In a post from a few years ago, Bryan Caplan sings the praises of the very different approach to public healthcare practiced in Singapore:
In The Undercover Economist, Tim Harford highly praised the health care policies of Singapore. But it wasn’t until I read the section on health care in Ghesquiere’s Singapore’s Success that I realized how amazing the official numbers are. If the following is true, all the comparisons showing that the U.S. greatly outspends Europe without getting better health are beside the point, because Singapore makes Europe look like the U.S.:
The Singapore government spent only 1.3 percent of GDP on healthcare in 2002, whereas the combined public and private expenditure on healthcare amounted to a low 4.3 percent of GDP. By contrast, the United States spent 14.6 percent of its GDP on healthcare that year, up from 7 percent in 1970… Yet, indicators such as infant mortality rates or years of average healthy life expectancy are slightly more favorable in Singapore than in the United States… It is true that such indicators are also related to the overall living environment and not only to healthcare spending. Nonetheless, international experts rank Singapore’s healthcare system among the most successful in the world in terms of cost-effectiveness and community health results.
How does Singapore do it? Singapore is no libertarian health care paradise, but it does self-consciously try to maintain good incentives by narrowly tailoring its departures from laissez-faire:
The price mechanism and keen attention to incentives facing individuals are relied upon to discourage excessive consumption and to keep waste and costs in check by requiring co-payment by users.
[…]
The state recovers 20-100 percent of its public healthcare outlay through user fees. A patient in a government hospital who chooses the open ward is subsidized by the government at 80 percent. Better-off patients choose more comfortable wards with lower or no government subsidy, in a self-administered means test.
I’ve heard a lot of smart people warn that co-payments are penny-wise but pound-foolish, because people cut back on high-benefit preventive care. Unless someone is willing to dispute Singapore’s budgetary and health data, it looks like we’ve got strong counter-evidence to this view: Either Singaporeans don’t skimp on preventive care when you raise the price, or preventive care isn’t all it’s cracked up to be.
