Singapore: #13 in the World Index of Healthcare Innovation

Introduction

In the 2024 World Index of healthcare Innovation, Singapore is ranked 15th, declining from 10th place in 2022. The country’s drop is due in part to its performance on Choice (20th), alongside ranking 19th in Fiscal Sustainability due to rising public healthcare spending and high government debt. Despite its universal health savings account (HSA) system and relatively low healthcare costs, Singapore’s comparative advantage is diminishing relative to other industrialized nations.

Singapore has robust research universities and advanced digital healthcare systems, leading to an above-average ranking on Science and Technology (12th). Still, the dynamic city-state could focus on pairing free-market reforms with universal HSAs to increase competition and drive down costs for the public sector.

Background

Singapore’s healthcare system remains a unique model that doesn’t neatly fit into Western categories like single-payer or universal private insurance. This system incorporates elements from both poles of the health policy spectrum, combining features of a single-payer system with those of a free-market approach, thus forming a hybrid model that emphasizes both efficiency and cost-effectiveness.

Central to this innovative model is the combination of mandatory HSAs and comprehensive catastrophic health insurance. About 20 percent of an individual’s wages are mandatorily deducted, with a significant portion allocated to personal Medisave accounts. In 2024, the annual contribution limit for Medisave was increased to $7,800, reflecting adjustments for inflation and rising healthcare costs. These accounts play a critical role in managing health expenses, primarily covering inpatient services and certain outpatient costs. HSAs are a cornerstone of the system that encourages personal responsibility and prudent health spending.

Medishield Life, a universal health insurance scheme managed by the government, complements Medisave by covering severe and prolonged medical treatments. This ensures that no citizen is without support during major health crises. Despite broad coverage, the system requires substantial copayments and deductibles, which effectively manage the demand for health services and discourage unnecessary use. As of 2024, Medishield Life covers over 5.7 million Singaporeans (95 percent of the population), illustrating its extensive reach and critical role in the national health landscape.

In prescription drug management, Singapore offers a model of limited regulation combined with market mechanisms. The Ministry of Health maintains the Standard Drug List, where drugs listed are subsidized up to 75 percent, making essential medications affordable. However, unlisted drugs are not subsidized, promoting consumer discretion and market competition. This balanced approach ensures accessibility while promoting cost containment and personal choice in medication.

The Singaporean healthcare system is strategically designed to optimize resource use and maintain sustainability. Health expenditure is projected to constitute 4.9 percent of GDP in 2024, a slight increase from previous years, reflecting ongoing investments in health infrastructure and public health initiatives. The system’s structure—balancing compulsory savings, insurance coverage, and substantial patient co-payments—ensures universal coverage while preventing system abuse and maintaining high standards of healthcare delivery.

DIMENSION PERFORMANCE

Quality

Singapore ranks 17th for Quality. Singapore struggles most to prevent hospitalizations, especially for chronic ailments like asthma, COPD, and diabetes. However, Singapore ranks third in the Index in mitigating COVID-19, behind only the United Arab Emirates and Taiwan. Its strong GDP growth, moreover, fuels investment in healthcare resources. Singapore boasts a rank of 5th in patient-centered care—up from 29th in 2021—due to improvements in patient safety, transparency, and wait times to see a doctor.

Choice

Singapore ranks 20th on Choice. Access to new treatments is limited, ranking 27th due to a government-controlled drug formulary. Furthermore, Singapore’s system also ranked 26th on provider choice, in part because patients are not free to choose which doctor they see when visiting a polyclinic. However, a key characteristic of its healthcare system is the use of health savings accounts. This approach significantly reduces health insurance costs, evidenced by its 2nd place ranking in affordability, while allowing patients extensive control over their healthcare expenditures. 

Science & Technology 

Singapore is ranked 12th overall in Science and Technology. Despite its strong performance in health digitization, at 7th in the Index, the nation faces challenges in medical advances, ranking 25th. However, Singapore’s scientific research capabilities are highly regarded, matching many top European academic centers and securing the 10th position in the Index.

Fiscal Sustainability

Singapore faces significant challenges in Fiscal Sustainability, ranking 19th. While its public health spending ranks among the lowest in the Index (5th), concerns about the country’s financial stability are growing. Singapore’s national solvency is ranked 30th, with a debt-to-GDP ratio exceeding 169 percent, a double-digit percentage-point increase from the previous year. Moreover, the growth in public health spending, ranked 28th, is exerting further pressure on an already strained national budget.