Press Releases
Healthcare funding: HK's way forward
Governments around the world face a tough challenge: How to finance a
sustainable, high-quality public healthcare system. Secretary for Health,
Welfare & Food Dr Yeoh Eng-kiong believes Hong Kong may have struck the right
balance with its proposed strategy that incorporates a medical savings scheme to
be tapped after retirement.
"It seems reasonable that we should all share responsibilities for our own
health," he said in an interview with news.gov.hk in the final days in his post.
"We're proposing in future people would have to start saving for their
healthcare needs when they age."
Singapore pioneered the "medi-save" concept in the region, although residents
there don't have to wait until retirement to use their accounts to pay for
healthcare.
"Our concept was to have as little financial impact as possible for the people
in Hong Kong, so we looked at the minimum amount that we need to contribute. The
findings of our study show that a contribution of up to 2% of earnings will be
affordable to a large proportion of the population," Dr Yeoh said. "That money
would only be used for healthcare needs after people have retired."
The Government will consult widely to gauge public views on the idea. For the
community to understand and accept the medical savings account idea, and for a
system to be developed, agreed and passed by the Legislative Council will take
some time, Dr Yeoh said.
Medi-save aims to complement other funding methods
Introducing such an innovative programme to complement other healthcare finance
measures is necessary, he believes.
"Healthcare financing is a big issue in every country. There is no place in the
world where there is no problem in terms of funding. Whichever major source of
funding very much depends on that place's values, systems, what system was
there, and whether one wants to improve it incrementally or change it
dramatically. In Hong Kong we started off with a simple system using a tax base.
"The Harvard Report recommended radically changing the whole system, to a social
insurance method supplemented with taxation. This was rejected by the total
community. After they rejected this we went back to look at how the present
system could be improved on and enhanced so that it could be more sustainable in
the longer term."
Strategy builds on existing system
The savings plan would be designed to minimise the impact on the community, to
build on the present system and to ensure that public healthcare financing is
sustainable.
"We need to make sure that whatever subsidies we get from the public purse are
always targeted at the people who need them most. We have now restructured our
fees so that our subsidies should be targeted to those at the lower income
levels," Dr Yeoh said.
"At the moment our cost recovery is only 3% of our total costs. So we say that
this cannot go on in the future. Increasingly, if we want to keep up with the
quality and the technology, then the resources need to be more and more targeted
to lower incomes. Those who are not in the low-income category will need to pay
more."
Middle-income earners also protected
Subsidies should also be targeted at the services that carry high financial
risks to even the middle income earners, he said. They should cover treatment of
catastrophic illnesses, like strokes and cancer.
"Even middle income people could not afford this without subsidies, and not only
would they not be able to afford it, they would also, in many instances, lose
their capacity to work, to generate income, so it would be a double jeopardy."
The Government has also begun using the fees and charges structure to manage
demand so that resources are used appropriately. Dr Yeoh points to public
hospitals' accident and emergency departments as a prime example.
Fees and charges curb misuse of resources
"Until we changed the policy, nobody paid for anything when they went to the
emergency department and it was a high-quality one-stop service. If you were
worried you had broken your leg, you go and get the X-rays, get everything done
right away. If you need a cast, it's put on for you. You don't have to come back
three days later. It's all done on the spot and we charged zero dollars," he
said.
"We had one of the highest emergency attendance rates in the world. And some of
our emergency departments would see attendance during weekends of 1,000 people a
day. It was like a market. People would go there, get a number and then go and
have yum cha and come back. They were non-urgent, so they would expect to wait
three hours. They would go out and come back two hours later. So once we charged
for emergency care, attendance fell by about 10 to 15%. But it's creeping up
again."
Global experience shows fees must be used as a management tool "so that you
don't force people not to come, but they see that it's still a premium service
and they're willing to pay more. Once you go to a certain level, people then
shift to the outpatient clinics," he said.
Plan designed to safeguard seniors
The proposed medi-save programme will help cover funding shortfall and provide
more of a level playing field, especially as Hong Kong's population ages.
"We found that even with very heavy subsidies, 30% of people couldn't pay the
$68-a-day hospital fee, and these tended to be people who had retired and people
with chronic illnesses. If we did not have this public savings account, you'd
see that in future there would be people who would be responsible and save up
for their healthcare needs after retirement and there would be other people that
the public purse would cover."
Dr Yeoh expects the Government will work with the insurance industry, so that it
could provide healthcare schemes that would be compatible with the medi-save
concept. People who have adequate protection could be exempt from contributing
to the scheme, he said.
"Our commitment is that we want to keep our healthcare costs cheapest, of the
highest quality, so that whether you pay through taxation or through
contributions, it would be the minimum."
Ends/Sunday, September 26, 2004
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