• Goldhill and Singapore

    The following chain of logic was suggested to me by an email exchange with Tyler Cowen:*

    1. Singapore’s health system works well.
    2. Goldhill’s proposed system is similar to Singapore’s.
    3. Therefore, Goldhill’s system should work well.

    Leaving aside whether or not you agree with the premise in 1, if 2 holds, 3, more or less, follows. Of course it all hangs on what “similar” means.

    I did a bunch of Googling and Twitter and email outreach, and some reading on Singapore’s system was suggested to me. Cowen also recommended to me someone who knows a great deal about the country’s health system, and I spoke with that individual.

    Without going into a lot of detail, there seem to be at least two big differences between what Goldhill has proposed and the Singapore system:

    1. The deductible for Singapore’s “catastrophic” plan (MediShield) is lower than what Goldhill proposes (TruCat). MediShield deductibles are as low as $1,500 per year (that’s Singapore dollars, which, converts to about $1,200 per year U.S.). If Goldhill pinned down TruCat’s deductible, I don’t recall the annual figure, but I do remember it was supposed to be on the order of $500,000 per lifetime. Singapore’s MediShield doesn’t sound very catastrophic to me.
    2. Singapore’s deductible is low enough that there isn’t a need for loans to people who can’t pay it. Not so of Goldhill’s system. There, if one can’t pay the deductible, one can get a loan, the balance of which is forgiven if it grows higher than what could be paid off in 10 years or upon death. In Singapore, the safety net is MediFund, which sounds akin to U.S. Medicaid.

    All in all, I agree with Cowen’s view that Goldhill’s system is a lot like Singapore’s but with differences in scale. I think another way to say it, though, is that Singapore’s system is a lot like universal, mid-range deductible Medicare with a mandatory health savings account (HSA) plus Medicaid for the poor. By the way, in Singapore, the government dictates what health services you can and cannot use your HSA funds for.

    I wonder, though, if one believes Singapore’s system is working well, why advocate a system at a different scale? One reason is that U.S. health care prices are a lot higher. On the other hand U.S. per capita income is lower. Do those facts warrant a dramatic change in scale?

    I am neither disparaging nor praising Singapore’s system. I will say this much, though, I cannot imagine a Congress that would pass anything like universal Medicare, even if it was mid- to high-deductible. We can’t even agree whether all poor people should get Medicaid! That issue is settled in Singapore.

    * I am not putting words in Cowen’s mouth. He didn’t write out this chain of logic in this way.


    • My friends recently visited Singapore and said the wealth (and spending) is unimaginable. Maybe Cowen is implying that it’s the health care system that caused the wealth. As for Cowen and Goldhill, I don’t see Goldhill’s system as libertarian at all. Cowen presumably does. But the health savings account envisioned by Goldhill isn’t solely a self-funded account like the libertarian model HSAs. Goldhill’s system has many funding sources for the accounts including public sources. I know Frakt understands this, but there are libertarians who will find anything to support their world view. Even wealth in Singapore. It’s like the pious Christian who sees the image of Jesus in mashed potatoes; she sees what she wants to see.

      • As a factual matter, Singapore does spend only about 5% of its GDP on health care, compared to an OECD average of 9.5%, to say nothing of the US. So it does seem likely that there’s something we can learn from them. But yes, absolutely there’s a see-what-you-want-to-see effect (which, I’ll admit, is also a factor in my previous comment).

    • Singapore also has a hospital sector dominated by public hospital,s price controls, and limits specialty physicians to 40% of all practicing physicians. I suspect this helps.

    • By per-capita GDP, Signapore is only ~20% richer than the US. I don’t think wealth is it. I think it’s the price controls and “the government dictates what health services you can and cannot use your HSA funds for.” I.e. death panels! 🙂

    • Hmm…beneficiary of MNC tax arbitrage , relative high debt to GDP, and price controls.

      Inquiring minds want to know how this one will work out in the long run.

    • Cowen has also mentioned that Singapore has price controls for many services, which he thinks is acceptable. By the way, this probably has something to do with why the MediShield deductible is so low (in US terms).

      Still, Singapore has a lot of per capita wealth, but inequality is also higher than the US:


      Also remember, MediShield is essentially hospital insurance. And the deductible is $1,500, but you have co-insurance of at least 10% up to the coverage limit (called the claimable limit in Singapore). So, you would still pay quite a hefty chunk of a hospital stay (albeit the rates are again controlled and subsidized, so they’re not as high as Medicare pays).

      Basically MediShield is not really a catastrophic plan by US standards for the reason Austin thinks (the deductible is quite low) and one he may have missed (you can incur quite a bit of cost sharing, so not like the HSAs here). But in another sense what expenses are catastrophic to a moderate-income Singaporean are probably less than here.

    • It was my understanding that Singapore goes beyond price controls and determines what procedures can be done at what hospitals. (This is from memory so it could be wrong.) I also have doubts about the system working piecemeal. I suspect that it works in the context of the overall required savings that they have in Singapore. Not sure how you get that into law here.


    • Trying to put Singapore’s system somewhere in the spectrum that ranges from “free market” health care to “socialized” health care is a pointless exercise. The fact is that neither USA liberals nor conservatives would ever support implementing anything like this in the USA.

      The Singaporean system became relevant when conservatives started claiming it as an example of free market principles working in health care. Then, liberals countered that the Singaporean system did not resemble at all what conservatives were advocating. The liberals were right in this but then some took it too far by claiming that it actually resembled things they were advocating.

      If you look at the Singaporean system, we see large amounts of out of pocket expenditures and private expenditures as shares of the entire system. These elements of the system are conservative. Indeed, Singapore, more than any other system, utilizes cost sharing as a way of holding down costs which conservatives do support and it seems to work pretty well at doing this. However, Singapore also has price controls and universally guaranteed public catastrophic insurance which look more like what liberals want.

      The only respectable argument I have seen made here is that Singapore lends support to a particular element of conservative health care policy (cost sharing).

      In the end, I see Singapore as the conservative version of Sweden. A country with a very different set of policies than the USA along with a very different and much smaller population. Liberals are understandably annoyed when conservatives cite Singapore as proof that conservative policies would work in the USA, but they often do not see themselves making an almost identical error in citing Sweden (or Denmark, Norway, etc.).

    • My experience here in Japan tells me that it’s price controls that are the important thing in keeping costs down. I love the affordable universal insurance here, but every time I go to the doctor or dentist here, I calculate, from the 30% I’m required to pay, what the doctor/dentist is getting, and every time I come up with a number that I’d be happy (and easily able) to pay for the service I get. There are even caps on charges implemented as refunding. It was nice that they refunded half the US$2500 I was charged for a 5 day hospital stay in which they successfully reattached a detached retina, but I’d have been happy to pay the whole US$8,500 for the great job they did. And I’d hate to think what I would have been charged in the US had the retina blown while I was visiting Boston.