Health Care Investment Reform Hong Kong
Introduction
Hong Kong is considered to be one of the most advanced and successful cities in Asia today. Almost in all attributes, Hong Kong serves to be one of the most regarded cities having the best services, information, and the latest technologies, being termed as “Asia Pacific’s Information Gateway and Hub” (Wong, 2002). This has prompted the city to be one of the Asian cities having the latest advancements, not only in products and services, but also in fashion, latest gadgets, and technologies as well. In addition, the healthcare system of Hong Kong serves to be of high standard and quality, and nearly comparable with the healthcare systems of other Western countries. It has many attributes that may be considered Asia’s edge and pride, and thus the commencement of continuous improvement and development not only in the medical field, but also in other aspects, such as the economy, politics and society. In this regard, with the use of the latest technologies in Hong Kong, it can be perceived that the latest technologies and health care can also be observed and rendered by the medical and healthcare systems of Hong Kong. However, given the increasing needs of the citizens of the city and the continuous changes in terms of technology and society, its health care system also needs reforms and changes in order to accommodate the needs of the citizens.
Hong Kong’s Current Health Care System
It has been reported that Hong Kong’s demographic and epidemiological profiles are closely similar to that of most advanced economies. This is because the city’s population is aging and increasingly suffers from chronic diseases. In the year 2003, the share of population having ages of 65 years old and above was about 10-11% and was predicted to increase to 13.3% in 2016. With increased life expectancies and a diet typical of well off countries, its population is increasingly suffering from diseases such as diabetes, heart diseases, and cancer. Moreover, similar to other wealthy countries, Hong Kong faces socio-health problems, such as mental disorders, alcoholism, sexually transmitted diseases, violence and substance abuse. Such conditions require a health care system that emphasizes primary and community care, and integrates prevention, outpatient, inpatient, community and other social services. However, despite such needs, the Hong Kong health care system remains public hospital-led and compartmentalized, with little communication between the secondary/tertiary level, and the primary and outpatient level. In addition, the majority of the private doctors providing outpatient services do not have family medicine training, nor do they perform gate-keeping functions or referrals to higher levels of care. Most private doctors work as solo practitioners on a fee-for-service basis. Clients often doctor-shop and their medical records are not transferred from one provider to the other. Thus, the lack of coordination among providers often results in duplicated services, repeated tests, discontinuity of care and confused clients; therefore, adversely affecting their health and unnecessarily increasing health care expenditures (Yip and Hsiao, 2004).
Furthermore, it has also been emphasized that Hong Kong has an incoherent financing strategy that has created inequity as well as the lack of universal medical insurance. Public funding from government revenue primarily funds acute and specialty care, thus, cannot be used to purchase private care and no universal medical insurance scheme is present. On the other hand, the private sector collects fee-for-service revenue from clients and primarily provides outpatient services. From this it can be observed that both sectors are not coordinated. This is because the government adopts a laissez-faire policy towards the private sector and allows physicians and hospitals to charge ridiculous fees that are very highly unaffordable for most of the population. There is no fee schedule and fees that can segregate one provider from the next. In the absence of any universal medical insurance scheme, clients mainly pay out-of-pocket and are left vulnerable to major financial risks. In turn, equal access to care is also compromised. The choice of provider is dictated by the ability of clients to pay. Those who can afford it seek treatment from the private sector, thus, are able to choose their own doctors. On the other hand, those without means seek care from the overcrowded public sector where they fact no choice of doctor and long waiting lines (Yip and Hsiao, 2004).
From this situation, it can be perceived that the reform for the health care system and investment in Hong Kong is badly needed. This is because through a significant and useful reform, the citizens of Hong Kong would be able to be provided with better health care services that they deserve. In addition, they would also be entitled to lessen their health care expenses, thus, not intimidating them to spend for their health care needs.
Health Care Reform in Hong Kong
It has been indicated that the government of Hong Kong Special Administrative Region or HKSAR launched a healthcare reform consultation to seek public views on the future development of the city’s healthcare system and financing arrangements. The healthcare reform is said to be a cross-generation project that concerns everyone in the society. The Chief Executive of the city, Donald Tsang described the healthcare reform as important for the future of the whole community of Hong Kong, the next generation, and the entire development of the city. Noting that it is a comprehensive package of proposals to address healthcare financing, the city’s Chief Executive urged all the political parties in the Legislative Council and the whole community to analyze the advantages and disadvantages of suggested reform and supplementary financing options rationally and practically and give their views. In addition, the reform is aimed at maintaining the quality healthcare service, enhancing the efficiency of the healthcare system, promoting competition in service delivery, while at the same time improving health through preventive care, and ensuring that no one would be left unattended (“HKSAR gov’t calls for healthcare reform consensus”, 2008).
Moreover, it has been emphasized that the first stage of the healthcare reform will last for three months until June 13. It is indicated in the consultation paper that the government will plan to undertake reform in five areas, which include enhancing primary care to put greater emphasis on preventive care; promoting public-private partnership in healthcare; developing electronic health-record sharing, strengthening the public healthcare safety net, and reforming healthcare financing arrangements. Furthermore, six options for providing supplementary financing have been outlined in the consultation paper for discussion. These six options include increasing user fees for public healthcare services; requiring the workforce to contribute a certain percentage of their income to fund healthcare for the whole population; encouraging more individuals to take out private health insurance in the market; setting up personal healthcare reserve; establishing medical savings account, as well as mandatory private health insurance (“HKSAR gov’t calls for healthcare reform consensus”, 2008).
Furthermore, the reform of the health care delivery in Hong Kong is unquestionably one of the most pressing health and medical care issues facing the city, but so far, the members of the government do not have yet agreement on the definition of problems, let alone the solutions. In relation to this, there are three principles guiding the reform of the health care system in Hong Kong, namely, the system should use scarce resources efficiently to deliver care, which is acceptable to the users and which consistently reduces inequalities in health across the community (Hedley, 2001).
Need for Health Care Reform
It has been mentioned earlier that the need for the reform of Hong Kong’s health care system lies on the lack of coordination of both public and private health sectors and the lack of adequate health care services provided for health clients. In addition, it has also been indicated that Hong Kong has a public/private sector imbalance, which creates problems both in terms of sustainability and overall system efficiency. Such inefficiencies spring from an over-reliance on hospitals due to an inadvertently flawed incentive system. Moreover, fragmentation of care despite the government’s best efforts is also a significant problem, which is most problematic outside the Hospital Authority. This is because in the private sector, it has about 80% of the market share in outpatient services, but provides only 6% of hospital care. This becomes ironic as half of all health expenditures are in the private market. With the rigid separation of the public and the private sectors, patients either go for a very high level of subsidy in the public sector, or no subsidy in the private sector. Given such observations, the Harvard Report regarding the city’s healthcare reform concludes that Hong Kong’s healthcare system has a variable quality of care, particularly in the private sector. A systematic quality framework, similar to that of the Hospital Authority does not exist in the private sector (Garnett, 2002).
Based on this, the different reasons for change in Hong Kong’s health care system must be emphasized. Primarily, the health care financing system, in which the main funding was from taxation and Government provided most of the hospital services, had remained unchanged for decades, in fact, it was almost the same as when introduced in the early days of the British colony. In this the city differed from the other cities in Asia. Taiwan had introduced national health insurance two years ago, South Korea over ten years ago, and Singapore introduced its Medisave system in the 80’s (Yuen, 1999). From this, it can be perceived that other advanced cities in the Asia Pacific region have already decided to fix their health insurance policies and laws in order to further provide healthcare services to its citizens. If Hong Kong wants to stay ahead and on top of other cities and be able to sustain it, it must also be able to improve its healthcare system. Another reason is that the population of Hong Kong is now an aging population, with the percentage of those aged 65 or over rising from 7% in 1985 to 12% in 2001 (Yuen, 1999). With an aging population, it can be distinguished that older citizens or individuals need more attention and care from both public and private hospitals. In this case, an aging population would suffer more from different fatal diseases, such as heart disease, diabetes, cancer, and obesity. As such, the lack of proper and adequate services from both the public and private health institutions means placing the lives of the aging in danger.
Third reason is that high-tech medicine and expensive drugs would push health care costs up (Yuen, 1999). It is already recognized worldwide that the use of advanced and more sophisticated technologies has already extended to the medical and healthcare field, thus, making diagnosis and treatment of patients or clients more appropriate and more easily done. With this, it can be perceived that due to the use of more advanced and high-tech equipments, the costs for healthcare services would be far more expensive. In order to provide better services for the citizens of Hong Kong, the Government must then decide to implement the reform. Fourth, rising patient expectations, driven by the increase in affluence, would also raise costs. In the old days patients had been laid on camp beds in wards with little public complaint; now the papers were full of criticisms of medical services (Yuen, 1999). Due to the drastic changes in the society, it can be observed that consumers, including patients are becoming much more demanding and decisive of what they want and need. In this case, slight mistakes and inefficient services would make the reputation of a particular hospital have a bad record. Adding to the keen eye and sharp words of the media, the criticisms of Hong Kong’s medical and healthcare services must serve as a wake-up call for a reform. Lastly, the reason for a health care reform is due to the fact that Hong Kong’s economic growth is slowing, thus, limiting the Government’s ability to pay (Yuen, 1999). This limits the ability of the public health sector to provide health care services to the citizens of Hong Kong, forcing them to opt for seeking services from private health care sector, which is more expensive. This then serves to be a major dilemma for poor citizens in the city.
Comment and Critique on Supplementary Financing Options
The supplementary financing option describes mandatory private health insurance as supplementary financing. Such options require or mandate the citizens of Hong Kong, particularly to the working citizens to pay extra costs for their health insurances, thus, providing coverage for their private hospital services and charges. Because it is mandated by law on a population-wide basis, all the insured irrespective of age, gender and health conditions are charged the same premium for the same insurance plan of the same coverage and benefits. As such, it can be perceived that equality among the citizens of Hong Kong is being promoted in terms of providing better health care services. Because each working individual in the society are required to give taxes for the provision of better health care in the city, each individual would be able to obtain appropriate services, regardless of social or economic status, as the taxes paid by working citizens become the source of the premiums. In addition, this serves to be a good way for providing health care and health services to the aging population of Hong Kong, as anybody would be able to obtain healthcare services regardless of age or regardless of any existing medical disease. In this regard, it can be seen that such financing options would be able to help sustain the population of Hong Kong, thus, promoting health, long lives, and the provision of better health care services.
It can also be emphasized that supplementary financing options in Hong Kong, which are implemented along with the health care reform initiative would do the citizens of the city good because it provides wider range of health care services that would help further cater to the needs of the citizens. The option enables the city’s health care services to be personalized or customized according to the specific needs of the patients or customers, thus, providing a wider scope of the level of benefits and the amenities to be provided by the health care institution. Significantly, the mandatory financing option would relieve the pressure on public health care services, as providing health care services to less fortunate citizens in Hong Kong. Through the insurance, each individual would be able to avail of the health care services provided in private hospitals. This is not to say that private hospitals are far better than public hospitals. However, there are some equipment and services offered in private hospitals that are not being offered in public hospitals. As such, it can be given emphasis that the provision of better and longer lives is being achieved. However, not all advantages can be indicated, as this financial option would serve as additional costs or burden to the working class, thus, not allowing them to freely tend to their needs or even save the extra money, as it is allotted for health care or medical services, which would be given to other individuals. Thus, this might create further problems in the future, such as in personal expenditures and family crises.
In terms of criticizing the supplementary financing options, number 12.3 of the Chapter 12, subsection (d) emphasizes that the financing option may encourage tendency to overuse healthcare. This is because mandatory private health insurance is susceptible to moral hazards, when providers and patients may have the incentives to over-supply and over-use healthcare. This is related to the Theory X of Health Economics, which emphasizes that financial rewards get in the way of high quality care and reduce caring. Nowhere can this be seen more clearly than in the ownership and control of health care facilities. Physicians want to own pharmacies, hospitals, and medical laboratories to exploit patients. Their ownership and control simply demonstrates how these greedy profiteers expand their monopoly control (Musgrave, 1995). The Theory X of Health Economics is most relevant to the identified supplementary financial option because of the fact that money matters complicate things, thus, either over- or under-supply health care services provided to citizens. This is because the amount of financial rewards to be received by many medical or health care institutions might somehow be the focus of that medical or health care institution and not the appropriate services that must be provided to the patients or clients. Thus, in this sense the amount of money or financial rewards involved in the process may either complicate or improve the medical or health care services provided to patients.
Another supplementary financial option is emphasized in Chapter 12, 12.3, which indicates that the mandatory private health insurance provides broad coverage for essential healthcare services ranging from in-patient services, out-patient services to prescription drugs, as well as other related healthcare services. This is related to the Theory Y of Health Economics, wherein financial rewards are the driving force generating the highest health care quality in the world. It is the financial rewards that bring caring people into the industry and maintain the high level of compassion. Ownership is anything but greed. Providers are in the best position to access need for facilities and to understand the importance of high quality. They are not satisfied with inferior services and want to have control so that they can insure high quality and access to care (Musgrave, 1995). In this regard, it can be emphasized that due to financial rewards, the extent of the medical or healthcare services provided for the citizens of Hong Kong would be wider, thus, further catering to their needs better. In this sense, it can be understood that due to the increase in finances, all the medical and healthcare needs of Hong Kong patients are given utmost importance.
Based on this, a recommendation would be to increase the salaries of the working class in order to have the ability to comply with the new policy. In this regard, the personal expenditures of the citizens in Hong Kong would not be entirely affected. On behalf of our department, another recommendation for the government would be to ensure that policies regarding the provision of equal medical and healthcare services to all citizens in relation to the mandatory private health insurance. This is to make sure that the government would be able to support the rights of each citizen and to guarantee them their rights for medical and healthcare services.
References
Chapter 12 Supplementary Financing Option (5) – Mandatory Private Health Insurance, 1-7.
Garnett, L.R. (2002). Harvard Medical International. Retrieved June 3, 2008, from http://www.hmiworld.org/hmi/issues/March_April_2002/forum.html.
Hedley, A.J. (2001). Health Care Reform in Hong Kong. HKMJ, 7(2), 1-2.
“HKSAR gov’t calls for healthcare reform consensus”. (2008). People’s Daily Online. Retrieved June 3, 2008, from http://english.people.com.cn/90001/90782/90880/6372879.html.
Musgrave, G.L. (1995). Health economics outlook: two theories of health economics. Business Economics, April, 1-9.
Wong, R. (2002). TDC Trade. Retrieved June 3, 2008, from http://www.hktdc.com/econforum/hkcer/hkcer021201.htm.
Yip, W. and Hsiao, W. (2004). A systemic approach to reform Hong Kong’s health care financing: the Harvard proposal, 1-11.
Yuen, P. (1999). Hong Kong Democratic Foundation. Retrieved June 3, 2008, from http://www.hkdf.org/newsarticles.asp?show=newsarticles&newsarticle=92.
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