The Singapore Model & DeLong Care
In my post today I write about how Brad DeLong has come up with a totally unrealistic, but pretty good idea on reigning in health costs and covering the uninsured. (He came up with it quite a while ago, actually, but Yglesias resurrected it…) Yglesias writes, of the idea:
If there were no constraints whatsoever, I would organize the health care system this way which is more-or-less what they do in Singapore.
Note – Yglesias follows up this “ideal” plan with a model based on the UK’s NHS which I think is not only wholly unimaginative but rather a bad idea all told. C’est la vie.
In any case, what I wanted to point out was this piece in The American (published by the American Enterprise Institute) which basically states that the Singapore model might very well be the perfect one to adopt in the U.S.
In countries such as Canada and Britain which have national insurance programs funded primarily by general tax revenue, Medical Savings Accounts (MSAs) could be introduced by directly allocating a portion of existing tax revenue spent on healthcare to individuals to set up MSAs. Such governments could then progressively reduce general taxes and replace them with Singaporean-style payroll deductions allocated to MSAs.
And, says the World Bank, in countries like the United States, with well-developed private health insurance covering basic services, consumers could be given the choice of opting for MSAs with a catastrophic-illness insurance provision instead of traditional insurance or managed care. “However, for MSAs to become truly universal, governments would have to allocate public funding—whether drawn from general tax revenue or payroll taxes—to individual MSAs.”
Pilot programs with some MSA features have been introduced in the United States, with a focus on plans that enable employees to shift from traditional health insurance to voluntary MSAs with high-deductible health insurance.
The critics in Singapore, unlike many in the United States, are calling for fine-tuning—not for a new engine. The structure developed 25 years ago still works. Compared with the American system, it keeps Singaporeans healthier for much less cost per person.
It’s just interesting to me that entities as vastly different as these – the AEI and Yglesias/DeLong – could agree on something so radical, whereas our congress can barely come to a bi-partisan vote on…well on hardly anything of substance.