Supply and Demand Governing the Cost of Services
One of my biggest takeaways from Dr. Sean Flynn's lecture was how supply and demand are the ultimate force in determining the price of healthcare in Singapore. Here in the United States, we operate under third party payments for most of our medical needs, running bills services through an insurance or governmental assistance program like Medicaid before paying our portion. In Singapore, the dynamic is flipped with the individual covering the initial costs for a given year, and then once they have reached a threshold their insurance will kick in giving them assistance. The insurance however, doesn't cover the entire cost, leaving 10% up to the individual and their family, so this ensures that patients always will shop around for the lowest prices for drugs or procedures. Open knowledge of prices also allows providers to leverage their position, creating thriving competition over quality and affordability of services. The resulting differences in price of care are astounding. According to Temma Ehrenfeld of Healthline:
"This small island of 5.6 million people spends much less on healthcare than the United States at $4,047 per person. That was slightly less than 5 percent of its gross domestic product (GDP) in 2014.
That compares with $9,403 per person and 17 percent of our GDP in the United States."
This is the result of smart spending, competition among providers, and patients who are given fiscal responsibility, but not to the point in which they are entirely economically burdened.
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The free market forces at work in Singapore allow the healtcare system to operate under principles that apply across every other industry. The ramifications of such policy allow for quality service at a low price.
Individual Responsibility Under Singapore's Model
Singapore's model encourages personal saving. By setting aside portions of citizens paychecks, and allowing them to grow as tax free investments, few Singaporean citizens are found at the inability to afford necessary medical intervention. This mandatory saving would be hard to implement in the U.S. however, as the reallocation of this money would likely be viewed as a infringement on personal freedoms and liberty, but it doesn't mean that individuals here can't take inspiration from it and take action on their own. Many people here do have health savings accounts - somewhere around 26 million citizens (WEX Inc.). Considering our nation is around 330 million people though -- that is less than 10% of people. There needs to be a culture around saving money for personal medical expenses before we would be able to transition to a model like that in Singapore. How we encourage this saving though is a challenge in itself and a topic that is outside of the scope for this reflection.
Even though there is these personal savings for individual medical expenses in Singapore, the government is still an option for those with rare diseases in which the fiscal burden becomes too much to bear. Qualifying individuals receive the same quality of care as anybody else. This mix of private, public, and individual responsibilities over medical expenses provides scaffolding for a successful system in which citizens can live healthy lives and not worry about going bankrupt over health related expenses. The economic freedom in Singapore provides flexibility and transparency of prices, which further reduces the burden on individuals all the while increasing the quality of care and decreasing the overhead costs.
Resources
Americans Have Stockpiled Over $61 Billion in HSAs for Future Medical Expenses. (2019, August 29). WEX Inc. https://www.wexinc.com/insights/blog/health/health-savings-accounts-hsa/americans-have-stockpiled-over-61-billion-in-hsas-for-future-medical-expenses/
Temma Ehrenfeld. (2018, January 24). Lessons the U.S. Can Learn from Singapore’s Health System. Healthline; Healthline Media. https://www.healthline.com/health-news/us-can-learn-from-singapore-health-system