The case for rais­ing pub­lic health­care fees

Ho Lok-sang says the Hos­pi­tal Au­thor­ity is right to raise the fees which it charges on health ser­vices, but adds that a cap on a per­son’s an­nual ex­penses is also needed

China Daily (Hong Kong) - - COMMENT - H O L O K- S A N G

The Hos­pi­tal Au­thor­ity (HA) re­cently pro­posed rais­ing the fees it charges on health ser­vices, which have not changed for many years. The pro­posed raises are ap­pro­pri­ate, but this should go hand in hand with in­tro­duc­ing an an­nual cap on el­i­gi­ble health­care ex­penses for each pa­tient. This an­nual cap can be re­garded as the “an­nual de­ductible” that peo­ple have to pay be­fore the ben­e­fits of the “pub­lic in­sur­ance plan” kicks in.

I have ar­gued that the HA is like a gi­ant “health main­te­nance or­ga­ni­za­tion” that pro­vides in­sur­ance to ev­ery Hong Kong cit­i­zen and of­fers med­i­cal ser­vices at the same time. Hong Kong peo­ple do not pay an ex­plicit in­sur­ance pre­mium, but ac­tu­ally are pay­ing such a pre­mium in­di­rectly through the tax sys­tem. The poor of course do not pay much tax, but even in Tai­wan, where ev­ery­body is cov­ered by the pub­lic in­sur­ance plan, the poor can pay re­duced pre­mi­ums or may even be ex­empt from the pay­ment. Ac­cord­ing to the of­fi­cial web­site, “the per­cent­age of the pre­mium paid by the in­sured for each cat­e­gory varies from 0 per­cent for low in­come cit­i­zens to 100 per­cent for the self-em­ployed.”

I have been ad­vo­cat­ing fee raises along with putting a cap on pa­tients’ el­i­gi­ble health­care since I first made the pro­posal in my book Health Care Fi­nanc­ing and De­liv­ery: A Model for Re­form, pub­lished in 1997. This could have al­lowed the HA to have the nec­es­sary re­sources to im­prove its ser­vices greatly. Then Hong Kong peo­ple could have time­lier and bet­ter ser­vices. Un­for­tu­nately, this sim­ple pro­posal has been ig­nored by our leg­is­la­tors and by our gov­ern­ment for all these years.

Ac­tu­ally, this sim­ple ar­range­ment com­bines user fees and tax fi­nanc­ing. More­over, it rep­re­sents an ap­pli­ca­tion of the in­sur­ance prin­ci­ple, as well as the con­cept of “an­nual de­ductible”. Pa­tients who want pro­tec­tion against the ex­penses that they may have to pay can buy pri­vate in­sur­ance, which will in­volve very rea­son­able in­sur­ance pre­mi­ums be­cause the max­i­mum ex­po­sure for the in­sur­ance com­pa­nies is only the an­nual de­ductible.

Many peo­ple ob­ject to fee raises much like a knee-jerk re­ac­tion: Any fee raise is sim­ply pre­sumed bad for the pa­tient. But even with low or non-ex­is­tent fees, what good is the ser­vice if it takes too long to get it or if the ser­vice is not avail­able when you need it? To­day, many pa­tients have to wait a long time be­fore they can get a spe­cial­ist clinic ap­point­ment or for an MRI.

I, too, would ob­ject to fee raises if there is not a cap on an­nual ex­penses. With an an­nual cap in place, what is there to worry about? Pa­tients will pay only when they can af­ford it and will not have to pay any more once the to­tal ex­penses be­come ex­ces­sive. This is why I call this sys­tem “Ex­ces­sive Bur­den In­sur­ance”.

With the tech­nol­ogy avail­able to­day, in par­tic­u­lar with the elec­tronic records that each pa­tient will have, track­ing the cu­mu­la­tive el­i­gi­ble ex­penses each year is no longer dif­fi­cult. Once the cu­mu­la­tive ex­penses reach the cap, the pa­tient will be ad­vised that he will not have to pay any more for the rest of the year.

For the poor we may also re­duce fees as well as lower the cap. If we do not want to put ex­tra bur­den on those get­ting Com­pre­hen­sive So­cial Se­cu­rity As­sis­tance, we can give them an ex­tra an­nual al­lowance that will cover the max­i­mum health­care fees that they have to pay.

The present fee struc­ture of our pub­lic health­care sys­tem re­ally does not make much sense. Peo­ple, of course, will not com­plain when they are asked to pay just a nom­i­nal fee for costly ser­vices. But if they can af­ford it, why charge them so lit­tle, es­pe­cially The au­thor is dean of busi­ness at Chu Hai Col­lege of Higher Ed­u­ca­tion

Many peo­ple ob­ject to fee raises much like a knee­jerk re­ac­tion: Any fee raise is sim­ply pre­sumed bad for the pa­tient. But even with low or nonex­is­tent fees, what good is the ser­vice if it takes too long to get it or if the ser­vice is not avail­able when you need it?”

when the health­care sys­tem is get­ting more and more costly and fac­ing in­creas­ing de­mands by the day? I also will not com­plain if we can charge pa­tients just a nom­i­nal fee and are still able to pro­vide re­li­able, timely ser­vices, and if this can be sus­tained. Un­for­tu­nately, when pa­tients badly need ser­vices they may be told that they must wait; and when pa­tients can­not af­ford to pay for some items which are des­ig­nated to be charge­able, they some­times have to go with­out these items.

As far as I can see, un­der our po­lit­i­cal sys­tem most if not all leg­is­la­tors will tend to con­demn fee in­creases. Since they need votes in or­der to be re-elected, they typ­i­cally will not agree to any fee in­creases. This is most un­for­tu­nate.

Ac­tu­ally, the “Ex­ces­sive Bur­den In­sur­ance” con­cept has been ap­plied with much suc­cess in Swe­den, Aus­tralia and in Tai­wan, for ex­am­ple. It takes con­sid­er­able an­a­lyt­i­cal skill to see what is good for Hong Kong, and it takes po­lit­i­cal courage to stand up for what works — even when pop­u­lar opin­ion goes against it. Let us hope for the best.

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