The Healthcare Debate, Part 3: Why America Cannot Be Like Singapore

From Vox: Is Singapore’s “miracle” health care system the answer for America?

Healthcare is a really complicated issue, with no good answers, which is why it’s such a big debate (if the answer were obvious and the solution easy, there would be no debate and no healthcare problem in America), and also the issue runs across deep partisan lines. A major problem when debating healthcare is that each country is unique, and what works well for one country may not work for another. High-quantity socialized healthcare may work fine for a country that only has a couple million people and a huge petrol sovereign wealth fund to pay for it, but not so well in a country that has 330+ million people. Some say the solution is less regulation, and I generally err on the side of less regulation, too, but then how does a free market system deal with overtly unprofitable patients in a way that is consistent with America’s belief in ‘right to life’? [0]

My guess is, America’s healthcare cost are high because: American companies develop most of the drugs and Americans have very high expectations for their healthcare. For example, in the Vox article about Singapore’s healthcare system, the ‘C’ suites, which are the ‘pubic option’, seem unsanitary (shared toilets and multiple-beds in a single room, facilitating the spread of pathogens), and many Americans would not tolerate it. Americans are accustomed to seeing the doctor for the smallest of ailments and for elective procedures that may be of dubious efficacy (such as knee replacement, cosmetic surgery, tummy tucks, etc.).

From the post: The Healthcare (and Student Loan) Debate, Part 2…Why is everything so expensive?

American’s expectations for healthcare and education quality are high: We demand schools with lots of teachers, athletics, and other programs; colleges with lots of programs, stupid/pointless classes, and amenities; and for hospitals to treat everything and everyone, regardless of cost or ability to pay; and we want quick access to latest treatments and diagnostic machines. Other factors also boost costs, such as America’s use of private and two-person hospital rooms:

In many foreign countries, the public ambulances will not pick up someone unless their condition is an actual medical emergency, so if someone with a broken ankle calls the paramedics, the ambulance may not come. Of course, that would be unheard of in America, but it’s fairly common in many foreign countries. And you better call your family, too, because the hospital staff will not help, and it’s the job of the family to wheel the patient from room to room and to pick up the diagnostic reports to give to the doctors (it very much has a ‘DIY’ element), whereas in America the hospital staff do everything. In Britain, especially, there are a lot of delays [2]. Despite complaints, one UK/US dual citizen prefers the NHS service, although the wait to see the specialist was very long (6 weeks).

And in foreign countries, the drugs in many instances are NOT actually cheaper. In America you can get a big bottle of Ibuprofen at Walmart for very little money (it costs like a nickel a pill), whereas in certain parts of Europe you would pay the equivalent of 50 cents a pill for a small packet of the same active ingredient. ( Walmart, Rite Aid, and Walgreen’s have shelves full of cheap OTC drugs; in foreign countries: small stores, lower quality, much less selection, and higher prices. [3]

In America, Healthcare, in many instances, has become ‘futile care’. As I explain in The Healthcare Debate: Confronting Reality (End of Life Care and Costly Chronic Diseases), end-of-life care is really expensive, as well as treatment for rare and incurable diseases. It costs $50-80k a year to treat someone with dementia [1] (depending on the quality of the nursing home), and a typical dementia patient lives 10 years, which means that the entire lifetime after-tax income of an individual is canceled out just by a diagnosis of dementia. It’s almost as if the lifetime economic value created by someone is ‘given back’ in the final decade of life, in terms of paying for end-of-life care.

Why are drugs so expensive? Why does a Leukemia drug cost $10,000/month? Mainly because drugs are so expensive to develop and the failure rates are very high, and therefore drug companies need very large financial incentives to justify the risks to create new drugs. Other issues include legal and regulation risk, also raising prices. It costs hundreds of millions of dollars and a decade to bring a new drug into the market. For every Biogen, which is worth billions of dollars, there are hundreds of tiny biotech companies that fail. By making these drugs available to everyone regardless of ability to pay (at taxpayer expense), the US government is effectively subsidizing the research and development of these treatments.

[0] A single individual with a terminal and costly disease, such as dementia, could reasonably be covered as a ‘charity case’ by a private insurance company, paid for by the premiums of the healthy and productive, but in the least convenient world, what happens if you have thousands or even millions of unprofitable patients? If insurance stops being profitable for privater insurers, either the govt. pays the difference (Obamacare reimburses insurers to offset their losses in covering high-risk individuals), or some people don’t get healthcare.


Planning for Care Costs | Caregiver Center

The average cost of providing care for someone with Alzheimer’s is nearly $60,000 a year. A private room in a nursing home costs more than $82,000 per year, on average. An assisted living community for a resident with dementia runs about $55,000 per year.

Dementia care costs top $100 billion

NIH-supported study finds U.S. dementia care costs as high as $215 billion in 2010

Cost of Dementia Tops $157 Billion Annually in the United States


Accident and Emergency delays at NHS hospitals are so bad patients are giving up before they see a doctor

Thousands die from ambulance delays

NHS ambulance response statistics: delays that cost lives

Ambulance patients face long A&E delays

[3] Goods sold in America have much higher quality control than goods sold in Europe. That’s why when you buy a computer mouse in Europe, it almost breaks in a few weeks.