By: Hugo Douglas
For many, healthcare is a controversial topic, its universality makes it a source of debate and discussion, but what is the debate about? After the shock of the COVID 19 pandemic, the world awoke to the harsh reality that is the incompetency of its public healthcare systems. Public healthcare systems across the world have been stretched to their limit, yet many countries feel that they need to throw more money at the problem. Is this just the sunk cost fallacy at work? Can we still use underprovision and inefficiency as an excuse for the collapse of an already dysfunctional system?
Let’s talk about Singapore. It is expected that in the next decade, healthcare will be the most significant contributor to increases in government spending. This is to be expected, in the past decade alone, the government healthcare budget has increased from $3.7bn to $11.3bn (kudos to a rapidly ageing population). Nonetheless, this is unsustainable, especially in consideration with COVID spending. The practicality of healthcare spending is also part of the question. From a government’s perspective, it is more economically efficient to increase population health by subsidising widely used healthcare facilities. For example, vaccinations, general practitioners, dentists etc. Conversely, citizens are left with lacklustre infrastructure when it comes to the provision of specialist treatments. While general health and common illnesses may be covered, this method of optimisation still affects patients that need more extensive treatment. One must consider how efficient public healthcare entities can realistically be. With direct healthcare provision possessing certain constraints, the reality is that public firms have drastically different incentives than their private counterparts. Public firms have the benefit of more consistent, state funding resulting in a decreased drive towards profit, to which there are notable disadvantages such as a lack of innovation and consequently, efficiency. Development in technology goes hand in hand with scientific progress, it can be said that there is a snowball effect of sorts, and the lack of progress in technological advancement could be a limiting factor for future research and innovation. Moreover, the absence of competition between public firms, reduces the incentive to innovate and revolutionise technology, proving detrimental to the prospects of future scientific development.
To further accentuate my point, let’s take a look at COVID. Healthcare systems across the world were pushed beyond their limits to mitigate the effects of the virus. For instance, we saw the need for “instant hospitals” to be constructed in Wuhan, owing to the lack of healthcare resources available. The true weakness of the USA’s public healthcare infrastructure was revealed for all to see when they were faced with what was once an epidemic. Hospitals were understaffed and undersupplied, healthcare workers had to work for hours on end and available ICU beds were becoming more and more scarce. This highlights the fact that specialised divisions of healthcare aren't always as accounted for as the more generic ones. A lot of people are of the opinion that this means that there should be an increase in public health funding, but fail to consider the prospect of letting the private sector do the work. This is because they believe that lack of funding is the issue, as opposed to the model itself. The reality is that if we had more innovative technology that had better capability to mitigate a pandemic, we could’ve been in a better position to handle it. There is also the aspect of the amount of government funding that it takes to provide healthcare directly, it could be argued that there are other, more constructive ways that this money could be spent that benefit the public. In 2020, US healthcare funding reached $4.1trillion (19.7% of GDP at the time). There are many underfunded systems in the US economy, perhaps some of this money would have a greater impact if invested in public schooling, housing, food stamps or any other division of the economy.
Obviously, this is a complex issue. While the direct provision of healthcare has its benefits and private sector dominance has its downsides, this article aims to highlight some of the issues that can be experienced as a result of it. The best course of action may not always be black-and-white. For instance, countries like Australia operate on hybridised systems and other countries like Canada invest a large amount of money in an attempt to create stronger public healthcare infrastructure. Ultimately, it can depend on the circumstances, COVID is a great example of this because it knocked healthcare systems worldwide off-balance. The public will always need to consume healthcare the question is in what form?
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