This article originally appeared in The American Spectator.
Singapore spends less on health care than any other First World nation. Its inhabitants also rank as one of the healthiest peoples on the planet. Go figure.
With polls showing just 12 percent of Americans supporting one of Senate Majority Leader Mitch McConnell’s repeal-and-replace measures and even fewer wanting to keep Obamacare intact without reform, Washington’s solutions to our health-care woes appear pretty woeful to the American people.
What’s the harm with looking halfway around the world for help?
William Haseltine did just that in a book written in 2013 for the Brookings Institution. In Affordable Excellence: The Singapore Healthcare Story, he found a system that combines elements of the free-market system and of government management sure to alienate ideologues of all persuasions. He also persuades that what he studied works — at least a lot better than what we have.
How do they cover everybody but incur so little in costs?
Singapore makes everybody contribute to their health-care expenses. In the United States, where third parties — government welfare programs or private insurance — often pay the full bills of patients, patients often run up excessive tabs. Singapore provides a check against such behavior by mandating that the people receiving the care share in the costs. The government also requires transparency by mandating that providers promulgate the price for services.
The personal funds used to pay for individual healthcare come out of the Central Provident Fund, a system not unlike Social Security set up to ensure a cushion for retirement. Singapore eventually expanded this program of mandated savings to healthcare. “The Central Provident Fund’s contribution to the viability of the healthcare system cannot be overstated,” Haseltine writes, “it helps control costs by instilling in patients a sense of responsibility about their spending — after all, it is their money to save or spend; and it helps make care available and affordable to all.”
The government sets the percentages, which fluctuate in times of prosperity and recession, that employers and employees must contribute. The accounts earn a return on investment. Account holders can share money in their MediSave accounts with sick relatives and remain free to buy insurance atop the compulsory medical-savings account. While elements of the program resemble Medicaid and Medicare, it looks overall more like Social Security, perhaps the most popular government enterprise in America beyond those outlined by the Founders.
The compulsory accounts may not strike conservatives as ideal and the everybody-pays requirement might appear less than perfect to liberals. But results — radically reducing costs and providing universal coverage — achieves what both groups regard as the salient goal. Beyond this, health outcomes — the main goal of any system — rank as top notch.
“Today Singapore ranks sixth in the world in healthcare outcomes well ahead of many developed countries, including the United States,” explains Haseltine. “The results are all the more significant as Singapore spends less on healthcare than any other high-income country, both as measured by fraction of the Gross Domestic Product spent on health and by costs per person. Singapore achieves these results at less than one-fourth the cost of healthcare in the United States and about half that of Western European countries.”
Not every aspect of Singapore’s plan appears ready for export to the United States, such as strict limitations on the number of doctors, and radical differences exist between Singapore and the U.S. Singapore crams populations roughly equivalent to Los Angeles and San Diego into an area roughly the size of Washington, D.C. Singaporeans appear a few years younger and many pounds slimmer than the average American. The population, despite a high-percentage of non-resident inhabitants, remains relatively homogenous compared to the United States.
So, not everything that works there will work here. But key tenets of the program, such as a sustainable universal healthcare plan requiring universal support from beneficiaries, strikes as more cross-cultural commonsense than an idea strictly rooted in Singapore’s soil.
Americans could do a lot worse — namely, Obamacare.