“Every country in the world, at least all of the wealthy developed nations, are facing the same challenges that the U.S. is, that is a growing influx of new technology, much of it extraordinarily valuable that people are increasingly clamoring for, aging populations that are going to require more healthcare…and slow economic growth. Those are the three big challenges everyone is facing,” said Paul Howard, of the Manhattan Institute, in this exclusive Bold Business Interview.
He adds that while every country faces the same basic challenges, the way they address healthcare questions and how it is paid for, varies with their unique cultural constraints. Whether it be France, Germany, or the United Kingdom, the delivery and payment for healthcare is largely the result of history and traditions that have shaped the healthcare system within their own cultural environment.
Singapore has a system that might be said to be a hybrid of private and public. Many services are private, yet the government has no qualms about reviewing prices and imposing controls.
Howard suggests that if we are looking for models that may be applicable to the U.S., Singapore and Switzerland both offer interesting features that are worth considering. Both countries have achieved excellent healthcare outcomes, with universal coverage, and a private insurance market that helps to foster innovation and efficiency.
In terms of quality of care, access to service, and health outcomes, both Singapore and Switzerland rank among the top nations in the world. Singapore in particular is renowned for not only providing excellent health outcomes, in 2014 it was ranked as the most efficient healthcare system in the world. Singapore spends a mere 3% on healthcare, which compared to the U.S. figure at 18%, is stunning.
The Swiss system is also regarded as excellent by the Swiss themselves and international comparisons show it to be one of the best in the world. However, it is far more expensive than the Singapore model. On the other hand, the Swiss system is a bargain compared to that of the U.S.
In Switzerland, the details of services and coverage are regulated by the cantons, but they all offer a reasonable standard of care for the minimal base insurance rates. Patients have an annual deductible, which in Switzerland is called a “franchise” that varies from 300 to 1500 CHP, depending on one’s insurance plan. All citizens and residents are required to purchase an approved government plan, and all plans are required to accept all comers regardless of pre-existing conditions. The Swiss also generally face small co-pays for services below their “franchise” limits. One example is 15 CHP fee per day whn staying in a hospital.
Singapore and Switzerland, Models for Healthcare Success
Policy analysts who have looked at how to emulate parts of the Swiss model and use it to improve the U.S. system under the Affordable Care Act, suggest that a necessary first step is to disentangle health insurance from employment, as the current U.S. model results in unacceptable coverage gaps and distorts the market. To follow the Swiss model, all residents would be required to purchase individual health insurance, creating a large, robust pool to spread risks and guarantee universal coverage.
Singapore is unique in that as matter of national policy, no health service is entirely free of charge. It is believed that a small charge helps to prevent overuse of services. The fees for many services are applied on a sliding scale and subsidized for the poor. Everyone is required to be insured, but there is a complex system of ways and means to achieve that. The system combines purely private insurance, with mandatory savings systems, and subsidies; which is why many say that the Singapore system cannot be copied anywhere else. Yet the affordability may lie less in how services are purchased, than with how costs are controlled.
Singapore has a system that might be said to be a hybrid of private and public. Many services are private, yet the government has no qualms about reviewing prices and imposing controls. This is a somewhat unique feature of Singapore and may be the key to their extremely low percentage costs in terms of GDP. The remarkable aspect is that unlike in many countries where price controls lead to scarcity and poor quality, in Singapore the system has continued to maintain extremely high standards, excellent outcomes, and access.
Elements of either or both systems could provide a path to reform for the Affordable Care Act, which seems to be a failure on almost every front. The Swiss system of universal individual-based coverage could provide for a more representative insurance pool than can be obtained currently. And the Singapore method of price controls, while anathema to the medical community, may help American business be more competitive as it brings healthcare costs more in line with those of the global competition.