Health care in Singapore

The American magazine has a article, by Rowan Callick, on the health care system in Singapore. Commenting on the article Bryan Caplan says

It's not laissez-faire, but it is state intervention with the hands of a surgeon

Why does the system work?

What’s the reason for Singapore’s success? It’s not government spending. The state, using taxes, funds only about one-fourth of Singapore’s total health costs. Individuals and their employers pay for the rest. In fact, the latest figures show that Singapore’s government spends only $381 (all dollars in this article are U.S.) per capita on health—or one-seventh what the U.S. government spends.

Singapore’s system requires individuals to take responsibility for their own health, and for much of their own spending on medical care. As the Health Ministry puts it, “Patients are expected to co-pay part of their medical expenses and to pay more when they demand a higher level of service. At the same time, government subsidies help to keep basic healthcare affordable.”

The reason the system works so well is that it puts decisions in the hands of patients and doctors rather than of government bureaucrats and insurers. The state’s role is to provide a safety net for the few people unable to save enough to pay their way, to subsidize public hospitals, and to fund preventative health campaigns.

There are (moral hazard) problems with any system where a third party pays the bill. Decisions by "patients and doctors" might turn out to be less efficient than the decisions of the "bureaucrats and insurers." To contain the problem, Singapore looks to provide choice but with financial responsibility as well. The Callick article notes

In Singapore’s system, the primary role of government is to require people to save in order to meet medical expenses they don’t expect. While the Singaporean government does regulate prices and services, its hand is nowhere near as heavy as that of governments with extensive nationalized healthcare, such as the United Kingdom or Germany.

Caplan's comment concludes

I prefer medical laissez-faire to the status quo of Singapore. Still, it's worth calling attention to its success. Singapore shows that we can meet populist demands to "take care of everyone" for a fraction of the cost that both Europeans and Americans take for granted.

May be New Zealand could take a few pointers from the way things are done in Singapore.