Singapore: More Observations

I mentioned yesterday my short visit to Singapore. I thought I’d add some additional observations.

Singapore spends only 4% of its gross domestic product on health care(Singaporean Health Minister’s estimate). Just a reminder, in the United States we spend 16% of ours — nearly four times as much. What are we getting for that? The life expectancy of a male in Singapore is 79.29 and 84.68 years for a female. Again, just a reminder, in the United States the life expectancy of a male is 75.29 years; a female can expect to live to 81.13 years.¹ Hmmm.

What are the differences? I obviously haven’t had enough time to explore that question fully, but I’m going to now. There are a couple of obvious ones. In their system, everybody pays part of the cost. If you are poor, the percentage is very low, and if you simply can’t pay, the debt is written off, but there is a personal responsibility and it undoubtedly causes patients to engage.

Our system has an ailment I refer to as the “Chronic More Disorder.” Most patients in our country have very little reason to care what the cost is. Doctors have an adverse incentive to do more procedures, make more money. In a market, there have to be countervailing incentives to keep things in check. It doesn’t happen in our country. (An old theme for me, right?)

So, what about the quality you say? Aside from the statistics on life expectancy already cited, let me suggest we think about this. The Government of Singapore estimates that, in 2008, over 600,000 people, including many Americans, will engage in medical tourism. They will fly to Singapore to get their care at a fraction of the price. The Singaporean Government believes by 2012 the number will exceed a 1,000,000 people a year. In order to attract these people, they are transparent with both cost and quality outcomes. Patients have more information about care in Singapore than about care they would get from their local hospital. Hmmmm.

Here’s another thing I learned. When the government was formed in the 1950s, the British had set up a system of Central Provident Fund (CPF) which requires the Sing people to set aside 35% of their earnings. They allow the savings to be tax free. Does that sound like Social Security? Well, there is an important difference. Each citizen’s account is segregated. They cannot use it until it is time for retirement, but they do have influence on how it is invested. It is not like our Social Security System where each generation of workers pays for the retirement of their parents.

If you were simply looking at these two different systems as an investment opportunity and doing steely-eyed analysis on the likelihood of their prosperity in the future, which would you invest in?

• Investment 1: Spending 4% of their total receipts on health care with no future liability.
• Investment 2: Spending 16% of their receipts on healthcare with a $24 trillion legal and moral liability in the future.
• We should also toss in that number 2 above will have half as many workers per retiree in 20 years and that both get similar big picture results.

The global market is now weighing this question. I will have much more to say about this soon.

¹ Singapore statistics: The CIA factbook accessed on 4/21/2008 at https://www.cia.gov/library/publications/the-world-factbook/geos/sn.html 

US statistics: The CIA factbook accessed on 4/21/2008 at https://www.cia.gov/library/publications/the-world-factbook/geos/us.html

Comments

Dr. Leavitt,
I like your observations but the simple observation of what the US and Singapore get for their money opens Pandora's box.

Are many of our problems preventable? Diabeties, death by weapon (knife, club, car), obesiety. Yes Pandemics can be mitigated.

How much of our health care costs go to cover the un-insured like illegal aliens. Premature babies is difficult subject that carries more ethicaly weight than financial sense.

Lastly - hospital profits. Not just doctors and HCW and medical insurance but corporate profits off of suffering.

Just a few observations we might all ponder, weak and weary, over a healty system with surge capacity just nearly.

Travel safely sir. I look forward to your posts.

Regards
Kobie
‘Nothing we can do can change the past, but everything we do changes the future.'

Posted by: Kobie | April 24, 2008 at 09:26 AM

Secretary Leavitt,

Thank you for providing this blog - Your insights and thoughts presented in the form of a blog are just GREAT for people like me that are trying to learn as much as possible about our current health care crisis and look at different examples and perspectives from around the world. I look forward to your next entry.

Matt

Posted by: Matt Spencer | April 24, 2008 at 06:33 PM

Mike,

Very interesting observations which many people have been pondering for decades. But the real question is, "What are you going to do about it?"

Dave Haley

Posted by: David Haley | April 24, 2008 at 09:42 PM

As with our S.S., just let the Sing politicos get into their CPF system, and THEIR children/grandchildren with be paying, too. Our S.S. monies is in a General Fund, and has been leached to pay for Oil Wars, Pork Bellies, and other dubious skulduggery. WHAT is being done about, and WHO is watching over our S.S.??
Travels now to Singapore? Who's watching the store?

Posted by: Mickej | April 25, 2008 at 01:25 PM

Dave Haley,

Hi, during the campaign year those asking for our vote should answer that?

Secretary Leavitt champians many things but "We the People" should also be raising a fuss. Go up the food chain.

Kobie

Posted by: Kobie | April 25, 2008 at 03:38 PM

Kobie,

The United States Secretary of Health and Human Services is the head of the United States Department of Health and Human Services, concerned with health matters. The Secretary is a member of the President's Cabinet. He is a member of the Medicare Boards of Trustees, which for the past three years has reported to Congress that the Medicare Hospital Insurance Trust Fund is going broke in 11 years.

Others also have sounded the alarm. “As the baby boom generation moves into retirement, these programs face progressively larger financial challenges,” said Treasury Secretary Henry Paulson, one of the trustees. “If we do not take action soon to reform Social Security and Medicare, the coming demographic bulge will jeopardize the ability of these programs to support people who depend on them.”

This serious problem has drastic implications for every person, legal and illegal, in this country. If you are 40 now, you will be 51 when the money runs out for everyone.

Mike has big, big leadership responsibility for addressing this pending crisis our country is facing. He has warned Congress about it for three years and he is in a position to do things NOW which could start to address this issue. Sorry. But Mike does not deserve a pass on this issue just because he is going out of office in a year. If he feels the next guy ought to handle it, he should resign and step aside and let someone else fill the position who will start fighting for "We the people." That includes you and me.

Kobie, do you have the ability to generate $386 BILLION over the next 20 years to help this problem? If you do, come forward and offer your assistance. If not, shut up and let Mike answer for himself. I do have that ability through a system I have a patent pending on. I have publicly offered to Mike that I would obtain private funding to entirely pay for a Centers for Medicare and Medicaid two year pilot study to prove the concept would work and he has not answered this offer. If anyone in this country had an idea that could have this great an impact on our healthcare delivery system for the elderly, disabled, and poor, a system which is going broke in 11 years, if I were Mike, I would be doing everything I could to talk to them.

But maybe you are right. Maybe we ought to give good old Mike a pass because he is a short-timer and would rather travel the world than work hard for those whose health he was appointed to oversee.

Believe me, I am going up the food chain and he is right at the top. And I, as one of "We the people" am asking the guy at the top who has the job now, "What is he going to do about it?"

So far he has ignored someone who has a plan on how to make the system work $386 BILLION ways better. Go to www.haleygroup.com to check it out. I just might share this whole episode with the Wall Street Journal or the Washington Post and let them tell it to "We the people" so they can make up their minds on what Mike should be doing.

David A. Haley

Posted by: David Haley | April 25, 2008 at 07:49 PM

Mr Haley,

Many have sounded the alarm on social Security. The short list: not putting SS into the stock market, not funding other programs with SS money, going after Illegal aliens who do not pay into FICA, to pandemic which will cut deeply into the younger generation supporting SS, even removing SS numbers from computer records.

I did check out your website for quick payments. It looked good. The press section came up as under construction.

No, nor will I ever have the ability to give 386 Billion. I do hope you get heard and things work out. My friends and I would benifit from that.

As for your comment "Maybe we ought to give good old Mike a pass because he is a short-timer and would rather travel the world than work hard for those whose health he was appointed to oversee. "

I disagree. I do give Mr. Leavitt high marks. A disaster is not the time for introductions and to exchange business cards asking "So what do you do?" Also at a time when the world does not like the U.S., Mr. Leavitt has, in my opinion, helped improve our image and safety. Look at teh CDC helping to fund a Pandemic drill in Indoesia.

By helping them we help protect ourselves. Unless you are in a bunker, you are only as safe as your neighbors.

Mr Leavitt has also opened the door on many issues. Now has he sovled all the problems, I doubt it. No adminstration or depart does. There are many problems to solve. Some even larger than 400 billion dollars.

Mr Haley, if you have gone up the food chain with more to be done then yes - hit the WSJ, post on the blogs. Do not let your ideas lay dormant nor fall on deaf ears.

Regards
Kobie

Posted by: Kobie | April 30, 2008 at 10:49 AM