Tuesday, October 20, 2009

Warm up the death panels

Writing in the Wall Street Journal, William McGurn (ex Bush speechwriter) rolls out a recurring anti-health care reform talking point -- that the US spends way more on healthcare than Singapore, so why don't we switch to that system? --

"When I'm asked to describe the differences between the U.S. and Singapore systems, my one-word answer is 'complexity,'" says Dr. Jason Yap, director of marketing for Raffles Hospital, a leading private care facility in downtown Singapore. "There are so many parties in the American system that do not really contribute to care."

Dr. Yap is referring to the higher costs that come from an American system that depends on regulation and oversight to accomplish what Singapore tries to do with competition and choice. At the Raffles lounge for international patients, he shows me an example of the latter. It's a one-page, easy-to-read list of fees.

At the high end of accommodation, a patient can choose the Raffles/Victory suite for about $1,438 per night. That price includes a 24-hour private nurse, a refrigerator stocked with drinks, and an adjoining living room to entertain. At the other end of the scale, a bed in a six-person room goes for just $99.

Dr Yap is having words put in his mouth since he never actually said that it specifically was regulation and oversight that adds to the American's system's costs. The way his quote is presented, he could just as easily be referring to the insurance companies. And note also how the cost quotes are for the bed, not the actual care. You don't get treated for $99/night. But anyway, McGurn says it all must be working because Singapore only spends 4 percent of GDP on healthcare compared to 15 percent for the US.

The above is the Singapore population age distribution. It's unusual. It has relatively few very young people and old people and lots of working age people in between. Most developed countries have a much more even distribution across the various age groups. To put some concrete numbers on it, the US has 6.8 percent of the population in the 0-4 years range compared to 4.4 percent for Singapore, and the US has 12.8 percent at 65 or over compared to 8.8 percent for Singapore (all figures as of 2009 from US Census Bureau).

If you take out lots of expensive young people and lots of expensive old people, then, sure costs go down. Incidentally, Singapore's fertility rate is well below replacement, so they're headed for a future much like the one that the demographic doom mongers say Europe is headed for.

But in the never ending quest for factoids, reduction of healthcare costs by having fewer old people and fewer kids is now apparently the preferred model.

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