Healthcare Financing: How should costs shift from private pockets to the public purse?

Abstract

In early 2013, Singapore's Health and Finance Ministers announced that the government was reviewing the country's healthcare financing system with a view to increasing the state's share of national healthcare spending from the current one-third to 40 per cent. This review occurred in the context of a fast-changing and politically more contested Singapore. Among others, Singapore's population was ageing rapidly, income inequality had risen amid greater economic volatility in the past fifteen years, and citizens were increasingly concerned about the affordability of healthcare in a country that had always emphasised individual responsibility over social protection. As the government grappled with the question of how it should adjust the balance between collective and individual responsibility in healthcare financing, health policymakers in Singapore faced a number of interconnected challenges: diagnosing correctly the limitations of the current financing system; finding the right balance between economic incentives, social equity and fiscal sustainability; and developing sound alternatives that were acceptable to Singaporeans with unequal levels of wealth and health.