Can you imagine the United States having a health care system that delivers better outcomes than those we get today at a cost that is 75% less? That number is not a misprint or a fantasy; it’s the reality in Singapore, where there is universal coverage. Life expectancy is 85, more than five years better than in the U.S. Decades ago, Singapore seriously lagged the U.S; now, infant mortality is lower and other medical metrics in the city-state are also better than they are here.
Doctors and health-care practitioners are every bit as good in Singapore as they are here, or just about anywhere else in the world. Many get trained in the U.S. or at top-flight schools elsewhere. The nation is always scouring the world for best practices and cutting-edge technologies. That’s right—Singapore’s hospitals and clinics don’t hesitate to buy the latest and the best equipment and devices.
Just look at the prices of medical procedures in Singapore. In the U.S. heart-bypass surgery will set you (and your insurer) back some $130,000. In Singapore? $18,000. A hip replacement costs 72% less and a heart valve 92% less.
Drug prices there are a fraction of ours. Insurance premiums are inexpensive—about $50 for those under 20 years of age and a little more than $1,000 a year for those in their late 80s. Moreover, if you pursue bad habits, such as overeating or smoking, your premiums go up. Unlike in the U.S., individuals pay for the policy, so it’s portable, not tied to their jobs. Therefore, Singapore has a robust individual-insurance market.
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Does Singapore accomplish this by underpaying physicians? Nope. The after-tax incomes (Singapore’s income-tax rates are a fraction of ours) of general practitioners and specialists are about equal. And docs in Singapore aren’t plagued by malpractice costs or countless hours spent filling out insurance forms.
As this year’s election campaign heats up, the issue of health-care costs will come to the fore again. Unfortunately, the issue will be cast as the system we have today versus some version of a European-style single-payer system. Neither model resembles what Singapore does. So what does that country do?
Sean Masaki Flynn’s extraordinarily important—and, so far, largely ignored—book The Cure That Works (Regnery, $28.99) gives the answers in straightforward prose. You’ll be rubbing your eyes in disbelief: Health care can indeed be inexpensive, first-rate and easily accessible to everyone.
The bottom line: Capitalism with safety nets works! Singapore has the most free-market-oriented medical system anywhere.
The U.S., in contrast, has a third-party system—providers, patients and insurers/government. And it’s the third parties that are the drivers here. Hospitals, for instance, know their revenues depend more on how well they negotiate with insurers than on how well they satisfy patients. This leads to the utterly strange situation of prices almost never being posted!
In Singapore the dynamic is a two-party system. The patient is in charge, just as the consumer is in almost every other market. Essentially, all workers pay a chunk of their salary into the equivalent of a health savings account. But they—not the government—own the assets. From that account an employee pays premiums for insurance to cover catastrophically expensive medical conditions as well as routine medical expenses. What isn’t spent remains in the account and grows. Because most people don’t suffer from chronic conditions, the overall value of these accounts increases, and they now equal nearly four and a half years’ worth of the country’s total yearly medical outlays.
Another crucial factor in Singapore’s system: All health care providers, including pharmacies, must post the prices of everything. No hidden $25 charge for a Tylenol pill! Bills are simple so that the customer understands exactly what he or she is being charged for. Hospitals and clinics compete for a patient’s business; thus, they provide good service at low cost. If you want a fancy hospital room, you’ll pay extra; if you want a bare-bones one, where you’re in a space resembling an army barracks with plenty of other patients, you’ll save money. But what’s amazing is that regardless of your choice, the care is the same! There’s no distinction in the quality of care because of income.
Contrast this pricing transparency with what we have in the U.S. Flynn rightly compares our situation with a Third World bazaar, where you haggle with a merchant for an item. It’s hard to make price comparisons with other merchants without spending an inordinate amount of time.
The Singaporean government does supply subsidies for the indigent or if someone suffers some catastrophe, but unlike in the U.S., these are not budget-busters because free-market competition keeps prices eminently reasonable.
Source: Forbes
