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Understanding How Singapore’s Healthcare System Works

Singapore’s universal healthcare system is often touted as a paradox. The state spends far less on universal healthcare than other developed nations with similar systems. Yet, it consistently produces among the best healthcare outcomes in the world.

With Singapore’s system, even the most financially-disadvantaged Singaporeans have access to a leading hospital. Contributors to the system can also expect a very high standard of care regardless of their current financial state.

Here, we’ll briefly discuss how Singapore’s unique healthcare system manages to reduce costs while delivering some of the most enviable healthcare outcomes in the developed world.

How Is Healthcare Delivered in Singapore?

Singapore has a universal healthcare system that covers the healthcare needs of citizens and permanent residents. Citizens and permanent residents contribute to the functioning of the state healthcare system through Singapore’s “Three M’s” —MediSave, MediShield, and MediFund.


MediSave is the default healthcare fund. Contributions to this fund are mandatory for all people working in Singapore. These contributions comprise between 7% and 9.5% of an employee’s wages and are made available to contributors through a MediSave account. They may then use these funds to pay for routine medical procedures.


However, not all healthcare expenses can be considered routine and many procedures may be too expensive to cover under MediSave. The MediShield program helps address these other needs.

MediShield is an optional state-sponsored health insurance program aimed at covering medical expenses in excess of what could be covered by the MediSave program. Though it is optional, most working Singaporeans choose to contribute to the program because of the reasonable premiums and potential benefits. Contributors to MediShield are entitled to payouts once their MediSave account has been used up for legitimate medical expenses.


The last pillar of the Singaporean medical system is the Medical Endowment Fund (MediFund). This fund is reserved for individuals with serious financial constraints, including those who have used up their MediSave and MediShield. MediFund has a substantial publicly-funded endowment and the investment earnings of this fund are used to cover the healthcare expenses of qualified patients. Over 99% of applicants are approved, which further increases the country’s positive healthcare outcomes.

How Is The Singaporean Healthcare System Funded?

As mentioned earlier, the different pillars of the Singaporean healthcare system are funded through different means. The MediSave savings program is funded through mandatory employee contributions, the opt-in MediShield insurance program is maintained by contributor premiums, and MediFund is made possible through endowment investments.

This system is different from most other universal healthcare systems in the world due to the varying levels of involvement from both the government and beneficiaries of the pillar programs. In other developed countries with universal healthcare, public funding tends to take a much larger role. As a result, the cost of maintaining these programs can sometimes be controversial.

In Singapore, the existence of the three different funds with different contribution frameworks helps offset the public cost of delivering healthcare while ensuring access for the most vulnerable patients. While there is occasional criticism, particularly when it comes to the MediFund program’s vulnerability to external market forces, most Singaporeans still support the current system.

How Else Does the Singaporean Government Keep the Cost of Healthcare Low?

While the system’s public-private funding balance and sustainable financing are arguably the biggest factors in keeping the cost of Singaporean healthcare low, the government’s high degree of regulatory control also plays a part. MediSave, MediShield and MediFund would arguably not work without this key component and the government’s popular mandate to implement this control.

While the Singaporean government generally encourages free market competition, it actively chooses to intervene to reduce the risks to the most vulnerable. It also takes action to keep the prices of important medications within acceptable thresholds. The pharmaceutical products that could be purchased through MediSave are also preapproved by the government to prevent healthcare profiteering.

About 80% of the country’s available hospital beds are also in public hospitals. Many leading hospitals such as National University Hospital are state-owned, allowing the government to have more control over the affordability of services.

While all patients in public hospitals receive the same level of healthcare and are seen by the same doctors, the accommodations within hospitals differ in amenities depending on how much patients are willing to spend from their MediSave account. Thus, an individual in the system that needs inpatient care can choose to pay a premium rate for an air-conditioned private room with upgraded amenities or choose among a selection of shared wards to save on their MediSave expenses.

Additionally, it’s worth noting that, in many cases, the government pays directly for healthcare expenses. This is different from many other systems where payments are made to an insurance provider. This helps further reduce the administrative costs of delivering healthcare.

Private Healthcare in Singapore

Private hospitals and private insurance options are also available in Singapore. Private hospitals tend to offer faster wait times and more comfortable facilities and are among the best-equipped in the world. They serve Singapore’s large population of expats and high-net worth individuals, and they also form a key component of the country’s multibillion-dollar medical tourism industry.

However, unlike many similar private facilities overseas, even leading hospitals have wards available to spread out the cost of healthcare and to keep access to these facilities relatively affordable. Thus, many Singaporeans have wide access to a selection of private and state-sponsored healthcare options.

Other Factors That Contribute to Singapore’s High Healthcare Outcomes

The healthcare system is just one reason for the country’s healthcare outcomes. Singaporeans are generally much healthier than their counterparts in other developed countries for a few key reasons:

First, the state actively discourages car ownership by deliberately increasing the cost of ownership. As a result, there are far fewer vehicular accidents and fewer cases of pollution-related respiratory illness in the country. Singaporeans are also generally more active as a result of having reduced access to automobiles.

Second, firearm and drug-related crimes are exceedingly rare in the country thanks to a decades-long focus on social order. Thus, the resulting harm from these activities is mitigated, ultimately reducing their social and financial costs.

Lastly, Singaporeans are among the most educated people in the world. There is a well-studied correlation between education and lifespan and Singapore’s long-lived population is certainly evidence of that phenomenon. Educated people are more likely to make healthy choices and are less likely to engage in risky behaviour. This may account for the high buy-in to MediShield and may also partly explain why Singaporeans tend to have fewer lifestyle diseases compared to counterparts in other nations.

Access Healthcare Services in Singapore

Whether you’re an expat, a citizen, or a permanent resident, chances are you have a good selection of high-quality healthcare services available to you. If you are a contributor to the country’s healthcare system, access to a leading hospital and some of the world’s most recognized specialists is virtually guaranteed. Even individuals who may not be able to contribute typically still have some access to healthcare.

The innovations and benefits of the Singaporean system may be tough to export, as many of the reasons for its success are dependent on local norms and culture. However, we can be sure that the country’s unique approach to healthcare will continue to inspire other nations for decades to come.

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