A Health Care System to Emulate
I spent several months this year attempting to move to the Republic of Singapore. I believe the island-nation has an exceptionally bright future. If the world didn’t already have the definitive case study for the transformational benefits of capitalism and free markets in the United States, the city-state of Singapore would make an equally compelling case. Today it boasts the world's fifth highest per-capita GDP.
Last week there was a fascinating article on Singapore’s health care system in the WSJ. I had no idea that this nascent country had done such an extraordinary job of mastering this “problem”, but it comes as no surprise given their embrace of economic reality.
According to the WSJ Singapore has the equivalent of universal health coverage, world-class quality and attractive prices. This miracle derives from a lack of Government interference in the system. Instead of regulation, price fixing, and perpetual new layers of oversight, Singapore relies on actual competition and free choice by consumers.
The system provides a glimpse into the fundamental reform necessary to fix our broken health care system. Removing arbitrary Government distortions and restoring individual responsibility, which has been lacking since World War II, would eliminate the cause of unsustainable price inflation.
Singaporeans have to pay for a portion of their care and choose what they consume. They have medical savings accounts that they use for out-of-pocket expenses. These funds are the property of the account holder. What is not spent remains the property of the owner. It is not hard to understand why costs are contained.
The Singapore solution is remarkably similar to common sense reform I advocated in “A Tragic Mistake of History”.
Singapore spends 4% of its GDP on health care compared to 17% of GDP in the United States. Yet Singapore produces superior outcomes based on life expectancy and infant mortality. It is truly remarkable how effective free markets are at producing efficient outcomes. US efforts to engineer a better system through Government interference and legislative mandates effectively wastes 13% of GDP and produces a worse outcome.
It is an abomination that the same political philosophers who created this monumental waste and inefficiency now advocate a command economy “solution” to the health care cost problem which would further exacerbate out of control costs and produce inferior results.
Last week there was a fascinating article on Singapore’s health care system in the WSJ. I had no idea that this nascent country had done such an extraordinary job of mastering this “problem”, but it comes as no surprise given their embrace of economic reality.
According to the WSJ Singapore has the equivalent of universal health coverage, world-class quality and attractive prices. This miracle derives from a lack of Government interference in the system. Instead of regulation, price fixing, and perpetual new layers of oversight, Singapore relies on actual competition and free choice by consumers.
The system provides a glimpse into the fundamental reform necessary to fix our broken health care system. Removing arbitrary Government distortions and restoring individual responsibility, which has been lacking since World War II, would eliminate the cause of unsustainable price inflation.
Singaporeans have to pay for a portion of their care and choose what they consume. They have medical savings accounts that they use for out-of-pocket expenses. These funds are the property of the account holder. What is not spent remains the property of the owner. It is not hard to understand why costs are contained.
The Singapore solution is remarkably similar to common sense reform I advocated in “A Tragic Mistake of History”.
Singapore spends 4% of its GDP on health care compared to 17% of GDP in the United States. Yet Singapore produces superior outcomes based on life expectancy and infant mortality. It is truly remarkable how effective free markets are at producing efficient outcomes. US efforts to engineer a better system through Government interference and legislative mandates effectively wastes 13% of GDP and produces a worse outcome.
It is an abomination that the same political philosophers who created this monumental waste and inefficiency now advocate a command economy “solution” to the health care cost problem which would further exacerbate out of control costs and produce inferior results.
Posted by Whitney Ross at 10/28/2009 8:52 PM 
Categories: Government Action is Counter Productive, Policy Suggestions
Categories: Government Action is Counter Productive, Policy Suggestions
While the 4% figure is interesting, if a country wants to spend 5%, 10%, or even 20% on healthcare that is OK with me as long as private individuals back that choice based on their own ability to spend or their insurance policy. Where the national healthcare issue breaks down is when one group of people want another group of people to 100% cover THEIR healthcare costs so that they can keep grandma alive for two more weeks. Even choices like that require costs and the people that make this choice should be made to take on at least some of the financial hardship of the decision. When they can offload the cost to government plans at no cost to their own, there is no incentive to lead a healthy lifestyle. By the way I will be in Singapore in 3 days looking forward to seeing what it is like.
Reply to this