HEALTH NEWS

Lessons the U.S. Can Learn from Singapore’s Health System

Written by Temma Ehrenfeld on January 24, 2018

Singapore spends much less per person on healthcare than the United States. Its citizens also pay more out of pocket, but health costs are relatively cheap.

Singapore health system

Singapore might not get high marks for a lot of things, but its health system gets top rankings for efficiency from Bloomberg.

This small island of 5.6 million people spends much less on healthcare than the United States at $4,047 per person. That was slightly less than 5 percent of its gross domestic product (GDP) in 2014.

That compares with $9,403 per person and 17 percent of our GDP in the United States.

How does this Asian nation do that?

Singapore actually requires its citizens to pay for most of their medical costs. However, compared to other rich countries, it keeps prices low.

Singapore also has a strong safety net with universal health coverage.

With all that, Singapore’s model may look like a solution for the United States.

As Craig Garthwaite, PhD, health economist with Northwestern University’s Kellogg School of Management, put it to the New York Times, “Singapore, a scrappy underdog, has become a fan favorite of conservatives.”

There are, however, a number of qualifiers.

Singapore relies on mandatory savings accounts and mandatory insurance. Both are policies not attractive in today’s U.S. Congress.

It also effectively has national price controls and top-down management. The government, in other words, runs a tight ship.

In the mid-1980s, Singapore experimented with deregulation and saw a big increase in costs and public protest.

Today, “the Singapore government intervenes heavily and comprehensively in the health sector,” wrote M Ramesh and Azad Singh Bali, health systems experts at the National University of Singapore.

Has any system — anywhere — shown that market competition and putting patients in charge of their dollar led to efficiency and good care?

Healthline asked Tom Miller, JD, a health policy expert at the American Enterprise Institute. His answer: “Parts of rural China. The United States in the first half of the 20th century. May need to look beyond this galaxy for a parallel universe.”

In other words, not Singapore.

Indeed, Singapore isn’t a free-market miracle, but it does demonstrate the advantages of lower prices.

A mix of public and private

Singapore was once a British colony. Until 1959, it offered medical care free through government hospitals and clinics in a system modeled on the United Kingdom’s National Health Service (NHS).

In 1959, the island became self-governing.

Its political system can be repressive.

People “who are critical of the government or the judiciary, or speak critically about religion and issues of race, frequently face criminal investigations or civil suits, often with crippling damages claims,” Human Rights Watch wrote in a 2017 report.

After independence, the country’s new ruler introduced private insurance and providers.

Heavily-subsidized public hospitals and clinics still offer cheap care, but almost nothing is free.

“Everyone is expected to pay all or part of the costs, including hospital care. Outpatient care, including at the [public] clinics, is funded largely out of pocket,” Ramesh and Bali explained.

In 2013, private spending accounted for 69 percent of total health expenditures. That was significantly more than in the United States, where it came to about 28 percent that same year.

Singapore’s public hospitals, which provide four-fifths of all beds, offer four levels of care. Prices rise sharply if you request a fancier ward.

There are also private hospitals that attract thousands of wealthy medical tourists from Malaysia, Thailand, and Indonesia. However, higher prices soon may be driving them away.

Locals complain that the tourists are taxing over-stretched facilities.

Most Singaporeans see private primary care doctors. Clinics are available that mostly serve lower-income people.

Singapore tightly controls the number of doctors, too: There were 2 doctors for every 1,000 people in 2014, compared to 2.6 per 1,000 in the United States and 4.1 per 1,000 in Germany.

There’s a 24-hour house call medical service available. There are also a number of 24-hour hospitals and clinics as well as ambulance service.

Health outcomes

Singapore, once poor, has become a rich country.

Along with that, it has a high life expectancy at birth (83) and at age 60 (25). A bit better than Americans enjoy (79 and 23).

As in much of Asia, Singapore is aging rapidly, so it will need to shift its focus.

“The government has, understandably, focused on hospital care. Going forward it will need to pay more attention to long-term care and primary care,” Ramesh told Healthline.

Although widely thought to provide good care for the price, the island doesn’t report data on as many health measures as other advanced countries.

For example, the latest figures on the prevalence of hypertension and diabetes on the health ministry’s website overview hasn’t been updated since 2010.

Officials are probably playing it safe for personal career reasons, Ramesh told Healthline, not because they’re hiding something dire in the data.

Ashish Jha, a physician and the director of the Harvard Global Health Institute, noted: “The lack of data in Singapore is a problem, and it had higher rates of unnecessary hospitalizations and far higher heart attack and stroke mortality rates than the United States.”

Mandatory savings and insurance

The system includes three levels of protection.

Both a savings account and catastrophic insurance are required. There are also public back-up funds.

Workers must contribute a large percentage of their wages to their personal Medisave account. They also get matching funds from employers.

The money is tax-exempt. It can only be used for hospitals and certain other medical costs, as well as health insurance for the worker and family members.

Singaporeans are automatically enrolled in Medishield, a low-cost insurance program for major or prolonged illnesses that their Medisave balance won’t cover.

Medishield has a deductible and copayments along with government-defined benefits. The closest match in the United States is the Affordable Care Act plans.

There are also other private insurance plans and some employer coverage.

The safety net

If you can’t cover your costs through Medisave and Medishield, the government steps in to cover doctors’ bills for chronic or acute conditions and some dental work.

There are special funds to cover needy children and prenatal care.

Home hospice services are free and there are subsidized options for home nursing and long-term care for seniors. Family caregivers may get payments.

If you can’t afford the cost, you may get subsidized care in a private nursing home. In the United States, you might be covered by Medicaid.

How Singapore controls costs

Singapore’s health system is tightly managed.

The government sets limits on bills paid under Medisave or Medishield, as well as the number and kind of services you can receive.

For example, advanced diagnostic tests require a wait if you expect to pay for it through Medisave or Medishield.

You can go to specialists, but you won’t get a subsidized price without a referral.

There are ceilings on how much any one provider can get from someone’s Medisave account, too.

The health ministry “is known to closely monitor billing practices of hospitals and raises alarms when it observes anomalies or suspected excessive treatment,” wrote Ramesh and Bali.

Private doctors who overcharge can be publically scolded.

A government agency buys all drugs, medical supplies, equipment, and information technology, keeping the costs low.

In the United States, by comparison, the Veterans Administration and state Medicaid programs buy drugs at lower cost than other insurances, including Medicare.

To promote competition, the Singapore health ministry publishes the costs of procedures at every hospital.

Singaporeans can visit one website, see prices, and use online calculators to judge how much of the bill their insurance and savings account will cover.

Looking abroad

Most people agree that the U.S. health system needs reform. Looking abroad for lessons, nobody’s perfect.

In Great Britain, citizens are at risk if its NHS is underfunded. The system is facing cuts and some worry that a big epidemic could bring the system to its knees.

Taiwan also has a National Health Insurance program that was underfunded until 2013, when the government put in new taxes. Taiwan has saved money with top notch information technology.

Chile established a British-style NHS in the 1950s, privatized it in the 1980s under the military dictator Augusto Pinochet, and then put in reforms in the early 2000s. High-income people are generally treated privately and poor people in the public system. But people have become increasingly dissatisfied and a high-profile commission recommended returning to a single-payer system — but this time closer to the Canadian model with private providers.

In the New York Times 2017 competition, “The Best Health Care System in the World: Which One Would You Pick?” the paper asked five healthcare experts to vote whether the United States or Singapore had the best healthcare system.

Only one picked Singapore and only because the United States was worse. Two complained about Singapore’s savings accounts and the other two about the lack of data.

The overall winners? Germany and Switzerland.

So, what’s the biggest lesson Americans can learn from Singapore?

Don’t just focus on expanding insurance coverage, Ramesh said.

Americans need to change a system of “costly and unnecessary provision of healthcare,” he said.

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