Friday, March 5, 2010

US can get pointers from S'pore's health-care system

Mar 5, 2010

By Matt Miller


We interrupt Washington's feud over President Barack Obama's 'way forward' for a brief word on a path not taken, courtesy of the only rich nation that boasts universal coverage with health outcomes better than America's while spending one-fifth as much per person on health care. Introducing (drum roll please): Singapore.

Yes, it's an island city-state of just about 5 million people. Yes, it's more or less a benevolent dictatorship. And, yes, until recently, bringing chewing gum into Singapore could land you in jail.
But Singapore, a poor country a few decades ago, now boasts a higher per capita income (when adjusted for local purchasing power) than the United States. And here's the astonishing fact: Singapore spends less than 4 per cent of its gross domestic product on health care. The US spends 17 per cent - and Singapore's somewhat younger population doesn't begin to explain the difference. Matching Singapore's performance in health care in America's US$15 trillion (S$21 trillion) economy would free up US$2 trillion a year for other public and private purposes.

Do I have your attention?

Today the US can't find cash to recruit a new generation of great teachers, rebuild its roads and bridges, pay down the national debt, or invest in better airports, high-speed rail, a clean energy revolution or any of a hundred other things sensible American patriots know the US should do to renew the country. They can't do these things in large part because the Medical Industrial Complex vacuums up every spare dollar in sight.

It's only slightly melodramatic to assert that if the US could run its health-care system as efficiently as Singapore does its system, it could solve most of its other problems.

So how does Singapore do it?

In health circles, it's always conservatives who bring up Singapore, because of the primacy it places on personal responsibility. According to Professor Phua Kai Hong of the National University of Singapore, roughly one-third of health spending in Singapore is paid directly by individuals (who typically buy catastrophic coverage as well); in the US, by contrast, nearly 90 per cent is picked up by third-party insurers, employers and governments.

Singaporeans make these payments out of earnings as well as from health savings accounts. The system is chock-full of incentives for thrift. If you want a private hospital room, for example, you pay through the nose; most people choose less expensive wards.

Conservatives are right: Singaporeans have the kind of 'skin in the game' that promotes prudence.

But that's only half the story. There's also a massive public role. For starters, adequate savings for retirement and health expenses are mandated by government (employees must sock away 20 per cent of earnings each year, to which employers add 13 per cent).

Public hospitals provide 80 per cent of the acute care, setting affordable pricing benchmarks with which private providers compete. Supply-side rules that favour training new family doctors over pricey specialists are more extensive than similar notions Mrs Hillary Clinton pushed in the 1990s. And in Singapore, if the children are obese, they don't get Rose Garden exhortations from the First Lady. They get no lunch and mandatory exercise periods during school.

There's more - including an ample safety net for the poor - but you get the gist: Singapore achieves world-class results, thanks to a bold, unconventional synthesis of liberal and conservative approaches. It's further to the left and further to the right than what President Obama or his foes now seek. The island's real ideology is pragmatic problem-solving.
It works, thanks to cultural traditions that let this eclectic blend flourish. The system is nurtured by talented, highly paid officials who have the luxury of governing for the long term without being buffeted much by politics.

Americans obviously can't transplant Singapore's approach wholesale to the US. But the reason they can't emulate even some of Singapore's success has to do with that iron law of health-care politics: Every dollar of health-care 'waste' is somebody's dollar of income.
As a stable advanced democracy, the US is so overrun by groups with stakes in today's waste that real efficiency gains are perennially blocked.

Any hope for something better starts with tallying the price of today's paralysis. Americans should think about that US$2 trillion the next time they see states, citing budget woes, shut the door to college on tens of thousands of poor American students. Or when the next firm moves jobs overseas because health costs in the US are soaring. Or when the next bridge collapses.

Thanks, Medical Industrial Complex!

We return now to our regularly scheduled political battle, which - no matter the outcome, according to some projections - will leave health costs headed to more than 20 per cent of GDP by 2019.


Mar 5, 2010

Obama's D-Day on health-care Bill

March 29 Congress vote expected, but may not go his way
By Chua Chin Hon

WASHINGTON: Drawing a line under a bitter debate on health-care reforms, United States President Barack Obama yesterday urged legislators to 'finish their work' with a decisive vote in the coming weeks.

But given the unanimous opposition among the Republicans and lack of public support for the proposed health-care Bill, experts said this move represented the biggest political gambit yet by Mr Obama, one that could shape the year-end legislative polls as well as his re-election bid in 2012.

Acknowledging the political anxieties surrounding the issue, Mr Obama said: 'I know there's been a fascination, bordering on obsession, in this media town about what passing health insurance reform would mean for the next election and the one after that. I will leave it to others to sift through the politics, because that's not what this is about. That's not why we're here.'
The President has made health-care reforms his top domestic priority since taking office over a year ago, arguing that millions of Americans should not be bankrupted or denied proper care because of rising medical costs.

Economists have also warned that the inefficient health-care system is putting an unsustainable strain on fiscal resources.

But whereas Mr Obama and the Democrats have favoured a comprehensive approach, tabling a Bill that would cost at least US$900 billion (S$1.2 trillion) over 10 years, the opposition Republican Party has called for an incremental and less expensive way to deal with the problem.
A year-long effort to bridge the differences has come up empty thus far, with the Republicans insisting that the Obama administration scrap the current Bill and start over.

Mr Obama said he did not think another year of negotiation would be fruitful, and signalled that the Democrats would press ahead with a politically risky parliamentary manoeuvre called re-conciliation, which would allow them to pass the Bill with a simple majority.

But there are doubts as to whether Mr Oba-ma can marshal enough votes, given the deep divisions within his own party over health-care reforms and worries among Democratic lawmakers that the unpopular Bill would cost them their seats in Congress. As a result, the coming weeks will be a major test of his leadership skills.

'This is now about the real politics in Washington,' said Dr Joseph Antos, an expert on health-care policy at the American Enterprise Institute think-tank.

'If you can't get your own party members to vote for it, then all this is just a waste of time and it won't make any difference how hard you have tried to get the average voter to appreciate what you are trying to do for him.'

The White House did not set an explicit deadline for the health-care Bill to be passed, but media reports said D-Day was likely to be March 29, just before the Congress' holiday recess.
Both parties, however, are already positioning themselves well beyond March 29.
In rebutting Mr Obama's ultimatum on health-care reforms, Republican Senate leader Mitch McConnell tried to cast the issue as one that pitted the Democrats against the American people, rather than an inter-party squabble, saying: 'This is not an argument between Democrats and Republicans. This is an argument between Democrats and the American people. I assure you that if this Bill is somehow passed... every election in America this autumn will be a referendum on this issue.'

Mr Obama, for his part, sought to occupy the high ground by arguing that passing the health-care Bill was the right thing to do despite the political consequences.

'In the end, that's what this debate is about. It's about what kind of country we want to be,' he said from the White House. 'At stake right now is not just our ability to solve this problem, but our ability to solve any problem.

'The American people want to know if it's still possible for Washington to look out for their interests and their future. And as long as I hold this office, I intend to provide that leadership.'

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