Incentives to control spending.There has been some argument about whether Medisave accounts have reduced overall health care spending in Singapore. On the one hand, anytime you force people to save for a consumption item and the savings rate for a lot of them is higher than what they were previously spending, total spending is going to go up. But, money in the accounts belongs to the account holder and anything not spent in the current period rolls over and is available for future spending. So, compared to taxing people and giving the revenue to insurance companies to pay for first-dollar coverage, spending in Singapore is definitely lower than it would have been.
A shift from the public to the private sector.The most important thing Singapore has accomplished in health care (in contrast to all the other developed countries) is an enormous shift of money and power from the government to the private sector. Since 1984, the Singaporean government's share of the nation's total health care expenditure dropped from about 50% to 20%. When you stop to think about it, that's incredible.
A different approach to social welfare. The most important feature of Singapore's overall approach to social welfare is that the country has found a rational way to provide services that are provided by ill-conceived social insurance programs in the rest of the developed world. As is well known, programs for the elderly have devolved into little more than legalized Ponzi schemes in the United States and throughout Europe. Governments everywhere have made promises of benefits they were unwilling to fund. So now they must either default on those promises or impose draconian taxes on the productive sector. Singapore has avoided that problem.
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