In the next few paragraphs I'm going to describe the health care system in Singapore and especially how it works. This approach seeks to mainstream the better practices that are already being applied in some countries. Because sometimes is easier, more effective and painless just to copy some good and working ideas.
So how does Singapore achieve such impressive results? The Singapore health system is based on a combination of government subsidies (through taxation) and individual responsibility. In order to assist individuals in meeting their component of personal medical expenses, the Government has established the framework of Medisave, Medishield and Medifund that combine individual responsibility and is overlaid with government funding, particularly to provide a safety net to support the health needs of low income earners and poorer individuals.
The key to Singapore's efficient health care system is the emphasis on the individual to assume responsibility towards their own health and, importantly, their own health expenditure. The result is a system that is predominantly funded by private rather than public expenditure.
- 1. Medifund
Medifund is an endowment fund set up by the Singapore Government to assist those in financial hardship in funding their medical needs. The scheme is intended as a safety net for those who cannot afford the subsidized charges for hospital or specialist out-patient treatment, after allowing for any Medisave or Medishield funds. Qualification for Medifund provision is means tested, based on an individual's financial circumstances at the time of application.
- 2. Medisave
Medisave is a compulsory medical savings scheme with funds available to meet a portion of future personal or immediate family's hospitalization, day surgery and certain outpatient expenses.
Medisave is a subset of the mandatory Government pension scheme (the Central Provident Fund or CPF) to which a total of 33 per cent of wages is contributed (comprising 13 per cent employer contributions and 20 per cent employee contributions) to individual accounts to fund retirement and health related expenditure. Of the 33 per cent contribution, around 6 per cent to 8 per cent (depending on age) is credited to the employee's Medisave account. In practice, Medisave covers approximately 85 per cent of Singapore's population.
- 3. Medishield
Medishield is effectively a national insurance scheme for catastrophic illness that is intended to cover a significant component of medical expenses from major or prolonged illnesses that are not covered by Medisave. Medishield operates under a scheduled reimbursement system based on days of hospitalization and type of surgical treatment, offset by individuals sharing costs by way of co-payments and deductibles.
The Government has, in recent years, allowed the private insurance market to offer similar Medishield-type policies so individuals now have a choice of choosing between Medishield or a private alternative. Premiums for Medishield (or private insurance alternatives) can be paid from an individual's Medisave account.
- 4. Eldershield
The Government has also recently introduced Eldershield, an extension to the ‘3M' system. Eldershield is a private insurance scheme designed to help fund future medical expenses incurred in the event of severe disability, particularly at advanced ages.
The key to Singapore's efficient health care system is in its emphasis on the individual to make a significant contribution towards their own healthcare costs. With this focus, the Government has been able to maintain a relatively low level of public expenditure (below 1%) on health for many years with the major burden put on individuals and/or their employers.