What Makes Singapore’s Health Care So Cheap?

Singapore’s health care system is distinctive, and not just because of the improbability that it’s admired by many on both the American left and the right.

It spends less of its economy on health care than any country that was included in our recent tournament on best health systems in the world.

And it spends far, far less than the United States does. Yet it achieves some outcomes Americans would find remarkable. Life expectancy at birth is two to three years longer than in Britain or the United States. Its infant mortality rate is among the lowest in the world, about half that of the United States, and just over half that of Britain, Australia, Canada and France. General mortality rates are impressive compared with pretty much all other countries as well.

When the World Health Organization ranked health care systems in 2000, it placed the United States 37th in quality; Singapore ranked sixth.

Americans tend to think that they have a highly privatized health system, but Singapore is arguably much more so. There, about two-thirds of health care spending is private, and about one-third is public. It’s just about the opposite in the United States.

Singapore’s health system also has a mix of public and private health care delivery organizations. There are private and public , as well as a number of tiers of care. There are five classes: A, B1, B2+, B2 and C. “A” gets you a private room, your own bathroom, air-conditioning and your choice of doctor. “C” gets you an open ward with seven or eight other patients, a shared bathroom and whatever doctor is assigned to you.

But choosing “A” means you pay for it all. Choosing “C” means the government pays up to 80 percent of the costs.

What also sets Singapore apart, and what makes it beloved among many conservative policy analysts, is its reliance on health savings accounts. All workers are mandated to put a decent percentage of their earnings into savings for the future. Workers up to age 55 have to put 20 percent of their wages into these accounts, matched by an additional 17 percent of wages from their employer. After age 55, these percentages go down.

The money is divided among three types of accounts. There’s an Ordinary Account, to be used for housing, insurance against death and disability, or for investment or education. There’s a Special Account, for old age and investment in retirement-related financial products. And there’s a Medisave Account, to be used for health care expenses and approved medical insurance.

The contribution to Medisave is about 8 percent to 10.5 percent of wages, depending on your age. It earns interest, set by the government. And it has a maximum cap, around $52,000, at which point you’d divert the mandatory savings into some other account.

A second health care program is Medishield Life. This is for catastrophic illness, and while it’s not mandatory, almost all of the population is covered by it. It’s really cheap, from $16 a month for a 29-year-old in 2019 to $68 a month for a 69-year-old, without subsidies.


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