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The Singapore health system achieving positive health outcomes with low expenditure
Watson Wyatt ^ | 2009 | John Tucci

Posted on 03/23/2012 12:19:22 AM PDT by Cronos

The Singapore health system – achieving positive health outcomes with low expenditure

John Tucci explores the current set-up.

In the 39 years since achieving independence, Singapore has developed into

one of the wealthiest countries in Asia Pacific with annual GDP (on a per capita

basis) being amongst the highest in the region. This is an impressive accomplishment

for such a small country with very limited natural resources other than its

people.

What is equally impressive, although less well known, is that Singapore is

generally acknowledged as having one of the most successful healthcare systems

in the world, in terms of both efficiency in financing and the results achieved

in community health outcomes. This is quite an achievement compared to most

other developed countries.

Figure 1 compares the total annual health expenditure (as a percentage of

GDP in 2001) and ‘healthy’ life expectancy (averaged for males and females

as at 2002) for a number of developed countries. The measure of ‘healthy’ life

expectancy has been proposed by the World Health Organization as a measure

of the expected number of years to be lived without reduced functioning due

to illness or disability. As can be seen, the annual health expenditure for

Singapore is less than half that of many developed countries even though its

citizens enjoy comparable ‘healthy’ life expectancy (although this is at the

lower end in the comparison).

Figure 1

Source: World Health Organization

Life expectancy is not the only indicator of the quality of healthcare. Singapore

also performs well in relation to other indicators, including low infant mortality

rates and acceptable waiting times for most forms of healthcare treatment (particularly

in public health care facilities).

So how does Singapore achieve such impressive results?

The key to Singapore’s efficient health care system is the emphasis on the

individual to assume responsibility towards their own health and, importantly,

their own health expenditure. The result is a system that is predominantly

funded by private rather than public expenditure. For example, in 2002, private

health expenditure in Singapore (that is, financed by individuals or employers

on behalf of individuals) amounted to almost 67 per cent of total health expenditure

with the remaining 33 per cent financed by the Government from tax revenue.

As shown in Figure 2, this is not the norm for most developed countries (the

US aside), where health financing is predominantly from public expenditure.

Figure 2

Source: World Health Organization

Singapore’s low public health expenditure is also reflected in the low individual

tax rate environment that exists there (2 per cent to 28 per cent for individuals

and 26 per cent for companies) compared to the other countries which need to

draw higher taxation revenue to fund their public health expenditure.

Overview of the Singapore health system

The Singapore health system is based on a combination of government subsidies

(through taxation) and individual responsibility. In order to assist individuals

in meeting their component of personal medical expenses, the Government has

established the ‘3M’ framework of Medisave, Medishield and Medifund that

combine individual responsibility and is overlaid with government funding,

particularly to provide a safety net to support the health needs of low income

earners and poorer individuals.

Public financing of healthcare

Taxation subsidies

The Government subsidises healthcare through taxation revenue,

providing funds for public hospitals and health promotion. As discussed

earlier, this amounts to approximately one third of Singapore’s total annual

health expenditure.

Medifund

Medifund is an endowment fund set up by the Singapore Government to

assist those in financial hardship in funding their medical needs. The scheme

is intended as a safety net for those who cannot afford the subsidised charges

for hospital or specialist out-patient treatment, after allowing for any

Medisave or Medishield funds. Qualification for Medifund provision is means

tested, based on an individual’s financial circumstances at the time of application.

Private financing of health care

Medisave

Medisave is a compulsory medical savings scheme with funds available to meet

a portion of future personal or immediate family’s hospitalisation, day surgery

and certain outpatient expenses.

Medisave is a subset of the mandatory Government pension scheme (the Central

Provident Fund or CPF) to which a total of 33 per cent of wages is contributed

(comprising 13 per cent employer contributions and 20 per cent employee contributions)

to individual accounts to fund retirement and health related expenditure. Of

the 33 per cent contribution, around 6 per cent to 8 per cent (depending on

age) is credited to the employee’s Medisave account. In practice, Medisave

covers approximately 85 per cent of Singapore’s population.

Medishield

Medishield is effectively a national insurance scheme for catastrophic illness

that is intended to cover a significant component of medical expenses from

major or prolonged illnesses that are not covered by Medisave. Medishield

operates under a scheduled reimbursement system based on days of hospitalisation

and type of surgical treatment, offset by individuals sharing costs by way

of co-payments and deductibles.

The Government has, in recent years, allowed the private insurance market

to offer similar Medishield-type policies so individuals now have a choice

of choosing between Medishield or a private alternative. Premiums for Medishield

(or private insurance alternatives) can be paid from an individual’s Medisave

account.

Eldershield

The Government has also recently introduced Eldershield, an extension to

the ‘3M’ system.

Eldershield is a private insurance scheme designed to help fund future medical

expenses incurred in the event of severe disability, particularly at advanced

ages.

Private health insurance

In addition to individuals self-financing through Medisave, Medishield

and Eldershield, a significant portion of workers (and their dependents) are

covered by private health insurance. Private health insurance, which is often

funded by employers on behalf of employees, covers a diverse range of medical

expenses that are not typically reimbursed under the 3M system.

Direct payments

Invariably, individuals will still need to pay for part of their medical expenses

directly, even after receiving reimbursements from Medisave, Medishield or

private health insurance. These amounts generally relate to deductibles,

co-payments (under Medisave or Medishield) or for over the counter prescription

drugs not covered by private health insurance.

What can be learned from the Singapore health care system?

The key to Singapore’s efficient health care system is in its emphasis on

the individual to make a significant contribution towards their own healthcare

costs. With this focus, the Government has been able to maintain a relatively

low level of public expenditure on health for many years with the major burden

put on individuals and/or their employers.

The use of compulsory savings (that is, the Medisave account) has been very

successful as the main source of private funding for hospital expenses.

Another key focus of the Government has been to ensure that overall health

expenditure does not fall victim to the significant inflationary pressures

that have been evident throughout the world. This has been achieved by actively

regulating the supply and prices of healthcare services in the country.

Although the Singapore health system has been very successful, it is a very

difficult system to replicate in many other countries for several reasons:

Nonetheless, the Singapore health system is one that is certainly worth studying

by those countries who continue to be challenged by common healthcare issues

such as:

Sources:

World Health Organization website (www.who.int)

Singapore Ministry of Health website (www.moh.gov.sg)



TOPICS: Government; Miscellaneous
KEYWORDS: health; healthcare; obamacare; singapore
An interesting research paper for those who want to see how we can better implement healthcare across a nation
1 posted on 03/23/2012 12:19:30 AM PDT by Cronos
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To: Cronos
One problem is it is very difficult to make these types of comparisons because statistics are generated differently for each country and the populations are very different.

I'd guess drug abuse there for example is far lower than other western countries - do drugs there and lose you life promptly - no slow death through the health care system costing lots of money...

I'd also guess Singapore has a very stable homogeneous population as in practically zero immigration.

Another detail rarely mentioned is much of the medical technology used in other countries is developed in the United States where American citizens pay for that development and other countries get the benefit without the heavy front end investment/cost.

2 posted on 03/23/2012 1:46:39 AM PDT by DB
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To: Cronos

For those who think that this would work in America, there are a couple of things that they should notice.

1.) Fly to Singapore. Look at the people. Find a fat person, just one... THERE AREN’T ANY!
2.) You cannot even smoke outside, cigarettes are HEAVILY taxed and each package has disgusting pictures on it.
3.) Alcohol is heavily taxed to discourage its use.
4.) Public transport is safe, fast and better than driving, and the entire country is covered by the MRT (Subway system).
5.) Since Singapore is small and crowded, automobiles are heavily taxed to discourage their use, hence fewer accidents.


3 posted on 03/23/2012 1:47:03 AM PDT by Bon mots ("When seconds count, the police are just minutes away...")
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To: Bon mots

I will add this....the reason why medical costs in Denmark and the Scandinavian countries have been kept in check...are the same reasons.

Once you toss in unhealthy diets, ease of smoking, aggressive drinking habits, assaults and violence, teenage drivers, and 75mph speed limits...the variable for increased costs goes up. I’m shocked at how the media refuses to ever discuss this matter. If you took every rule set up in Singapore, and applied it to America....no family in the nation would have to pay more than $2k for yearly healthcare. In fact, most hospitals in America would be empty and lacking patients. This ought to make folks think.


4 posted on 03/23/2012 2:48:21 AM PDT by pepsionice
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To: pepsionice

Singapore also has a fast, cheap, effecient means of dealing with young offenders - they get caned, then released.

No long imprisonment in an expensive system which acts as a graduate school for learning crime.


5 posted on 03/23/2012 4:10:31 AM PDT by BlackVeil
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To: Cronos

The NWO elite crowd has yet to get their communist tentacles into Singapore!!!!


6 posted on 03/23/2012 4:23:17 AM PDT by mo (If you understand, no explanation is needed. If you don't understand, no explanation is possible.)
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To: DB
I'd also guess Singapore has a very stable homogeneous population as in practically zero immigration.

Nope. Singapore has a diverse, though largely Asian, population, with considerable immigration (also Asian), although they try to control it.

7 posted on 03/23/2012 4:45:52 AM PDT by Tax-chick (Does your life need some excitement? Become a Cub Scout leader!)
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To: Bon mots

Hilarious. How much of what you posted would the rugged individualists of the USA put up with? The answer is none.

Let’s face it, we want it all, but we don’t want to pay for it, nor sacrifice in any manner.


8 posted on 03/23/2012 4:48:01 AM PDT by Wolfie
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To: Cronos
You don't want to model a health system from a country that actually canes criminals in public do you??
9 posted on 03/23/2012 4:52:15 AM PDT by wetgundog (" Extremism in the Defense of Liberty is no Vice")
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To: wetgundog

oops /sarc.


10 posted on 03/23/2012 4:53:37 AM PDT by wetgundog (" Extremism in the Defense of Liberty is no Vice")
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To: BlackVeil

——Singapore also has a fast, cheap, effecient means of dealing with young offenders - they get caned, then released.
No long imprisonment in an expensive system which acts as a graduate school for learning crime.——

Bump.

Ironically, while we see caning as “cruel and unusual,” is actually far more merciful than our existing penal system, for the reason you give.


11 posted on 03/23/2012 5:01:03 AM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: Cronos

-—Another key focus of the Government has been to ensure that overall health expenditure does not fall victim to the significant inflationary pressures that have been evident throughout the world.

This has been achieved by actively regulating the supply and prices of healthcare services in the country.-—

IOW, rationing.

Otherwise, the program seems fairly reasonable, although a long way from a free market.

The most difficult question regarding healthcare, now and in the future, is, What can be done for the uninsurable and the elderly? —cases of “market failure.”

In a low-tax, free market society, churches, family, and charity could fill the void. But we’re not there, so what is the best program that can be implemented now?


12 posted on 03/23/2012 5:16:02 AM PDT by St_Thomas_Aquinas (Viva Christo Rey!)
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To: wetgundog
caning criminals in public -- that's not too bad in my book :)

beheading IS bad, but caning is more public shame than anything

13 posted on 03/23/2012 6:58:46 AM PDT by Cronos (Party like it's 12 20, 2012)
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