Medical Savings Accounts: The Singapore Experience

Studies | Health

No. 203
Monday, April 01, 1996
by Thomas A. Massaro, M.D., Ph.D. and Yu-Ning Wong


Can Medisave Work in the United States?

Singapore has a well-defined health care policy. The state actively manages all aspects of the medical system, from physician supply and education to price setting and service criteria. Such aggressive government intervention in the marketplace, which would probably be unacceptable to most Americans, is at least as important to the success of the Singapore system as is the individual savings mechanism.

Despite the nation's economic success and the government's paternalistic nature, the welfare system is spartan and public assistance is meager. Individuals are expected to provide for themselves and their families, and the population of Singapore generally accepts the role of personal responsibility in areas of social welfare. Without this sense of personal responsibility the Medisave system would work less well.

"If MSAs were available in the United States, prudent buying would begin to chip away at the high cost of care."

Nevertheless, Medisave works in Singapore because the prudent buyer can obtain quality health care at low cost. Currently, even prudent buyers find the U.S. system expensive. Few Americans would be comfortable with only $11,000, to cover health care costs. Yet this amount purchases a good bit of care in Singapore. This fact suggests that, if MSAs were available in the United States, prudent buying would begin to chip away at the high price of care and might reduce it significantly.


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