Saturday, December 18, 2010

Role of social insurance

Most countries have a universal health insurance system that is provided by the state or through the private sector on conditions that are regulated by the state. It allows the population to have the basic level of health care at an affordable cost. Most developed countries, with the exception of America, have this kind of arrangement.

America has a private health care system. It produced high cost and leaves a significant portion of the population to be uninsured.

Singapore used to have a good and affordable health care system. In recent years, we are adopting some of the bad practices of America. There are now complaints that parents cannot buy insurance through Medisheld or the private alternatives for children with some congenital conditions.

Our problem is caused by the misconception that the private sector is more efficient in the use of resources. This is only partly true, but it has to be balanced with the negative aspects  of the pursuit of profit at the expense of other consideration, and the high cost of marketing and administration.

Some services, such as health care and education, are better handled under a social insurance scheme, rather than by the private sector. See the explanation in this article.

Tan Kin Lian

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