Monday, November 02, 2009

Singapore healthcare

I've been back in Singapore since mid-Oct for a health thing. (If you are interested, I wrote about my trip to a good Cambodian clinic in Siem Reap which led to this trip home).

Singapore has one of the best healthcare systems in the world and it's again in the spotlight at a time when the US is debating healthcare reform.

I was happy with my experience at the Toa Payoh government polyclinic. I took a number and within 20 minutes saw the doctor. I was done just over an hour, including waiting time for the medication. The clinic also called up a hospital for me to see a specialist. For the consultation, I paid - wait for it - SGD8.80 (USD6.30)! The medication, Serratiopeptidase (for inflammation) cost SGD4 for 40 pills. Incredible. I could not believe how cheap it was. The only complaint is that I did feel that the doctor was in a rush and was not interested in going the extra mile to find out what was wrong with me, basically taking me at my word. It all felt very perfunctory. (A friend said "What do you expect? It's conveyor-belt heathcare!")

One possible downside is you don't get to choose the specialist at the hospital if you go through the government-subsidised route, which is what I chose to do. You also have to wait some time for your appointment. In my case it was just over 2 weeks which I thought was fine. But for these small inconveniences, I will pay SGD25 for the consultation with the hospital doctor, compared with SGD83 should I choose to bypass the government system and go directly to the hospital.

A few years ago, in his book "The Undercover Economist", Tim Harford praised the health care policies of Singapore, which have resulted in the lowest infant mortality rate in the world, out of 224 countries: 2.31 deaths per 1000, versus the US's 6.26. Out of interest, Cuba's infant mortality rate is 5.82 and Cambodia's is a whopping 57.79.

(Still, you have to question these figures. Singapore is a small country and the time taken to send a sick baby to the hospital, thereby increasing the chances of his survival, is much shorter than say the US, a geographically large country. A better comparison would be say between Singapore and Manhattan - what is the difference in mortality rate for the two cities?)

Life expectancy at birth in the U.S. is 78 years; in Singapore, it's 82 years. (Cuba's is 77 and Cambodia's 62) Source for all these figures: CIA world factbook 2009 estimates.

This is even though the U.S. has 2.6 physicians per 1,000 people, compared with 1.4 physicians in Singapore. The United States has 9.4 nurses per 1,000 people; Singapore, just 4.2. And while the U.S. spends almost 16 percent of its GDP on health care, Singapore spends a mere 3.7 percent. Figures quoted from Niko Karvounis' excellent essay "Health Care in Singapore: What's the Secret?".

So how does Singapore do it? If you know anything about Singapore, you would know that while the ruling People's Action Party has consistently rejected the notion of being socialist, professing to run Singapore as a free-market economy, it has many socialist policies. Public housing, where 80 per cent of Singaporeans live is one, as are the government-linked companies (GLCs) that account for more than 60% (I think 60% only if GLC is very broadly defined) of the country's GDP (source: You would be hard-pressed to get the ruling party/government to admit to this. There should be a difference between "the ruling party" and "the government" but there isn't in Singapore, a one-party state.

This "state capitalism" has done well for the country, ranked the top 5 richest country in the world GDP (PPP) per capita for 2008. (Another blog post on the culture of business and resulting materialism of the country beckons. I feel like an alien in Singapore having lived in Cambodia for over 3 years now).

Back to Singapore's healthcare system.

In the 1980s, the Singapore government rejected the British-styled National Health Service and instead came up with the “3M” system — Medisave (1984), Medishield (1990) and Medifund (1993).

Medisave is a national health savings account and people contribute to this fund through their CPF (Central Provident Fund) deductions. For every dollar you earn, you and your employer have to contribute a percentage into your CPF account. This forced savings is supposed to form the retirement money for Singaporeans who are able to withdraw the money only after a certain age (55, but the government plans to increase this, to correlate to a higher retirement age). Medisave, a subset of a Singapore's CPF account was supposed to help with healthcare costs.

Medisave proved insufficient. Read Niko Karvounis' above mentioned article "Health Care in Singapore: What's the Secret?". It is the best explanation of Singapore's healthcare system I have read and I highly recommend it.

He notes that according to William Hsiao, a Professor of Economics at the Harvard School of Public Health, Medisave has failed to contain health care costs in Singapore: since Medisave was introduced in 1984, the rate of health care spending per capita increased from 11 percent to 13 percent a year after the program’s introduction.

By 1993, Singapore’s government started Medifund, an endowment fund to help poor patients pay their medical bills. According to Singapore’s Ministry of Health, the Medifund endowment was SGD1.6 billion this year and 98 percent of patients who apply for Medifund aid are approved.

But the real changes made in 1993 represented a paradigm shift: from regulating the demand for healthcare (what patients would pay) to regulating the supply of healthcare (what resources are available). Today, hospitals have to clearly list the costs of their service and there is a price cap on public hospital services, not only for surgeries but for hospitalisation. In 2009, means testing was introduced, which ensures only patients who truly cannot afford to pay qualify for the high hospital bill subsidies (up to 80%).

There is a lot more to the system and for further reading check out Niko Karvounis' essay.

Of course the system is not perfect and it is hard to replicate elsewhere, especially in the US, where people are paranoid about government regulation or intervention, except of course when it suits them.


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