Sustainable Health Care Financing: The Singapore Experience
| Published date | 01 March 2017 |
| Author | Jeremy Lim |
| Date | 01 March 2017 |
| DOI | http://doi.org/10.1111/1758-5899.12247 |
Sustainable Health Care Financing: The
Singapore Experience
Jeremy Lim
Oliver Wyman Group
Abstract
The Singapore health system has been lauded for achieving impressive population health outcomes utilizing only a modest
4–5 per cent of GDP, with the government’s share only one third of this. Measured health spending is consistent with a larger
government commitment to fiscal prudence and discipline in balancing budgets. In fact, the Singapore constitution permits a
government to only spend revenue raised during its term of office. Drawing down of national reserves can only be done dur-
ing exceptional circumstances and requires specific approval from the president. However, the sustainability of Singapore’s
health system is under pressure from changing demographics, disease trends and growing demands from citizens for greater
equity and expanded health care services. In the face of these challenges, the Singaporean government has responded by
introducing three major costly policy reforms: the Pioneer Generation Package, to help elderly people pay for medical treat-
ment; MediShield Life, to expand insurance coverage; and the Community Health Assistance Scheme (CHAS), to provide gov-
ernment subsidies for primary care for those that qualify. Despite the expansion of funding and services, the government
remains committed to the longstanding principles of fiscal prudence and not drawing from past reserves.
The Singapore health system attracts widespread policy inter-
est for its low GDP per capita spending on health care and
impressive population health outcomes (see Table 1). With
national health expenditure at barely 5 per cent of GDP Sin-
gapore spends half of what the UK does, and less than a third
of the USA (WHO, 2012). However, this comparatively modest
spending does not equate to poor population outcomes: not
only was Singapore named by Bloomberg Media (2012) as
the healthiest country in the world, it was also recently
described by the Economist Intelligence Unit as the second
most efficient health care system in the world. At the individ-
ual level, the Financial Times writer Gillian Tett in an editorial
titled ‘Thank You, Singapore’extols the ‘astonishing efficiency’
she experienced while undergoing emergency treatment in
Singapore and credits Singapore’s doctors and health system
with saving her life –even speculating that if she had been in
her home country (the USA) she might not have survived.
However, international praise has to be considered in the
context of local sentiments and anxieties. In the 2000 World
Health Report, which ranked the Singapore model the sixth
best globally, the authors scored Singapore a meagre 101st
(out of 191 countries) in the ‘Fairness of Financial Contribu-
tion’category. In primary care, a survey of experts rated Sin-
gapore’s health care system a modest 10.9 out of 30 points
(Khoo et al., 2014), which compares poorly with countries
like Australia (17.0), Denmark (26.0) and the UK (29.0) (Stigler
et al., 2012).
Fifteen years after the World Health Report, Singaporean
citizens continue to bear the largest burden of health care
spending. The government’s share of total health care
spending remains at roughly a third, with citizens paying
the remaining two thirds through a mix of personal savings,
private insurance, family support and philanthropy (WHO,
2012). High levels of out-of-pocket payments in the Singa-
pore system continue to give rise to anxiety: a 2012 survey
revealed that 72 per cent of Singaporeans believe that they
‘cannot afford to get sick these days due to high medical
costs’(Hooi, 2012) while the government-organized ‘Our Sin-
gapore Conversation’, a national dialogue aimed at discern-
ing Singaporeans’aspirations and concerns, identified health
care costs as a major issue.
In response, the Singapore government has announced a
slew of measures aimed at reducing individual out-of-pocket
health care spending, including increasing government
spending and expanding insurance coverage. This article
traces the changing ideologies governing health care financ-
ing in Singapore and examines how and why fundamental
changes are being effected.
The article is organized in two parts. The first briefly
describes Singapore’s health care financing model and the
underpinning ideologies, which reinforce financial sustain-
ability. The second explains why, despite having served Sin-
gapore well for almost five decades, profound changes are
underway amid concerns over long-term financial sustain-
ability.
Singapore’s health care financing model
Singapore has been built on strong economics and fiscal pru-
dence. The country’s reputation as an ‘economic miracle’
needs little introduction. Despite the trauma of its ejection
from Malaysia in 1965 and the consequent loss of a hinter-
Global Policy (2017) 8:Suppl.2 doi: 10.1111/1758-5899.12247 ©2017 University of Durham and John Wiley & Sons, Ltd.
Global Policy Volume 8 . Supplement 2 . March 2017 103
Special Issue Article
To continue reading
Request your trial