NCPA - National Center for Policy Analysis

SINGAPORE A LESSON IN WAITING

December 5, 2008

The United States spends about 16 percent of its gross domestic product (GDP) on health care.  That's a three-fold increase since 1960, says Byron Schlomach, director of economic policy with the Goldwater Institute.

Many suggest that the United States should emulate Europe and Canada, which spend an estimated 7 percent to 10 percent of GDP on health care.  On the cost side, that sounds pretty good at first blush, but they don't innovate much, and Pittsburgh has more MRI machines than all of Canada, says Schlomach.

A better model, suggests Schlomach, is Singapore:

  • This city-state, by any common measure, has a healthier population than most, but Singapore spends less than 4 percent of its GDP on health care.
  • Singapore only lightly regulates private health care providers, requiring them to post prices so consumers can shop around.
  • Singapore provides a safety net for basic health care for the indigent, and it requires citizens to be financially responsible for their care through mandatory deductions for health savings accounts.
  • Singapore's government promises to pay 80 percent of basic health costs and provides a state catastrophic insurance plan that competes with private plans.
  • Even so, government pays only 25 percent of the total health bill. U.S. governments pay almost 50 percent.

Like Singapore, the United States needs to do more to encourage Health Savings Accounts, reduce dependence on employer-provided health plans, and reduce government-provided health care benefits to the barest essentials.  Singapore is a lesson in waiting, says Schlomach.

Source: Byron Schlomach, "Singapore a lesson in waiting," Goldwater Institute, December 4, 2008.

 

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