Singapore Healthcare Costs: Why Competition Matters

Why are Singapore healthcare costs so much lower than those in the United States? Professor Sean Flynn argues that the answer is not simply fewer doctors, fewer procedures, or less medical care. Instead, he points to something more fundamental: competition and the pressure it creates to keep prices close to the actual cost of providing healthcare.

In the interview, Flynn describes Singapore as a highly competitive healthcare market in which providers face strong pressure to keep markups low. His central argument is that when prices are pushed toward costs, a country can reduce healthcare spending without necessarily having to reduce the amount of medical care people receive.

That distinction matters because discussions about US healthcare costs often assume that spending can only be reduced by cutting services. Flynn challenges that assumption by asking a different question: What if a significant portion of the problem is the price paid for healthcare rather than the amount of healthcare being delivered?

Singapore Healthcare Costs and the Power of Competition

Flynn compares Singapore’s healthcare competition to competition between supermarkets.

Supermarkets do not necessarily keep prices low because they voluntarily choose tiny profit margins. According to Flynn, intense competition forces them to keep prices competitive. He argues that Singapore applies a similar pressure to healthcare.

In his description, the result is a system in which healthcare prices are much closer to the underlying cost of providing services.

The important idea is simple:

Lower healthcare spending does not automatically mean less healthcare.

If prices are substantially inflated above costs, reducing those markups can lower total expenditure without proportionately reducing the quantity of services purchased.

That is the central point Flynn wants the comparison with Singapore to illustrate.

Does Lower Healthcare Spending Mean Less Medical Care?

One common concern about reducing healthcare expenditures is that lower spending must eventually mean fewer surgeries, fewer doctor visits, fewer medications, or reduced access.

Flynn argues that this is a false choice when the underlying system contains substantial inefficiencies and excessive markups.

He points to Singapore as an example where lower overall spending can coexist with access to substantial medical services. The transcript acknowledges that Singapore has fewer doctors, nurses, and dentists per capita than the United States, but Flynn argues that this does not necessarily translate into worse access. He specifically cites shorter wait times in Singapore for the services he discusses.

Independent data also show that Singapore spends considerably less on healthcare as a share of its economy than many other high-income countries. The Commonwealth Fund reports that Singapore’s national health expenditure was 4.9% of GDP in 2022, compared with an 8.2% average among high-income countries. (Commonwealth Fund)

That does not, by itself, prove that competition is the sole reason for the difference. Singapore’s healthcare system has multiple structural features, including subsidies, mandatory medical savings, insurance, and government assistance.

But it does make the Singapore comparison relevant to the broader question of how healthcare can be delivered at different costs.

The Hidden Cost of Healthcare Administration

Another major part of Flynn’s argument concerns administrative inefficiency.

He uses his mother’s experience as an eye surgeon at Kaiser Permanente to illustrate the problem. After the implementation of the Epic electronic health-record system, Flynn says routine patient visits involved an enormous number of electronic fields and dropdown menus.

According to his account, Kaiser eventually had to employ medical scribes whose job was to complete those electronic forms while physicians interacted with patients. Flynn uses this example to challenge the expectation that electronic health information systems automatically produce large savings.

The broader issue is not whether electronic medical records are inherently good or bad. It is whether an administrative system has sufficient pressure to eliminate unnecessary work.

Flynn argues that a system in which prices remain substantially above costs can tolerate inefficiency because organizations do not face the same competitive pressure to remove every unnecessary expense.

This is an important part of the healthcare competition argument.

Competition is not simply about forcing companies to compete for customers. It can also create pressure to identify unnecessary costs, streamline operations, and find more efficient ways to deliver the same service.

Why US Healthcare Costs Are So High

The United States spends an enormous amount on healthcare.

According to the Centers for Medicare & Medicaid Services, U.S. healthcare spending reached $5.3 trillion in 2024, or $15,474 per person, accounting for 18.0% of GDP. (Centers for Medicare & Medicaid Services)

Flynn’s argument is that the discussion should not automatically assume that lowering this expenditure requires reducing the amount of healthcare Americans receive.

Instead, he argues that the United States should examine the gap between price and cost.

In the transcript, Flynn describes the American system as one in which prices can remain far above underlying costs. He argues that the resulting environment can allow inefficiency, administrative burdens, and large markups to persist because providers and institutions do not face sufficiently strong competitive pressure to eliminate them.

This is where healthcare price transparency becomes relevant.

If patients, employers, insurers, and government programs cannot easily determine what medical services actually cost and compare prices between providers, competitive pressure becomes more difficult to apply.

Price transparency alone does not guarantee lower healthcare costs, but transparent and comparable prices can make it easier for purchasers to identify differences and potentially reward lower-cost providers.

The Drug Markup Problem

Flynn also uses prescription drugs to illustrate his argument.

The transcript refers to what he characterizes as extremely large markups on some generic medications and connects those markups to the way drugs are distributed in the United States.

His broader point is that healthcare spending can contain significant price distortions that are not directly related to the amount of medical care patients receive.

If a medication, procedure, or hospital service costs considerably more than the underlying resources required to provide it, then reducing that price could lower total spending without eliminating the service itself.

That distinction is crucial.

Cutting waste is not the same thing as cutting care.

Singapore’s Healthcare Safety Net

Competition is only one part of Singapore’s healthcare model.

Singapore also has a layered healthcare financing system designed to help residents manage medical expenses. The Ministry of Health describes its framework as involving government subsidies, MediSave, MediShield Life, and MediFund.

Government subsidies help reduce healthcare bills at public institutions. MediSave provides a medical savings mechanism, while MediShield Life provides lifelong basic insurance protection for Singapore Citizens and Permanent Residents. MediFund serves as a further safety net for people who cannot pay their medical bills after other forms of assistance.

This matters because Flynn’s argument is not simply that healthcare should be left entirely to market forces.

His argument is that competition can help reduce the price of healthcare, while a safety net can help ensure that people who cannot afford care are not excluded from it.

In the interview, Flynn emphasizes this combination, arguing that Singapore’s government can purchase healthcare for people in financial difficulty at the lower prices produced by the competitive system.

Singapore’s Ministry of Health likewise describes a system in which subsidies, MediSave, MediShield Life, and MediFund work together to make healthcare more affordable and provide additional assistance to people who need it. (Ministry of Health)

Competition and a Healthcare Safety Net Can Coexist

One of the most interesting aspects of Flynn’s argument is that he does not present competition and government assistance as mutually exclusive.

Instead, he describes them as complementary.

The logic is:

1. Competition puts downward pressure on healthcare prices.
2. Lower prices reduce the cost of purchasing medical services.
3. Government assistance can then purchase those services for people who cannot afford them.
4. The safety net becomes less expensive because the underlying prices are lower.

The Singapore system is more complicated than this four-step summary, and its healthcare financing model includes several mechanisms beyond competition. Singapore’s official healthcare information describes a multi-layered financing structure rather than a purely market-based system. (HealthHub)

Nevertheless, this is the central lesson Flynn draws from the comparison.

What Could the United States Learn From Singapore?

The Singapore example raises a different way of thinking about healthcare reform.

Instead of beginning with the question:

“What healthcare services should we eliminate?”

Flynn suggests asking:

“Why does each service cost so much in the first place?”

That change in emphasis could shift attention toward several areas:

• Healthcare price transparency
• Competition between providers
• Administrative overhead
• Drug distribution and markups
• Hospital operating efficiency
• Incentives created by insurance and reimbursement systems
• The relationship between healthcare prices and underlying costs
• How government assistance can purchase care more efficiently

The transcript’s central argument is that expenditure and quantity of care are not necessarily the same thing. A country can potentially spend less because it pays less for the services it purchases rather than because it purchases dramatically fewer services.

The Bigger Healthcare Cost Question

Singapore does not provide a simple blueprint that can automatically be transferred to the United States.

The two countries have different populations, institutions, financing arrangements, regulations, labor markets, and healthcare structures. Singapore itself uses substantial government involvement alongside individual medical savings, insurance, subsidies, and public healthcare institutions. (Ministry of Health)

But the comparison raises an important economic question.

If healthcare prices are significantly higher than the cost of producing the underlying service, then reducing those price differences could potentially lower spending without requiring an equivalent reduction in medical care.

That is Professor Sean Flynn’s central argument.

For the United States, where healthcare spending reached $5.3 trillion in 2024, the question is consequential: How much of healthcare spending reflects the quantity of care Americans receive, and how much reflects the prices and inefficiencies built into the system that delivers it? (Centers for Medicare & Medicaid Services)

Singapore’s experience suggests that competition, cost control, and a healthcare safety net do not necessarily have to be treated as separate goals.

The real debate may be about how to design a system in which competitive pressure keeps prices closer to costs while public policy ensures that people who cannot afford necessary care can still receive it.

Frequently Asked Questions

Conclusion

The debate over US healthcare costs is often framed as a choice between spending more money or receiving less care.

Professor Sean Flynn offers a different framework.

His argument is that the United States should look more closely at the prices paid for healthcare, the markups embedded in the system, and the administrative inefficiencies that can survive when competitive pressure is weak.

Singapore provides a useful case study because its healthcare system combines cost-consciousness and competition with substantial government involvement and a financial safety net.

The broader lesson is not simply that Singapore spends less.

It is that healthcare spending depends not only on how much care a society buys, but also on the prices it pays for that care.

If competition can push prices closer to costs, then reducing healthcare expenditure does not necessarily have to mean reducing healthcare itself.

Watch or listen to the full conversation with Professor Sean Flynn for the broader discussion of healthcare costs, competition, price transparency, and what the United States might learn from Singapore.

The Cure That Costs Less: Prof. Sean Flynn on Healthcare Costs