Jamus Lim Profile picture
Oct 26 20 tweets 6 min read
When I first arrived in the United States for my doctoral studies, I was shocked at how expensive mandatory healthcare insurance was. At several thousand a year, it seemed a lot more expensive than the twenty or thirty dollars we’d pay when we saw our doctor. (1/n) Image
Plus, I was 25. I would go to the doctor maybe twice a year, if even that often (remember when you were that invincible?). I thought that U.S. healthcare was just an unfair tax on the young and healthy, a reflection of the overall poor health of the American population. (2/n)
I’ve since learned that, all things considered, the couple thousand bucks was a pretty decent deal. Insurance covered visits to the dentist and eye doctor, plus routine care. And if I was admitted to hospital, the out-of-pocket expenses, while high, wouldn’t break the bank. (3/n)
Every system has its positives and negatives. Still, Singapore’s ability to deliver world-class care, at very contained costs, seemed to me a miracle, which I attributed to a fortunate mix of culture and policy. (4/n) Image
The 3 pillars the Singaporean model (Medisave, Medishield, Medifund), plus subsidies, have been at the centerpiece of this successful approach. Still, the 3Ms only finance a bit more than 8 percent of national health expenses, with most costs still paid for out-of-pocket. (5/n)
Furthermore, our healthcare cost landscape is rapidly changing. Healthcare prices have risen faster than overall inflation, and some have even suggested that the medical inflation rate would grow by between 7 and 10 percent. (6/n) Image
In October, Parliament debated the government’s white paper on #HealthySG. The document focuses on preventative health as a complement to treatment, which has the added benefit of keeping medical spending down (healthy people see the doctor less). (7/n)
But improving health cannot be the sole strategy for keeping our medical costs in check. We need to recognize that the economics of healthcare has a tendency to skirt competitive forces, which is the usual way markets keep prices low. (8/n) Image
I offered a number of suggestions for how we could control spiraling costs. One way is to improve pricing transparency at clinics and hospitals, by requiring doctors to post their multiplier over MOH benchmarks. (9/n) Image
Insurance companies can choose to only pay out for doctors charging at the 40-60th percentiles. This provides a check on pricing behavior. Patients who wish to keep their preexisting doctors can do so, by topping up at their own expense. (10/n)
Speaking of preexisting stuff, patients with such conditions should be allowed to switch insurers. This could mean higher premia in the short run, but translate into greater competition in the long run (which would then lower insurance charges). (11/n) Image
Medishield Life, as a major player, can be more proactive in bargaining for lower prices. This sets the tone for what prices are acceptable for procedures it covers, and is routinely done in single-payer systems worldwide. (12/n) Image
The public sector isn’t exempt from price escalations, and there are anecdotes of such egregious practices at public hospitals, especially for pre-subsidy charges. These should be policed more closely, and not allowed to diverge too much. (13/n) Image
That’s because while there isn’t generally any “optimal” mix of public vs private healthcare. The private sector keeps a lid on demand with pricing, while the public sector tends to rations by time. (14/n)
So you pay more for the privilege of seeing a private doctor quickly, while you wait longer & spend less time with doctors at a public facility (incidentally, it’s a myth that it’s about quality; doctor friends swear that public hospitals are better at many procedures). (15/n)
Hence when we see recent reports of excess wait times at hospitals (including, alas, in #SengkangGRC General), I worry that this public-private price differential has gotten out of whack. (16/n) Image
We should also recognize that some drivers of rising medical costs have little to do with greedy doctors, patients, hospitals, or insurers. Record land sales eventually get passed on via higher rents and, in turn, higher medical fees. (17/n) Image
If we insist on market pricing of land, regardless of function, we invite such price spirals. Land prices indirectly become an implicit tax, and a millstone around the necks of the sick and infirm. (18/n)
But there are also non-medical tools we can deploy to contain healthcare costs. One is to better integrate information technology systems for insurance claims, in an expanded public-private partnership. (19/n)
The bottom line is that there’s unlikely to be a silver bullet for solving our medical cost woes. #HealthySG is one pillar. But we mustn’t place it all on the patient. We can also better design and regulate the healthcare financing market. #makingyourvotecount (n/n)

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More from @jamuslim

Oct 18
The idea of trusts and foundations may conjure up images of rich people and their lofty estates, and seems to be far removed from the everyday concerns of most Singaporeans. (1/n)
But the truth is, most of us have encountered trusts in some form. We donate to charities, which is a type of trust. We nominate beneficiaries for insurance or CPF, both of which are trust arrangements. (2/n)
And if you invest, you may have purchased a share in a unit trust, or a real estate investment trust (or REIT). So in reality, most of us have at least a passing familiarity with what a trust is, and how they play a role in our lives. (3/n)
Read 13 tweets
Jul 28
Inflation, as understood by economists, is the rate of change in prices. When prices rise, stuff gets more expensive. This is what is happening across the world now, as well as in Singapore. (1/n)
But one-off price increases, while unpleasant, do not give rise to inflation. Inflation happens when price rises are persistent. Many economists, while worried about inflation, do not expect it to persist beyond this year or next. (2/n)
Yet even when this inflation storm passes, not everyone will be made whole. For many Singaporeans, inflation is not just an inconvenience. If salaries don’t increase to offset higher prices, the current episode will quickly morph into cost-of-living crisis. (3/n)
Read 14 tweets
Mar 4
At the commencement of this session of Parliament, Prime Minister Lee expressed his hope that, with a more sizable Opposition, there would be more sophisticated policy debate, with alternatives instead of just objections being offered. (1/n)
My #workersparty colleagues and I took that charge seriously. So when the GST hike was proposed, we took pen to paper, and worked out a range of revenue options that we felt could stave off the need to raise GST. (2/n)
By our estimates, the hole that GST would fill is around $3.6 billion. So we went ahead and worked out four different ways—we call these levers—that we could pull in more revenue, each built around a different theme. (3/n)
Read 18 tweets
Mar 2
In January’s Parliamentary sitting, members debated the transition toward a green economy. It will also feature in the budget and Committee of Supply debates, currently ongoing. The issue is urgent and important, not least because steps need to taken today to get us there. (1/n) Image
I’m not usually a Debbie Downer, but my contributions to the debate were mostly cautionary. I spoke about the importance of measuring progress, and warned about how green financing wasn’t some magic bullet, as well as risks from greenwashing. (2/n) Image
We’ve heard about how the financial sector can make a massive difference to getting us to the promised land of limiting climate change. Of course, finance is important (I teach, research, and practice it, after all!) but not quite sufficient. (3/n) Image
Read 15 tweets
Sep 15, 2021
Every year, I teach a course in international economics. In the first lecture of the course, I teach what is known as the Ricardian model: named after the 18th century economist, David Ricardo. (1/n)
The key insight then—as it is today—is that free trade between two countries allows each one to specialize according to what they can do relatively well. This is known as comparative advantage. (2/n)
In doing so, these economies can enjoy levels of consumption greater than if they chose instead to go it alone, and attempt to produce everything at home. This elegant, compelling argument underlies why economists generally favor free trade. (3/n)
Read 12 tweets
Sep 14, 2021
The term “debate” often evokes images of raucous speeches and lively verbal jousting. Alas, parliamentary debates (in this country at least) are often heavily structured, guarded affairs. (1/n)
For instance, to make a point, one has to be recognized by the Speaker. This preserves order and decorum, but it comes at the cost of stifling dynamic riposte, especially for a heated topic. (2/n)
Time constraints exacerbate the problem (Parliament has more issues to discuss than time allows). This was the case yesterday, when a few #workersparty MPs (myself included) were unable to raise supplementary questions before the end of question time. (3/n)
Read 12 tweets

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