Learning wrongly from S’pore

Dear Mr Haseltine,

I refer to your 23 Mar 2013 Straits Times article “Learning from S’pore: It pays to make patients pay” [1].

You wrote that Singapore gets much better health care for less than 25% of US health care costs and around half of European healthcare costs. You must not forget that Western nations have much aged populations and hence much higher old age dependency ratios than Singapore. All else being the same, having higher old age dependency ratio naturally means higher healthcare costs. Any comparison of healthcare costs without accounting for differences in population agedness will bound to lead to unfair and ultimately meaningless comparisons. It would be like comparing a young man’s healthcare expenditure to that of an old man’s. You gain no insight other than the common sense knowledge that the old man is more prone to expensive sickness than the young man.

For example, the table [2] below shows that although Italy’s 2011 healthcare expenditure is about 1.5 times that of Singapore’s, its old age dependency ratio is nearly 2.5 times that of Singapore’s. It’s not unreasonable to expect Italy to spend more on healthcare simply due to a higher old age dependency ratio.

Country 2011 old age dependency ratio 2011 per capita health expenditure 2011 regression predicted per capita health expenditure 2011 % healthcare overspending compared to regression predicted value
Italy 31.5 $3,436 $4,305 -20%
Korea, Rep. 15.9 $1,616 $1,765 -8%
Spain 25.3 $3,027 $3,290 -8%
UK 25.6 $3,609 $3,340 8%
Germany 31.2 $4,875 $4,251 15%
Finland 27 $4,325 $3,571 21%
Sweden 28.6 $5,331 $3,837 39%
Belgium 26.9 $4,962 $3,551 40%
France 26.4 $4,952 $3,480 42%
New Zealand 20 $3,666 $2,441 50%
Austria 26.4 $5,280 $3,478 52%
Singapore 12.7 $2,286 $1,248 83%
Denmark 25.8 $6,648 $3,384 96%
Netherlands 23.6 $5,995 $3,020 99%
Ireland 17.8 $4,542 $2,079 118%
Canada 20.8 $5,630 $2,570 119%
Australia 20.3 $5,939 $2,487 139%
Switzerland 25.1 $9,121 $3,255 180%
Norway 22.6 $8,987 $2,852 215%
Luxembourg 20.3 $8,798 $2,486 254%
United States 20 $8,608 $2,426 255%

We can adjust for old age dependency by doing a linear regression of healthcare expenditure on old age dependency ratio for all nations rich and poor. The resulting p-value is 8.4 × 10-23 which means there is a highly significant relationship between healthcare costs and old age dependency ratios. We can make use of the regression coefficient to predict healthcare costs based on old age dependency ratios. Based on regression predictions, Singapore actually overspends on healthcare by 83%. This means that either Singapore is over-consuming on healthcare by 83% or healthcare is 83% more expensive than it should be or a mixture of both. Countries like the UK and Germany which overspend by 8% and 15% respectively are actually more prudent or cheaper than Singapore for the old age dependency ratios that they have.

Neither is Singapore’s healthcare outcome much better than Western nations’. The table below [3] shows very little difference in life expectancies between Singapore and the Western nations, certainly not much better.

Country 2011 life expectancy at Birth (years) As percentage of Japan’s
Japan 83 100%
Switzerland 83 100%
France 82 99%
Australia 82 99%
Spain 82 99%
Canada 82 99%
Italy 82 99%
Singapore 82 99%
Sweden 82 99%
Luxembourg 82 99%
Netherlands 81 98%
Norway 81 98%
Korea, Rep. 81 98%
New Zealand 81 98%
Ireland 81 98%
Austria 81 98%
Germany 81 98%
Finland 81 98%
Belgium 80 96%
United Kingdom 80 96%
Denmark 79 95%
United States 79 95%

In some cases, like cardiovascular and diabetes mortality rates [4], Singapore fares worse than many Western countries.

Country 2008 cardiovascular and diabetes deaths per 100,000 (males) Country 2008 cardiovascular and diabetes deaths per 100,000 (females)
Japan 118 Japan 65
France 128 France 69
Australia 136 Spain 86
Spain 140 Switzerland 86
Switzerland 143 Australia 89
Netherlands 151 Canada 90
Canada 152 Norway 91
Italy 156 Netherlands 93
Norway 158 Italy 102
Belgium 161 Belgium 102
United Kingdom 166 United Kingdom 102
Korea, Rep. 168 Sweden 103
New Zealand 171 Ireland 104
Singapore 171 New Zealand 106
Sweden 179 Finland 106
Ireland 179 Denmark 107
Denmark 180 Singapore 109
Luxembourg 184 Korea, Rep. 115
Austria 188 Luxembourg 116
United States 190 United States 122
Germany 207 Austria 124
Finland 211 Germany 134

The empirical experience [5] of the man on the street is that Singapore’s healthcare is expensive. This truth hasn’t been reflected by healthcare statistics thus far because healthcare statistics have been wrongly compared all this while. Old age dependency significantly impacts healthcare costs. Without factoring in old age dependency, we can never arrive at the true picture of healthcare costs.

[1] Straits Times, Learning from S’pore: It pays to make patients pay, 23 Mar 2013

[2]
• 2011 old age dependency ratio is from World Bank data
• 2011 per capita healthcare expenditure is from World Health Organisation

[3] 2011 life expectancy from World Health Organisation

[4] 2008 cardiovascular and diabetes deaths per 100,000 from World Health Organisation (latest data available)

[5]

• Today online commentary, Spend more, to keep healthcare affordable, 30 May 2013

72 per cent of Singaporeans believe “we cannot afford to get sick these days due to high medical costs”, according to a 2012 Mindshare survey.

• Most Singaporeans Unfamiliar with Healthcare Financing Schemes

http://sph.nus.edu.sg/index.php/health-for-you/health-articles/11-health/266-most-singaporeans-unfamiliar-with-healthcare-financing-schemes

… the general sentiment was that healthcare costs are expensive, current schemes are restrictive and more government intervention is needed to offset rising costs … only 48% of respondents expressed confidence in being able to afford healthcare in the future, citing high out-of-pocket costs as the reason … In fact, expensive healthcare costs is one of the main reasons driving lack of confidence and satisfaction towards Singapore’s healthcare financing framework, with at least 72% of participants indicating that they found hospitalisation, day surgery and chronic disease follow-up procedures costly.

• Singapore Business Review, Why managing healthcare costs must be Singapore firms’ top agenda, 21 May 2013, RAY BOND & DANNY YAP
http://sbr.com.sg/healthcare/commentary/why-managing-healthcare-costs-must-be-singapore-firms-top-agenda

For example, a survey conducted by Towers Watson last year found that Singapore employers were faced with increasing healthcare costs, with the bill for employees’ care rising by 8.5 per cent a year.

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One Response to “Learning wrongly from S’pore”

  1. vreedom Says:

    This is a gov who bothered to spend on useless gardens, stupid yog or sea games, foreigners stuff but not using the money for the healthcare necessary for locals. Learning from them is as good as committing treason.

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