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April 01, 2004

Comments

T. Gracchus

The evidence for malpractice recvoeries causing significant price increases for malpractice insurance is not all that good. For example, Pennsylvania has had fairly stringent caps on awards for two years and ther has been little change in malpractice rates. In light of the evidence suggesting that most medical malpractice does nto result in a lawsuit, focus should be elsewhere in examining problems of high medical costs.

jholbo

I don't know the answer to this one either. There are various factors that are always in effect in Singapore - notably, the ability to hire lots of foreign workers on the cheap to do menial construction/cleaning/maintenance. That must help cut the bill. It isn't government subsidies, which is what you might think, because the pricing is the same for private as well as public hospitals. (Public is somewhat cheaper, but private is still astoundingly cheap. Our bill was for a private hospital.)

In part I think the question has to be: really, why should it cost THAT much more (if it's not just insurance)? You need a clean room and a bed and linen, and so forth, and someone to check you in. But so far that's just a nice hotel with a touch of triage. (Yes, she's a highly trained nurse. But that's still just a few minutes of her time.) You need some machines, which cost, but they last for years and years. You need to pay the doctor. But the doctor only actually saw you for maybe 5-10 minutes (in a case like ours, and many cases are comparable.) Even at a very high wage that needn't be costing you thousands. You need a shot of medicine. But that's really not that costly, actually.

By the by, medicine (i.e. pills and asthma inhalers and stuff in bottles) in Singapore is insanely cheap. I often fill several prescriptions for Belle and pay just a few dollars. An expat friend of mine likes to relate the story about the Singaporean doctor who was prepared to prescribe him some course of antibiotics (?) but warned that they were new, there was no generic, so they would be VERY expensive. (Cost for full course: $13, i.e. US $7 or so.)

Yes, I realize I just left out a bunch of costs and this is terribly ignorant and naive, but exactly WHY does American health care cost so many orders of magnitude more than Singaporean? I have always just assumed it was mostly the cost of malpractice insurance. If that's wrong, I don't know what the answer is. Singaporean doctors and nurses earn quite good salaries - not as much as American, I guess, but not 10 times less. And the facilities are indistinguishable, except that the Singaporean ones are less crowded.

The value of incredibly cheap and convenient first-world healthcare is huge. For us - for Belle - who has tragically many medical problems, this has been possibly the single best feature of Singapore in terms of quality of life.

vik

Ok this is my take as a medical student on why the system is so absurd in america when it comes to costs and the service (and yes, much as i will defend the fact that we have the best research and technology here, it is absurd). Essentially it comes down to the fact that there are huge fixed costs in the system that you do not see elsewhere and too many ppl committed to defending those costs.

First, the cost of suing doctors far outweighs the benefits. Hospitals and doctors get charged exorbitant amounts which are passed on to the consumer but more importantly, the standard of care goes down enormously as a result. Most of my teachers order unnecessary tests all the time (most CT's for example) just because the fear of getting sued pervades the sytstem. In addition, in many cases, operations will not be performed for cancer patients or others for whom the risks of surgery are deemed too high i.e. the risk that the patient's family will sue later despite knowing that the operation is risky even if, as in most cases, it is the best option for the patient (full disclosure: my best friend's grandfather had this happen to him as he found that although there were a few surgeons willing to do his particular procedure, none of their insurance companies would allow it). You might ask why if this system is so bad for the doctors, the hospitals, and the patients (for most patients who actually have malpractice happen to them do not get compensation and of the group who do get settlements, a large percentage do not deserve it but merely had the best lawyers like the cerebral palsy 'victims'), who benefits? Well, both insurance companies and litigators make large profits from the system and are powerful enough to prevent substantive change, which I have to say is a natural reaction on their part.

Next, the large number of uninsured people and the indigent who most hospitals are forced by law to take care of (they are typically the most unhealthy as well) institutes a large financial burden that has to be carried by someone and thus most health care insitutions charge exorbitant costs to those who do have coverage. Your 100 dollar bottle of water or 2000 dollar hospital bed is not just going to pad profits. In addition, these patients also have the most motivation to sue and so feed into the problem detailed above of too many procedures.

Finally, the whole disassociation of customer from payment is the final major structural problem. Have you noticed the costs of Lasik surgery for example plummeting the last few years? When people pay directly for their care, they ration themselves and don't demand the most expensive procedures unless absolutely necessary while also demanding the best deal on it. Under the present system, no one has any idea who is paying the bill according to the Economist magazine and so there are no barriers to health inflation nor realistic limits on health services. While it sucks to wait for surgeries and mammograms, resources are finite and if you want top class and immediate health care (waiting times for serious procedures in the US are far less than in universal health care systems in general) for most people, then it will cost enormous amounts.

As for drug prices, I don't want to get into this in detail but the truth is that the other coutries in the world are not getting drugs at anywhere near cost. The US government subsidizes the research and the drug companies fork over large amounts of capital in a gamble that it will get approved by an often byzantine and irrational FDA (read about the recent fuss about antidepressants for example) and so essentially, the US market both inspires and pays for the massive amounts of drugs produced. At that point, the other medical systems' in the world can cut much better deals with the pharmaceutical industry since the industry's marginal costs are pretty much zero when selling it elsewhere, having recouped their capital in America. In addition, not even Medicare buys in sufficient bulk in America to force discounting and this aggravates the differential in prices.

After this long litany of problems, I'm actually surprised the system isn't even more dysfunctional though there are some explanations for this (higher salaries for doctors and researchers draw much better talent than in the past despite the lack of 'bedside manner' often seen, the incredible technological leaps seen in the past half century, etc.). In the end, though, I wouldn't despair since the truth is that what would one rather spend too much money on? Which other aspect of the economy would one rather see waste and overallocation of resources in, if one assumes that reform will be slow if at all possible? After all, just in the last few decades, the lives of most American patients have gotten far better. If you don't believe me, think of the knee or hip replacements that cost 30 grand versus most post-70 year olds not walking at all, the use of new expensive pharmaceuticals that have made clinical depression, schizophrenia, Parkinson's, hypertension, and even heart disease very treatable, or finally, the fact that even the chance that your baby would die or be born with a birth defect now is so rare that it is a tragedy rather than a 'fact of life' as my grandparents thought of such things. For some reason, the vast majority of these advances do not really seem to spring from the Singaporean health care system or any other wonderfully efficient one. Thus, be careful what one wishes for though of course, your points are still strong ones...

nah

"Singaporeans also have individual Medisave accounts, which are tax-free. I don't know all the ins and outs of it, but I think some money is withheld from your paycheck and depostited into your individual account, and that you can also top it up with more of your own money up to a certain amount."

That's pretty much it. Good luck convincing god-fearing americans that that's not tantamount to communist-pinko taxation though. Next you'll be telling me Singapore doesn't have a gun problem!

loy

Yes, for the most part, Singapore does not have a gun problem. Since I'm actually a citizen of the nanny state, let me fill in some details for what nah alluded to.

Each month, 20% of my paycheck is automatically docked, and together with an amount equal to 13% of my pay, added to an account in the Central Provident Fund. Think of it as a (near) nation wide pension fund for individuals. The CPF contribution is allocated to three accounts--the ordinary, special and medisave accounts (22, 5 and 6% respectively) and given a small interest rate (the last I checked, 2.5% pa for the ordinary account and 4% for the special and medisave accounts; all tax free).

I can use the ordinary account for the purchase of (public) housing, college education of my children and certain approved investments. The special account is the pension fund proper and cannot be touched until I reach the retirement age. The medisave account can only be used for medical expenses, both for myself and my dependents, and to purchase medical insurance.

The 13% employer's contribution figure is variable and can be used as a powerful macroeconomic tool. For instance, in times of recession, it is reduced so as to decrease the cost of labor. In better times, it is returned to a higher figure.

The accumulated CPF funds are invested, largely overseas, by a statuory board in charge of such matters. In other words, it is put to work generating foreign currency savings, etc. Another macroeconomic feature.

Since the money I have in my CPF account is in my own name, it is a bit misleading to think of it as taxation rather than enforced savings. Obviously, I would understand if "God-fearing" Americans are uncomfortable with it--but to someone who grew up in the system, it is pretty much invisible to me, just part of the furniture of the social world I live in, so to speak (much as social security tax might be to Americans?).

Caveat: nothing I say above amounts to a defense of the system, or imply any favorable comparison with an other real world system. To every social and economic benefit provided by the CPF scheme, there are also other social and economic costs. Nothing comes for free.

Cheers

loy

If anyone insists on a comparison, take a look at this online paper. I thought the writer (an American) did a really thorough job of it.

Belle Waring

Loy, thanks for injecting some facts into the discussion. You are a most welcome commenter. And email me your address, because I never sent you your wedding present...

Debra Riley

181556: Hey, does anyone know where I can find a list of gas stations with low prices in my area?

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