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CHAPTER 2

High Quality, Low Cost

Lee Kuan Yew wanted Singapore to achieve excellence—“first world standards” as he put it in his memoirs. Only then, he believed, would his young country survive and thrive. There is no doubt in my mind that the standards he desired for his city-state have indeed been met, and healthcare is one good example. Singapore now has a First-World healthcare system, rated sixth in the world by the World Health Organization and ahead of most high-income economies.¹ By most common measures, the nation has achieved noteworthy outcomes in all areas of healthcare. It has increased the life expectancy of its citizens; increased infant survival rates, and achieved one of the lowest under-five mortality rates in the world. Singapore's cancer survival rates are similar to Europe's, while its cardiovascular disease death rate is half that of the rest of the Asia Pacific region. As I will show throughout this chapter, Singapore produces world-class outcomes on par with the most-developed nations of the world, but it does so at a fraction of the cost usually associated with high-quality care.

A quick look at cost comparisons with other nations brings the point home. Countries like the United States and the United Kingdom struggle with the budget-busting, ever-rising cost increases of providing care. The United States, for example, spends almost 18 percent of GDP on healthcare. Singapore, on the other hand, spends slightly under four percent of GDP. The government's expenditure for healthcare has been slightly under one percent, far less than other most developed countries. It is, however, beginning to break the one percent barrier, coming in at just under 1.5 percent in 2010.²

I would like to begin our exploration of the Singapore healthcare system's achievements with a close-up look at some representative outcomes (see Table 2.1), how they have improved over the years, and how they compare with other nations in the region and around the world.

Table 2.1

Life Expectancy

The number of years we may be expected to live is of utmost interest to all of us, and is a key measure of the efficacy of a nation's healthcare system. A Singaporean woman can now expect to live until 84, versus 66 in 1960. Singaporean men also live longer—up to 79 years, versus 62 in 1960. This enhancement of life is a direct result of the quality of healthcare services, but the system must share some credit with the improved standard of living, improved sanitation, good quality water, and a cleaner environment. Such improvements were part of a well-thought-out effort to raise the quality of health of all Singaporeans.

Singaporeans now live two to three years longer than the citizens of the UK and the US. They also live longer than inhabitants of other high-income economies, with the exception of Japan and Hong Kong, where life expectancy is up to 83 years.

In the Asia Pacific region, there is a dramatic divide among nations. On one side are countries like Japan, Singapore, Hong Kong, and Australia where people live beyond 80 years, and on the other are lower-middle-income countries where citizens can only expect a lifespan of about 70 years. Then there is the case of India, where the numbers are even less promising, with men living until 63, women to 66 (see Table 2.2).

Newborn and Infant Mortality

Another key measure of the success of Singapore's healthcare initiatives is the vastly improved survival rate among newborns and infants. A number of factors affect infant mortality, such as health of the mother, maternal care, and birth weight.

The newborn mortality rate per 1,000 live births in Singapore declined from five in the 1990s to just one in 2009. The United Kingdom, Australia, and Canada had the same mortality rate of five in the 1990s, but by 2009 had declined to three in the United Kingdom and Australia, and four in Canada. In the United States, the rate stands at four. Singapore's infant mortality rate (the probability of dying in the first year per 1,000 live births) has fallen from 36 in 1960 to just over two in 2009; a decrease of almost 94 percent in just under 50 years. Aside from Japan among the high-income economies, Singapore has the lowest neonatal and infant mortality rate for both sexes. Over the past 20 years, the upper-middle and lower-middle-income economies throughout Asia have achieved major reductions in infant mortality rates, but they still remain very high—50 for example, in India, 30 in Indonesia, 17 in China, and 12 in Vietnam (see Table 2.3).

Maternal mortality rates have also declined precipitously, from 86 deaths in 1950 to 12 deaths in 1975, to 3 in 2008.

Table 2.2

Table 2.3

Under-Five Mortality Rate

This measure is an indication of the probability of dying by age five per 1,000 live births, and Singapore has achieved one of the lowest rates in the world. With ten deaths among men and eight among women in 1990, Singapore's current rate is three for men and two for women. Japan's numbers are similar, whereas the United States stands at eight for men and seven for women. The United Kingdom is at six for men and five for women. Under-five death rates are generally lower for women, even in the upper-middle and lower-middle-income countries with the exception of China and India. Within some countries, the disparities based on income are very large. For example, in India, children in the poorest 20 percent of the population are three times more likely to die before turning five as those in the richest 20 percent (see Table 2.4).

Childhood Diseases

Through the National Childhood Immunisation Programme, most childhood diseases have declined, with diphtheria, neonatal tetanus, poliomyelitis and congenital rubella virtually eliminated.³

Adult Mortality Rate

Singapore's adult mortality rate (defined as the probability of dying between the ages of 15 and 60 per 1,000 population) is significantly lower than the rest of Southeast Asia and even lower than developed countries. The rate has halved since 1990 and now stands at just under 60. The United States, by contrast, is just over 100 and Australia just over 60. Among the nations of Southeast Asia, there are very large variations in the rate—much greater than that observed for child mortality. Very high rates include India and Thailand at about 200 and China well over 100 (see Table 2.5).

Number of Physicians and Hospital Beds

Singapore performs well on other health indicators related to system infrastructure, including hospital beds available and physicians serving the population. A common measure of both is the number of beds or number of physicians (physician density) per 10,000 population. Another and perhaps more accurate way to find the ratio is to use the total number of beds in the acute sector in 2011 while excluding those in the Community Hospitals and the Chronic Sick Hospitals. Dividing the acute sector beds by the total Singapore population, we find a 1 bed-to-10,000-population ratio of about 20. Other developed countries have similar numbers, but Japan stands out with an extraordinary 140 beds. For Singapore, these numbers are derived from taking the total number of beds, including Community Hospital and Chronic Sick Hospital beds, and dividing by the resident population of Singapore, resulting in a 1 bed-to-10,000-population ratio of about 30.

Table 2.4

Table 2.5

Singapore is home to over 9,000 doctors according to the Singapore Medical Council, scoring a physician density rate of just over 18—higher than China, Malaysia, Thailand, and most other countries in the region, but behind the US and other high-income economies (see Table 2.6).

The number of physicians and hospital beds in the Singapore system is purposely kept in check to avoid oversupply and the too-easy availability of doctors or of beds. The idea behind this action is to prevent excessive and undue use of healthcare services. I will have more to say about this approach later in the book.

Cancer

With respect to one of the biggest killers of all—cancer—Singapore is making great strides. Overall, the country's five-year age standardized relative survival ratio for men improved from 14 percent in 1973–77 to 45 percent in 2003–07; the ten-year ratio improved from about 15 percent in 1978–82 to 41 percent in 2003–07. For women, the five-year ratio went from 28 to 58 percent during the same periods, and the 10-year numbers improved from 26 to 53 percent in those same 1973–77 and 2003–07 periods.⁴

While the Asia Pacific region contributes to half of all cancer deaths, survival is highest in Singapore, China, and South Korea with regard to cancers where prognosis depends on the stage of diagnosis. Survival rates in the three countries are in the 80 percent range for breast cancer, 60 to 80 percent for cervical cancer, 70 to 80 for bladder cancer, and 44 to 60 percent for large bowel cancers.⁵

One interesting comparison I found is that Singapore's one- and five-year relative survival ratios for nasopharyngeal cancer in both genders are higher than in the United Kingdom. Singapore performs at par with Europe for rectal, colon, and lung cancer five-year relative cancer survival rates, for cases diagnosed in 1995–99. And it performs better than Europe in stomach, liver (male five-year RSR), and ovarian cancer. Unfortunately, the county lags in bladder, corpus uteri, and female breast cancer survival rates.

Table 2.6

Cardiovascular Disease

Cardiovascular disease is one of the main causes of deaths in developed countries. In the Asia Pacific region, the disease now accounts for as much as one-third of all deaths. In 2004, death rates in Japan, Australia, Singapore, and the Republic of Korea were lower than 200 per 100,000 people in contrast to the majority of countries in the region where it exceeded 400 deaths per 100,000.⁶

Singapore does not do quite as well with in-hospital case-fatality (within 30 days of admission) rates for acute myocardial infarction—with a rating of almost nine per 100 patients in 2007. Korea did slightly better with a rate of eight for the same year. Patients in United Kingdom and United States had lower fatality rates: just over six in the United Kingdom for the same year, and just over five in the United States in 2006.⁷

Ischemic stroke patients in Singapore had an in-hospital case-fatality rate of five, versus the United States’ four (2006), and Korea's just over two. Korea attained a hemorrhagic stroke case-fatality rate of 11 versus Singapore's 25, with the United States at about 25 as well (see Figures 2.1, 2.2, and 2.3).

New Challenges

Singapore's success is also less clear in some of the newer health concerns arising among the populace. Diabetes is an example. Singapore's diabetes rate continues to rise, increasing by three percentage points between 2004 and 2010. As of 2010, over 11 percent of Singaporeans have been diagnosed as diabetic. This finding trends in parallel with increased obesity, which jumped almost four percentage points in the same time period to almost 11 percent of the population.⁸

Quality of Care

Not only does Singapore perform well in terms of achieving world-class outcomes, the quality of care as experienced by consumers is also one of the system's highest accomplishments. The Ministry of Health regularly conducts “Patient Satisfaction Surveys” to gauge the sentiments of the consumers of its health services. The seventh Patient Satisfaction Survey was done in 2010. It assessed the level of patient satisfaction, compared performance of the different healthcare institutions, and gathered feedback for service improvement. The survey found that over 75 percent of patients were satisfied with the services at the public hospitals, polyclinics, and national specialty centers. Further, almost 80 percent would recommend the services of public healthcare institutions to others⁹ (see Chart 2.1).

Figure 2.1

Figure 2.2

Figure 2.3

Confirming what Singapore's own self-assessments reveal, a World Health Organization report on comparative health systems issued in 2000 ranks Singapore's sixth globally in terms of overall performance. By comparison, the United States ranks 37, the United Kingdom 18, and Japan 10.¹⁰

Singapore's Healthcare Expenditure

Good healthcare is expensive, and many of the most-developed nations of the world are finding that the ever-rising costs for quality care are unsustainable. Singapore, on the other hand, has deftly managed to keep its costs low without sacrificing quality. In fact, it has achieved that exceptionally high rating from the World Health Organization while spending less per capita than any other high-income economy.

In spite of rising costs everywhere—due mainly to demographic trends, new and expensive technology, and changing disease patterns, Singapore, I am pleased to see, continues to spend less than four percent of GDP for healthcare, by far the lowest figure among all other high-income countries in the world.

The United States, by contrast, spends almost 18 percent of GDP annually—a huge price to pay that is currently causing bitter controversies and political battles as the nation debates its future approach to care.

When it comes to prices of specific procedures, one can immediately see the differences that exist in Singapore's costs vs. the United States. For example, the cost of an angioplasty in the United States is almost 83,000, while in Singapore the cost is about 13,000. A gastric bypass in the United States is almost US70,000, while in Singapore the cost is 15,000 (these figures are in US dollars and include at least one day of hospitalization).¹¹ See Table 2.6a for more cost comparisons.

Singapore's total national health expenditure as a percentage of GDP is comparable to that of the upper-middle (China–Malaysia), and lower-middle-income countries (India–Philippines), but the health outcomes achieved are on par with those delivered by the highest-income countries in the world.

Singapore's per capita expenditure was just over US2,000 in 2009. Comparison figures with other counties are available for 2008 and show that the United States spent the most per capita at just over US7,000. Other developed countries on average spent over 3,000, except for Japan, which spent well under 3,000. In the lower-middle-income countries, the figure falls as low as 90, for example, in Indonesia. Singapore, in contrast, spent just over US1,800.

Chart 2.1

Table 2.6a

Figures on government-only expenditure for the world's healthcare systems also show Singapore as the leader in keeping costs under control. Per capita studies reveal that in 2008, the government spent over 600 for care, while the United States spent almost 3,500, the United Kingdom over 2,600, Japan about 2,300. Asia Pacific figures range from 274 in Malaysia, 126 in China, down to 40. The Singapore government expenditure as a percentage of total government expenditure was around eight percent (see Tables 2.7, 2.8, and 2.8a).

Private expenditure in Singapore amounted to around 65 percent of the total national expense (2008). Note that this includes payments out of the government-run MediShield scheme and related insurance schemes, Medisave accounts, and other private insurance schemes or employer-provided medical benefits. The figure for the United States is 52 percent, 17 percent for the United Kingdom, and 18 percent Japan. Singapore's relatively high private expenditure is a direct result of the government's efforts to shift more of the cost burden to consumers than do most other countries. The approach is a fundamental strategy for keeping public expenditures down and curbing unnecessary usage. I would have to say that the approach is working. Later in the book, I will take a much closer look at this strategy, as well as the system's guiding principle of encouraging individuals’ responsibility for their own care.

I find it interesting that the figures for private healthcare expenditure in lower-middle-income countries are also substantial, but for a different reason. The underdeveloped public healthcare infrastructure in these countries and a general lack of faith in the system cause citizens to gravitate toward private healthcare services and to pay for their own care. In India, private expenditure was as high as 67 percent in 2008; in the Philippines it amounted to around 65 percent.

Singapore's Advantages

Along with its excellent system of medical care, Singapore has developed an infrastructure that helps support healthy living and general wellness: an inexpensive and affordable mass transit system, neighborhood wet markets (fresh food markets) and supermarkets that carry affordable fresh fruit and vegetables, islandwide park connectors and HDB exercise stations, Ministry-funded community centers in every neighborhood, and close proximity to family and other support systems.

Table 2.7

Table 2.8

Table 2.8a

In addition, Singapore's economy and environment have played a role in its healthcare achievement. The country's wealth, high employment rate, compactness and lack of rural areas, and relatively low number of immigrants give it some advantages in its continuing efforts to nurture and sustain the excellence of its system.

Singapore's government leaders, ministers, and care professionals have developed a healthcare system with some of the best outcomes in the world, and as I have explained, with far less cost to the economy than might reasonably be expected. In the following chapters, I will explore how exactly they accomplished this extraordinary feat.

Chapter 2: KEY POINTS

 Singapore's healthcare system has achieved First World standards at a lower cost than any high-income country in the world

 The system has achieved excellent outcomes by most common measures:Increased life expectancy of its citizensIncreased infant survival ratesOne of the lowest under-five mortality rates in the worldAn adult mortality rate lower than any nation'sHospital beds ratios similar to the United States’Cancer survival rates similar to Europe'sCardiovascular disease death rates half of most countries in the region

 Singapore's quality of care is excellent:Most consumers of its services report a high level of satisfactionIt is ranked sixth in the world by the World Health Organization

 Cost of care has been kept low while achieving very high quality:It spends less per capita than any other high-income nationThe government outlays per capita for the system are a fraction of what developed nations spendPrivate expenditure is relatively high compared to many countries, in keeping with the government philosophy that people must be responsible for their own care