Discuss whether the Singapore government currently adopts appropriate policies in the provision of healthcare.

Market failure is said to occur when the free market does not allocate resources efficiently or does not allocate resources that best satisfies societys needs. There are 3 possible sources of market failure in healthcare provision. They are positive externality, imperfect information and inequality. Positive externality occurs when third parties benefit from the consumption or production of a good. Healthcare is wide ranging, as it varies from treatments in clinics, hospitals to immunization against diseases. Singaporeans are required to be vaccinated against diseases such as chicken pox and polio. Those who choose to get immunization injections receive benefits in terms of higher resistance to diseases and better health conditions. However, the people around them enjoy some positive externalities in the form of less risks of contracting such diseases as it is less able to spread through the population. There are extra benefits enjoyed as a spillover by third parties. Market failure also occurs where potential sellers and buyers have limited information about or understanding of what they wish to sell or buy. There is asymmetric information as the information available to buyers and sellers differ. Especially in specialized field of medical treatments, it is easy for patients to be exploited by doctors. Doctors may provide more medical service than needed to earn more or low quality medical services at the same rate. There is non-available of published rates as well. Inequality issues arises when resources are directed only to providing for the rich, such as plastic surgery and away from basic healthcare for the poor who are not able to pay. A persons survival will be severely affected if he is unable to afford the care he needs, for example, a heart bypass. The more severe the problem, the more an individual will perceive healthcare as a necessity. The treatment is usually costly and many households will not be able to afford such healthcare if financed purely from their own income or wealth. The government intervenes by granting subsidies to lower the cost of production. Subsidies are given to newborn babies and school children vaccinations against chicken pox and polio. Medical screenings at polyclinics are subsided as well, especially for the elderly. Legislations are also implemented by the government. It is compulsory for babies in Singapore to be vaccinated against certain diseases such as chicken pox and polio. Public education in the

form of dissemination of information regarding the benefits of vaccination through schools, medical centres are also present. The measures above will increase the demand of healthcare services. The government also intervenes by: o Allowing more private hospitals/medical centres to be set up, including increase in number of public hospitals o o Providing wards at subsidized rates Class B and C/ unsubsidized rates - Class A Increased intake of medical students or allow foreign doctors to practise

Limitations: o o o Costly to provide public hospitals which may lead budget deficit The cost of training doctors may drain Singapores finances Published rates can only act as a guide; treatments are different as it varies from patient to patient, doctor to doctor. This makes it hard to compare. As Singapore has a fast ageing population, the government also looks into healthcare for the elderly. The government has come up with various policies to ease the financial burden of government expenses on elderly healthcare. o o o Compulsory medical savings in CPF Legislation are in place to ensure parents are taken care of by children and community hospitals are run by charitable organizations like the Ren Ci Hospital, the St Andrew Community Hospital and the upcoming Khoo Teck Phuat Hospital. o Promotion of healthy living to ensure a healthy population, a work-life balance.

In conclusion, the Singapore government has a comprehensive package of policies that are appropriate to deal with the various issues.