Commentary: Medical Savings Accounts in Singapore: What Can We Know?

The primary determinant of the cost, quality, and form of medical care premiums in my country is the country’s own history, culture, social mores, and politics. Yet there is clearly a strong interest by theorists to try to use the variation in the way other countries choose to finance services, to yield generalizable conclusions on the effect of those financing systems. Both of these statements are represented in Michael Barr’s interesting review of the health care financing system in Singapore. Beginning with the low share of gross domestic product (GDP) spent on health care as a fact to be explained, Barr is surely right in arguing that this relatively low proportion is not explained entirely by the design of Singapore’s health care financing system. Other governmental health policies, public housing and social policies, and the unique ethnic and cultural mix also function to limit quantities, prices, and qualities of medical services. On the other hand, he seeks (as have many others) to understand whether the combination of medical savings accounts and catastrophic health insurance for the nonpoor has also made a difference. It is this second goal that I will primarily address.