Doctors: Where the money is

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The argument over public sector doctor salary increases is complex – but HT simplifies it for you. Learn why, this row will erupt time and time again until a formal mechanism is put in place.


 

On Wednesday October 21, over 1,300 public-sector doctors gathered at the main lobby of Queen Elizabeth Hospital to stage a mass sit-in for an additional 3% pay rise, on top of the original 5% (with slight variations depending on staff levels) on offer, to put them in line with civil servants. From 5% to 8% – who’s right and who’s wrong in this dispute?

Participating in the protest included some of the most prominent doctors in the city, namely renowned microbiologist and recently resigned University of Hong Kong Council member Professor Yuen Kwok-yung (袁國勇) and President of Hong Kong College of Anaesthesiologists Council Dr John Liu Tak-chiu (廖德昭), as well as heads of Hong Kong Public Doctors’ Association, the Hong Kong Medical Association, the Hong Kong Academy of Medicine, the Hong Kong Doctors Union, Frontline Doctors Union, and Médecins Inspirés.

 

Every six years…

The established system works like this:

The HA does not have its own salary adjustment mechanism. It has been following that for the civil servants, namely the net pay trend indicators (PTIs) derived from the annual pay trend survey (PTS). So, if the survey determines, for example, if civil servants get a 5% pay raise, then doctors, by custom (not a legal mechanism), would receive the same 5% raise. In effect, doctors pay increases or decreases were linked to those in the overall economy.

On this occasion, the 3% additional pay rise, however, was derived from the Pay Level Survey (PLS) conducted every six years. So civil servants receive, every six years, a pay adjustment based on the PLS, in addition to their annual pay adjustment (the PTI).

However, there is no precedent of the HA following the PLS. The first PLS in 2006 recommended no changes to salary levels after a period of economic downturn (dotcom/9-11 crash, then SARS). Doctors were not clamouring to have the PLS adjustment at that time. Doctors now are clear – they want the extra pay based on the PLS: an extra 3% on top of their annual adjustment of 5%.

The doctors claim the convention is to follow the civil servants, regardless of whatever the mechanism is. Given the PLS recommended raise was zero in 2006, it’s unclear if it was followed or not – no one cared.

 

The Government: Hands off

The Hong Kong Government, while urging the HA to take into consideration the morale of its staff and the attractiveness of the remuneration package, stated it would not allocate additional resources for this particular case. The Government’s position is that the HA is an independent body and the Government will not step in to dictate employment terms like salary.

“As the Hospital Authority is a statutory authority responsible for the provision of public medical and hospital services, it can determine the salary level of its employees according to its assessment…the Government will not allocate additional resources for this particular exercise. So the HA has to demonstrate that in the long run, it has the ability to sustain and absorb the recurrent expenses arising from this particular exercise,” Secretary for Food and Health Ko Wing-man (高永文) stated.

Dr Pierre Chan Pui-yin (陳沛然), chairman of the Hong Kong Public Doctors’ Association, says the HA is like a contractor of the Government, and whether it would like to follow salary adjustments for civil servants – which has been the case for the past 20 years or so – should be its own business.

 

HA’s ability to pay

The HA said the move would cost it an additional HKD200 million a year. It is currently receiving annual funding of HKD49 billion from the Government, allocated in a one-line vote in LegCo of the year 2015-2016. The HA holds some HKD3 billion in reserve on a rolling basis. If the government doesn’t ante up extra cash, then the HA would presumably need to raid this piggy bank.

Just a week prior, the Government announced a HKD570 million plan to retain 60 out of 100 public hospital doctors who will pass their retirement age of 60 in the next two years. The authority treats 90% of local patients but employs only 40% of doctors.

 

A temporary victory

In wake of the overwhelming discontent, the HA board approved the pay rise for approximately 2,000 or so senior doctors after a board meeting held on the day following the sit-in. The HA’s Finance Committee was tasked with handling the arrangement and is expected to submit a study report to the Board on November 19.

The Hong Kong Public Doctors’ Association issued a statement soon afterward, welcoming the positive response but stressed that the pay rise has to be fully backdated to October 2014, same as civil servants, and that the HA professional salary scale be pegged with equivalent grade in the Government unless a mutually accepted mechanism can be forged in the future.

Dr Leung Ka-lau (梁家騮), who represents the medical sector in the LegCo and is the first public hospital doctor in Hong Kong to be elected as a lawmaker, also backed his colleagues’ call for a ‘fair’ pay adjustment mechanism.

 

Grumpy

This was not the first time doctors staged protests requesting to be treated in accordance to salary adjustments for civil servants. In December 1, 1991, the HA, a nominally independent body distinct from the Government, was established to take over management responsibilities of all public hospitals along with some 20,000 staff. About 60% of the staff opted to work under HA terms of employment while the rest chose to remain civil servants. New doctors were recruited after 1999 under the HA’s unpopular staff reconstructuring scheme, creating an issue of unequal pay for equal work. In June 2007, about the same number of public sector doctors launched a similar mass sit-in at the same venue. The HA, like this time, eventually backed down after showing initial reluctance to respond to the doctors’ demand.

Eight years have passed and the issue remains unsettled. Dr Louis Shih Tai-cho (史泰祖), president of the Hong Kong Medical Association, says there is a weird status-quo that while salaries of public doctors are officially unpegged from that of civil servants, both the HA Board and the staff recognise an unwritten convention that there is some sort of “point-to-point connection” between the terms.

The nature of the tenuous connection was made explicit when HA staff were asked to follow a 5.38% pay cut for appointed officials and senior civil servants back in 2009.

“Back then [in 2009], public sector doctors were told that they were ‘closely linked’ to their government counterparts. And now, even after the [HA’s] concession, the Government remains sticking to its stance that there is no mechanism to peg the two bodies. I don’t think the doctors would accept that,” Dr Shih says. These contradictory messages – you’re ‘closely linked’/’no you’re not’ – creates confusion, acrimony, and room for debate about how doctors are compensated, with all parties seeking the most favourable terms to their own interests.

 

Neither ‘public’ nor private

As an alternative option, former Secretary for the Civil Service Wong Wing-ping (王永平) earlier suggested that the salary scale for public hospital doctors should be adjusted with reference to their private counterparts instead.

Dr Chow Pak-chin (周伯展), vice-president of the Hong Kong Medical Association, shares his personal view with Harbour Times on this subject and argues that Wong’s suggestion is infeasible.

“The operation models between public-sector and private-sector doctors are essentially different,” says Dr Chow. He explains that the former have a full team to back them up and have a list of statutory protections, though separated from the civil service system, including annual leave, pensions, gratuity payment, and – very important – insurance, a costly part of private practice. Private sector doctors bear all these costs.

 

It ain’t the same

Furthermore, private sector doctors in practice don’t have salaries. They charge per visit or procedure. They pay clerical and medical support staff. If they don’t work (i.e. take a holiday), they don’t get paid. They don’t report their incomes to government (other than through their tax returns, presumably off limits to the HA, or via company tax returns whose information might not reflect their income as salary if they are paid in tax free dividends). To make it clear, private sector doctors are like entrepreneurs – they might pay themselves some salary, charge administration fees for dispensing drugs, but also take profits out of their business after paying for staff, rent, medical equipment and supplies, as well as insurance. None of that would be picked up in Inland Revenue Department statistics on salaries or in a salary survey. In short, it is hard to measure private sector doctors’ ‘salary’ level in a credible way and use it for comparison in the first place.

The identity crisis of public sector doctors will continue so long as the Government refuses to adjust doctor salaries based on private sector salary adjustments. The argument against this methodology is that public sector doctors’ working conditions are fundamentally different to private sector doctors.

Right now, there is no representative of frontline public doctors in the HA’s Board. Ensuring their representation rights within the system could be the first step to solve the dispute and attract more doctors to join and stay in the HA rather than paying the retirees and senior doctors to stay on the job.