Flouncing to Singapore

From Wikipedia: Universal health care is implemented in all but one of the wealthy, industrialized countries, with the exception being the United States. It is also provided in many developing countries and is the trend worldwide.

John Stossel, writing at Independence Institute, states that the World Health Organization’s (WHO) ranking of the USA as 37^th in the world in health care is misleading. He said that ” The WHO judged countries not on the absolute quality of health care, but on how “fairly” health care of any quality is “distributed.” I respond by stipulating that Mr. Stossel is indeed correct. Anyone who can afford it can get top quality health care in the USA. The issue, John, is fair distribution. Whatever the solution to revamping our beleaguered health care system is, it will involve fairly distributing access to basic health care for all of us. The issue then, is the classic have’s vs. have not’s.

An ideal solution, one that would be acceptable to both the left and the right, would be one in which personal responsibility plays a role, while assuring access to all. That sounds nearly impossible until you consider that such a solution has been working in Singapore for over 20 years.

The Government in Singapore knew that they needed to revise their health care system so they did what many of us would do. They studied health care systems around the world and learned what was working and what was not. Then they implemented a system that put together the best elements from the various systems that they studied. Seems kinda logical, doesn’t it?

The aim was to give maximum responsibility and choice to patients, requiring them to spend their own money rather than that of government or insurers. At the same time, they needed to ensure that nobody faced catastrophic medical bills and that even the poor had enough money to buy medical care.

The solution was to require all citizens to maintain a savings account that can be used only for medical expenses. Achieving this savings was no problem, they simply reduced each person’s tax bill by $1,500 a year. This is roughly the cost, in taxes, of both the UK and the US public health systems. For people that pay less than $1,500 in a tax year, the government would contribute money to make up the shortfall. Since the system is compulsory, no adverse selection takes place, such as you and I face when we apply for insurance with private insurance companies.

The government then created cheap catastrophe insurance, which pays out only when a particular course of treatment is very expensive. You spend your money, from your compulsory savings account for your health care. You make your own decision about that health care, rather than having an insurance company or government agency make those decisions for you.

Your health-care savings would automatically go into a high interest bank account that would build up gradually throughout your life. For most people, medical bills are low in their younger years, so you could expect to have thirty thousand dollars in your account when you turn forty; more, if you’ve managed to keep your spending low and watched the money earn interest.

Thirty thousand dollars buys a lot of medical care, unless of course, you required a single, expensive procedure. In that case, the catastrophe insurance would restrict your expenses.

If you reach retirement age with money still in your medical savings account beyond some minimum, you can put the excess toward your pension. When you die, you can pass the savings along to your heirs. If you have a relative with ongoing medical problems, you can donate part of your savings to them.

At every point in your life you have an incentive to spend money only on health care that you feel is absolutely necessary. If you felt that the right treatment for you was a bit of preventative maintenance, that that would be your choice.

Clearly, with some imagination we can step back from out current failed system and think about how to fix it. The system I’ve just sketched out has been successful in Singapore for two decades. The typical Singaporean lives to the age of eighty and the cost of the system (both the public an private portions) is about a thousand dollars per person. That is less that just the cost of the bureaucracy alone in the United States.

Annually, the typical Singaporean pays about seven hundred dollars privately, compared to twenty-five hundred dollars for Americans. The government spends about three hundred dollars per person (mostly for the catastrophe insurance). This is about five times less than the British government and seven times less than the American government.

The debate in America seems to be stuck on a choice between government or market. As was mentioned in part one, both have their limitations. Fairness is not a function of the market, any market. The Singaporean solution recognizes the shortfalls of each. Their answer lies in a combination of the two working together to put the consumer in ultimate control of their own healthcare.

Singapore is ranked 7^th by WHO. Yes, John, it’s very likely that distribution was a huge factor in that ranking. Do I care that the Mayo Clinic may be the best in the world if I don’t have access to it? No, I don’t. I doubt that you do either.