roasted chicken

Healthcare systems (and roast chicken?)

To have a glimpse of how complex the US healthcare system is, you should take a look at this video, from the 2014 Health Innovation Summit.

99 problems but reinbursement ain’t one‘.

It’s a very interesting 35 minutes.  The speakers include CMO of Welldoc, CEO of Omada Health (love this company) and a lady from a healthcare think-tank.

And I mean complexity in terms of payments and reimbursement, not quality of medical care.

Think of it this way:

When I feel like having roast chicken for dinner, I head down to the supermarket, buy the chicken using money from my wallet, and bring it home to cook.  So if I want to have chicken, I pay for the chicken.   It’s a fair trade and everyone is happy.  And chicken prices are reasonable and affordable, because the government subsidies the cost of staple foods.

roasted chicken

(Image source: aaanything.net)

But lets suppose now I need chicken for dinner, but I can get it without paying a cent from my own pocket.

Instead, I ask the supermarket to collect the money from my distant uncle living in Malaysia.  Suddenly, everyone’s interests are no longer aligned :

  • I’ll pick the most expensive organically farmed chicken since I don’t need to pay for it
  • The supermarket incurs time and cost to track down my distant-uncle-in-Malaysia and collect payment and passes this on.
  • My distant-uncle-in-Malaysia doesn’t care much about my health and just wants to pay as little as he is obligated to do, because I killed his favourite plant when we last met 20 years ago.

It’s simplistic, but try substituting the supermarket for the doctor, and the distant-uncle for the insurer/payor, and the chicken for the surgery I need as a patient.

And so this makes healthcare innovation in the US extremely challenging.  Even if you create something of great value to the patient and the doctor, you have to figure out how to get paid in this complex landscape.  In a startup environment, cash is king – you could easily run out of money if  it take 6 months or more for your revenue to come in.

 

Thankfully things are simpler in Singapore.  There are fewer stakeholders involved in the equation.  Which makes Singapore a great test bed for health innovation.

Where does the money come from?

The government is the largest by far, subsidizing up to 80% of hospital bills and controls risk and prices by being in control of the national healthcare insurance scheme (Medishield).  The patients pays a co-payment, often from his/her mandatory healthcare savings (Medisave).  Both parties are aligned in their interests – of keeping you healthy and minimizing medical costs.  Several large private insurers, such as Prudential and Great Eastern Life round up the landscape.

Personally, I think healthcare policy is one area Singapore has done a great job.  I don’t mean to brag, being a Singaporean myself, but the statistics really speak for themselves.

Singapore spends approximately 4 – 5% of GDP on healthcare every year, compared to 17 – 18% in the US (Source : World Bank).  And our healthcare outcomes are not inferior – in fact Singapore was ranked number 2 in the world for healthcare outcomes (Source : “Health outcomes and cost: a 166-country comparison”, Economist Intelligence Unit).

 

Despite the long working hours and relatively low renumeration (compared to other countries such as Australia) as a doctor in the public sector, we must be doing something right here.

Lets have a big round of applause for all healthcare staff working in the public sector here.

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