Settling on voluntary healthcare insurance?
George Cautherley, Convenor, Healthcare Policy Forum
Last month, the Legislative Council's Panel on Health Services approved the government's proposal to establish a Health Protection Scheme Office. Subject to approval of funding by the Finance Committee, the Office will be established in early 2012. The function of the Office is to implement the private healthcare insurance scheme and to consider how to subsidize private insurance with the $50 billion earmarked fiscal reserve for healthcare expenditure.
This gives the impression that Hong Kong society has settled on private healthcare insurance as its healthcare financing reform direction. At least, this is what the government is saying. Citing opinion research it sponsored and consultation responses it received, the government repeatedly claims that the public prefers voluntary private insurance to other financing reform options.
An opinion survey commissioned by the Healthcare Policy Forum and conducted by Lingnan University's Public Governance Programme does not support this claim. The Forum survey successfully interviewed more than 1,000 Hong Kong residents aged 18 and above in late June and early July in 2011 with a response rate of 31%. Many of the survey's findings are in fact diagonally opposite to the government's claims about Hong Kong's preferred healthcare financing reform direction.
While the government suggests that only a minority of the community supports a more progressive tax regime for financing healthcare, our survey found the contrary. About three-fourths (73%) of Forum survey respondents supported using a more progressive tax regime to fund public services as a principle; a similar proportion (74%) favoured introducing progressive taxation for funding public services in Hong Kong. Among respondents (65% of the total) who did not find Hong Kong's public healthcare services adequate and who wanted the injection of more resources into these services, 75% picked a more progressive tax regime as the tool for generating more resources.
On the government-proposed private healthcare insurance scheme, consistent with the government's claim, the Forum survey found majority support among respondents (66%). However, it should be noted that analytically, "supporting" does not necessarily entail "participating". Following this logic in our survey design, we found that more than one third (34%) of the scheme supporters had no intention of actually joining the scheme; only one third (33%) indicated they would. This translates into only 22% of the total number of respondents supporting and intending to join the scheme at the same time. Hong Kong people's embrace of the private healthcare insurance scheme is hardly as enthusiastic as the government would have us believe.
Subsidizing the uptake of private healthcare insurance has been the most controversial aspect of the government-proposed scheme, because it raises a question of justice in using public money to subsidize the relatively well-off to enjoy better healthcare services. On this, the government claims that society's views are divergent. Our survey indicates that views are not as divergent as depicted. There is in fact a predominant view. Hong Kong people are very public-minded regarding the use of public money; the predominant view is that public money should be used for the benefit of the whole society rather than for the individual. A very high proportion of Forum survey respondents agreed that if the government was to increase spending on healthcare, the money should be used for the benefit of the whole society like spending on the public healthcare system (84%) or for setting up a population-wide medical reserve for paying future public healthcare expenditures (75%). Meanwhile, a significantly lower proportion of respondents agreed that the money should be used for the benefit of the individual, such as subsidizing individuals to set up personal medical saving accounts (57%) or to take out individual private insurance (53%).
Such public-mindedness was further corroborated by our respondents' priorities in the use of any increased public funding on healthcare. About 43% of the respondents took spending on the current public healthcare system as the first priority in the scenario of increased public spending on healthcare, 20% opted for setting up a medical reserve for the whole population and 16% preferred setting up personal medical saving accounts; only 13% supported subsidizing private insurance.
Zooming in on respondents who supported the private insurance scheme as a group and compared to the community at large, survey data show that they are no less supportive of funding public services through a more progressive tax regime, nor less public-minded regarding the use of public money. It is worth noting that more than 67% of scheme supporters supported the scheme regardless of whether there would be premium subsidies. For the scheme supporters, then, concern about insurance subsidies is only secondary. It is plausible that they only welcomed the government's proposed private healthcare insurance scheme as a consumer protection measure. If given the choice, they would prefer a public system funded by progressive taxation than private healthcare insurance.
Further analysis of the survey data reveals that income level has little bearing on Hong Kong people's support of progressive taxation or on their public-mindedness. In other words, people in different income groups show similar levels of support for progressive taxation and have similar levels of public-mindedness.
According to our survey, Hong Kong people's preferred option of healthcare financing is unambiguous: firstly, public healthcare services funded by progressive taxation are preferable to voluntary private health insurance; secondly, new public money if any should be used for the benefit of the whole society rather than for the individual.
Scientifically, a single observation cannot verify a hypothesis but it can falsify a hypothesis. Likewise, one single survey may not be sufficient for establishing Hong Kong's preference regarding healthcare financing reform, but the Forum survey stands to call into question the government's various claims in this regard. Hong Kong's healthcare financing reform direction has not yet been settled. Two pieces of advice look appropriate. For the current government, in order not to put the cart before the horse and not to prematurely commit the next government to a policy direction that the community may not endorse, it should suspend the plan to establish the Health Protection Scheme Office. For the new government that will be installed in mid-2012, in order not to add to its democratic deficit which results from small-circle elections, it should reassess what the community actually prefers in connection with healthcare financing reform.
The Chinese version of this article was published in Ming Pao on 29 December 2011.
The above does not necessarily represent the views of the Foundation. Reproduction of the presentation requires written permission from the author.