3M: Scotch Tape for the Broken US Healthcare System?

Since 1965 when Singapore obtained independence from Malaysia, this small country in the Western Pacific has grown from a chaotic, overcrowded island with high unemployment and poor infrastructure to the successful society it is today.   This is due in part to the fierce leadership of its first Prime Minister, Lee Kuan Yew and also to its highly developed market-based economy.  As a result, its citizens “…enjoy a remarkably open and corruption-free environment, stable prices, and a per capita GDP higher than that of most developed countries.”1 In a mere 46 years Singapore has accomplished an enormous feat of societal engineering that the Unites States has taken far longer to achieve.

Not yet impressed?  Then you aren’t familiar with their 3M healthcare system.  While Singapore ranked 6th in overall health by the World Health Organization in 1997, the United States didn’t even make the top 30.  Meet the 3 M’s: Medisave, Medishield, Medifund.  Medisave covers about 85% of all Singaporean citizens and is mandatory for all individuals who work, even if they are self-employed.  Each person contributes 20% of their wages into a fund and the employers add an additional 13% of support per employee.  Medishield covers chronic, serious, or catastrophic illness and Medifund is an endowment fund which covers the underprivileged who still cannot pay despite the other initiatives.4 There is also an optional ‘add-on’ called Eldershield for those with severe disability and the elderly.  In an effort to promote price wars for consumer attention as well as transparency, the Ministry has begun publishing hospital bills to make comparison-shopping a little easier.  What does this all mean in dollars and cents?  Singapore spent 4.3% of their GDP to America’s whopping 14.6% in 2008 and got far better results.

Their innovative system has garnered much praise and attention, including World Bank bloggers2, the Journal of the American Enterprise Institute3 and Tim Harford in his bestselling book the Undercover Economist.5 So, the most important question now becomes, would this system work in the US?  Many of these same authors and bloggers spouting praise become unsure on this point, saying that the Singaporean model would be difficult to replicate anywhere else.  In their defense, one of the most salient features of the Singapore system is that the whole country runs efficiently on 29 hospitals and care facilities.  In 2010, the US American Hospital Association reported that there are 5,795 registered hospitals.6

Despite this fact, it seems a bit shortsighted to claim that there is no foundation in emulating the model simply because the numbers are different.  Countries the world over have turned to the US for model ideas on how to recreate government, democracy, civil rights and market economies in their own cultures.  Nearly all other high-income countries in the world have adapted to some form of universal healthcare coverage and yet the United States keeps trying to reinvent the wheel instead of emulating someone else for a change.  In the case of healthcare, we aren’t the forerunners.  We aren’t even close.  It’s going to take a little more watching and a little less doing to fix our broken system.  And if that doesn’t work, maybe some Scotch tape.

1 CIA FactBook https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html

2 World Bank Blog http://blogs.worldbank.org/psd/how-do-they-do-it-public-private-partnerships-and-universal-healthcare

3 Journal of the American Enterprise Institute http://www.american.com/archive/2008/may-june-magazine-contents/the-singapore-model

4 Ministry of Health-Singapore http://www.american.com/archive/2008/may-june-magazine-contents/the-singapore-model

5 Harford, Tim.  The Undercover Economist. Oxford University Press, 2007. Print.

6 American Hospital Association http://www.aha.org/research/rc/stat-studies/fast-facts.shtml



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