Singapore healthcare costs: a letter to World Bank president

Dear Dr Kim,

I refer to the 18 Jul 2014 Channel NewsAsia report of your recent comments on Singapore healthcare.

Singapore’s healthcare expenditure as a percentage of GDP is low primarily because Singapore’s old age dependency ratio of 13.2 is much lower than those of most Western democracies which can range from about 20 to 32. It is well known that the bulk of a nation’s healthcare costs are incurred on old folks so naturally, a younger population like Singapore’s, all else being equal, will spend less on healthcare.

The following is a plot of World Bank’s “health care cost as % GDP” against old age dependency ratio for High Income countries. The regression’s extremely low P-value of 3.84 × 10-9 confirms the very close relationship between health care costs and old age dependency. Apart from the US, the graph shows no significant outlier points. In other words, Singapore healthcare cost isn’t out of the ordinary after adjusting for old age dependency.


Extremely low P-values are also obtained if health care costs are normalized by life expectancies or if all countries are considered. It is therefore a mistaken view that Singapore is one of a kind in getting good health outcomes with very little spending. It spends less primarily because it is younger.

There are other reasons why Singapore achieves good health care outcomes despite low health care expenditure:

Singapore has no natural disasters, no extreme weather conditions that can kill. This reduces our death rate and improves our life expectancy which is a key measure of health outcome.

• Examples:

Straits Times, Japan’s snowstorm leaves 19 dead, causes transport chaos, 17 Feb 2014

Straits Times, Heatstroke kills three in Japan, 24 Jul 2014

Some old Singaporeans would rather take their own lives than to incur health care costs so as not to burden their children with hefty medical bills.

• Example:

Before you praise our government’s focus on execution, do read some of our news about how overcrowding has led to corridors and tents being used to house patients.

• Straits Times, Hospitals facing severe bed crunch take unusual steps, Patients being housed in tent and corridors, or sent to other hospitals, 8 Jan 2014

As World Bank president, it is hoped that you will advise governments around the world not to blindly follow the Singapore example but to base their healthcare expenditures on what is right for their old age dependency ratios. After all, in time to come, when Singapore ages and our old age dependency ratio creeps up to what it is for Western nations today, we too will end up with high healthcare costs.


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