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18-11-2013, 10:16 AM
(This post was last modified: 18-11-2013, 10:43 AM by CityFarmer.)
This may be a good input for the MediShield Life Review Committee, which was appointed by the Ministry of Health, to review the MediShield. It is also a good read for those interested.
Lessons from Obamacare for Singapore
As a health economist who lived in the United States until I moved to Singapore four years ago, I am often asked how the Singapore health system compares to America’s, especially with both embarking on healthcare reform.
One of the ideas that I stress in my comparative health systems course is that a country’s health system typically reflects the political ideologies that it was founded upon. However, as countries grow wealthier, concerns over access and equity tend to take on a more dominant role in shaping the healthcare system.
Let’s take the US first. The US is a capitalistic society. When health insurance first took hold after World War II, it was offered by private employers as a way to attract and retain workers in a period when both labour and cash were scarce.
The government soon recognised the benefits of private health insurance and the employment-based model of risk pooling. It offered employers tax breaks for providing health insurance to their employees and dependents. Today, it is this tax break that keeps employers in the health insurance business and it is why the majority of full-time employees have employment-based health insurance.
MANY AT RISK
Although it has many advantages, this model left a large percentage of the US population at risk from high medical costs, such as the elderly and those out of the labour market. The latter includes many recent college graduates who have yet to find jobs, the unemployed, the self-employed and those who work for small businesses, which do not offer insurance.
Efforts to find a private-sector solution to insure these groups failed because the premiums that insurers required to insure these high-risk groups were greater than what many were willing or able to afford.
In 1965, after much debate, the US Congress passed legislation that created the Medicare and Medicaid programmes that respectively provide public insurance for the elderly and the disabled, and for low-income households. Over the past 48 years, these programmes have been expanded until coverage is near universal for those who qualify. This is about 30 per cent of the US population. In fact, although most people consider the US healthcare system to be a private insurance model, Medicare and Medicaid are responsible for roughly half of annual US medical expenditures.
SINGAPORE: MORE BANG FOR THE BUCK
Now let’s look at Singapore. Since its creation, it has put individual and family responsibility first, with government assistance provided on an as-needed basis.
The healthcare system clearly reflects this. The Medisave system of forced savings and family-based risk-pooling requires individuals to weigh the costs and benefits of treatment, as they are ultimately spending their own or a family member’s health savings.
However, as with the US system, it also leaves many individuals at risk for high medical costs. This includes low-wage earners whose Medisave account grows less slowly, and those out of the labour market, who often do not have a Medisave account.
To address this, the Government created MediShield (whose basic plan is like a catastrophic insurance plan), need-based subsidies, and Medifund as the payer of last resort. These programmes provide greater healthcare access for citizens than what could be afforded through Medisave alone.
Crucially, these programmes helped to contain cost. Herein lies the major difference between the Singapore and US systems.
In the US, private insurance has historically provided fairly comprehensive coverage, and, as noted above, Medicare and Medicaid provide near universal access to those who qualify. In contrast, in Singapore, individuals remain the main payers for health services. There are caps and limitations on claims on Medisave and MediShield, while Medifund serves primarily as a safety net for the needy.
Just how do these differences play out in real life? When one compares common metrics of health system effectiveness, such as infant mortality rates and life expectancy, Singapore outranks the US and is among the best in the world in both categories. Yet, Singapore is able to spend less on healthcare than the US.
In the US, government health expenditures are roughly half the total spending. In Singapore, government health expenditures are less than a third. Moreover, total expenditures dedicated to health spending are only 4 per cent of gross domestic product in Singapore, much less than the 18 per cent that the US government spends.
In other words, Singapore gets more “bang for its buck”. This is because of greater reliance on cost sharing and coverage limits.
HOW TO WIDEN ACCESS?
So let’s fast forward to today’s healthcare reform efforts. Contrary to what you might expect, the Affordable Care Act, or Obamacare as it is commonly termed, is not about cost control or reining in government funding. It is about the push for greater access and health equity that all developed countries inevitably face.
It primarily targets the roughly 50 million Americans who are too young for Medicare, not poor enough for Medicaid, and for a myriad of reasons — not the least of which is the persistently high rate of unemployment by US standards — do not have private insurance.
Without reform, these individuals are at significant financial risk should they require high-cost medical treatments. Obamacare, by mandating that all individuals purchase health insurance or face a financial penalty, is expected to alleviate this problem.
Singapore’s health-reform effort is also about promoting greater access to health services and greater health equity. The similarities do not end there: Singapore plans to ensure universality of MediShield through an expanded programme termed MediShield Life.
This expansion has similarities to the Obamacare mandate, as it will require individuals to purchase a MediShield plan with a pre-defined benefit package and, like the US plan, give subsidies to those who cannot afford it.
It will also offer more benefits and fewer restrictions; the Government has already announced a lifting of several of the caps and has been slowly expanding MediShield to cover some outpatient and disease management services. This will mean greater health equity. However, the challenge is that greater health equity will mean greater costs.
The formation of the MediShield Life Review Committee is a sure sign that the Singapore Government recognises this reality and is taking it seriously.
The committee’s mandate to review the MediShield Life scheme and make recommendations on how to best balance between ensuring adequate insurance protection for all Singaporeans for life and maintaining premium affordability is an important discussion that Singaporeans must engage in.
As the push for expanded coverage continues, it is worth pausing to make sure that any expansions will meet the desired objectives, yet at a reasonable increase in costs.
Singapore does not want to be in the unenviable position of the US, with both high costs and significant health inequities.
ABOUT THE AUTHOR
Eric Finkelstein is Director of the Lien Centre for Palliative Care and Professor, Health Services & Systems Research Programme, at Duke-NUS Graduate Medical School.
http://www.todayonline.com/singapore/les...-singapore
Lessons from Obamacare for Singapore
As a health economist who lived in the United States until I moved to Singapore four years ago, I am often asked how the Singapore health system compares to America’s, especially with both embarking on healthcare reform.
One of the ideas that I stress in my comparative health systems course is that a country’s health system typically reflects the political ideologies that it was founded upon. However, as countries grow wealthier, concerns over access and equity tend to take on a more dominant role in shaping the healthcare system.
Let’s take the US first. The US is a capitalistic society. When health insurance first took hold after World War II, it was offered by private employers as a way to attract and retain workers in a period when both labour and cash were scarce.
The government soon recognised the benefits of private health insurance and the employment-based model of risk pooling. It offered employers tax breaks for providing health insurance to their employees and dependents. Today, it is this tax break that keeps employers in the health insurance business and it is why the majority of full-time employees have employment-based health insurance.
MANY AT RISK
Although it has many advantages, this model left a large percentage of the US population at risk from high medical costs, such as the elderly and those out of the labour market. The latter includes many recent college graduates who have yet to find jobs, the unemployed, the self-employed and those who work for small businesses, which do not offer insurance.
Efforts to find a private-sector solution to insure these groups failed because the premiums that insurers required to insure these high-risk groups were greater than what many were willing or able to afford.
In 1965, after much debate, the US Congress passed legislation that created the Medicare and Medicaid programmes that respectively provide public insurance for the elderly and the disabled, and for low-income households. Over the past 48 years, these programmes have been expanded until coverage is near universal for those who qualify. This is about 30 per cent of the US population. In fact, although most people consider the US healthcare system to be a private insurance model, Medicare and Medicaid are responsible for roughly half of annual US medical expenditures.
SINGAPORE: MORE BANG FOR THE BUCK
Now let’s look at Singapore. Since its creation, it has put individual and family responsibility first, with government assistance provided on an as-needed basis.
The healthcare system clearly reflects this. The Medisave system of forced savings and family-based risk-pooling requires individuals to weigh the costs and benefits of treatment, as they are ultimately spending their own or a family member’s health savings.
However, as with the US system, it also leaves many individuals at risk for high medical costs. This includes low-wage earners whose Medisave account grows less slowly, and those out of the labour market, who often do not have a Medisave account.
To address this, the Government created MediShield (whose basic plan is like a catastrophic insurance plan), need-based subsidies, and Medifund as the payer of last resort. These programmes provide greater healthcare access for citizens than what could be afforded through Medisave alone.
Crucially, these programmes helped to contain cost. Herein lies the major difference between the Singapore and US systems.
In the US, private insurance has historically provided fairly comprehensive coverage, and, as noted above, Medicare and Medicaid provide near universal access to those who qualify. In contrast, in Singapore, individuals remain the main payers for health services. There are caps and limitations on claims on Medisave and MediShield, while Medifund serves primarily as a safety net for the needy.
Just how do these differences play out in real life? When one compares common metrics of health system effectiveness, such as infant mortality rates and life expectancy, Singapore outranks the US and is among the best in the world in both categories. Yet, Singapore is able to spend less on healthcare than the US.
In the US, government health expenditures are roughly half the total spending. In Singapore, government health expenditures are less than a third. Moreover, total expenditures dedicated to health spending are only 4 per cent of gross domestic product in Singapore, much less than the 18 per cent that the US government spends.
In other words, Singapore gets more “bang for its buck”. This is because of greater reliance on cost sharing and coverage limits.
HOW TO WIDEN ACCESS?
So let’s fast forward to today’s healthcare reform efforts. Contrary to what you might expect, the Affordable Care Act, or Obamacare as it is commonly termed, is not about cost control or reining in government funding. It is about the push for greater access and health equity that all developed countries inevitably face.
It primarily targets the roughly 50 million Americans who are too young for Medicare, not poor enough for Medicaid, and for a myriad of reasons — not the least of which is the persistently high rate of unemployment by US standards — do not have private insurance.
Without reform, these individuals are at significant financial risk should they require high-cost medical treatments. Obamacare, by mandating that all individuals purchase health insurance or face a financial penalty, is expected to alleviate this problem.
Singapore’s health-reform effort is also about promoting greater access to health services and greater health equity. The similarities do not end there: Singapore plans to ensure universality of MediShield through an expanded programme termed MediShield Life.
This expansion has similarities to the Obamacare mandate, as it will require individuals to purchase a MediShield plan with a pre-defined benefit package and, like the US plan, give subsidies to those who cannot afford it.
It will also offer more benefits and fewer restrictions; the Government has already announced a lifting of several of the caps and has been slowly expanding MediShield to cover some outpatient and disease management services. This will mean greater health equity. However, the challenge is that greater health equity will mean greater costs.
The formation of the MediShield Life Review Committee is a sure sign that the Singapore Government recognises this reality and is taking it seriously.
The committee’s mandate to review the MediShield Life scheme and make recommendations on how to best balance between ensuring adequate insurance protection for all Singaporeans for life and maintaining premium affordability is an important discussion that Singaporeans must engage in.
As the push for expanded coverage continues, it is worth pausing to make sure that any expansions will meet the desired objectives, yet at a reasonable increase in costs.
Singapore does not want to be in the unenviable position of the US, with both high costs and significant health inequities.
ABOUT THE AUTHOR
Eric Finkelstein is Director of the Lien Centre for Palliative Care and Professor, Health Services & Systems Research Programme, at Duke-NUS Graduate Medical School.
http://www.todayonline.com/singapore/les...-singapore
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