Spending three days in Singapore reminded me how much there is to like about the city. Some, like cleanliness, are quite basic. Others demonstrate thought processes advanced enough that we should view Singapore as an example to the world of how a nation can be run.
Below are three things I would import from Singapore:
Grocery carts. It is difficult to imagine, indeed, that something as mundane and uninteresting as a grocery cart would be worthy of global emulation, yet it is so. All my life I have heard comedians mock the one wheel of the grocery cart that wobbles when in use. In Singapore, and in Jakarta as well, the wheels rotate 360 degrees. In a society that heralds community, that grocery carts possess the ability to quickly move out of the way of someone navigating down the aisle should come as no surprise. But Singapore takes it one step further. In several of the books I have read, most notably those by Gladwell, there is mention that supermarkets are always looking for ways to cover the cost of corralling grocery carts after customers bring the groceries to their cars. Paying lot attendants to gather them periodically throughout the day costs grocery stores millions of dollars per year. How does Singapore address this expense? Much the same way as airports do luggage carriers. To use a grocery cart, a patron must place a $1 coin into a slot do dislodge it from the other carts. Upon return to the cart corral, you can then retrieve your dollar by reconnecting your cart to the others gathered there. I would love to see the US grocery stores implement this using a quarter. Give the homeless something to do other than ask me for change as I exit the store.
Assigned seats in movie theaters. If you've ever attempted to see a blockbuster movie on opening weekend, you know the importance of not just buying your ticket early, but also standing in line long before other customers to have your choice of seats. If you are a late arrival, be prepared to sit separate from your date (God forbid anyone slide to the center) or sit in the second row and leave the show with a sore neck. Singapore theaters have solved this problem by requiring you to select your seat at the time of purchase. This is such a simple difference that I am surprised that no theaters (of which I am aware) have begun to do this in the US. As we push more and more people to buy their tickets in advance online, having them select their seat at time of purchase is an idea whose time has arrived.
Medical system. Last, but certainly not least, as I've mentioned several times before on this blog, the US should implement Singapore's medical system. So much health care debate in the US centers around what it would cost to insure everyone. People assume that, if everyone is covered, the country would go broke. A 2004 Kaiser commission study concluded it would increase existing government expense by $48 billion. The study neglects to recognize what a CBS investigation found in the same year: hospitals charge 2.5x more to uninsured than what they charge insurance companies.
In reality, as Singapore demonstrates, insuring everyone will drive costs DOWN, not up, especially if we use the Singapore system, for two reasons. First, medical facilities, specifically those who, by law, cannot turn anyone away, set prices according to their ability to recover. Most hospitals, in addition to providing care, need to make a profit. They are bound by the same laws of economics as a traditional business - marginal revenue must equal marginal cost. This means those that CAN pay, will pay a price high enough to cover for those who CANNOT pay. Otherwise, hospitals go out of business. When everyone CAN pay, marginal cost (the cost of servicing one more patient) will drop, which will cause the price to drop.
The second reason is the result of a more fundamental law of economics: supply and demand. Today, because copays hide the actual cost of service from anyone with insurance, we live in an environment with what is known as a "moral hazard". Meaning, we will consume as much as health care services as our ability to pay the copay amount: we're price insensitive. Think of it this way, if you had insurance for purchasing diamonds, and you only ever had to pay $25 to buy a diamond, would you stop after you had purchased the two you needed for your earrings, or would you load up? Singapore's universal coverage also has a copay, but in a different way. Each person, according to their income, has a medical expense cap. Once you've reached that cap, the government picks up the remaining cost of services. This approach removes the moral hazard and forces patients to be price-sensitive. If you know that you have to spend $2,000 out of your own pocket before the government picks up the tab, are you having your procedure at a facility that charges $100 or $50, assuming equal quality? Obviously, you'll go to the $50 facility - it's your money. When medical providers compete on price and quality, instead of paying marketing expenses to get on the "preferred vendor list" of an insurance company cost of service goes down and quality goes up. It's really quite simple.
Unfortunately, I don't think any of the above will occur in the near future. The medical changes, especially, are unlikely. Medical insurance is a multi-billion dollar industry, with a very strong lobbying presence, and politicians who want to gain re-election don't walk away from that kind of funding. Doesn't stop me from hoping. Who knows, if enough of us write letters to our representatives, maybe we can make it happen.
Below are three things I would import from Singapore:
Grocery carts. It is difficult to imagine, indeed, that something as mundane and uninteresting as a grocery cart would be worthy of global emulation, yet it is so. All my life I have heard comedians mock the one wheel of the grocery cart that wobbles when in use. In Singapore, and in Jakarta as well, the wheels rotate 360 degrees. In a society that heralds community, that grocery carts possess the ability to quickly move out of the way of someone navigating down the aisle should come as no surprise. But Singapore takes it one step further. In several of the books I have read, most notably those by Gladwell, there is mention that supermarkets are always looking for ways to cover the cost of corralling grocery carts after customers bring the groceries to their cars. Paying lot attendants to gather them periodically throughout the day costs grocery stores millions of dollars per year. How does Singapore address this expense? Much the same way as airports do luggage carriers. To use a grocery cart, a patron must place a $1 coin into a slot do dislodge it from the other carts. Upon return to the cart corral, you can then retrieve your dollar by reconnecting your cart to the others gathered there. I would love to see the US grocery stores implement this using a quarter. Give the homeless something to do other than ask me for change as I exit the store.
Assigned seats in movie theaters. If you've ever attempted to see a blockbuster movie on opening weekend, you know the importance of not just buying your ticket early, but also standing in line long before other customers to have your choice of seats. If you are a late arrival, be prepared to sit separate from your date (God forbid anyone slide to the center) or sit in the second row and leave the show with a sore neck. Singapore theaters have solved this problem by requiring you to select your seat at the time of purchase. This is such a simple difference that I am surprised that no theaters (of which I am aware) have begun to do this in the US. As we push more and more people to buy their tickets in advance online, having them select their seat at time of purchase is an idea whose time has arrived.
Medical system. Last, but certainly not least, as I've mentioned several times before on this blog, the US should implement Singapore's medical system. So much health care debate in the US centers around what it would cost to insure everyone. People assume that, if everyone is covered, the country would go broke. A 2004 Kaiser commission study concluded it would increase existing government expense by $48 billion. The study neglects to recognize what a CBS investigation found in the same year: hospitals charge 2.5x more to uninsured than what they charge insurance companies.
In reality, as Singapore demonstrates, insuring everyone will drive costs DOWN, not up, especially if we use the Singapore system, for two reasons. First, medical facilities, specifically those who, by law, cannot turn anyone away, set prices according to their ability to recover. Most hospitals, in addition to providing care, need to make a profit. They are bound by the same laws of economics as a traditional business - marginal revenue must equal marginal cost. This means those that CAN pay, will pay a price high enough to cover for those who CANNOT pay. Otherwise, hospitals go out of business. When everyone CAN pay, marginal cost (the cost of servicing one more patient) will drop, which will cause the price to drop.
The second reason is the result of a more fundamental law of economics: supply and demand. Today, because copays hide the actual cost of service from anyone with insurance, we live in an environment with what is known as a "moral hazard". Meaning, we will consume as much as health care services as our ability to pay the copay amount: we're price insensitive. Think of it this way, if you had insurance for purchasing diamonds, and you only ever had to pay $25 to buy a diamond, would you stop after you had purchased the two you needed for your earrings, or would you load up? Singapore's universal coverage also has a copay, but in a different way. Each person, according to their income, has a medical expense cap. Once you've reached that cap, the government picks up the remaining cost of services. This approach removes the moral hazard and forces patients to be price-sensitive. If you know that you have to spend $2,000 out of your own pocket before the government picks up the tab, are you having your procedure at a facility that charges $100 or $50, assuming equal quality? Obviously, you'll go to the $50 facility - it's your money. When medical providers compete on price and quality, instead of paying marketing expenses to get on the "preferred vendor list" of an insurance company cost of service goes down and quality goes up. It's really quite simple.
Unfortunately, I don't think any of the above will occur in the near future. The medical changes, especially, are unlikely. Medical insurance is a multi-billion dollar industry, with a very strong lobbying presence, and politicians who want to gain re-election don't walk away from that kind of funding. Doesn't stop me from hoping. Who knows, if enough of us write letters to our representatives, maybe we can make it happen.
Posts
No comments:
Post a Comment