Hong Kong Hospital Reform To Blur Public-Private Divide

HONG KONG - In a bid to maximize the efficiency of its healthcare system, Hong Kong wants to blur the lines between public and private health providers.

"Eventually you won't see a clear demarcation between the private and public sector but rather more integration," said Hong Kong's Secretary of Health Dr. York Chow speaking Feb. 17 during a healthcare conference organized by the Economics Intelligence Unit in Hong Kong.

Hong Kong's healthcare needs are overwhelmingly provided by heavily subsidized and increasingly crowded public hospitals. A small number of private hospitals and clinics exist and have plenty of spare capacity but they are expensive and cater to only about 10% of the population.

The government subsidizes the Hospital Authority to the tune of 97%. Users pay minimal fees. The Hospital Authority underlined the higher costs the same day, announcing that its annual budget would increase to $4.6 billion in the coming year from $4.3 billion in 2010.

"Healthcare is one of the few services whose cost has risen well beyond the (consumer price index)," said Chow. The problem is that "we are inheriting a very large and dominantly public system."

Financing, General Approach Likely To Change

Changes are likely to focus both on financing and the overall approach to healthcare.

For more than two years, the Hong Kong government has been considering reforms to its healthcare platform to develop an affordable and sustainable system (Also see "Hong Kong Health Reforms Ignore Pharmaceutical Costs" - Scrip, 14 Jan, 2011.).

On the financing side, Hong Kong wants to implement a system of widespread insurance through which users would prepay for health services, particularly in-patient services that are most expensive. This should help reduce the burden on the government.

But the idea has faced some resistance, not least because patients barely pay anything now and nothing in advance.

"If you get something for free, it is very hard to get people to start paying for it," said Thomas Abraham, director of the Public Health Media Project at Hong Kong University.

On the care side, the government also wants to put more emphasis on prevention by encouraging patients to begin using general practitioners as primary healthcare providers, said Chow.

Hurdles To Clear

Reforms face a few hurdles, partly created by the success of the current public system.

The first is cost. As public hospitals are heavily subsidized, patients have to pay very little for services that would otherwise cost tens or hundreds of thousands of dollars in the private and strictly for-profit hospitals.

The second is an emphasis on treatment rather than prevention, which the government plans to address with a new electronic records management system that would allow records to follow patients and should be in place by 2014, said Chow.

The government also plans to open up land for private hospitals, even if it means a loss to the government in terms of land costs, said Chow.

In Hong Kong, where the idea of free markets is deeply entrenched, giving cheap land to private concerns has created some controversy. Still, Chow said the government will open up the first of four plots for bidding before the end of the year. The only unbreakable requirement will be that the land be used to build hospitals and not malls.

Ultimately, said Chow, Hong Kong wants to continue providing widespread and quality healthcare but cutting costs through insurance and utilizing more spare capacity available in the private sector.

"We hope access to the public and private sector will be the same," said Chow.

As Chow was speaking, however, the Hospital Authority announced plans to spend more than $12 million to retain more doctors and experienced nurses. So far this year, about 100 pediatric nurses - 8% of the total - have quit the public system headed for higher paying jobs at private hospitals or overseas.

- Alfred Romann ([email protected])