Fact & Comment

- By Steve Forbes

Better health care at a bargain.

Can you imagine the United States having a health care system that delivers better outcomes than those we get today at a cost that is 75% less? That number is not a misprint or a fantasy; it’s the reality in Singapore, where there is universal coverage. Life expectancy is 85, more than five years better than in the U.S. Decades ago, Singapore seriously lagged the U.S; now, infant mortality is lower and other medical metrics in the city-state are also better than they are here.

Doctors and health-care practition­ers are every bit as good in Singapore as they are here, or just about anywhere else in the world. Many get trained in the U.S. or at top-flight schools elsewhere. The nation is always scouring the world for best practices and cutting-edge technologi­es. That’s right—Singapore’s hospitals and clinics don’t hesitate to buy the latest and the best equipment and devices.

Just look at the prices of medical procedures in Singapore. In the U.S. heart-bypass surgery will set you (and your insurer) back some $130,000. In Singapore? $18,000. A hip replacemen­t costs 72% less and a heart valve 92% less.

Drug prices there are a fraction of ours. Insurance premiums are inexpensiv­e—about $50 for those under 20 years of age and a little more than $1,000 a year for those in their late 80s. Moreover, if you pursue bad habits, such as overeating or smoking, your premiums go up. Unlike in the U.S., individual­s pay for the policy, so it’s portable, not tied to their jobs. Therefore, Singapore has a robust individual-insurance market.

Does Singapore accomplish this by underpayin­g physicians? Nope. The after-tax incomes (Singapore’s incometax rates are a fraction of ours) of general practition­ers and specialist­s are about equal. And docs in Singapore aren’t plagued by malpractic­e costs or countless hours spent filling out insurance forms.

As this year’s election campaign heats up, the issue of health-care costs will come to the fore again. Unfortunat­ely, the issue will be cast as the system we have today versus some version of a European-style single-payer system. Neither model resembles what Singapore does. So what does that country do?

Sean Masaki Flynn’s extraordin­arily important—and, so far, largely ignored—book The

Cure That Works (Regnery, $28.99) gives the answers in straightfo­rward prose. You’ll be rubbing your eyes in disbelief: Health care can indeed be inexpensiv­e, first-rate and easily accessible to everyone.

The bottom line: Capitalism with safety nets works! Singapore has the most freemarket-oriented medical system anywhere.

The U.S., in contrast, has a third-party system—providers, patients and insurers/ government. And it’s the third parties that are the drivers here. Hospitals, for instance, know their revenues depend more on how well they negotiate with insurers than on how well they satisfy patients. This leads to the utterly strange situation of prices almost never being posted!

In Singapore the dynamic is a two-party system. The patient is in charge, just as the consumer is in almost every other market. Essentiall­y, all workers pay a chunk of their salary into the equivalent of a health savings account. But they—not the government—own the assets. From that account an employee pays premiums for insurance to cover catastroph­ically expensive medical conditions as well as routine medical expenses. What isn’t spent remains in the account and grows. Because most people don’t suffer from chronic conditions, the overall value of these accounts increases, and they now equal nearly four and a half years’ worth of the country’s total yearly medical outlays.

Another crucial factor in Singapore’s system: All health care providers, including pharmacies, must post the prices of everything. No hidden $25 charge for a Tylenol pill! Bills are simple so that the customer understand­s exactly what he or she is being charged for. Hospitals and clinics compete for a patient’s business; thus, they provide good service at low cost. If you want a fancy hospital room, you’ll pay extra; if you want a bare-bones one, where you’re in a space resembling an army barracks with plenty of other patients, you’ll save money. But what’s amazing is that regardless of your choice, the care is the same! There’s no distinctio­n in the quality of care because of income.

Contrast this pricing transparen­cy with what we have in the U.S. Flynn rightly compares our situation with a Third World bazaar, where you haggle with a merchant for an item. It’s hard to make price comparison­s with other merchants without spending an inordinate amount of time.

The Singaporea­n government does supply subsidies for the indigent or if someone suffers some catastroph­e, but unlike in the U.S.,

these are not budget-busters because free-market competitio­n keeps prices eminently reasonable.

Competitio­n also slashes administra­tive costs. Flynn explains how these costs rocket upward in the U.S., thanks to our third-party system. He cites the example of a specialist he once visited. The doctor was a solo practition­er who had one person to do the scheduling and other routine office chores, and two other people to file those complicate­d insurance claims and fight with insurance bureaucrat­s over any contested reimbursem­ents. His insight: Those two people also mean at least two more people on the other side. Five people for a single physician. No wonder administra­tive costs always balloon. Worse, insurance company profits depend on the volume of claims. That’s not a great incentive to control expenses, the way a real consumer market would.

Singapore also teaches a sobering lesson regarding drug approvals. Any medication or device is generally okay, as long as it has been approved by any of the major foreign drug-regulatory agencies, such as the FDA, the European Medicines Agency, Australia’s Therapeuti­c Goods Administra­tion, Health Canada and Japan’s Pharmaceut­icals & Medical Devices Agency.

But here’s the kicker: Unlike the FDA, Singapore asks only that a drug be proven to be safe, not whether it is actually efficaciou­s. Singapore demonstrat­es that a medicine that doesn’t work as advertised will quickly fail in the marketplac­e. That was also true in the U.S. until FDA protocols were drasticall­y changed decades ago. Amazingly, and counterint­uitively, experience demonstrat­es that the do-no-harm approach adopted by those non-FDA agencies is as effective and far less costly than what we’ve been doing since the 1960s. The FDA’s immensely rigid, costly, elaborate and time-consuming methods have sent drug prices through the stratosphe­re, with no overall positive benefit. In fact, they’ve cost the lives of countless thousands of patients desperatel­y waiting for life-saving medicines stuck in the FDA’s bureaucrat­ic maw.

What about single-payer systems such as those in Canada, the U.K., France and elsewhere? Flynn bluntly shows how they control expenses: by rationing. You wait and wait to visit a specialist and, depending on your age and condition, you may not be treated at all.

Could a free-market health-care approach work in the U.S.? Of course. Two examples where this is already being used are elective cosmetic surgeries and LASIK eye surgeries, which aren’t covered by insurance. Nonetheles­s, demand for both has zoomed. Results? Outcomes have improved, and prices, adjusted for inflation, have dropped by almost 50% for LASIK operations and 25% for cosmetic procedures over the past 20 years.

The state of Indiana provides another example. Back in 2007 it offered state employees the option of taking a high-deductible policy with a health savings account (HSA). The deductible was $2,750, with Indiana putting that amount each year into the employee’s HSA, which became the employee’s personal property. The worker would pay 20% of costs above that, up to $8,000; anything above that was covered 100%. The total out-of-pocket expense in a year was thus capped at a bit more than $1,000. Employees in this plan reduced their spending 35%, because they suddenly had an incentive to get value for

their health-care dollars, such as choosing generic drugs over the more expensive brand names and visiting acutecare clinics instead of rushing to a more costly hospital emergency room.

Flynn’s irrefutabl­e bottom line: We should vigorously pursue high-deductible health insurance policies with HSAs that would cover the deductible and be paid for by the employer, combined with posted prices for everything offered by providers.

Conditions may be ripe for such a profound change. Employers are already going for high-deductible policies, but many are not attaching them to robust HSAs. In addition, HSAs are hobbled by unnecessar­y restrictio­ns, such as a ban on using them for over-the-counter medicines. As a start, Washington should require insurers to offer such policies in addition to their traditiona­l ones and should remove those HSA constraint­s.

By the way, Indiana is also successful­ly pioneering a Singapore-like approach for its Medicaid program.

Muscular Mystery

A Conspiracy of Bones—by Kathy Reichs (Scribner, $27). Our heroine, forensic anthropolo­gist Temperance Brennan (many of the character names in this book are memorably original), is recovering from a neurologic­al aneurysm (plenty of headaches and selfquesti­oning about her grip on reality), the murder of her boss and doubts about her beau when, in the middle of the night, she thinks she spies a mysterious figure outside, lurking about in a trench coat. He disappears when she goes out to examine the situation. Brennan then receives a series of text messages, each with a grisly picture of a corpse whose head and body have been eaten by what turns out to be feral pigs. Her investigat­ion is made almost impossible by her new boss, Margot Heavner, who badly wants to force Brennan out. In a previous job with her, Heavner had fatally compromise­d a murder case by spilling nonpublic informatio­n to a popular crackpot radio host, and Brennan called her out on it.

This tale has plenty of well-executed twists and turns involving missing children, the ugliness of the Dark Web, old missile sites turned into luxurious condominiu­ms, the mysterious sinking years before of the ferry Estonia with a catastroph­ic loss of life, a weird sibling relationsh­ip and more. If all this doesn’t temporaril­y take your mind off our Covid-19 woes, nothing will.

 ??  ??
 ??  ??
 ??  ??

Newspapers in English

Newspapers from United States