November has been a testy month for the healthcare community. Firstly, there is this unsavoury (depending on your position, it could also be ‘savoury’) revelation that the National Kinky Foundation (NKF) has removed its male CEO due to some personal indiscretion with a male employee. You can bet your kidneys that subtle warning signs have been there for some time. But as usual in our compliant culture, no one speaks up till it’s too late…. And then there is a lot of cleaning up to do by then.
Next on the list is this revelation that the SMC is still deliberating about how to implement or operationalise certain parts of its new Ethical Code and Ethical Guidelines (ECEG). In an article in The Straits Times on 18 November 2016, it was reported that the SMC “are deliberating this matter at present and will be providing clarifications to the doctors in due course” when it was asked if doctors can continue to pay Third Party Administrators (TPAs) a percentage of their fees.
There are a few things one must note about the new ECEG. Firstly, the new ECEG which will come into force on 1 Jan 17 is a document that is to be fully implemented. It is not just an aspirational document merely stating niceties and lofty ideals. Every sentence therein will be used by SMC or patients’ lawyers to secure a conviction when the occasion arises. There is nothing wrong with that, because that’s what lawyers are trained and supposed to do in real life.
So every word in the ECEG needs to be carefully thought through. What are its exact legal implications? The sentence in the new ECEG on TPA fees, “Such fees must not be based primarily on the services you provide or the fees you collect and you must not pay fees that are so high as to constitute ‘fee splitting’ or ‘fee sharing’” has opened up the question of what exactly is “primarily”? It’s a good question and it needs to be answered clearly.
Unfortunately, no one knows the answer because SMC is still deliberating. It’s unfortunate. It’s embarrassing even. One should not issue a new ECEG and be still deliberating what a key paragraph or word therein actually means in real life.
It would have been far better if someone had the gumption to ban percentage-based fees entirely. No “primarily”, “secondarily” or “tertiarily” woozy, iffy stuff. Draw the line in the sand. Instead, now everyone is tied in knots awaiting the outcome of the deliberations. There is no guarantee that the outcome of the deliberations will be clear, useful and simple guidance or clarification. It may be “primarily means primarily, not “pre-“ or “post-primarily”. By which time, doctors and TPA administrators may have slit their carotids in frustration. Some wordsmiths communicate, others obfuscate.
This is like what one of my old consultants used to say – “half-pregnant” situations – there is no such thing as half-pregnant, you are either pregnant or not.
Secondly, there is this tea-room talk that some parts of the ECEG will be applied with a light touch, specifically the bits on TPA fees. This hobbit does not find this argument convincing.
Old laws and guidelines may be applied with a light touch because they have become a bit out of date and current situations and context have evolved. The old laws and guidelines need revision in due course but perhaps not immediately. Or they may be removed for good eventually. But these considerations do not apply to new laws and guidelines. New laws and guidelines are new precisely because they have been drafted and implemented to address new situations. While one may delay the implementation of these new laws so that people are given more time to be aware, this delay is at best temporary. Likewise, a light touch may be applied initially because awareness is lacking, but again this is only for a short time. A light touch cannot be maintained indefinitely for new laws and guidelines. The intent must be to enforce new laws and guidelines fully. If not, then why should they be promulgated in the first place?
Since we are on the subject of TPAs, we now go on to the attempted IPO (Initial Public Offer) of a Managed Care Company and TPA – Fullerton Health. Many of us in the medical profession are familiar with this company. Apparently they had wanted to IPO the company with a valuation of about $1.1Billion. That’s in Singapore Dollars, in case anyone is wondering.
According to another The Straits Times article published on 21 Nov 2016, Fullerton Health has “called off plans for a share market listing following the long delay generated in part by anonymous complaints about the medical firm’s business model”.
Apparently, there were many queries and poison pen letters and “The complaints centred largely on how the firm takes a 15 per cent cut of doctors’ fees under its managed care services”. According to the Group CFO, the complaints were “surprisingly repetitive”
It was reported in The Straits Times article that the IPO was called off as the company had wanted to have the company shares traded on the Singapore stock exchange before the American Presidential Election.
It is highly unusual for any IPO to be called off because of poison pen letters and complaints. According to a Business Times article published on 24 November 2016, only five IPOs have been sunk by poison pen letters since our stock exchange adopted a public scrutiny process as part of its IPO framework 14 years ago. So it is a rare occurrence.
This Hobbit hopes that Fullerton will attempt to IPO again on the Singapore stock exchange. Our languid stock exchange will benefit from a big IPO; and healthcare companies are often investor’s favourites. Still, it would be interesting to note whether Fullerton’s business model will remain the same (charging a percentage) or change as a result of the SMC’s new ECEG. Many doctors and investors should read the new or updated prospectus with great interest when an IPO is attempted again.
Meanwhile, there are poison letters that have no merit, and there are those that have. This Hobbit does not think that completely unfounded claims will be taken seriously by the stock exchange or regulatory bodies. It is really up to healthcare companies who wish to IPO in Singapore to really examine if their practices stand up to not just business standards but also the healthcare industry’s ethical considerations and requirements as well.
Finally, as we are nearing the end of another year, we should be in a more charitable and philosophical mood – the quote for the day comes from a senior lawyer who was quoted in the aforesaid Business Times article, “The practical side of things is, try to make peace and don’t make enemies.”