HK must aim to offer timely, affordable healthcare
Hong Kong’s healthcare system has served the city well. We have not devoted a lot of resources to healthcare. The special administrative region government spends only about 3 percent of its GDP on healthcare. Private spending on healthcare is about the same. Spending not much more than 6 percent of the GDP on healthcare, we nevertheless enjoy the longest life expectancy in the world. Our excellent healthcare system of course is not the only reason behind this. But it certainly plays an important role.
Still, our healthcare system is under a lot of stress. Many complain about the long lines for an appointment to the specialist clinics, and in recent years a number of medical incidents have occurred sometimes leading to tragic consequences. The fact is that the Hospital Authority does not have the resources to give patients more reliable and timely needed care. The charge of HK$120 ($15.92) per day for acute beds covers all meals, diagnostic costs, and almost all medical and nursing care costs, with the exception of “itemized charges” that cover very expensive items. The subsidy for in-patient care is roughly 97 percent of costs. But low cost is not enough. What matters more is whether patients can get timely, reliable care that is affordable. Currently, some drugs that are known to be of significant clinical benefits but are also deemed too costly are not covered in the Hospital Authority drug formulary. Some expensive items used in operations are also at patients’ expense. Although in the event of “emergency”, there is typically not much need for waiting, patients deemed not in emergency often have to wait more than a year before seeing a specialist doctor. A patient suffering from cancer having to wait a year or two before he or she is diagnosed may miss the golden window of opportunity for effective treatment.
Back in 1997, in a book commissioned by the Hong Kong Centre for Economic Research, I recommended “raising health service fees but capping the annual eligible healthcare expenses”. The idea is that the government would pay for all expenses beyond the annual cap, but patients should in principle pay the direct cost of the services. This way, patients would pay more, but would never need to pay beyond the annual cap. Services could be improved; waiting time could be cut; lives would be saved. I would propose that for low-income people, the charges could be reduced, as will the annual cap. For Comprehensive Social Security Assistance recipients, it is possible to increase the monthly allowance, say, by HK$100 per head, and capping annual eligible expenses at HK$1,200. This will ensure that they never need to pay a cent more than before.
Unfortunately, over the years, Legislative Council members who need votes in order to get elected would rarely endorse raising fees of any kind. But my proposed plan would not affect affordability and would produce extra revenue estimated at billions of Hong Kong dollars. With the additional revenue thus derived, we could cover more drugs that can help patients, and recruit more and better manpower to provide better services.
Apart from this idea, we can also provide a “lifetime healthcare supplement” for each Hong Kong resident. This is a contingent fund that does not need to be actually expensed. Under the idea, each Hong Kong resident will have access to a lifetime healthcare supplement that he or she can draw on to meet verified healthcare expenses, with the provision that he or she must match the funds drawn at 1-to-1 or some other ratio (low-income people may be allowed, for example, to match each dollar withdrawn with, say, just 50 cents of his/her own money). The supplement will be fixed for life, which means that if the funds are drawn, the supplement will be exhausted. These provisions will ensure that no one will draw the funds without careful consideration. I believe many Hong Kong residents may never withdraw any funds from their accounts. Exactly because of this, the supplement for each person can be bigger, thus offering each Hong Kong resident greater peace of mind, as he or she will know that hundreds of thousands of Hong Kong dollars are available for his or her healthcare needs if he or she needs it.
In a survey that I conducted in November 1996 for the aforementioned commissioned report (published as “Healthcare Delivery and Financing: A Model for Reform, City University of HK Press”, 1997) I found that 62.3 percent of the 907 respondents indicated that they were willing to pay more taxes for a healthcare system that offers better services. This compares with 27.4 percent for those who were not willing. The remaining 10.2 percent were invalid responses or did not have a clear position on the subject. The results, I believe, should still be valid today. People value health, and they do not mind paying a bit more in order to get better care. But healthcare expenditures could be very big. In America, healthcare expenditures are a leading cause of personal bankruptcy. In Hong Kong, we do have the Samaritan Fund and Community Care Fund Medical Assistance programs to help patients with financial difficulties to meet large medical expenses. But even a middle-class household that cannot qualify for the Samaritan Fund or the Community Care Fund can run into difficulties. The annual spending cap will ensure that no one will be in financial stress due to healthcare expenses.
I should also mention that dental care is an important aspect of care because it matters a lot to people’s well-being. Yet our government dental clinics with general public sessions offer only emergency dental service limited to pain relief and extraction. I would propose that full dental care be covered under the “pay and cap” program as explained above.