A political threat looms over much of the
world. Developed countries as well as many emerging
countries, as in China’s case, are beginning to see the effects that demographic aging
and many public services’ unsustainability can cause with increasing concern. Along with pensions, health is another of
the fields that generate the most uncertainties and fears. An increasingly aging population and the emergence
of new and expensive medical technologies have raised some very important questions: Will we be able to pay for a quality health
care system or will we be condemned to a precarious health situation that affects our life prospects? Is there a successful model that can lead
the way? Are there alternatives? Well, in this video we’ll look at a system
that we may more or less like, but which we should definitely know about and take into
account throughout this debate. Let’s see it. Check out the following graph, it shows a
country leaving the Third World and becoming one of the richest areas on the planet. Thirty-five years ago, Singapore and Spain
had the same per capita income, today however the former more than doubles the Spanish per
capita income. In 2015, Singapore’s per capita income was
$86,100 per year and Spain’s was just $34,750. But, even if we took countries such as Finland,
Denmark, Sweden, Germany or the United States as examples, we’d be able to see that Singapore
is much richer than any of them. However, it’s often said that Singapore’s
example isn’t good enough because their wealth essentially comes from a financial
sector that is much larger than that of any of the aforementioned countries. That’s true, but no, that’s not the key
to this small state’s success. The weight of Singapore’s financial sector
isn’t big enough to explain such differences in per capita income. In fact, if we were to eliminate the effect
of these countries’ different financial sector sizes, Singapore would still be much
richer than all the others. Because actually, both trade and manufacturing
are more important in Singapore than the financial sector. We’re talking about one of the largest merchandise
exporting countries in the world. For example, the proportion of electronic
material that this country exports in relation to its GDP is larger than the proportion of
anything exported by countries like Spain, Sweden, Denmark, or even Germany. So, the question is: How did Singapore achieve
such a high level of prosperity? Well, if we wanted to simplify it, we could
say that Singapore is the second freest economy in the world according to the Index of Economic
Freedom published annually by the Heritage Foundation and the Wall Street Journal. Its public spending, for example, is half
of the US’s and a third of Sweden’s. Listen to the words of the historic president
of Singapore, Lee Kuan Yew, which successfully reflect the real foundations of this country’s
economic success. “When most of the Third World was deeply
suspicious of exploitation by western multinational corporations, Singapore invited them in. They helped us grow, brought in technology
and know-how, and raised productivity levels faster than any alternative strategy could. Lee Kuan Yew.) Singapore’s success is therefore not due
to the financial industry but due to the same reasons that have led to the growth of other
economies: legal security, low taxes, monetary stability and moderate regulations. A commitment to the free market that has made
this country become, in many areas, an example to follow. And we’re not only talking strictly about
economics, but also certain social issues, such as health. Yes, you heard it right, Singapore is also
a role model in terms of health policy. (AN IMPOSSIBLE CHALLENGE?) Let’s take a look, for example, at Spain’s
case, a country whose health system is considered one of the most efficient on the planet. Well, the problem is that, beyond being corrigible,
it isn’t sustainable. See, in just a decade, the total cost of the
Spanish health system has almost doubled, and everything indicates that as a result
of the aging population and the demand for new and expensive health technologies, this
trend will be unstoppable, and will continue to worsen year after year… And don’t think that this only happens in
Spain, not at all. Medical bills, that is the sustainability
of health systems is a widespread problem in other developed countries. So the question that arises is how can we
overcome these challenges and ensure the sustainability of health systems? A good model – which is never taken into
account – could perhaps be that of a completely free health system, a system in which demand
and supply are determined by the market and not in political offices. This could lead to some benefits: For one, more money for families thanks to
lower taxes, and a precautionary saving level against any ailments that may arise that’s
higher than the present one. This would allow for direct primary care payments
and insurance against minor ailments, common issues, and more expensive treatments. Another benefit would be a greater diversity
of and competition among different health centers, in such a way that, given the threat
of being displaced in the market, productivity, differentiation and innovation would be promoted. In other words, we’d achieve a wide range
of services that would positively impact both the quality of the service and lead to lower
prices. Competition is usually the best formula to
guarantee better goods and services for consumers. And health isn’t any different. However, nowadays, no country uses all of
these principles. And no, the US health system, as we’ll see,
isn’t precisely a free market model. Now, there is a country that has used some
of these characteristics. And it has done so with extraordinary results. Listen to Singapore’s case. (A MODEL FOR HEALTH REFORM) Right now, Singapore has the best healthcare
system in the world: it’s top quality and costs practically half that of Spain’s health
system, and less than a third of the US’s. But this isn’t just a matter of lower costs–it’s
also, and above all, about quality and results: See, life expectancy at birth in Singapore
is two to three years longer than in Britain or the United States. Its infant mortality rate is among the lowest
in the world and is almost half that of the United States, Great Britain, Australia, Canada
or France. And in general its mortality rates are impressive
compared to most Western countries. Now… the question we can ask ourselves is
how they achieved such success? Well in this case they have achieved it, fundamentally,
by using market criteria. First of all, the main feature of the Singapore
model doesn’t just lie in the fact that more than 60% of all health spending is private,
but that to a large extent, it is directly paid by users. That is, co-payment is the norm here. But, not everyone pays the same when they
go to a hospital. There are public and private centers, as well
as 5 levels, 5 classes: A, B1, B2 +, B2 and C. Each of these letters gives users a different
service: for example class A gets you a private room and a choice of doctor; while in class
C the room is shared and the doctor is assigned by the hospital. Of course, each class has a different cost. If a user chooses class A, they pay for everything,
if instead they choose class C, the government subsidizes 80% of the cost. But where do people get the money to pay for
healthcare? Well from the same place as in other countries:
from the wealth they generate, from their work. The difference is that the huge contributions
that governments usually collect, are saved in Singapore– in a mandatory way yes–in
special accounts under each citizen. They can only use these accounts for certain
purposes, such as paying their pensions, their children’s education, homes or health. In the case of health care, the account is
known as Medisave and is used to pay for doctor visits, hospitalizations, medications, etc.,
etc. This is the second key point of Singapore’s
medical system Thanks to this formula, demand is self-regulated
and people can manage how to spend the money they accumulate in these accounts – for
example by accessing different kinds of care, whether they want to receive or be hospitalized
in hospitals with fewer comforts but which are cheaper, or with more services and higher
costs – decreasing redundant and superfluous consumption. Another very important point is that, for
the most serious cases, there’s a universal public insurance known as MediShield Life
that hardly costs $16 a month for a-30 year-old. And with it, of course, comes the possibility
of hiring other private insurers that improve the services offered. Finally, the third leg of Singapore’s health
system is public expenditure itself: What happens if someone can’t cover their
medical bills? Well, to guarantee access to health care,
the government subsidizes hospitals and has a public fund, the Medifund, designed to pay
health bills for lower-income families. So, folks, this is how Singapore has managed
to create a relatively economical medical system, while achieving results and quality
levels that place it among the best health systems in the world according to the World
Health Organization and different rankings such as Bloomberg’s “Most Efficient Health
Care Systems”. However, despite all this, when we usually
talk about healthcare and the free market we automatically think of the United States
and not Singapore. And that is a serious mistake. (USA vs. Singapore) Indeed, the US doesn’t have a European-style
public health system. And since the country’s results are quite
deplorable, considering that it spends more than 17% of its GDP on its healthcare system,
which is twice that of most European countries, the debate on health seems settled: private
health care is worse than public health care because it costs twice as much and has similar
or even lower service levels. But this, as we saw with Singapore, where
60% of health spending is private, isn’t true. In Singapore, the health care system isn’t
only better, it’s one of the best in the world and involves much lower costs than in
other developed countries. The issue is that the US health system isn’t
only heavily intervened upon and regulated by the government, its cost is tremendously
socialized. See, 90% of all health spending is channeled
through two different agents other than the patient. Out of every 100 dollars spent in the US health
system, 45 come from insurance companies, 45 from state programs such as Medicaid, and
only 10 from patients’ pockets. Yes, public health spending in the United
States is in relative terms higher, for example, than in Spain. But we’ll talk about that in another video… The fact is that as we’ve seen, Singapore
sets a healthcare system model on the table that has a great combination of cost, innovation
and medical results. We may like some aspects of this system, and
not others… but I think it wouldn’t be unreasonable to take it into account when
talking about health, the future, and sustainability. So I really hope you enjoyed this video, please
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