PRUDENCE again underlies the latest tweak to health financing. Higher MediShield premiums Health Minister Khaw Boon Wan announced last week may be untimely when prices of almost everything are rising.

But it is better to act before affordability starts to erode. Patients having to pay only 20 per cent instead of 40 per cent of a $10,000-plus hospital bill are unlikely to quibble over $10 extra a month. Health costs continue to go up.

They rose 6.2 per cent last year, escalating from the 2.4 per cent annual average increase in the previous five. More expensive oil, higher health workers' wages and the 2 per cent GST increase last July contributed to the hike, along with more expensive traditional Chinese medicines. There is no guarantee health-care costs will not continue to hover above the inflation rate projected at between 5 and 6 per cent this year.

To blunt the impact, Mr Khaw has singled out two items for which he would raise MediShield claim limits - daily treatment care and implants such as those in orthopaedic therapy.

The first has become a burden for subsidised B2 and C class patients against which the current $500 claim cap is an inadequate offset. The other takes into account more costly but beneficial procedures requiring advanced technology and prosthetics that could cost as much as $18,000. It seems a fair trade for a premium increase that is within the affordability indicated in public consultations three years ago, when MediShield was last overhauled.

Similarly, extension soon of Medisave coverage to cancer scans and outpatient asthma care will help defray costs that have risen or will rise with the newest medical advances. Obstructive lung disease soon may also join the list, which already includes other chronic illnesses such as hypertension, high cholesterol levels, diabetes and stroke.

As Mr Khaw seeks to keep quality of health care high and costs moderate, however, Singaporeans must also play their part. Some 60 per cent of the 2.8 million MediShield subscribers have enrolled in enhanced coverage for more expensive wards. Soon, with hospital means testing setting a cap on government subsidy according to income levels, those who can afford higher coverage than basic MediShield should take Mr Khaw's advice and increase their protection.

This will leave the Government with more funds to help low-income patients who might need hospitalisation most but can afford it least. Large and small, changes to medical financing are building up to a prudent way to contain costs as expectations rise.