A look at S'pore's Healthcare

A look at S'pore's Healthcare

Saying that healthcare is expensive or cheap in Singapore is nearly a non-statement. Firstly, healthcare is such a general term that it should be neatly cut out for surgical analysis. Healthcare can range from basic illnesses such as cough and flu to catastrophic illnesses like cancer. Healthcare can also be necessary, cosmetic or even luxurious.

Healthcare consumers are also increasingly differentiated; bear in mind Singapore is no longer a fishing village but a teeming city of locals and foreigners. Consumers can range from the extreme poor to the middle class to the uber-rich, and the type of demand races an entire spectrum – foreign medical tourists want luxurious healthcare, while the middle class may demand ‘aesthetic treatment’, and the poor thinks hospital wards with air-conditioning and television sets are no big deal.

Then healthcare providers are specialised too, working in either public or private sectors. People aspiring to join the healthcare sector need not just be doctors; they can be speech therapist, occupational therapist, pharmacist, nurse, intellectual disability psychiatrist…and the list goes on.

In addition, there are also the GPs, the polyclinics, specialist centres and public and private hospitals supplying the demand by consumers. For the GP industry, it is clearly a monopolistically competitive market: large number of small clinics, low barriers to entry and little market power. For the polyclinics and public hospitals markets, there is a duopoly – Singhealth and National Healthcare. But both are managed like not-for-profit organisations, and heavy subsidies are provided for consumers. In the private sector, Raffles Medical Group and ParkwayHealth dominate, with a few other smaller private healthcare suppliers.

Reasonably enough, the private sector will be the one drawing the richer international consumers. However, the government believes Singapore can be a medical hub – and so it allows the Singhealth and National Healthcare to set up international desks. Hence international consumers have a range of choices. What this means for local consumers will be dealt in Part 2.

Interestingly, we do not know for sure if provision of healthcare is a comparative advantage which Singapore enjoys. It makes little economic sense if Singapore tries to be a ‘medical hub’ without ensuring the relative opportunity cost is lower than that of other countries in the region. Some surgeries, and lasik comes to mind, are relatively cheaper in other countries. Foreign consumers will doubtfully come here for treatment.

As healthcare is such a heterogeneous good and service, in some areas Singapore will enjoy comparative advantage; in others, not so. Some sectors such as splitting up Siamese twins have attracted foreign consumers. But it is unsure if the opportunity cost of splitting Siamese twins is indeed relatively lower than that of, say, the UK or US. Hence it is very difficult to judge if Singapore has comparative advantage even in these few sectors where Singaporean surgeries have attained worldwide attention.

However, that being said, it is true Singapore is seen as a symbol of safe and quality medical treatment, and its accessibility, convenience and other facilities (which probably can help to speed up recovery?) are heavy plus points. On the whole, this seems that Singapore has relatively lower opportunity cost in providing healthcare services, and so theoretically it should specialise on being a medical hub, leveraging on its comparative advantage. But as mentioned, there are so many types of healthcare that Singapore cannot enjoy comparative advantage in all.

http://forums.delphiforums.com/sunkopitiam/messages?msg=24445.1