HCM 3530 Module 5 Asia-Pacific Systems Written Assignment Example

One Price List or Personal Savings Accounts: How Japan and Singapore Keep Costs Low, and What Each Would Mean for Americans

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B.S. in Healthcare Management, Thomas Edison State University

HCM-3530: Comparative Healthcare Systems

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Month Day, Year

One Price List or Personal Savings Accounts: How Japan and Singapore Keep Costs Low, and What Each Would Mean for Americans

Japan and Singapore are often cited as proof that a wealthy country can achieve excellent health at moderate cost. Both have life expectancies above 83 years, among the highest in the world, yet they spend 10.7 and 4.5 percent of their economies on health respectively, against 16.7 percent in the United States (World Bank, 2026). They reach that result by almost opposite methods. Japan relies on universal social insurance and tight government control of prices; Singapore relies on compulsory personal savings, targeted subsidies and an emphasis on individual responsibility. This assignment examines each system and evaluates what the United States could adopt.

Japan: Universal Insurance and a National Fee Schedule

Japan achieved universal health insurance in 1961. People are covered by employment-based insurers, by community-based national health insurance run by municipalities, or by a separate system for those aged 75 and older (Ikegami et al., 2011). Patients may visit any clinic or hospital without referral and generally pay 30 percent of the cost, with lower rates for young children and older adults and a monthly ceiling on payments for high-cost care.

The key to cost control is the national fee schedule. The government sets one price for every service and drug, paid by all insurers to all providers, and revises it every two years. Ikegami et al. (2011) explain that this price control, rather than limits on volume, has kept spending moderate even though the Japanese use a great deal of care: frequent outpatient visits, long hospital stays and many hospital beds. The trade-off is that low prices push providers toward high volumes of short visits, and the rapidly aging population is straining the system's finances.

Singapore: Savings, Insurance and Subsidies

Singapore's financing rests on several layers, often summarized as the 3Ms. MediSave is a compulsory medical savings account funded from a share of each worker's wages, used to pay for hospital care and some outpatient services. MediShield Life is a basic national insurance plan, universal since 2015, that covers large hospital bills and certain costly outpatient treatments. MediFund is an endowment fund that helps people who still cannot pay. Government subsidies, which are larger in the basic wards of public hospitals, sit underneath all three (Tan et al., 2021).

The philosophy is personal responsibility with a public guarantee. Because people spend their own savings first, they have a reason to avoid unnecessary care, and the government also limits the supply of hospital beds and specialists. Tan et al. (2021) report total health spending of about 4.5 percent of GDP in 2016 alongside good outcomes, but they also describe pressures: shortages of hospital beds and long-term care, rising chronic disease in an aging population, and high out-of-pocket payments. World Bank (2026) data show out-of-pocket payments at 25.4 percent of Singapore's health spending in 2023, compared with 12.2 percent in Japan and 10.9 percent in the United States.

Comparison With the United States

Table 1 compares the three countries.

Both Asian systems deliver better outcomes than the United States at well under a third of its spending per person, and in Singapore's case at less than a third of its share of national income. Outcomes reflect diet, social conditions and other factors outside health care, as Johnson et al. (2018) caution, so the systems should not receive all the credit. Still, the contrast in cost points to prices and organization. Japan controls prices directly through one fee schedule; Singapore controls demand through savings and supply through planning. The United States does neither systematically: its prices are negotiated separately by many payers, and patients' costs depend on their insurance rather than on a deliberate design.

What the United States Could Adopt

Japan's fee schedule is the more transferable lesson. Medicare already sets prices administratively for its own patients; extending reference prices to private insurers, as Maryland's all-payer hospital rate setting does, would apply Japan's logic without changing who insures whom. The risk, as Japan shows, is that low prices encourage volume, so price setting would need to be paired with attention to how much care is delivered. Maryland's approach addresses that risk by giving hospitals a global budget, a fixed annual revenue amount, so that seeing more patients does not automatically raise income; that combination of set prices and a spending limit is closer to what Japan achieves through its biennial fee revisions.

Singapore's model is harder to adapt. American health savings accounts resemble MediSave but are voluntary, tied to high-deductible plans and most useful to higher earners, while Singapore pairs savings with universal catastrophic insurance, heavy subsidies for basic care and strict supply planning. Without those other pieces, savings accounts alone would shift cost to patients without the protections that make Singapore's system work.

Conclusion

Japan and Singapore show two opposite routes to excellent health at moderate cost: universal insurance with tightly controlled prices, and compulsory savings with targeted subsidies and planned supply. Each has its price, high utilization in Japan and high out-of-pocket costs in Singapore. For the United States, the clearest lesson is that controlling prices across payers matters more than the choice between public and private insurance.

References

Ikegami, N., Yoo, B.-K., Hashimoto, H., Matsumoto, M., Ogata, H., Babazono, A., Watanabe, R., Shibuya, K., Yang, B.-M., Reich, M. R., & Kobayashi, Y. (2011). Japanese universal health coverage: Evolution, achievements, and challenges. The Lancet, 378(9796), 1106-1115. https://doi.org/10.1016/S0140-6736(11)60828-3

Johnson, J. A., Stoskopf, C., & Shi, L. (2018). Comparative health systems: A global perspective (2nd ed.). Jones & Bartlett Learning.

Tan, C. C., Lam, C. S. P., Matchar, D. B., Zee, Y. K., & Wong, J. E. L. (2021). Singapore's health-care system: Key features, challenges, and shifts. The Lancet, 398(10305), 1091-1104. https://doi.org/10.1016/S0140-6736(21)00252-X

World Bank. (2026). World development indicators [Data set]. https://databank.worldbank.org/source/world-development-indicators