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I agree it is important readers don’t wrongly conclude that Medisave, Medishield, and Medifund by themselves account for Singapore’s excellent performance. It is unhelpful to leave it with that though.
The existence of these medical savings accounts (and other subsidy sources) does, however, allow patients and providers to interact within a structured market environment – where patient choice directly influences providers’ income; and where patients are conscious of cost for most services.
Choice as an accountability mechanism gives patients’ significant leverage in their interactions with providers; and, the fact that providers get paid partly based on output contributes to Singapore’s relatively high productivity and efficiency.
Since people pay fees for most services they are very cost conscious. And this consciousness constrains providers from increasing prices. Singapore’s low prices are one of the factors driving their strong performance as a medical tourism destination – as well as contributing to the systems’ remarkable cost efficiency (total spending on healthcare in Singapore is 3.9% of GDP, about a third of the European average).