Part I on the Hong Kong Healthcare Series: A System Under Strain

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Hong Kong has a well-established dual-track healthcare system and was even praised by Bloomberg for having the world’s most efficient healthcare. But a preference for subsidized healthcare has led to heavy burden in the public sector and funding is needed more than ever, as Hong Kong’s private healthcare is simply too expensive for many people.

At a government hospital or clinic, residents pay $45 per out‐patient consultation, while private clinics typically charge between $180 and

About 70 percent of the total out‐patient consultations in the city are provided by the private sector as the waiting time is much shorter. On the other hand, over 90 percent of in‐patient services are provided by public hospitals, where patients are charged less.

“The public hospital system of Hong Kong provides a comprehensive range of quality services at a very low level of user charges, at a flat rate of US$13 per day per bed, representing about 95 percent subsidies compared to the cost,” said Secretary for Food & Health Dr Ko Wing-man last year in a summit in Singapore.

As of the end of 2015, there were 27,895 beds in 42 public hospitals and institutions under the Hospital Authority (HA), compared to only 4,014 beds in 11 private hospitals.

The HA also manages 48 specialist out-patient clinics and 73 general out-patient clinics, which saw 7.3 million and nearly 6 million of attendances respectively in 2014/15.

It ain’t cheap

According to the Food and Health Bureau’s Domestic Health Accounts, from 1989/90 to 2014/15, public health expenditure soared by 425 percent cumulatively in real terms during the period, compared to 257 percent for private health expenditure. The public share in total health expenditure also went up from 40 percent to 50 percent.

This suggests that the residents are relying on public healthcare more than ever, and the healthcare expenditure only gets higher.

To meet the demand, in 2018/19, the HA was provided with a 10-year high recurrent funding of $61.5 billion, up by 13.1 percent and representing 15.1 percent of the government recurrent expenditure. During the last 14 years, recurrent funding to the authority rose from $28 billion in 2003/04 to $49 billion in 2014/15.

More, older

But Hong Kong’s booming and aging population has been boosting demand for public healthcare. In recent years, public hospitals have been seeing bed-population ratio of over 100 percent on most days. United Christian Hospital, for example, saw bed occupancy rates in medical wards reaching 127 percent this January.

To expand the capacity of the public healthcare system in medium and long term, the government is carrying out two 10-year hospital development plans to build new hospitals and offer more beds.

In total, $500 billion has been set side to provide additional 8,000 to 9,000 hospital beds in the near future. The government has allocated $200 billion to the ongoing first 10-year plan to deliver 5,000 hospital beds, and another $300 billion to the second 10-year plan as an initial provision to add 3,000 to 4,000 more beds.

Beds good, people better

“The funding can help improve the hardware, but there is software to consider. Public hospitals have long been troubled with shortage of manpower,” says Mr Pierre Chan, lawmaker from the medical sector.

In spite of the funding that goes into the public healthcare system, the shortage of doctors and nurses in Hong Kong is the core problem, especially when the reliance on public in-patient services grows.

There have been suggestions such as public-private partnership to alleviate the burden in the public sector, as well as price transparency in the private sector to encourage patients to use private services.

(Look for Part II later this week)

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