The Agenda

An Exchange on Singapore’s Health System on Bill Maher

A blogger named Matt Rock writes:

On last night’s edition of “Real Time with Bill Maher,” Reihan Salam, a conservative journalist, made a comment that I found to be rather — oh, what’s the word – incorrect.

I’m very grateful that Rock managed to locate the word “incorrect” before too much time passed. I was getting nervous. 

Here’s how it boiled down: Salam was engaged in a debate regarding health care. Someone mentioned that the United Nations conducted research that rated the United States in 37th place, prompting Salam to claim that Singapore was rated number one on that list… and that Singapore uses a 100% “consumer-driven” system.

Actually, this is not what I said. I never referenced the list. My recollection is that I made a brief aside that Singapore is the best system in terms of efficiency, and that it is a completely free market system. I will return to this point, but first let’s go back to Rock.

The study that Maher and his guests were discussing was the World Health Organization’s rankings of the world’s best health systems (article here). Salam’s first inaccuracy — that Singapore was ranked in first place — is wrong. France assumes the top spot, while Italy, San Marino, Andorra, and Malta also beat Singapore, which assumed sixth place in the rankings. His next inaccuracy came when he claimed that Singapore’s health care system was driven by the private sector. This, too, was completely false. Singapore uses a universal health care system which co-exists withinsurance offered by the private sector, similar to France’s system. Of Singapore’s twenty-three hospitals, ten are run by the government. If presented with the facts, I wonder if Salam might call Singapore’s health care system a socialist one?

I wasn’t claiming that the WHO study ranked Singapore first. The study ranked France first. France spends over 10 percent of GDP on health and is experiencing galloping cost growth. This is better than the U.S., but, unfortunately for them, trending in the same direction. Singapore spends roughly 3.8 percent of GDP, which sounds pretty good to me. I was making a value judgment, admittedly, but I think that’s allowed. As for whether Singapore has a free market system, I think the key issue here is how markets work in setting prices for goods and services. Singapore uses a compulsory savings mechanism and a form of universal risk pooling that involves a public health system for handling catastrophic costs, which is the system I’ve advocated in Grand New Party and in a number of columns for Forbes.com. “Completely free-market” is a slippery statement. Keep in mind that this was an impromptu parenthetical, and I was one of six guests on the program, including a surprise guest. 

Here’s the bottom line. The United States spends more money than any other country in the world on health care, and our results are the polar opposite of what you’d expect when learning that. Health insurance offered by the private sector is great, right up to the point where you need a live-saving operation or vital medication. When insurance companies charge record fees for their services, and these are matched by record net profits across the board, the system has failed. Consider this, Mr. Salam, before you head back onto television.

I agree with this. Note that this remark on Singapore has been removed from the broader context of my remarks, which involved criticizing the role of private insurance companies and suggesting that single-payer would be preferable to the health reform bill. 

Another interesting comment that Salam made was that, according to him, Medicare is a complete and total failure. But that’s a whole other can of worms which I’ll save for the next time when Salam starts spouting rhetoric.

I don’t recall saying that, and if I did I was wrong. Medicare is not a complete and total failure along many metrics, including providing medical care to people over the age of 65. Also, it has proved very successful at transferring taxpayer dollars to medical providers. So the phrase “complete and total failure” demands context, which is hard to provide in light of the format.

Medicare is a complete and total failure at containing cost growth. Rather, it exacerbates cost growth throughout the health system through Medicare’s fee-for-service structure. Odd that I would describe Medicare as a complete and total failure given that I suggested that Medicare-for-all, again, would be preferable to the Senate health bill along many metrics. 

I have explicitly stated that I favor a system that protects against catastrophic expenditures — I even said that on the program. That is the nature of Singapore’s consumer-driven system. They do have a public health component and a regime of forced savings, both of which I see as attractive features of the system.

Would you like to explain these points on a television comedy program, with six other guests and a live audience? 

But this does give me an opportunity to praise Singapore’s system. You can find a detailed description via Watson Wyatt.

The key to Singapore’s efficient health care system is the emphasis on the individual to assume responsibility towards their own health and, importantly, their own health expenditure. The result is a system that is predominantly funded by private rather than public expenditure. For example, in 2002, private health expenditure in Singapore (that is, financed by individuals or employers on behalf of individuals) amounted to almost 67 per cent of total health expenditure with the remaining 33 per cent financed by the Government from tax revenue. As shown in Figure 2, this is not the norm for most developed countries (the US aside), where health financing is predominantly from public expenditure.

Singapore’s low public health expenditure is also reflected in the low individual tax rate environment that exists there (2 per cent to 28 per cent for individuals and 26 per cent for companies) compared to the other countries which need to draw higher taxation revenue to fund their public health expenditure.

Funnily enough, I found this report via an email correspondent who claimed that I was wrong to describe Singapore’s system as “completely free-market.” In fairness, I’m one of those eccentrics who believe that public infrastructure and regulations are vital to a free market system. My correspondent noted that there is a public component to Singapore’s system. I was well aware of this fact.

The Singapore health system is based on a combination of government subsidies (through taxation) and individual responsibility. In order to assist individuals in meeting their component of personal medical expenses, the Government has established the ‘3M’ framework of Medisave, Medishield and Medifund that combine individual responsibility and is overlaid with government funding, particularly to provide a safety net to support the health needs of low income earners and poorer individuals.

One wonders if the various statements made by my fellow interlocutors have been as rigorously fact-checked as my parenthetical claim that Singapore has the world’s best health system, and that it is “completely free-market.”

I am constantly inspired by the collective wisdom of the blogosphere. 

Reihan Salam is president of the Manhattan Institute and a contributing editor of National Review.

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