In Health Care, Do We All Lose to Singapore?


As the health care debate boils over this summer, one meme sure to be be stirred into the stew is the frequently recited fact that Americans lead the world in health spending but have no similar world-leading claim to life expectancy. In fact, we rate 50th out of more than 220 countries with an average age of 78. But as the graph after the jump shows, the disconnect between health spending and life expectancy isn't unique to America.

Here's the graph provided by CNN that shows pretty convincing that a nation's health expenditures are a pretty poor indicator of life expectancy around the world.
560 healthcarespending.pngOne conclusions that is often drawn from graphs like these is: the UK has an publicly-run health care system that would make Newt Gingrich's head explode, but they still have higher life-expectancy. But the real winner of this graph seems to me to be Singapore, whose long lives and small health expenditures are the envy of the world. As EconLog puts it, Singapore "makes Europe look like the United States."

But there's a problem with turning Singapore into a sexy pin-up for health care wonks: it breaks a lot of rules. Conservatives should hate it because the government regulates supply and sets prices and forces all its citizens to put money into a health care savings account. More liberal reformers should be irked by its famously high co-pays to help the government recoup money, because too-high co-pays are supposed to discourage the less fortunate to seek preventative care when the illness can be more cheaply treated. As Watson Wyatt sums up, it's a bizarre combination of a public option and private special care where "the private healthcare system competes with the public healthcare, which helps contain prices in both directions."

When you take stock of the compulsory savings accounts, the mandatory payroll reductions and the copays, you've got something quite weird: A largely government-run program that is ultimately funded mostly by private spending. Indeed, as a percent of total expenditures, private spending on health is higher than the United States and three times greater than the UK and Japan.

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So where will Singapore fall in the health care discussion? Probably close to nowhere, unfortunately. Singapore is an extraordinary hodgepodge of health care principles, but it's also a city-state whose health care system is comprised of fewer than 30 hospitals. Still, perhaps it deserves a place in the summer-long blockbuster discussion that begins with "What are we paying for, exactly?"

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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