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HK healthcare is a dual-track system

April 09, 2013


Secretary for Food & Health Dr Ko Wing-man

The healthcare system of Hong Kong runs on a dual-track basis encompassing the public and the private sectors. Public healthcare is the cornerstone of our healthcare system, acting as the safety net for the whole community, while the private healthcare sector provides personalised choices and more accessible services to those who are willing and may afford to pay for private healthcare services.
Our bed-population ratio is about five beds per thousand population. The total health expenditure as a share of GDP was 5.2% in 2009-10. Despite both indicators being on the low side, compared with other developed economies, Hong Kong's overall infant mortality rate is below two deaths per thousand live births, and life expectancies are above 80 years for both males and females.
Meeting future challenges 
On the other hand, we are facing serious challenges, like many other countries, from a rapidly aging population, increase in life-style related non-communicable diseases, and escalating medical costs due to advances in technology. At present, the proportion of elders in our population is about one in eight. This figure will become one in four by 2030. To add to the above, the public hospital system of Hong Kong provides a comprehensive range of quality services at a very low level of user charges, at a flat rate of US$13 per day per bed, representing about 95% subsidies compared to the cost.
As such, the public hospital system is very popular and provides over 90% of all in-patient bed-days. The high subsidisation rate and quality healthcare services offered by public hospitals continue to attract patients into the system, resulting in overstretched public hospitals as well as lengthening waiting lists and waiting time for services.
With sustained economic growth, the Hong Kong SAR Government has so far been able to meet the increase in expenditure required by public healthcare over the past years. The annual Government recurrent expenditure on healthcare increased 40% from 2007 to 2012, reaching almost US$5.8 billion in 2012, accounting for 17% of total recurrent expenditure of the Government. We were also able to launch a number of public hospital development and re-development projects in the past few years.
At the same time, the private sector has also been relatively active because of local demand and the increasing number of patients from the Mainland. Nevertheless, rising health expenditure, which grows at a rate faster than that of the economy, leads to the important question of how we could ensure the sustainability of our healthcare system in the long run.
Dual-track system preferable
As sustainability issues and healthcare reform are common policy agenda to many countries, it is natural for Hong Kong to seek to learn from the experience of other places. Since 1993, 1997 and 2001, different rounds of public consultation on healthcare reform were conducted by the Government with elements of increasing personal contribution through co-payment, introducing mandatory public healthcare insurance, and establishing a savings account for post-retirement medical care being put forward for discussion.
With all these suggestions being turned down by the general public, Hong Kong has come to terms with the fact that every society has its own unique economic, social, cultural and political characteristics which shape the structure and development of the healthcare system, and that we cannot just replicate ‘successful examples’ elsewhere.
These rounds of public consultation have also established a clear consensus in the community that the dual-track healthcare system, with public healthcare funded predominantly by general taxation, is preferred and should be continued. The next question is to ensure the balanced and sustainable development of public and private sectors with the private sector taking up a fairer share of the total healthcare need, thereby alleviating the pressure of public healthcare and public finance.
Previously, the structure of our healthcare system tended to be compartmentalised and offered little scope and incentive for the two sectors to collaborate. By building a more integrated system with better partnership and collaboration, the two sectors can complement and support each other in a more efficient manner. Some of the reforms that we are currently undertaking will help improve the situation, and some of them are already bearing fruit. For instance, we have already introduced a number of public-private partnership programmes, such as the pilot programme for purchasing primary medical care for elderly patients, the vaccination subsidising programmes, and partnership programmes for cataract surgeries and haemodialysis.
We are also developing a territory-wide electronic health record sharing system, which will facilitate the sharing of patients' health records between the public and private sectors. Our target is to have the system ready by 2014 for connection with all participating public and private hospitals, and to make available relevant systems to private healthcare providers for bi-directional information sharing.
Formulating a health protection scheme
Besides, we are at a critical stage in formulating detailed proposals for the Health Protection Scheme (HPS), which is a voluntary and government-regulated private health insurance scheme proposed in 2010. By offering better protection and value-for-money private insurance products, the HPS aims to provide an alternative to public healthcare to those who are willing and can afford private healthcare services, in particular the middle class.
As more people choose to make use of private healthcare services, the public system can have the capacity to re-prioritise its work to better focus on providing services in its four target areas, namely emergency care, service for under-privileged groups, complicated illnesses that entail high costs and advanced technology, as well as the training of health care professionals. In drawing up detailed proposals for the HPS, we would consider using financial incentives or government subsidies, including tax incentives, to encourage people to participate in the scheme.
At the same time, in anticipation of the rise in service demand due to the aging population, there is a need to continue to expand the service capacity in both sectors, not only in terms of hardware but also healthcare manpower.
On manpower, we are conducting a review to carefully examine the forecast of healthcare manpower requirements, taking into account the overall healthcare needs of the population as well as the foreseeable increase in demand in both the public and private sectors, with a view to ensuring that there is education and training capacity for an adequate supply of various healthcare professionals. In this connection, we are already increasing the number of places in local universities for the training and supply of healthcare professionals. We are also working with the regulatory authority, namely the Hong Kong Medical Council, in streamlining the arrangement for licensing examination to facilitate overseas-trained medical practitioners to be able to return to practice in Hong Kong.
Ensuring a sustainable system
As I elaborated in the past few minutes, it is essential for us to maintain our unique, dual-track healthcare system - there is no better or acceptable alternative. Ensuring its sustainable and balanced development requires a delicate balancing act by turning the various knobs carefully and co-ordinately:
(i) adjustment in co-payment for public healthcare services judiciously, bearing in mind affordability issues and political sensitivity;
(ii) enhancing public-private partnership initiatives and selective and targeted purchasing of private services;
(iii) facilitating the flow of medical information and patients across the two sectors with electronic health record platform;
(iv) enhancing the utilisation of private healthcare services by introducing the Health Protection Scheme; and
(v) managing the supply and provision of public and private healthcare services and facilities.
Similar to the tools adopted to calibrate the balance and development of the macro-economy, these turning knobs will hopefully allow us to adjust the balance and development of the public and private healthcare sectors as required by the needs of time and the community.
Secretary for Food & Health Dr Ko Wing-man made these remarks at the Asian ministers panel discussion session of the World Health Summit Regional Meeting - Asia in Singapore on April 9.