Sunday, January 13, 2008

Singapore's Health Care System

Bryan Caplan has an interesting post on Singapore's health care system over at EconLog. What is particularly startling is that Singapore only spends 4% GDP compared to 15% GDP in the US and around 11% GDP in France on health care but still obtains similar outcomes (better than the US and similar to the French). Some of the features of the system:
  • "There are mandatory health savings accounts: "Individuals pre-save for medical expenses through mandatory deductions from their paychecks and employer contributions... Only approved categories of medical treatment can be paid for by deducting one's Medisave account, for oneself, grandparents, parents, spouse or children: consultations with private practitioners for minor ailments must be paid from out-of-pocket cash..."
  • "The private healthcare system competes with the public healthcare, which helps contain prices in both directions. Private medical insurance is also available."
  • Private healthcare providers are required to publish price lists to encourage comparison shopping.
  • The government pays for "basic healthcare services... subject to tight expenditure control." Bottom line: The government pays 80% of "basic public healthcare services."
  • Government plays a big role with contagious disease, and adds some paternalism on top: "Preventing diseases such as HIV/AIDS, malaria, and tobacco-related illnesses by ensuring good health conditions takes a high priority."
  • The government provides optional low-cost catatrophic health insurance, plus a safety net "subject to stringent means-testing."
I wonder why Singapore's health care system isn't touted more in the media as an example. We have heard of the wonders of the French, Canadian, British and Cuban systems but this is a vastly different method of health care delivery that is equally successful in terms of outcomes but vastly superior in terms of cost effectiveness. Now, I am sure to some extent a health policy wonk like Ezra Klein would say something to the effect of "Well, Singapore is a small homogeneous nation and it is unlikely to scale", but I would think the same criticism would apply to a lot of the European countries whose systems we are told should be models for reform. Inquiring minds want to know. This tends to reinforce my broader view that health care does not correlate highly with health outcomes and the basic problem with the U.S. health care system is it encourages people to consume too many units of health care and the insulation between consumer and provider encourage excessive costs per unit.

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