Sunday, 1 October 2023

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Focus on Healthcare – Navigating between NHS, Obamacare and 3M

In part four of TOC’s Focus on Healthcare series, we took a look at how Singapore’s 3M system (Medisave, MediShield, Medifund) measured-up against those of other developed countries. No single healthcare system is perfect, but it is through open and honest examination of best practices (and worst failures), not sweeping statements like “beware welfarism of The West”, that we can make ours better.

In this article, our foreign correspondent examines the forces at play in the UK’s NHS and the USA’s Obamacare. Is national healthcare best served by market forces, or is a state-funded system more feasible? The diagnosis, we discover, is not quite that clear-cut.

By Ghui

Healthcare and its spiraling costs have been a bone of contention in Singapore of late. Amongst the various concerns raised by Singaporeans, the escalating costs of medical care have been chief.

This is not a situation that is unique to Singapore. The viability of the healthcare reform, dubbed Obamacare in the United States and the sustainability of the National Health Services (NHS) in the United Kingdom have made daily headlines in their respective countries. Tempers have been inflamed and discussions have been impassioned on both sides of the Atlantic, to say the least. Given that healthcare has such an impact on us as a society and has touched each individual personally, the degree of public interest is justified.

The healthcare systems in the United States, the United Kingdom and Singapore are vastly different. The needs of the various populations are also diverse. It would therefore be an exercise in futility to compare these various systems in a like for like manner. What I will however attempt to do is to contrast intention with result and objective.

The Singapore system is (if we are to generalise) a hybrid of the US and the UK. By and large, we can consider the NHS as funded by the state. This is of course not funded in a vacuum. Taxes are considered high when compared to Singapore and all UK tax payers contribute a certain proportion of their salary to National Insurance. For making that contribution, however, any tax payer can walk into any government hospital or clinic and receive free treatment (excluding prescriptions, which would cost around SGD15 per prescription). This system will also support those who cannot afford to make National Insurance contributions and is distributive in that respect.

For all intents and purposes, British taxpayers will not have to worry about the costs of healthcare unless they wanted private healthcare. This is an amazing idea and very progressive given that it was developed in the 50s in postwar Britain.

However, years of poor management has led to the NHS being overstretched. It is massively in debt and there are ongoing questions as to its sustainability. The process of overhauling the NHS to bring it in line with economic reality is very much an ongoing one. I believe in the viability of the NHS. However, for it to endure, it has to nip endemic work duplication, poor record keeping and coordination in the bud once and for all.

The US on the other hand is completely different. Prior to Obamacare becoming law, US healthcare can be considered elitist. Large chunks of low income Americans had no access to affordable basic healthcare. The very foundations of the prosperity of the USA is built on capitalism. It therefore follows that it would attempt to model its healthcare system on the free market system. After all, if it worked so well for the economy, making it one of the richest and most powerful nations in the world, why wouldn’t it work for the medical sector?

But as Paul Krugman explained, based on Kenneth Arrow’s groundbreaking postwar paper “Uncertainty and the welfare economics of healthcare”, healthcare cannot be marketed like bread or TV. Firstly, it is uncertain – no one knows when they will need it, what they will need or if they will need it. Secondly, if something goes wrong, it can really go wrong and wind up costing an arm or and leg (no pun intended). Most people will therefore be unable to cough up (again, no pun intended) the big bucks in cash.

The fallacy is the reliance on insurance to solve this problem because lest we forget, insurance companies are basically bottomline driven corporations after all and will see claims as a “cost” to the business. More often than not, their profits are directly related to how many claims they have to pay out. Why then are we surprised when a policy is excessively difficult to claim on? Their objectives and our goals as potential claimants are not really in line.

Popular literature and media coverage on both sides of the debate. Obamacare continues to be a point of contention in the US.
Popular literature and media coverage on both sides of the debate. Obamacare continues to be a point of contention in the US.

Long and short of the story – healthcare will not work like a standard market story and government intervention alongside affordable insurance will be necessary. Hence the relevance of Obamacare which in a nutshell creates a marketplace for affordable insurance to the masses.

Many would no doubt raise the many objections that have surfaced against Obamacare. However, it is quite clear that when you dig deeper, most protestors either disagree due to a lack of understanding, or feel that Obamacare should go even further. This is another story altogether but the important point is that the issues are being raised, discussed and addressed.

The US and the UK are in the process of changing their systems. These issues are being debated and discussed at the highest levels of government while being scrutinised by the press. Their respective citizens are keenly following the progress of such high level talks.

Such debate is healthy for a citizenry that have a right to be concerned, and essential is a country wishes to do well in implementing national healthcare. This is something that Singapore will need to emulate, if we wish to see success in our healthcare system.

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