Singapore Style Healthcare in AmericaBy: Chad Allen - 1/6/2017
As healthcare costs continue to rise in America, many more Americans are going to start hearing about a small sovereign city-state located just off the southernmost tip of Malaysia in Southeast Asia known as Singapore. This is because Singapore has a healthcare system that is talked about in great detail among healthcare policy wonks from both sides of the political spectrum.
However, instead of just describing the Singapore healthcare system to you, we are going to give you a "proof of concept" type scenario first to give all Americans a better understanding of how a similar type of healthcare system would actually work here in America.
So let's begin...
This type of healthcare system would be composed of 3 basic parts:
When an individual starts working 8% of their income would be sent directly into their own personal compulsory health savings account (HSA). Then when that individual needs to see a primary care physician for their basic health care needs, they would use their personal compulsory HSA account to pay for those services directly.
If their needs exceed basic care standards, then a Universal Catastrophic National Health Insurance Plan would takeover for that particular acute or prolonged medical event at an 80/20 rate.
If a person is unable to pay for their services, using their own compulsory HSA account, then a National Safety Net Medical Program would kick in for the poor or those suffering from extreme medical issues.
This account would be similar to what some Americans may know as an HSA account, but instead of being optional it would be a compulsory HSA account in which every working adult would contribute about 8% of their pay into their own personal HSA account each pay period. In addition, their employer could also contribute to an employee's HSA account as well. These contributions would take the place of paying a monthly premium to a typical health insurance company.
In other words, instead of paying a premium to a private health insurance company, you would instead be paying yourself through your own HSA account.
This HSA account would then earn a small amount of interest through a safe Government Securities Investment Fund.
When a person needs to see a doctor for rountine basic care they would then use this HSA account to pay for that service directly instead of using a traditional health insurance company.
Example: Someone visits their primary care physician for a rountine cold/cough which costs $80 plus $20 for a one-time cough medicine prescription.
Primary Care Physician Bill: $80
One-Time Prescription: $20
Total cost to Patient: $100
So in the above scenario, the patient would pay their entire $100 bill using their own personal compulsory HSA account. No health insurance company or program would be involved in this transaction at all. It would be a direct pay for service transaction.
If a person needs assistance for a surgical procedure or a long-term care condition such a diabetes then a National Catastrophic Health Insurance Program would kick in at an 80/20 rate. The government would cover 80% and the patient would cover 20% using their own compulsory HSA account.
There would be a small monthly premium ranging from $10-$50, and a yearly deductible ranging from $1,500-$2,000 depending on age.
Example: A 29 year old individual has to have an emergency appendectomy which costs $15,000.
Patient Yearly Deductible: $1,500
Government Pays 80%: $10,800
Patient Pays 20%: $2,700
Total cost to Patient: $4,200 (Deductible plus the 20%)
So in the above scenario, this acute catastrophic event would costs the patient $4,200 which they would pay for using their compulsory HSA account.
This would be a National Safety Net Medical Program for the poor or those suffering from extreme medical issues who have no way to pay for their care, and could only be accessed if an individual's and their spouse's compulsory HSA accounts were completely depleted. Resources, such as job training and placement, would then be given to help these individuals get out of poverty.
So how does this type of healthcare system actually work in Singapore?
Singapore's healthcare system continually ranks as one of the top healthcare systems in the world and continually ranks far better than the healthcare system in the United States.
Singapore's healthcare system is based on a 3 part system, which is similar to the principles that have been listed above:
(1.) First, Singapore has a compulsary HSA account called MediSave.
(2.) Secondly, they have a Catastrophic National Healthcare Plan which they call MediShield Life.
(3.) Finally, Singapore's healthcare safety net program for the poor is called MediFund.
Khaw Boon Wan, who was Singpore's Minister of Health from 2004–2011 describes Singapore's healthcare system in these simple terms:
"My MediSave is mine, your MediSave is yours, I work hard I earn more, my MediSave is bigger. You're lazy, you work less, your MediSave is small."
"I keep myself healthy, I hardly use it, I don't go to the hospital, my MediSave grows."
on the other hand,
"I could not be bothered, I smoke, I drink, I'm obese, I don't exercise, I fall sick often, my MediSave gets depleted."
(1.) Instead of paying a monthly premium to a health insurance company you are paying yourself through your own personal compulsory HSA account.
(2.) No more limited patient networks. Since you are paying for your own care directly you are free to shop around for the best healthcare and prices.
(3.) Increased competition between providers and hospitals because of direct payments without networks.
(4.) People will be more careful when spending their own money for medical services.
(1.) Americans hate being told what to do with their own money. The individual mandate under the current ACA exemplifies this issue. So convincing 320+ million Americans to buy into the idea of a "compulsory" HSA account would be difficult.
(2.) Low income individuals may have a difficult time adequately funding a compulsory HSA account.
(3.) People may avoid getting needed medical care if they know they will be paying the bill directly from their own HSA account.
So what do you think America? Like it, hate it or just not sure?