Singapore is a very small country compared to the United States, but its ideas about healthcare are much grander than that of the United States. Singapore became independent in 1965, and with 5 million plus people, they have accomplished many things that seemed to elude many big countries such as the United States, and many European countries. Part of Singapore’s accomplishments is its innovative idea of its healthcare system.
In 1982 Singapore began to study new ways to keep healthcare cost down and improve the quality of the delivery system. In 1984 under the leadership of Lee Kuan Yew, Singapore began a system of compulsory savings for medical expenses. At the times many analyst questioned the veracity of the system, but after three decades many people began to wonder whether other countries including the United States should follow Singapore's model.
In Singapore, each able body-working citizen is required to save for health care and retirement income. The percentage of saving is based on the age of the employee. For example, individuals up to age 50 are required to save 36% of their income. The employee contributes 20% of his income toward the saving account and the employer the remaining 16%. Out of this 36% 7 percent is deposited directly to a healthcare account called a Medisave account. Individuals are also automatically enrolled in catastrophic health insurance, although they can opt out if they so choose.
Singapore’s public policy with regards to healthcare is grounded in the philosophy that each person should be responsible for his or her own healthcare, and unlike in this country, each generation should pay its own way; each family and each individual should pay their own way, and until after an individual has gone through these levels will the government help if need be. This model is an alternative to the American welfare state, in which private saving and private insurance do what employers and governments do in other countries. The United States can resolve its budget deficit if it adopts the same philosophy toward public policy.
By way of simplification the questions that Singaporean public policy experts asked are the following: Can individuals be expected to manage their own health care dollars in a responsible manner? Does healthcare work better when insurance companies, employers or the government controls the money? The answer to the first question is a resounding yes and the answer to the second question is no. The proof is in the pudding. After more than three decades, Singapore has shown the world that individual self-insurance works quite well.
The United States should consider the Singaporean model for the following reasons. It provides a different approach to social welfare; incentives to control healthcare spending and a shift of responsibility from the public to the private sector.
Social welfare in most Governments in the developing world works this way: governments made promises of benefits (entitlements in America) to the unproductive sector of society, when the benefits come due, the governments must either default, impose excessive taxes such as the case of France under president Francois Holland, or borrow money to pay which increases the deficit. Singapore’s policy makers have avoided this problem by ensuring each individual pays his own way. This idea is as foreign to American liberalism as freedom was to white southerners during slavery.
The Singaporean model provides incentives for controlling spending. Medisave accounts have reduced overall health care spending in Singapore because the money in the accounts belongs to the account holder and anything not spent in the current period rolls over and is available for future spending. So, compared to taxing people and giving the revenue to insurance companies to pay for first-dollar coverage, healthcare spending in Singapore is definitely lower than it would have been without Medisave. Besides the saving, the greatest accomplishment was the shift of responsibility, power and money from the government to the private sector. Since 1984, the Singaporean government's share of the nation's total health care expenditure dropped from 50% to 20%. When one considers our trillion dollar deficit such a policy would make sense, but in Washington DC common sense is as rare as sea lions walking the sidewalk.
ObamaCare is the antithesis of what works in healthcare. It creates a huge bureaucracy, the sine qua non reason for failure. Governments are often very bad at running huge bureaucracy, and the people who pay the price are those who rely on governments to come through for them. Singapore proves that.
In 1982 Singapore began to study new ways to keep healthcare cost down and improve the quality of the delivery system. In 1984 under the leadership of Lee Kuan Yew, Singapore began a system of compulsory savings for medical expenses. At the times many analyst questioned the veracity of the system, but after three decades many people began to wonder whether other countries including the United States should follow Singapore's model.
In Singapore, each able body-working citizen is required to save for health care and retirement income. The percentage of saving is based on the age of the employee. For example, individuals up to age 50 are required to save 36% of their income. The employee contributes 20% of his income toward the saving account and the employer the remaining 16%. Out of this 36% 7 percent is deposited directly to a healthcare account called a Medisave account. Individuals are also automatically enrolled in catastrophic health insurance, although they can opt out if they so choose.
Singapore’s public policy with regards to healthcare is grounded in the philosophy that each person should be responsible for his or her own healthcare, and unlike in this country, each generation should pay its own way; each family and each individual should pay their own way, and until after an individual has gone through these levels will the government help if need be. This model is an alternative to the American welfare state, in which private saving and private insurance do what employers and governments do in other countries. The United States can resolve its budget deficit if it adopts the same philosophy toward public policy.
By way of simplification the questions that Singaporean public policy experts asked are the following: Can individuals be expected to manage their own health care dollars in a responsible manner? Does healthcare work better when insurance companies, employers or the government controls the money? The answer to the first question is a resounding yes and the answer to the second question is no. The proof is in the pudding. After more than three decades, Singapore has shown the world that individual self-insurance works quite well.
The United States should consider the Singaporean model for the following reasons. It provides a different approach to social welfare; incentives to control healthcare spending and a shift of responsibility from the public to the private sector.
Social welfare in most Governments in the developing world works this way: governments made promises of benefits (entitlements in America) to the unproductive sector of society, when the benefits come due, the governments must either default, impose excessive taxes such as the case of France under president Francois Holland, or borrow money to pay which increases the deficit. Singapore’s policy makers have avoided this problem by ensuring each individual pays his own way. This idea is as foreign to American liberalism as freedom was to white southerners during slavery.
The Singaporean model provides incentives for controlling spending. Medisave accounts have reduced overall health care spending in Singapore because the money in the accounts belongs to the account holder and anything not spent in the current period rolls over and is available for future spending. So, compared to taxing people and giving the revenue to insurance companies to pay for first-dollar coverage, healthcare spending in Singapore is definitely lower than it would have been without Medisave. Besides the saving, the greatest accomplishment was the shift of responsibility, power and money from the government to the private sector. Since 1984, the Singaporean government's share of the nation's total health care expenditure dropped from 50% to 20%. When one considers our trillion dollar deficit such a policy would make sense, but in Washington DC common sense is as rare as sea lions walking the sidewalk.
ObamaCare is the antithesis of what works in healthcare. It creates a huge bureaucracy, the sine qua non reason for failure. Governments are often very bad at running huge bureaucracy, and the people who pay the price are those who rely on governments to come through for them. Singapore proves that.
