director of operations of KWSH, who signed over the hospital to SLA officials in February. “It’s hard to imagine that this land does not belong to us anymore.”

Will poor and lower-income Singaporeans still be able to have KWSH to go to in five years’ time?

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2 thoughts on “Kwong Wai Shiu – 100 years old but will it survive?

  1. I have been a supporter of KWSH for the past 15 years. Yet I had withdrew my support of the NKF. It is disappointing that while we are trying to support the hospital, the government is trying to increase their costs.

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