The secret to Singapore’s “free market” health care

Conservatives love to talk up Singapore as a great example of how a country can have universal, low-cost, market-based health care.  Erza provides a great explanation of Singapore’s system and explains the ultimate way costs are held down– government intervention, just like every other advanced country with universal, affordable health care.  Now, Singapore does some really interesting things that do allow more of a role for a free market and consumer choice– in very basic health care, not for your heart attack– but the whole damn system is predicated on massive government intervention and regulation to keep prices down.  Ezra:

But Singapore isn’t a free market utopia. Quite the opposite, really. It’s a largely state-run health care system where the government designed the insurance products with a healthy appreciation for free market principles — the kind of policy Milton Friedman might have crafted if he’d been a socialist.

Unlike in America, where the government’s main role is in managing insurance programs, Singapore’s government controls and pays for much of the medical system itself — hospitals are overwhelmingly public, a large portion of doctors work directly for the state, patients can only use their Medisave accounts to purchase preapproved drugs, and the government subsidizes many medical bills directly… [emphases mine]

It’s easy, looking at Singapore’s insurance scheme, to see what conservatives find so attractive in the system. While there’s significant coercion, there’s also a real focus on pushing patients to act like consumers, and reserving insurance for unexpected, unusual costs. In addition, Singapore’s safety net — Medifund — is limited in its commitments and administered at the local level.

But all that happens within the context of a government-controlled — and often government-run — medical system

Singapore’s system is probably better designed in terms of how consumers spend their own money. But the lower overall prices make them much less exposed to health costs than both patients and employers inside the American system — which suggests to me that Americans have at least as much incentive as Singaporeans to try to use their power as consumers to cut costs.

The fact that that hasn’t worked is, I think, a reason to believe we’ve gotten the lesson of Singapore’s health system backward. Singapore heavily regulates both the pricing and provision of medical care to keep costs low (as do all other developed countries) and then, working off that baseline of low costs, has Singaporeans pay out of pocket in order to keep them mindful of how much they’re spending.

In America, conservatives want to apply that strategy in reverse: working off a baseline of extremely high prices, they want to force people to pay out of pocket as a strategy to bring those prices down. That hasn’t worked so far, and my guess is efforts to double down on it — of which the Republican Obamacare alternative is one — will continue to fail.

Yes, there really are some “conservative” lessons to be learned from Singapore.  It would be great to try and apply some of these after we used government to aggressively control prices in the non-free market that is health care.  The biggest lesson is that, no matter the details of the particular design, the ultimate key to holding down health care costs is effective government regulation.

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