How Do They Do It?

For many countries, good healthcare outcomes always come with huge bills. Singapore somehow manages a life expectancy at birth of 82 years, four years more than the United States, and yet spends only about 4 percent of GDP on healthcare, far less than the United States’ 16 percent.

The city-state has evolved a compact, efficient healthcare system that keeps costs down while delivering outstanding results. Life expectancy at birth is 81.9 years (79.3 for males and 84.7 for females, according to Wikipedia), while maternal mortality and infant mortality are 10.4/100,000 live births (nearly the lowest in the world) and 2.3/1,000 live births (the lowest) respectively.

This pattern is also maintained in more specific indicators like ventilator-associated pneumonia rates for ICU patients. About 92 percent of inpatient beds have been accredited by the Joint Commission International (JCAHO’s international arm). The World Health Organization, in its global survey in 2000, ranked Singapore 6th in the world and top in Asia. Yet, Singapore spent only US$ four billion on healthcare in 2006.

Singapore’s healthcare system is quite unique. It is highly socialized, with the government owning some 80 percent of inpatient beds and subsidizing 25 percent of all healthcare expenditure from general taxes. And yet it is a very intense marketplace, with both public and private sectors competing for professionals and patients. Public sector facilities, while government-owned, are legally private companies and licensed as private facilities. Some 10 percent of inpatient beds in the public sector are for “private” patients, are not subsidized and look as good as private facilities.

Patients choose between the private and the public sectors, and within the latter, between levels of subsidies. Such patient choice provides good feedback and makes the industry very competitive.

The government subsidy is a block grant upfront to the public sector and does not vary with volume. Thus Singapore avoids the intricacies of governmental price-setting for reimbursements and its downstream effects and administrative costs, as happens in Medicare and Medicaid, and decision making on care delivery and cost management is at the lowest possible level.

Healthcare Financing

Most resident patients in Singapore pay for inpatient healthcare expenses out of MediSave, an enforced national savings account, started in 1984, that sets aside 8 percent of each working adult’s income (subject to a cap) for future medical expenditures, not unlike the health savings accounts in the United States.

Simple limits on withdrawals per day of stay and per type of procedure ensure that patients have funds for their bills and yet encourages careful consideration as it remains their money if unspent. Families are encouraged to support each other so MediSave can be used for immediate families.

The checks and balances thus operate at the level of the individual consumer, who has final choice on his service provider and manner of payments.

MediShield is the national health insurance scheme. Launched and administered by the same government agency that runs MediSave, this insurance scheme is primarily for catastrophic and serious illnesses, and is the base insurance policy in the country.

Other health insurance firms may offer similar products but all riders must be on the common base policy. This avoids cherry-picking and creates a unified health insurance landscape which yet allows for multiple providers. Risk-pooling is by age cohorts which means young, healthy people are not put off by large premiums to support the older generations. While MediShield is voluntary (on an opt-out system, meaning all MediSave account holders are included unless they decide otherwise), the eventual take-up rate is nearly 90 percent.

For those patients who are indigent or otherwise in financial difficulties, there is the last-resort MediFund, an endowment fund that will pay their bills, subject to a means test.

While healthcare costs have risen through the years, the number of people who needed MediFund has not grown tremendously, indicating the relative affordability of healthcare in Singapore.

This combination of enforced personalized health savings accounts, a voluntary but well-subscribed catastrophic health insurance and a final safety net enables most people in Singapore to have access to high quality healthcare.

International Patients

Naturally, no country is without problems. Apart from the pressure to maintain its high quality while containing costs, Singapore suffers from an additional difficulty unfamiliar to large countries like the United States. Singapore is too small.

Having invested in very good healthcare infrastructure (including, for example, the innovative BrainSuite, an operating theatre with its own MRI/CT/Xray/radiotherapy ensuite facilities), excellent medical professionals sent for training in the very best centers, and able to tackle medical challenges that daunt others (like the separation of conjoint twins, tooth-in-eye operations and total peritonectomies for intra-abdominal cancers), Singapore does not have a large enough population to sustain this healthcare ecology.

Unlike the Mayos of the United States, which effectively draw their patients from the whole American population, Singapore’s own five million people are insufficient to provide enough patients. So Singapore serves the region.

In 2006, Singapore earned an estimated US$ 400-500 million from patients who traveled to Singapore for healthcare, roughly 10 percent of total revenues. Today, more than half a million people travel to Singapore each year primarily, or secondarily, for its healthcare services. While other medical destinations received much attention in recent years, Singapore is often the country to which the leaders in those countries go to when they themselves need medical care.

With so many medical visitors, Singapore is well equipped to receive, accommodate, manage, treat and return international patients safely to their home medical services. While excellence, safety and trustworthiness are important in healthcare, the larger picture of low crime, high security, the absence of riots and natural disasters, ease of access and use of English as the first language, all contribute to a unique peace of mind for the international medical traveler.