September 1998

Medical Profession and Government should spare no efforts
in imminent revamp of Health Care Financing Policy

(Keywords:- Harvard consultant, health financing, public sector, market share)

          When Professor William Hsiao of the School of Public Health of Harvard University, the "supremo" of business management, gave press interviews recently, presumably even unknown to the Health and Welfare Bureau, stating his "conclusion" of the faults of the Hong Kong health care system, Government's eyes sparkled as if they have "hit the jackpot". Ironically, this is "the grass is always greener in other people's pasture" syndrome at its best!

          To wit, Prof Hsiao stunningly stated that the Hong Kong system is 30 years behind time especially in comparison with our economic development. He attribute to our problems with: fragmentation of our health care system, lack of coordination between the private and public sectors, non-existence of "domestic health account". All these are true! The crux remains: whose responsibility it should be?

          Government procrastination being the culprit

          A search of views expressed by the medical profession will "give the cat away". For the last ten years, I have been calling and pressing government to up-date our health care policy -- now a quarter of a century old! Ever since I started on my public service career, I have been calling for an effective private and public interface, at times trying in a small way personal attempts -- convincing Hospital Authority to invite local private practitioners to the board membership of governing committees of hospitals. I have repeatedly called for Government to come out with proper visionary health targets. Government is well aware of these calls. Yet procrastination has always been the order of the day. Perhaps it needs to wait for the health care system to face an imminent collapse or the wisdom of a foreign expert at an unknown cost before the concrete wall of government's bureaucratic steeplechase could be dismantled.

          In any case, it is better later than never! Yet the core of the matter, which is the policy of health care financing, must be addressed and solved before a healthy wheel could start turning again.

          Lacking balance in health financing

          It has been Government's decided mission that "nobody should be devoid of proper care due to lack of means". This it should be, and this has worked well in the past when the cost of health care was low -- for a fixed revenue then, the health care of the population, or at least those who needed it, could be provided for, albeit perhaps fairly lengthy waiting time. Today when health care cost is soaring, due to aging population, due to expensive new technologies and increasing patients' demand, any limited injection of health care revenue will make it difficult to make ends meet. Regrettably, Government's mission statement does not state who cannot enjoy public health care. In short, a highly subsidised comprehensive health care is available to all irrespective of affordability.

          The improvement in public hospital environment with the establishment of the Hospital Authority and the economic downturn of the last two years has lured more and more patients into the public sector. However tenacious the public health care system may be, it is facing an imminent collapse. At the same time, the market share of the already small complement private hospital care is diminishing. In short, even those who would be paying their own hospital fees are now seeking to tap the public revenue. It is a "loss loss" situation. Public health care services are overloaded with work with a longer and longer waiting list; less and less money is spent on private medical services. In short, there are just as much patients who cannot get treatment as health care providers with no patients to treat!

          Two questions must urgently be addressed:- what market share should public health care be involved in; and how much money should be spent in public health care?

          A proper balance must thus be struck between the motto of "nobody should be devoid of proper care due to lack of means" and "those who can pay, pay" and "those who can pay more, pay more"!

          Public sector's market share

          It makes a lot of sense to consider that health care should consist of two parts: emergency or life saving; and the rest.

          The cost of the former must be the responsibility of Government or the state, and is thus a welfare.

          The latter should be considered as a service for which a payment must be imposed. To make it affordable to all, "payment" can be made through the following ways: -

          Thus, for non life saving conditions that need hospitalisation, a charge will be incurred irrespective whether the patient utilises a public or a private hospital. A genuine choice is, therefore, introduced. The end result is that workload in the public service will be lessened and more patients will be distilled back into the private hospitals. A new and more workable balance will thus be achieved.

          How can one draw the line between emergency and non life saving services, one might ask. Two factors must be taken into consideration. Firstly, it is a political decision to be made by the Government in full consultation with the health care profession and the public. Secondly, this line varies depending on the economic status of that country. A more practical health care funding basis is thus achieved, satisfying the principles that health care must be available to all, equitable, free to choose and affordable, without putting overt burden on public revenue.

          Extent of spending on public sector

          Finally, how much should the Government spend on health care? With the introduction of the above funding scheme, the amount of public health care budget will already be somewhat regulated. Hong Kong is spending about 14% of total public revenue on health care. This is about right.

          There has been a suggestion that public health care budget should be a fixed percentage of Gross Domestic Product (GDP). This is an erroneous move. It would be dangerous to allow health care budget to fluctuate with the variation of GDP which depends heavily on the bullish states or otherwise of our economy. Furthermore, it will make it very difficult for long term planning on which the health or our population depends!

(HKMA News)