How to Control Health Care Costs: Lessons from Abroad
At a Brookings event on June 13, 2013, Dr. William A. Haseltine, author of
Affordable Excellence: The Singapore Health Care System
(Brookings Press, 2013) argued that there are alternative models to the current health care system in the United States.
Haseltine began his remarks by noting that Americans often see worse results in terms of the quality and coverage of their health care, even though they pay more than people in many other high-income countries. Singapore, on the other hand, ranks sixth in the world health care outcomes—well ahead of the United States—while spending less than one fourth of what the United States spends.
Haseltine said in the U.S., health care costs are eating into every facet of human life. He noted that the country should look around the world at other health care systems in order to make sense of the best practices and efficient allocation of finances to adopt for the U.S. system. Singapore was one nation that particularly stood out in Haseltine’s research. He said Singapore is unique in that their health care system “really works.”
Haseltine noted that while the United States should not strive to adopt a health care system identical to Singapore’s, Americans can learn from its model. In Singapore, health care consists of both public and private systems. Multispecialty care is often delivered in public hospitals, while primary care is delivered by private sector physicians. He added that the system is based upon “the suspicion of the economic man,” where people may “cheat and chisel” the Singaporean health care system. Therefore, the Singaporeans have built a system where most people have to pay for their health care. In addition, Singaporeans believe in “social harmony,” or the notion that the system should not get too out of balance. He said their solution is something along the lines of a mandatory 401k, where citizens are obliged to save money for health care amongst other issues such as retirement and housing. In Singapore, health care companies are also mandated to publish their prices. Haseltine said this creates an atmosphere where customers essentially “shop” for the best health care policy to cover their specific needs.
Several years ago, Singapore had a system that created a strong sense of competition among health care providers. This drove prices up, however, as companies purchased increasingly more expensive equipment to provide the best services. Now, while competition still exists, the government has decided to regulate it—a system that Haseltine called “regulated capitalism,” a strange notion to many Americans.
Haseltine said Singaporeans’ response to their health care system is approximately 75% positive, with “rough edges” falling under elder care and chronic disease.
He concluded by discussing several lessons that the United States can take away from the health care model in Singapore. Haseltine recommended that Americans think of their country in terms of cities and regional networks, rather than as one entity. This outlook should help the U.S. adopt lessons from Singapore, a much smaller country. He cited co-payment—a concept not foreign to Americans—transparency, managed competition, and “doctors on salaries” as the primary lessons for a revised system in the United States.