IT WAS during the euphoric years after World War II that Western industrialised nations (with the notable exception of the United States) first established the foundations of the modern welfare state.
Based on an egalitarian vision of society, one of its tenets was that citizens would enjoy universal access to health care, funded either by taxes (as it was in Britain, Canada and Sweden) or state-mandated social insurance schemes (the practice in France, Germany and the Netherlands).
Unfortunately, the euphoria did not last long. Well before the recent global financial crisis, health-care costs in many developed countries were already spiralling out of control, fuelled by ageing populations, rising patient demand and escalating costs associated with advances in medical technology. What was once “affordable” grew into a crushing burden.
Health care does not come free. Someone must pay. But who, and how? And having settled that question politically, what if health-care costs grow (they inexorably will, as new treatments and more effective drugs come on-stream) into a bottomless pit? There are no easy answers, which is why no country appears to be completely happy with its health- care system, with many in the midst of reform (and some even moving in contradictory directions with each change of government).
Much of the current debate on health- care reform revolves around the key issue of sustainability. Apart from rationing and queueing, various governments have in recent years sought to achieve this by diversifying funding sources, encouraging greater individual responsibility through co-payments and turning to the free market in order to deliver health- care services more efficiently.
It is in this light that the concept of national health insurance and its relevance to Singapore, as extolled by advocates such as Dr Jeremy Lim (“The moral case for health insurance for all”; The Straits Times, April 26), ought to be examined.
National health insurance entails a state-mandated, risk-pooling system into which all must pay, and from which all will benefit, so that the burden on any one individual is ameliorated.
The idea of universal health coverage is a noble one. But it does not automatically lead to better health care at affordable costs. On the contrary, countries with such health-care systems invariably struggle with cost containment since increased access must necessarily mean increased utilisation of health-care services, not to mention the greater potential for abuse, fraud and wastage.
Indeed, a closer examination of health-care systems worldwide suggests that there has to be a more nuanced and multidimensional approach to health-care financing, and that a one-size- fits-all approach would, at best, be a partial solution. The current trend towards hybrid and structurally complex health-care systems seems to bear this out.
Consider Taiwan’s National Health Insurance (NHI). It is a mandatory, single-payer health insurance scheme that covers the entire population, with contributions from households, employers and the government. While the coverage is meant to be extensive, the NHI and other government expenditure account for only 57 per cent of total health expenditure at the national level, with individuals forking out a significant proportion out of pocket.
Furthermore, because of high consumption and the inability (politically) to raise premiums to cover rising costs, the scheme was plunged into financial difficulties just a few years after it was introduced in 1995. Since then, the NHI’s deficit has ballooned further – to NT$60 billion (S$2.6 billion) in 2009.
In contrast to Taiwan, Singapore’s health-care financing system consists of multiple channels of financial support. The 3M system – Medisave, MediShield and Medifund – treats the majority of health-care consumers as co-paying partners while making special provisions for the minority who cannot afford the co-payment.
Aside from 3M, Singaporeans have access to government subsidies in public hospitals. Thus, the basic medical needs of all Singaporeans, including the minority without insurance cover, are taken care of. In addition, the Government periodically pays money (from budget surpluses) into the savings schemes of low-income families and the elderly.
Such an approach not only counters the “moral hazard” generally associated with fee-for-service, third-party reimbursement (Singaporeans know this as the “buffet syndrome”), but also avoids providing the rich with health-care handouts (as would be the case under a universal coverage system that ignores income status).
Singapore’s multi-layered health-care financing system has enabled it to achieve the same goal of universal access to health care while keeping services affordable and ensuring the system remains sustainable in the long term. Over the years, it has purchased for Singaporeans good health outcomes, comparable and often superior to other developed countries’, at a much lower cost. The country’s total health spending is at 4 per cent of gross domestic product, compared with countries of the Organisation for Economic Cooperation and Development which spent an average of 9.6 per cent of their GDP on health care. In the case of Taiwan, the figure is 6.6 per cent.
The system is not perfect, but it has served Singaporeans well for the last 28 years. Rather than totally redesigning it, what is required is to continue building on its strengths while addressing existing gaps (such as tackling coverage for costly, non-catastrophic illnesses). Greater efforts should also be made to balance efficiency with compassion (for example, showing more flexibility in the implementation of the safety net so that no one falls through the cracks).
And yes, the next phase of the evolution of the health-care system should continue to be shaped by the national conversation regarding the kind of society Singapore wants to be. But make no mistake – despite claims to the contrary, there is no “magic bullet”.