The high cost of healthcare in countries such as Australia and America has many politicians twitching. In Australia, government expenditure into health care teeters at around 9%; in America, it's just above a whopping 15%. And yet Singapore only spends about 4% and has a level of healthcare services and health in general equal to Australia and America. What gives? What could the Singapore health system have that could teach others and in doing so, help save a lot of money?
One of the big problems with the healthcare system in America and Australia is that while it's a great way to stay well, it's also growing more expensive and that means a greater burden on those who need it the most-the rapidly growing, aging population. Universal healthcare may simply become unaffordable over time and plenty of people are going to fall through the cracks.
Why are costs high? No competition! Doctors and hospitals are either overloaded with patients or they are discouraged from competing with one another which means that the prices can be higher without fear. However, this system can be tackled: change Medicare to a health saving system and allow for competition over patients without regard to their insurance status. Singapore has this system and it works insofar as spending is concerned; les than 4% of its GDP is spent on healthcare. And though the spending is less, Singapore actually rates higher in World Health Organisation rankings-6th place as opposed to America (37) and Australia (32). So how does Singapore take care of its own?
The system is a two part program. First, Singapore has a compulsory savings program (Medisave). Employees and employers contribute between 6 and 8 percent of the employee's income, split down the middle and dependent on age. These funds are used to pay for medical expenses and unlike the Australian system, people cannot run a 'negative' balance; if the medical costs are higher than what is in Medisave, the difference has to come out of the patient's wallet or through voluntary insurance such as Medishield. But accounts can also be used to pay the expenses of immediate family members. For example, if you have never needed a doctor, but your father needs regular treatments, you can pay for them in part or in full from your Medisave account. Furthermore, those who have few funds can apply for assistance through a government appointed Medifund committee.
It's a far from perfect system; it doesn't provide as much coverage and the poor, unemployed and chronically ill are definitely at a disadvantage. However, the Australian system (and other systems) could take the Singapore method and tweak it to provide healthcare at a lower cost than it is now. How?
|Singapore Skyline (Source: Wikipedia)|
The big feature to take away from the Singapore system is the ability to have a government-funded savings account system that would offer the safety net features of Medicare without any disadvantage to the poor, chronically ill and/or aged. Within this system, the government would pay a pre-determined annual amount to everyone, based on age of citizens, into a health account for each person held at the Commonwealth Health Bank. Then the account would be supplemented jointly by employer/employee contributions, say 2% of income. Then funds gathered in each account would then only be used to pay for medical services at approved prices.
Private hospitals and individual practitioners could charge more than the approved amount, but the patient would have to pay the difference from his or her own wallet or private insurance. Private insurance would also be used to cover things like sudden and catastrophic events or illnesses that would kill a health savings account such as cancer treatments.
Unlike Singapore, citizens will be allowed to run up a negative health balance to provide a safety net, but if you make above a certain threshold of money a year, a slightly higher tax rate applies until the balance is put back to normal. If you die before the negative balance is dealt with, the estate must be used to pay for it and a positive balance can be willed to someone else. And just like the Singapore system, a positive balance can be used to help another family member out.
Now, the safety net feature does mean that Australia and any other country taking on this system would still pay more, but over the long run, the percentage would drop which is always a good thing.
How does this system also benefit patients? Aside from providing affordable care to everyone, a positive health account becomes an asset which is used to reward people for taking care of their health. There would be an end to over-servicing, over-ordering of tests and general floods to doctors which would reduce pressure in waiting lists. Furthermore, there would be more competition between public and private sectors which mean the system would become more efficient.
These changes may seem radical, but with a rapidly growing and aging population and increasing pressures to pay more and more for necessary services, it's important to overhaul the system now before universal healthcare becomes a footnote in history.
Lena Paul is a medical school graduate who is an enthusiastic blogger and holds an editorial position in Prepgenie, a test prep provider that offers exam preparation courses for GAMSAT, PCAT, UKCAT and UMAT.