Most people will agree that the U.S. health care system needs systematic restructuring. Americans pay more for their health care then residents of other high income countries but get worse health outcomes. The Affordable Care Act of 2010 addresses some but not all of the most pressing problems. I believe we can reduce health care expenses, saving trillions of dollars a year, by making our health care system more efficient, following the lessons from the best other countries have to offer. Singapore offers an excellent starting point.
In my new book, Affordable Excellence; The Singapore Health Care Story: How to Create and Manage Sustainable Health Care Systems (Brookings, 2013), I examine how Singapore has succeeded in establishing a health system that ranks among the best and most efficient in the world. Globally, Singapore ranks sixth in health care outcomes, yet spends proportionally less on health care than any other high-income country, spending less than one-fourth the cost of health care in the United States and about half that of Western European countries.
In the United States, public and private health care costs account for almost 18% of GDP, more than four times that of Singapore. Yet we rank at the very bottom of all advanced economy nations in terms of measures of health and below many less advantaged countries as well. The rapidly growing numbers of elderly patients who place the heaviest demand on health services burden our system even further. The present course is clearly unsustainable. The Affordable Care Act, if successful, will alter this trajectory only slightly, reducing projected health care costs from $4.8 trillion to $4.4 trillion in the year 2030.
The primary lesson from my study of the Singapore health care system is that the key to controlling costs lies in aligning individual and collective incentives. Individuals must understand that health services costs money and that they should pay those costs they can afford themselves. Government can create a framework of rules to align hospital and doctor incentives that encourage them to provide the best service at the best price. But the framework must also assure that people have the ability to pay and then provide a safety net if they cannot. Finally, the health care system should be monitored to make sure it is transparent and honest. Some of the key lessons from Singapore that I discuss in my book include: transparency in pricing; increased competition; a shift to home- and community-based care; investing in wellness; opt-out catastrophic health insurance; salaried doctors; higher co-pays; and a tiered system.
The lessons from Singapore’s health care system will be of interest to those currently planning the future of health care in emerging economies, as well as those engaged in the urgent debates on health care in the wealthier countries—with their serious long-term challenges in health care financing. Policymakers, legislators, and public health officials responsible for health care systems planning, finance and operations, as well as those working on health care issues in universities and think tanks, should understand how the Singapore system works to achieve affordable excellence.
Affordable Excellence provides proof of principle that it is possible to deliver excellent health to a diverse population at a cost that is sustainable for individuals and nations. I don’t expect any country to adopt all of the Singapore system but rather adapt some key features to their own unique circumstances.