In Budget 2013, the Ministry of Health (MOH) has announced that the government will increase its “share of national spending, to provide Singaporeans with greater assurance that care will remain affordable and accessible … We will in fact take on a greater share of national spending, from the current one-third to about 40 percent and possibly even further.”
I had written about this in a previous article, where I had surmised that even though Singapore has one of the highest GDP per capita in the world, our government spends the lowest proportionate expenditure on our healthcare in the economically developed countries. For a government with our GDP per capita, the government should be spending at least 60% on healthcare expenditure, and not the paltry less than 40% that we are on now. Even South Korea with a GDP per capita of about half of Singapore’s, the government spends about 60% on healthcare expenditure, almost twice that of the Singapore government.
On MOH’s website, they share that Singapore’s healthcare financing philosophy is that the “financing system (is) anchored on the twin philosophies of individual responsibility and affordable healthcare for all. Through a mixed financing system, use of market-based mechanisms to promote competition and transparency and the adoption of technology to improve the delivery of healthcare services, we have secured good healthcare outcomes for our population. We have done so with a national healthcare expenditure of below 4% of our GDP, which is low among developed countries (although this is expected to grow with an ageing population).”
Fair? – Market Forces to Determine Healthcare Access?
Essentially, this is what the government is saying – we will allow the capitalistic market forces of demand and supply to determine what the right price of healthcare is, and the government will spend as little as it can, so that the individual has to make the final decision as to whether it’s financially wise and feasible to engage in the health service, or not.
But is this fair?
- First, healthcare should be a basic and essential need for the livelihood of an individual.
- Second, healthcare costs have been rising much faster than people’s wages – where healthcare costs have continued to rise in tandem with inflation, real median income has remained stagnant over the past decade or so.
- Third, the government’s “mixed financing system, with multiple tiers of protection” of Medisave, MediShield and Medifund, has seen continued increases of the individual’s investment before these tiers are accessible by the individual. The Medisave Minimum Required Sum has been increasing by 20% on average annually over the past few years. The premium for MediShield has also risen, while the premium covered has become lesser per dollar premium. Also, not all Medifund applicants are successful in accessing Medifund for their healthcare bills.
Taken these into account, is it still fair for the government to rely on market demand and supply forces to determine whether an individual should access healthcare, or rightfully speaking, would be able to afford healthcare? Even if the government increases their proportionate expenditure to 40%, is this enough?
Social and Psychological Impact to Unmet Basic Healthcare Needs
MOH might say that, “These features of the Singapore system have been recognised in various international assessments.” However, what are the implications to a system which has become so economically viable? What are the social and psychological implications? Imagine for a second, that if you are a low-income individual and if you have a need to see a doctor, no matter how urgent, you would want to postpone seeing the doctor until it is absolutely necessary; because you would hope that you would be able to get better without having to spend the low income that you have to see a doctor, when you can spend on food or even on your children’s education. Imagine then for a couple, one person might want not to see a doctor but the other might insist that he or she should and an argument ensues, simply because they do not want to have to spend their meager income on seeing the doctor, when there are other basic necessities that they need to look out for, even as healthcare should rightfully be a basic necessity as well.
Underpinning the decision by our government to rely on the people to take responsibility over their own health, through using market forces to determine their consumption, is a thinking that healthcare isn’t a basic necessity. If it were seen as so, healthcare costs would have been kept low, with lower price inflation and higher governmental subsidies. But is that the right thinking – to think of healthcare as a non-basic necessity?
According to Paul Swanson, in his book, ‘An Introduction to Capitalism’, he says that, “A person without money – no matter how desperately they may want or need a particular good – has no demand. Lack of money corresponds to lack of influence in the market; the market does not respond to those without money.” Clearly, MOH’s “use of market-based mechanisms to promote competition” thus prices out a certain segment of the population from healthcare who would also require the most support to seek healthcare. Indeed, Swanson effectively sums it up when he says that, “An individual in dire need of medical care, judging by his/her physical condition, will receive it only if they have money. In the parlance of the market, individuals with need and no money have no demand. The motivation to satisfy their need is money – hunger or pain is not sufficient. This means that supply, as the other side of the coin of the market, is directed towards those with money.” What’s this means is that the Singapore’s healthcare system is a failure to our poor and continues to favour the rich and wealthy.
Need to Relook Our Healthcare Philosophy
A relook of our financing, and indeed, healthcare philosophy is required. It is not a matter of just the government increasing the proportion of government expenditure in healthcare. Even then, an increase to 40% is nothing to shout about as it would still be the lowest among all economically developed countries and an embarrassment for a country with one of the highest GDP per capita in the world. 40% is especially insignificant, when compared to ever-increasing healthcare costs and stagnant wages. Does the increase to 40% even compensate for the price and wage changes?
In order for our healthcare to adequately meet the needs of the people, the healthcare philosophy should look not only into the proportionate expenditure by the government on our healthcare, but also on the proportion of GDP allocated to healthcare expenditure, but more importantly, on the increase in healthcare costs and increase in real wages of the people. If healthcare costs continue to increase beyond the increase of real wages, more and more people will feel the strain of healthcare on their incomes. The healthcare system might then be able to adequately curb people’s overuse of the healthcare resources but underlying people’s decision not to access medical help, is it because they do not want to stress the system or is it because they would rather become more sickly than to have to seek medical help?
As a planner, the government might look at market dynamics as having been able to effectively manage demand for healthcare and our statistics continue to show a people who have one of the longest lives in the world. Yet, if we live long lives, but unhealthy ones and if we live long lives but suffer from continued psychological and social stresses, does it bode well for a people who are continually stressed, even as they do not seek support for it?
Looking Beyond A Financing Mechanism to Prices, Wages and Subjective Well-Being
A relook into our healthcare philosophy is required, and one that does not only look into the financing mechanism and statistics. The healthcare philosophy needs to also be holistic where the government intervenes actively into the market, to prevent price increases that are not on parity with the people’s incomes. If the government does not see it fit to intervene in market forces, then the government would need to intervene to ensure that the people’s incomes grow on parity. In a market economy, the people’s incomes will always grow at a much slower pace and prices at a much faster pace. The government’s role is to ensure parity and equitable distribution and thus it needs to first, manage the price and income growth for parity, and second, to ensure a tax model that allows healthcare financing to be equitably distributed.
Simply put, healthcare should be a basic need for all individuals. It requires a government to remodel its thinking to understand this. As long as we live in a capitalistic system, individuals who do not have comparative financial freedom are disadvantaged in a market economy. If the healthcare system is left to market forces, the individual will be unfairly penalised simply because he or she is systematically disadvantaged by the system – continued price increase and low wage growth is beyond his or her control. The government has to overhaul its thinking to look beyond the financing mechanism and statistics to make its decisions, but to also look into the price and wage mechanism, and more importantly, at the people’s subjective well-being in developing a truly fair and equal healthcare system for all.