Menu Close

Creating a better health system: lessons from Singapore

Australia is just ahead on life expectancy; Singapore is ahead on infant mortality. stockphoto mania/Shutterstock

Australia has a relatively strong health system by international standards, but it needs a makeover. To generate fresh ideas, The Conversation is profiling five international health systems that have important lessons – good and bad – to pull Australia out of its health reform black hole.

As a small city state with a population of 5.4 million people, Singapore has a clear sense of what it wants from its health system. This is captured in the 1993 Singapore Government White Paper Affordable Health Care – a 60-page manifesto that clearly embodies a national health policy, a vision and a guiding philosophy.

In contrast, Australia has no health care manifesto that clearly states what we want from our health system.

Singapore spends about half the proportion of GDP on health than we do in Australia – in 2012 4.7% of GDP versus 9.1% in Australia.

Health outcomes in terms of life expectancy, maternal and child health are similar. Australia is just ahead on life expectancy; Singapore is ahead on infant mortality.

OECD and World Bank

But as you might expect, the cost burden falls greatest on those who can least afford it. In Australia 68% of health spending comes from the public purse. That figure is just 38% in Singapore. The remainder comes from individual’s pockets, in one way or another.

So, how does Singapore’s health system work, and what can we learn from it?

Affordable health care

The heart of Singapore’s national health-care policy is a system based on balancing individual and household responsibility with state control (a single state – not the federated system that we have in Australia), balancing transparency, information and data sharing with market forces, balancing equity, expenditure and choice with affordability.

In the Affordable Health Care document, there’s no disguising the darker forces that can play in health-care delivery: doctor supplier-induced demand, markets that fail due to information asymmetry, price control, inequitable access to health care and workforce anomalies. All of these issues are laid out for all to see. Whether or not you agree with their approach, the rules of the game are clear.

OECD and The World Bank

Singapore, it seems, is open to a public conversation about money and health care, even if that conversation may appear a little one sided to an outsider. We try to have the same conversation in Australia and we encounter a major problem – we don’t have a national health policy against which we can measure the impact of change.

Sure, we have Medicare, a Pharmaceutical Benefits Scheme and a well established mixed system of public and private health-care financing and delivery. But does anyone really know what to expect from Medicare beyond the promise that every Australian has a right to basic health care irrespective of whether they can afford the bills?

The Singaporean way

The Singapore government blends the notion of individual responsibility and government control through a financing system of government subsidies for primary health care, hospital services and pharmaceuticals, along with individual savings accounts. Health care is not unique in that sense.

Out-of-pocket health expenses are significantly higher in Singapore than Australia. Zhanrui Ye/Shutterstock

Apart from the general pool of taxation revenue collected by the government, Singapore has a Central Provident Fund (CPF). Each month individuals and employers contribute to three accounts:

  • an ordinary account (savings to buy a home, insurance investment and education)
  • a special account (savings for retirement)
  • a Medisave account (money used to pay for personal medical expenses or the hospital bills for immediate family members).

The accounts are held by the government and earn a minimum risk-free return.


Medisave has been likened to a bank savings account for health care: the more you have in your account, the more you can spend; if you want to be imprudent with your personal savings that’s your business. But that’s not actually the case with Medisave; there are strict rules about how individuals can use their savings for medical expenses.

Hospital care is broken up into classes and levels from class C wards (lowest) to A (highest). The gradient of service refers to the amenity provided. If you want “… additional comforts such as air conditioning and privacy” then you will need to opt for the higher cost B1 and A class wards (is air conditioning really an optional extra in Singapore?).

The government provides a subsidy of 65% to 80% of the cost of a class C ward hospital stay, 50-65% for B2 class. The gap can be paid from a Medisave account.

If you are tempted to fly hospital business class on a beer budget and you run out of money to settle the bill, the Medisave accounts of your immediate family members can be used.

Data from Singapore Ministry of Health

If you are unlucky enough to need hospital care that results in a very large bill, there is a reinsurance pool known as Medishield that provides basic health care in subsidised wards.

There is also a basic care safety net for all Singaporeans known as Medifund.

The government subsidises the cost of primary health care in polyclinics. And GP visits and dentist visits (at approved providers) for lower- and middle-income Singaporeans. Medisave can also be used to pay for screening services.

Medisave for Australia?

While Singapore health expenditure is less than half that of Australia, there are worrying signs on cost control in Singapore. Over the decade 2000 to 2010 the real rate of health expenditure growth per person in Singapore was 8.1%. In Australia the comparable figure is just 2.0%.

It’s also unclear whether all Singaporeans get appropriate care when they need it, in a timely fashion, and whether that care is affordable. To make this call, I would want to see data on unmet need, waiting time for care and variations in health status by socioeconomic status; not to mention the quality of care.

Singapore’s Medishield scheme is supposed to protect locals from large medical bills. Burlingham/Shutterstock

In Australia, medical savings accounts and the notion of individual responsibility for health-care financing may seem like the inevitable response to the failure of collective responsibility through universal health insurance.

But Australia has not crossed that threshold. We should never allow Medicare to get to that point.

We do, however, need a strong sense of what we expect from Medicare, what it can deliver and how. It’s time we had a health care manifesto.

This article is part five of The Conversation’s International Health Systems series. Click on the links below to read the other instalments.

Want to write?

Write an article and join a growing community of more than 178,600 academics and researchers from 4,890 institutions.

Register now