A political threat looms over much of the world.
Developed countries as well as many emerging countries, as in China’s case, are beginning
to see the effects that demographic aging and many public services’ unsustainability
can cause with increasing concern.
Along with pensions, health is another of the fields that generate the most uncertainties
and fears.
An increasingly aging population and the emergence of new and expensive medical technologies
have raised some very important questions:
Will we be able to pay for a quality health care system or will we be condemned to a precarious
health situation that affects our life prospects?
Is there a successful model that can lead the way?
Are there alternatives?
Well, in this video we’ll look at a system that we may more or less like, but which we
should definitely know about and take into account throughout this debate.
Let's see it.
Check out the following graph, it shows a country leaving the Third World and becoming
one of the richest areas on the planet.
Thirty-five years ago, Singapore and Spain had the same per capita income, today however
the former more than doubles the Spanish per capita income.
In 2015, Singapore’s per capita income was $86,100 per year and Spain’s was just $34,750.
But, even if we took countries such as Finland, Denmark, Sweden, Germany or the United States
as examples, we’d be able to see that Singapore is much richer than any of them.
However, it’s often said that Singapore’s example isn’t good enough because their
wealth essentially comes from a financial sector that is much larger than that of any
of the aforementioned countries.
That’s true, but no, that’s not the key to this small state’s success.
The weight of Singapore’s financial sector isn’t big enough to explain such differences
in per capita income.
In fact, if we were to eliminate the effect of these countries’ different financial
sector sizes, Singapore would still be much richer than all the others.
Because actually, both trade and manufacturing are more important in Singapore than the financial
sector.
We’re talking about one of the largest merchandise exporting countries in the world.
For example, the proportion of electronic material that this country exports in relation
to its GDP is larger than the proportion of anything exported by countries like Spain,
Sweden, Denmark, or even Germany.
So, the question is: How did Singapore achieve such a high level of prosperity?
Well, if we wanted to simplify it, we could say that Singapore is the second freest economy
in the world according to the Index of Economic Freedom published annually by the Heritage
Foundation and the Wall Street Journal.
Its public spending, for example, is half of the US’s and a third of Sweden’s.
Listen to the words of the historic president of Singapore, Lee Kuan Yew, which successfully
reflect the real foundations of this country’s economic success.
“When most of the Third World was deeply suspicious of exploitation by western multinational
corporations, Singapore invited them in.
They helped us grow, brought in technology and know-how, and raised productivity levels
faster than any alternative strategy could.
Lee Kuan Yew.)
Singapore’s success is therefore not due to the financial industry but due to the same
reasons that have led to the growth of other economies: legal security, low taxes, monetary
stability and moderate regulations.
A commitment to the free market that has made this country become, in many areas, an example
to follow.
And we’re not only talking strictly about economics, but also certain social issues,
such as health.
Yes, you heard it right, Singapore is also a role model in terms of health policy.
(AN IMPOSSIBLE CHALLENGE?)
Let's take a look, for example, at Spain’s case, a country whose health system is considered
one of the most efficient on the planet.
Well, the problem is that, beyond being corrigible, it isn’t sustainable.
See, in just a decade, the total cost of the Spanish health system has almost doubled,
and everything indicates that as a result of the aging population and the demand for
new and expensive health technologies, this trend will be unstoppable, and will continue
to worsen year after year...
And don’t think that this only happens in Spain, not at all.
Medical bills, that is the sustainability of health systems is a widespread problem
in other developed countries.
So the question that arises is how can we overcome these challenges and ensure the sustainability
of health systems?
A good model – which is never taken into account – could perhaps be that of a completely
free health system, a system in which demand and supply are determined by the market and
not in political offices.
This could lead to some benefits:
For one, more money for families thanks to lower taxes, and a precautionary saving level
against any ailments that may arise that’s higher than the present one.
This would allow for direct primary care payments and insurance against minor ailments, common
issues, and more expensive treatments.
Another benefit would be a greater diversity of and competition among different health
centers, in such a way that, given the threat of being displaced in the market, productivity,
differentiation and innovation would be promoted.
In other words, we’d achieve a wide range of services that would positively impact both
the quality of the service and lead to lower prices.
Competition is usually the best formula to guarantee better goods and services for consumers.
And health isn’t any different.
However, nowadays, no country uses all of these principles.
And no, the US health system, as we’ll see, isn’t precisely a free market model.
Now, there is a country that has used some of these characteristics.
And it has done so with extraordinary results.
Listen to Singapore’s case.
(A MODEL FOR HEALTH REFORM)
Right now, Singapore has the best healthcare system in the world: it’s top quality and
costs practically half that of Spain’s health system, and less than a third of the US’s.
But this isn’t just a matter of lower costs--it’s also, and above all, about quality and results:
See, life expectancy at birth in Singapore is two to three years longer than in Britain
or the United States.
Its infant mortality rate is among the lowest in the world and is almost half that of the
United States, Great Britain, Australia, Canada or France.
And in general its mortality rates are impressive compared to most Western countries.
Now... the question we can ask ourselves is how they achieved such success?
Well in this case they have achieved it, fundamentally, by using market criteria.
First of all, the main feature of the Singapore model doesn’t just lie in the fact that
more than 60% of all health spending is private, but that to a large extent, it is directly
paid by users.
That is, co-payment is the norm here.
But, not everyone pays the same when they go to a hospital.
There are public and private centers, as well as 5 levels, 5 classes: A, B1, B2 +, B2 and
C.
Each of these letters gives users a different service: for example class A gets you a private
room and a choice of doctor; while in class C the room is shared and the doctor is assigned
by the hospital.
Of course, each class has a different cost.
If a user chooses class A, they pay for everything, if instead they choose class C, the government
subsidizes 80% of the cost.
But where do people get the money to pay for healthcare?
Well from the same place as in other countries: from the wealth they generate, from their
work.
The difference is that the huge contributions that governments usually collect, are saved
in Singapore-- in a mandatory way yes--in special accounts under each citizen.
They can only use these accounts for certain purposes, such as paying their pensions, their
children’s education, homes or health.
In the case of health care, the account is known as Medisave and is used to pay for doctor
visits, hospitalizations, medications, etc., etc.
This is the second key point of Singapore's medical system
Thanks to this formula, demand is self-regulated and people can manage how to spend the money
they accumulate in these accounts – for example by accessing different kinds of care,
whether they want to receive or be hospitalized in hospitals with fewer comforts but which
are cheaper, or with more services and higher costs – decreasing redundant and superfluous
consumption.
Another very important point is that, for the most serious cases, there’s a universal
public insurance known as MediShield Life that hardly costs $16 a month for a-30 year-old.
And with it, of course, comes the possibility of hiring other private insurers that improve
the services offered.
Finally, the third leg of Singapore’s health system is public expenditure itself:
What happens if someone can’t cover their medical bills?
Well, to guarantee access to health care, the government subsidizes hospitals and has
a public fund, the Medifund, designed to pay health bills for lower-income families.
So, folks, this is how Singapore has managed to create a relatively economical medical
system, while achieving results and quality levels that place it among the best health
systems in the world according to the World Health Organization and different rankings
such as Bloomberg’s "Most Efficient Health Care Systems".
However, despite all this, when we usually talk about healthcare and the free market
we automatically think of the United States and not Singapore.
And that is a serious mistake.
(USA vs. Singapore)
Indeed, the US doesn’t have a European-style public health system.
And since the country’s results are quite deplorable, considering that it spends more
than 17% of its GDP on its healthcare system, which is twice that of most European countries,
the debate on health seems settled: private health care is worse than public health care
because it costs twice as much and has similar or even lower service levels.
But this, as we saw with Singapore, where 60% of health spending is private, isn’t
true.
In Singapore, the health care system isn’t only better, it’s one of the best in the
world and involves much lower costs than in other developed countries.
The issue is that the US health system isn’t only heavily intervened upon and regulated
by the government, its cost is tremendously socialized.
See, 90% of all health spending is channeled through two different agents other than the
patient.
Out of every 100 dollars spent in the US health system, 45 come from insurance companies,
45 from state programs such as Medicaid, and only 10 from patients’ pockets.
Yes, public health spending in the United States is in relative terms higher, for example,
than in Spain.
But we’ll talk about that in another video...
The fact is that as we’ve seen, Singapore sets a healthcare system model on the table
that has a great combination of cost, innovation and medical results.
We may like some aspects of this system, and not others… but I think it wouldn’t be
unreasonable to take it into account when talking about health, the future, and sustainability.
So I really hope you enjoyed this video, please hit like if you did, and don’t forget to
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Don’t forget to check out our friends at the Reconsider Media Podcast - they provided
the vocals in this episode that were not mine.
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