GMO’S: an answer to world hunger or a threat to world food supply

Paper instructions:
-Provide a purpose and a strong “fight”
-include both sides, what one side thinks and what the other opposing side thinks. (both perspectives) Reminder that its a critical analysis!!!!
-Content=”is there real meat and data to support your arguments, Do you present researchers with multiple perspectives”


-APA FORMAT. 3-4 Pages
-USE AT LEAST 2 ACADEMIC JOURNALS (ex. Health Affairs), Think Tank journals and or books. Can use additional materials but use ones that are reliable, both quality

of research and relevance to the paper. (cite reference in apa) When using the references make sure you use them!!

-An article about GMO’S in developing worlds journal is provided to stimulate the mind for ideas and such.
-you can use the U.S and another DEVELOPED COUNTRY for the two sides and then expand on content with valid and strong analysis.

Global Health Issues
Singapore Health Savings Accounts syste

Leo Noriega
California State University, Long Beach

December 7, 2004
Singapore Health Savings Accounts System

In the 1980’s the health financing system in Singapore became unique in implementing for the first time what its known in the health care field as Health Savings

Accounts (HSAs) or Medical Savings Accounts (MSAs), which both terms are used interchangeably. An MSA is a federally qualified, tax-exempt individual health account

that a person invests to pay their health care expenses. It is similar to an Individual Retirement Account (IRA) that saves up untaxed money, but is used to fund

health care expenses instead of retirement income. ( Massaro and Wong, 1996).

How does it work?

These MSA includes three programs that help people pay for medical expenses: Medisave, Medishield and Medifund.

Medisave. Medisave is a national health care savings program designed solely to help citizens meet their individual responsibility by setting and paying for healthcare

from their own savings. For example, a Singaporean begins contributing 6% of his/her total wage, rise to 7% at age 35 and to 8% at age 45. All these “savings” are

tax-free. The government pays tax-free interest.

Medishield. The Medishield program was established in 1990 as a catastrophic insurance program in case of a long-term illness. The annual premiums range from $12 for

anyone under 30 years old, $132 for those between 66 and 70 years. To illustrate this, if a person needs a hip replacement and with Medisave restrictions that person

can only stay in the hospital for 10 days, Medishield pays for additional treatment and hospitalization until the person is out of danger (obviously within the

guidelines of the program).

Medifund. The Medifund Program is a government funded program establish in 1993 to offer financial assistance to the poor whose Medisave accounts are low and who have

few resources to pay the difference out of pocket. Funds are distributed on a case-by-case basis. This program is similar to the U.S. Medicaid system, as an insurance

program for the low-income and the poor.

The World Health Organization has released an important study of Medical Savings Accounts around the world. It looks at program in the U.S., South Africa, China, and

Singapore to name a few. According to this report, it suggests that the majority of health spending in Singapore is paid out-of-pocket. In 1999, out of total health

care spending of $160 billion (in Singapore dollars), $60 billion was paid by government, about $10 billion by MSAs, and $90 billion directly out-of-pocket. (World

Health Organizations, 2003).

Basically, it is a “consumer driven health care” with high out-of-pocket deductibles; meaning that if a client ‘wants’ more services, his/her funds decrease and more

high deductibles are paid at the point of service.

How is it this system different from other countries studied?

It is different in the sense that MSAs are direct funds from the individual and employer as compared to the U.S. (where 85% of all health care spending is paid by

third parties) where people pay for insurance that goes to a pool of money–that pays for members usually in the form of capitation under the managed care method. The

insurance payment is that “third-party” that the Singapore system much dislikes.

Another differentiation with other countries is that Singapore’s financing system is not a tax-generated universal program.

Has the Singapore HSAs system addressed some common market failures?

No health care system in the world has demonstrated to be perfect, however the Singapore health system has taken into account programs that protect the poor and

address potential market failure in its financing system.

It all seems to be the opposite in Singapore of what the market failure reasons are in the United States. Following is a table that will contrast the United States

health care system to that of Singapore.

*Market Failure in the U.S. Singapore

Lack of access: existence of 45 million uninsured (Census Bureau). The government has mandated national health care savings programs known as MSAs, under which

people are required to save to finance their own health expenses.
Complexity: lack of accurate and accessible consumer information. Medical social workers provide financial counseling to everyone at the time of admission into

the public hospitals. They advise patients that it is their responsibility to choose a ward class they can afford and to cover their expenses through a combination of

subsidies, Medisave, Medishield and personal funds. If necessary, patients can draw on their spouse’s, children’s or parents’ Medical accounts. (Massauro and Wong,


Patients can choose their providers—public or private-at all levels of care. All Singaporeans are entitled to basic medical services at government polyclinics and

public hospitals, where rates are regulated and subsidized.

Patients are expected to pay part of the cost, and to pay more when they demand higher levels of service. The public sector provides roughly 20% of primary care and

80% of hospital care through top large, integrated health care networks. (Singapore Ministry of Health).

Provider power: providers, paid by third parties, have a perverse incentive to over-treat and over-bill. The whole idea and goals of MSAs in Singapore is for

the ‘Government to promote individual responsibility towards healthcare, shift a greater share of the financing to individuals and employers, and ensure a fiscally

sustainable health care system in the face of an aging population.’ (Singapore Ministry of Health)

The Singaporean Government does not believe that a ‘third party’ should be responsible of administering the health of its people. In the same line, consumers are

satisfied with the financing system because of the benefits: cheaper and they save the hustle of dealing with the administration of sometimes very small medical

claims. ‘Workers like it because they decide how to spend their account, instead of having the manager of a health management organization (HMO) tell them what they

can and cannot like.’ (Liu and Yue, 1999)

Moral Hazard: insurance reduces personal responsibility and incentives to stay healthy and insured patients demand more services than they would in the absence of

coverage. Singapore’s MSAs are part of a movement toward “Consumer driven health care” in which consumers have a more active role in deciding what health care

they receive and from whom.
Entitlement: It’s government money, not mine; distributive justice says I have a “right” to health care. Completely the opposite, Singapore’s health system

mandates its citizens to save for their own health. Its philosophy is that health care should not be free.
Adverse selection: incentives for insurers to select healthy populations and to refuse the sick and the poor. (Compete on basis of population risk, not on service and

efficiency). Since there are no private health insurance companies in Singapore, there is no adverse selection. It is imperative though to mention that even though

the consumer (patient) has a fund that pays for his/her health care, there are guidelines as to how much to charge per procedure/surgery/treatment, hospitalization,

etc. no matter how complicated the ‘illness case may be.’

Obviously there is a lack of competition because the kind of insurance that someone could buy, it is within the MSA. Singapore complements MSAs with catastrophic

insurance (Medishield and ElderShield) to cover extraordinary expenses.

*Global Health Systems: Study Guide
Revised September 21, 2004 at 0800 hours

Does the design encourage individual responsibility and personal savings?

Absolutely. The whole idea, concept, objective, and goal in minds of the Singaporean Government is to make individuals responsible and accountable for their own


The government has determined five fundamental objectives for the health care system.

• To promote good health throughout the nation as a whole;
• To encourage individual to take responsibility for their own health and avoid over-reliance on state welfare or medical insurance;
• To provide good and affordable basic medical services to all Singaporeans
• To rely on competition and market forces to improve service and increase efficiency; and
• To intervene directly when markets fail to curtail health care costs.

With these objectives, the advantages are many. MSAs provide incentives for individual to take responsibility for their own health care needs. Unlike traditional

indemnity insurance, MSAs provide incentives for individuals to save and avoid unnecessary use of medical services. These funds belong to the citizens, accumulate over

a lifetime and can be used at the discretion of the individual. Health insurance premiums in other countries do not belong to the individual, (especially in the U.S)

where members of an HMO contribute to a pool of money that pays for the health care of others (not intentionally).

Is there risk of government failure in terms of bureaucratic supply problems?

*Bureaucratic Supply Failure in the U.S. Singapore

Difficult to monitor public agencies. No clear gauges like price/earning in private sector The desired output of medical care is “good health.” However, as

mentioned earlier, the Singapore is not a perfect health system.

The government has begun to place revenues caps on MOH hospitals. It is establishing limits on average charges per patient day and will adjust them annually. Hospitals

that exceed the limits will have their government subsides cut by that amount, while hospital with a budget surplus will keep the additional funds.

The government strictly monitors the licensing and specialization of doctors. To manage physician supply, the medical school class at the National University of

Singapore is limited to 150, and the numbers of foreign medical schools whose degrees are recognized has recently been reduced from 176 to 28. Training is not

dissimilar to that in the U.S. The five-year undergraduate medical school experience is followed by one year as a house doctor and two or three additional years of

basic training. Those who choose and are able to find slots must train for an additional two to three years to practice a specialty.

Singapore has made improvements of the past few decades have done much to enhance human welfare, both directly and indirectly. But much more remains to be done.

Communicable (and largely preventable) diseases are still common. Health systems also have to cope with the aging of populations, which leads to an increased burden of

the more expensive noncommunicable diseases. New illnesses, such as AIDS, have emerged. According to the World Development Report of 1993.

Inefficiency is common Singapore has one of the most sophisticated health care delivery systems in Asia, serving citizens and foreign national alike in both private

and public hospitals. In terms of efficiency of delivery, Singapore is comparable to U.S. managed health networks and point-of-service plans.

Quality of services is an important issue for the restructured hospitals. Hospital personnel are responsible for improving service, and senior management makes

decision based on the satisfaction of patients and other customers. Two examples show recent improvements:

• Patients waiting less than 15 minutes at admission increased from 40 to 71% between 1991 and 1992.
• Outpatient visits begun without the medical record were reduced from 388 per month in 1990 to one per month by 1993.

Singapore’s health indicators are equally impressive. Its average life expectancy increased by 15 years from 1960 (63 years) to 2001 (78) and is now one of the world’s

longest. Its infant mortality rate is the world’s lowest, at 2.2 per 1,000 live births, much improved from the 6.6 in 1990 (and 34.9 in 1960) and far lower than rates

in the United Kingdom (5.9) and the United States (7.6).

Asymmetry of information: only bureaucrats understand the budget Possibly, not much data exists on this topic, but I assume that it may be true that Singapore’s

top executives or government understand how the budgets are design and how they operate.

Budgets by ‘nature’ are always complicated unless someone has extensive knowledge of the finances.

Because competition can improve quality and drive down costs, governments should foster competition and diversity in the supply of health services and inputs,

particularly drugs, supplies, and equipment. This could include, where feasible private supply of health care services paid for by governments or social insurance.

There is also considerable scope for improving the quality and efficiency of government health services through a combination of decentralization, performance-based

incentives for managers and clinicians, and related training and development of management systems.

Is there risk of government failure in terms of x-inefficiency (lack of competition)?

Not much, since the Government is restructuring the government hospitals with seven of the largest facilities organized as separate corporations, each with its own

board of directors. The goals of restructuring are to introduce “accounting responsibility and commercial discipline” into hospital management and to improve the

standard of hospital services and responsiveness to patients’ needs. Singapore’s newly created quasi-independent status presumably gives the hospitals greater

entrepreneurial flexibility and allows them to respond rapidly to the changing marketplace.

Singapore General Hospital (SGH), the largest hospital in Singapore and one of the tow public tertiary centers, where high-technology procedures are concentrated, was

restructured in 1989. It is managed much like a private hospital in the United States. Although the fraction of the total hospital cost due to labor in Singapore is

very similar to that in the Untied States, SGH is considerably learner than its American counterparts. (Liu and Yue, 1999)

How much consumer choice do citizens of Singapore enjoy?

Plenty! Singapore’s citizens are free to choose the services needed at the location they choose depending on the level of quality. Singapore has 11, 800 hospital beds

(3.7 per 1,000 people) in both the public and private sectors. Patients can choose their providers—public or private-at all levels of care. All Singaporeans are

entitled to basic medical services at government polyclinics and public hospitals, where rates are regulated and subsided.

Patients are expected to pay part of the cost, and to pay more when they demand higher levels of service. The public sector provides roughly 20% of primary care and

80% of hospital care through two large, integrated health care networks. (Singapore Ministry of Health).

Would you recommend the Singapore system for adaptation to the U.S.?

The Medical Savings accounts work! However, I do not think this program would work in the United States. According to World Health Organizations report in 2000, the

system may be replicable in other countries, with design modifications to accommodate the differences in income levels, demographic profile and current health

financing. This means, that it’s like starting a new health care reform in the U.S. and that just would not happen anytime soon.

Many changes in our health care system are occurring but very gradually. I think the implementation of this system would take many years and the way our political

system works, it would probably get lost in waiting process. People will just not accept any other form of system, plus the loss would be many. Let’s considerer the

“insurance world” There are numerous insurance companies such as, Kaiser Permanente, BlueShield, Blue Cross, PacifiCare, Universal Care, Aetna, and many more. If we

were to explore the impact of their business in the U.S. economy I think legislators and the public will just not accept such an adverse change.

Another reason this type of system would not succeed in the U.S. is that many people are so used to the “free riding” concept as it was presented in class. People

‘need’ someone (many times the Government pay in form of Medicaid) pay for their health care consumption; I don’t think people are ready to start investing in their

own health. Although our population is aging, the young population still enormous and if its true that 15 million of the insured in the U.S. that can afford health

insurance but do not get one—they would still not get it because lets face it—young people most of time are healthy.

The advantages are many, such as not dealing with the insurance administration for minor claims, tax free investments, incentives to avoid risk life styles, and the

investments, I think we are just not ready to adopt something like Medical Savings Accounts.


The Singapore’s financing system of MSAs clearly has many advantages; however it is unlikely that it would produce the same outcomes in the United States. The U.S. is

undergoing many challenges in its Government, economy, and health care sector. MSAs will not be well received by the population that is undergoing war, inflation, high

rates of unemployment, and illnesses that come along with such a large population as the one in the United States.


Asher, 1995. “Compulsory Savings in Singapore: An Alternative to the Welfare State.” National Center for Policy Analysis, Policy Report No. 198. 198.html

Friedman. 2001. “How to Cure Healthcare.” The Public Interest. Winter, 2001.

Global Health Systems: Study Guide
Revised September 21, 2004 at 0800 hours
Professor Richard Tradewell

Massaro and Wong. 1996. “Medical Savings Accounts: The Singapore Experience.” National Center for Polity Analysis, Policy Report No. 203.

Ramsay, Cynthia. 1998. “Medical Savings Accounts: Universal, Accessible, Portable and Comprehensive health Care for Canadians.

Last visited: November 26, 2004

Singapore Ministry of Health.
Last visited: November 26, 2004.

World Health Organization, 2000. The World Health Report 2000: Health Systems: Improving Performance. Annex Table 8.


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