2003 Annual Dinner
of The Hong Kong Association of Pharmaceutical
on 14 January 2003
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Speech by Dr C H Leong
Chairman, Hospital Authority

          May I begin by thanking the Hong Kong Association of Pharmaceutical Industry for the invitation to speak at your Annual Dinner. This is, if my recollection is accurate, the 3rd time I am addressing your organization. First time as a member of the Legislative Council on Health care financing, second time as a member of the provisional Chinese Medicine Council on Chinese medicine. I presume this time is as the Chairman of the Hospital Authority.

          What should I be talking about? The hot topic regarding the HA is of course Liver Transplantation. But I am going to disappoint you. I have no comment on that suffice it say that I always belief that as a health care worker, our primary intention, our first prize is to get our patients well with the most efficient and cost effective means. I have no doubt that this must also be the motto of our two medical schools and I am grateful to the two deans and chiefs of service to so graciously cooperate. We want to make HK, and I stress HK, into a world leading liver transplant centre.

          I would therefore share with you the thoughts I have on the way forward for the HA. Our forefathers have come so far in developing a public medical service in HK that have attracted praise from every sector of the public and HA is the envy of many in the health care world. How can we ensure sustainability of this service in the face of economy downturn.

          Let me set the scene. When the HA was set up we are running on a budget of 3 billion. Today, Government revenue to the HA is 30 billion, a ten fold increase. Many have thus cried foul, the HA is overspending, we are providing too much and too good a service. I make no excuse to rebut these criticisms, for it must be the prerogative of any good and accountable governments to provide the best and adequate medical service to its population irrespective of means especially in times of plenty. Furthermore this increase in budget is to support 5 new hospitals, many new Clinical Management teams, 8.4 million patient man days, an expansion of service all for the good of, and at the demand of, our public.

          Time however has changed. Instead of allocating an agreed increase in 2.3% of budget. We are asked to actually decrease by 1.8% for the first year and another 1% yearly for the next 4 years. Rumours are that this is only the beginning, and the grapevine has warned us of some 15% cut. What do we do? What can we do?

          I have 2 working principle on the HA which I will not waiver.

1.        There will be no curtailing of medical standards.

          In short the emergency the urgent cases, life saving situations will be dealt with no delay irrespective of means. But regrettably for the less urgent, the public will have to tolerate a much long waiting queue. Gone will be the days of zero waiting time, gone will be the performance pledge for all referrals to the public hospital, yet we will stand by our pledge for the shortest possible treatment time for those that needs real and urgent services.

          The HA will do our parts dutifully as the safety net for health care in HK. We will provide "all services for some" and "some services for all" basing on the concept of target subsidy. The poor and the needy will be subsidized more whilst those who can afford will be subsidized less. Similarly those whose illnesses placed them in financial risk will be subsidized more whilst those with minor ailments subsidize less. Public money is thus used where it is needed most. In short, those who can afford, those with minor ailments will have to pay a varying part of the health care cost.

          The longer waiting list for the less urgent, the possibility of user pay concept for those who can afford could mean that some workload hopefully could be shift back to the private sector. With decrease in workload in the public sector understandably staff morale could be improved.

2.        My second principle is to ensure that public money is spent in the most efficient and cost effective manner. Yes, the HA can be proud to proclaim that since its inception, it has voluntary achieve a productivity gain of over 10% but there is still a chance to save more. I believe that during these time of economic gloom we have to do our best to economize, that goes also to the HA. I believe too that before the HA request for more budget, and we will have to if we need to keep our service ahead in line with scientific development, we must show the government, the public that we have done all we can to cut our expenditure yet maintaining our standards.

          It is on this basis that I have called for conglomeration of efforts, merging of services, reengineering the role of certain hospitals and perhaps close some. We have done this in the past. To wit, there is no need for 5 kidney transplant centers and we have closed one and still producing good results. We have closed 3 hospitals and changed the role of 4 and still maintain our well praised services yet with a good saving of some 200 million a year. We will do these transformations more and faster in the days to come. All these are in no way implying cutting services. Indeed conglomeration and merging of services may even have an added value of improving standards through pooling of clinical material to boost up experience.

          Staff, especially those whose functions and role are diminished because of changing needs in the HA will be given an opportunity for early retirement if they so decide, taking with them a reasonable package to start perhaps a new career.

          That said, we will then seek additional and new funding. The HA will always develop and introduce new services to provide for our public good. Yet this we will do only with additional and new money from the Government or to levy a charge on a cost recovery basis. We will for example establish Traditional Chinese Medicine clinics in line with Government policy only if we are given additional funding. We will be advising Government, without hesitation, to introduce a prudent charging policy for our medical service, to those who could afford it. Yet a safety net will always available be at hand for those who cannot afford or those much more in need.

          Private wards in Public hospitals for example would be charged on an itemized basis not only to provide a level paying field for the private medical services to compete, more importantly it would be difficult to explain that tax payers money is used to subsidize the rich.

          I am well aware that all these measure may not be able to overcome the heavy budget deficit that the HA is facing and the projection is that our deficit will reach some 800-900 million by the year 2003-2004. Nor is this the intention of introducing fees for new services and increasing fees for existing charges. Instead it is high time for the HK public to realize that if high standard of health care is to be sustained and if medical services is to move with medical scientific advancement then the cost of health care must be the responsibilities of both the tax payers and the users.

          Madam Chairman, it would be discourteous of me if I do not refer to the relationship between your industry and the HA.

          Let me start off with the bad news. We will still continue to use generic drugs whose formulary are identical to the original product. This is obvious for it would be impossible for any public body to explain to the tax payers why a less expensive legal product is not being considered when they are to all extent similar unless proven otherwise.

          We have however not cut our drug budget. Yes we have extended our plea to your industry to cut down your price, not to save on drug cost but to ensure that with the same amount of money more patients could derive benefit. Facts and figure have shown that the drug budget of the HA has increased by some 2.3% in the last year. This is on proprietary drugs alone. In fact the drug budget of the HA has shown a consistant annual increase from 1.1 billion in 1996 to 1.8 billion in 2002 with a highest increase in 1998-1999 of some 17.28%.

          Similarly, the HA is continuously adding new perhaps even expensive drugs into our formulary at the recommendation of our Drug Advisory Committee which consists of profession who looks at new drug on the basis of efficacy and for patients' good rather than on the budget. Form 1996 to last year a total of 115 new drugs were evaluated and 79 were approved. Needless to say, when public money is to be spent we would prefer to offer less expensive drugs that produces the same effect. Along the same line if a particular patient's medical condition fails to respond to the less expensive medication, or encounters unacceptable side effects, but react satisfactory to the more expensive drug, the HA will provide that patient the needed expensive medication through funds either from a new budget allocated to that specific drug or by applying money through the HA's Samaritan Fund. Should a patient however prefers the more expensive drug out of his own choice which is NOT medically related, he would have to purchase the medicine himself. In short NO patient will be denied of the proper treatment because the treatment is expensive. In this context, I have to express my very sincere gratitude on behalf of the patient to your industry for willingly decrease the price to the HA or to our patients directly, sometimes quite substantially.

          The determination to add new an expensive drugs into our formulary or otherwise is made by a very high level committee chair by the Chief Executive of the HA with recommendations from the Drug Advisor Committee and our Ethics committee and finally endorsed by the HA Board. I personally have always believed that input from your industry, the people in the know, especially on not taking certain medication on board, is essential. On this basis, I am given to understand that progress has been made between your President and my senior management on how this could be brought forward. One way is to invite your industry to make the necessary presentation should a certain new drugs be discussed or be discarded. I welcome this move and I look forward to see some channels open for discussion, open for the best interest of the patients.

          Finally, madam president, ladies and gentlemen if you would allow me, I would like to express some of my personal thoughts as a senior if not a senile medical profession on the role and responsibilities, before I closed.

          Firstly I look forward to the Industry supporting basic scientific researches in HK. Hong Kong has always excel in clinical expertise and clinical research. Our Health care professionals are universally sought after for their clinical excellence. Yet in the area of basic scientific research we have much to chase after. I do not believe that we do not have the brains nor the manpower. I believe that the stumbling block is the lack of adequate financial support for basic research, as basic research must be the kingpin of any medical development. I believe the pharmaceutical industries can do much in this direction i.e. support basic research. After all helping us, helping the budding medical scientists is helping you too. There are all the possibilities that a vaccine for AIDS, a panacea for all cancers could be just round the corner in our local community.

          Secondly, I look forward to your industry in taking a lenient stand over patent rights on global life saving drugs. I am here referring for examples to medication used to sustained life in patients for example with AIDS. I will be the last one to call for abandoning patent rights knowing the vast expense any drug firm has to invest to produce any meaningful drug, yet when it comes to a life saving issue, a health issue that affects the whole world, an issue that borders on a global epidemic, I look forward to our pharmaceutical industry to stretch out its "Samaritan hand".

          Thirdly, I look forward to your industry to be more understanding to doctors' needs. Yes, the pharmaceutical industry is a business and like all business it thrive on profit. This is just natural.

          All pharmaceutical manufacturers do produce many products, some have a better market than others, some make a better profit than others. It stands to financial reason that drug firms and local agents would be prone to import or stock more of the more popular products and ignore the others.

          Yet when there is such a drug in the formulary there will be users, especially for chronic illness where life depends on that product.

          I call upon on local pharmaceutical firms to balance the need for effective profit gain and services, a service which is not for the medical providers but for the end users, the patients, whose life could be dependent on it.

          Ladies and gentlemen, in the last 10 minutes or so I have tried to present to you my thoughts, all be it wild, on how I believe could bring the health care of Hong Kong into sustainable state in the future. Yet if these thoughts were to have any value it requires lot of effort, understanding and cooperation between the different key players and stake holders of the health care team of which madam president your industry is an essential integral part. There has been too much sectorization, too much mudslinging within the whole health care team, even within each health care profession. The disintegration of unity denigrate the patients' confidence on all of us. There should therefore be no territorial delineation, there should be no self proclaimed heroism, our first prize and ultimate goal must be to witness the betterment of our patients.