The place to look for a model is Singapore. That Southeast Asian city-state is smaller than New York City, but its per-capita gross domestic product and life expectancy are similar to those of the United States. Singaporeans spend much less money on health care (4 percent of their economy) than we do (18 percent).
Goldhill identifies three major differences between the Singaporean health system and ours. In Singapore, individuals contribute much more money at the point of purchase. The payment mechanism varies according to treatment and patient. Government doctors and facilities compete with private health care workers. Singaporeans are required to contribute to health savings accounts and purchase a catastrophic insurance plan. There is an insurance pool for the severely disabled and a fund to pay their bills. There are subsidies to providers based on their level of service.
But the thrust of Singapore’s system is individual responsibility for a large portion of direct payment. And the results are positive. “Health care in Singapore is high quality, high-tech, and, by international standards, cheap,” writes Goldhill. “Genuinely cheap, not just misleadingly cheap at the point of service.”
A small group of policy intellectuals are attempting to apply the lessons of places like Singapore to the United States. They are advocates of consumer-driven health plans that combine high deductibles with health savings accounts. Goldhill favors the consumer-driven approach, but he also recognizes that the results, to date, have been mixed. Current tax law puts such plans at a disadvantage. The Democrats in power are obsessed with universal coverage and subsidies for every form of health consumption. The Republicans have been content simply to oppose the Democrats, and GOP proposals maintain the flawed insurance model.
There is also the problem of expectations: Americans are not used to behaving like health care consumers. They are sometimes shocked by the sticker price of doctor appointments.
Goldhill understands that the health system will not meet his goals of equality, efficiency, and rationality overnight. He says it may take as long as a generation to introduce consumer markets to health care, and that the process may not begin until the system reveals itself as bankrupt. But he is not a defeatist.
“As quickly as possible,” he writes, “we must divert as much of the resources spent on non-catastrophic care into individual accounts.” Turn health care into as much of a consumer market as possible, he writes, and “we all will see the benefits of an industry competing on price, quality, and service.” He proposes a “balanced” system of “health accounts, health loans, and catastrophic insurance with a very high deductible.”
Goldhill’s radical plan would require more activity, and more direct payment, from the individual consumer. People like Becky would cease to be passive recipients of insurance benefits from corporations or governments and would become decisive agents in the marketplace. Consumer-driven health care thus strikes a blow against Big Government and managerial experts. “Health care experts want us to believe that health care is too complicated for patients-consumers to serve as an effective disciplinary force,” he writes. “But what’s the alternative?”
My only criticism of this comprehensive, thought-provoking, empirical, and well-written book is that it was published only this past month. Goldhill first wrote about the death of his father and the idea of consumer-driven health care in a cover story for the Atlantic in the summer of 2009. He clearly took his time in researching the health care problem, the Affordable Care Act, and possible solutions before he committed his ideas to book form.
Yet I cannot help thinking that Catastrophic Care might have had a significant impact on the debate over Obamacare, even on the 2012 campaign, if it had been published in, say, 2010. But that did not happen, and we are left with imperfect options. We can try to persuade Republicans and Democrats of the virtues of consumer-driven care as America continues its insurance-driven slide into insolvency. Or we can move to Singapore.
Matthew Continetti is editor in chief of the Washington Free Beacon and a contributing editor to THE WEEKLY STANDARD.