Health Care Policy and Funding
5 July, 1999
Health Care Review Task Force
Health & Welfare Bureau
Government of the Hong Kong Special Administrative Region
People’s Republic of China
Consultation Paper on "Improving Hong Kong’s Health Care System: Why and For Whom"
Enclosed is the Hong Kong Democratic Foundation’s response to the Government’s consultation on "Improving Hong Kong’s Health Care System: Why and For Whom".
We would be most willing to make ourselves available for detailed discussion on our submission.
Hong Kong Democratic Foundation
George W H Cautherley
- Summary of Recommendations
- Health Care Policy & Funding: A Hong Kong Democratic Foundation Perspective
SUMMARY OF RECOMMENDATIONS
- Much greater emphasis is placed on Preventative Medicine (1.4 – 1.6)
- Primary Care goals need to be developed (2)
- Primary Care provision should be enhanced through the application of Information Technology (3)
- A territory-wide patient health database system should be set up (4)
- A multi-cultural approach to medicine needs to be adopted (6)
- A unified system of health care provision is required (7.1 – 7.3)
- Funding should be through a system of mandatory health care insurance (8.1 – 8.4)
- An Institute of Health Policy and Economics should be set up at one of our Universities to provide appropriate consultancy services (9)
- There should be allowance in our health care system for Health Maintenance Organizations to operate as providers if they wish to do so (10.1)
- Various measures are proposed to assist in the competitiveness of health care provision (11.1 – 11.3)
- The role of the Department of Health is broadly defined (12)
- A suitable environment should be developed to encourage health care providers to evolve into centers of excellence for the Asia Pacific region as a whole and thus enhance the SAR’s service sector economy (13)
HEALTH CARE POLICY & FUNDING
A HONG KONG DEMOCRATIC FOUNDATION PERSPECTIVE
Although there has been publication of the Scott Report in 1985, which lead to the establishment of the Hospital Authority (HA), the 1990 Primary Health Care Report and the Government’s 1993 Green Paper "Towards Better Health", there has been no comprehensive statement on health care policy from the Government since its 1974 Medical White paper.
Given the significant developments in Hong Kong’s economic and social systems and the rapid pace of medical technological change since the mid 1970’s, Hong Kong is long overdue an in-depth review of its policy towards health care.
The brief given to the Harvard university team contracted to conduct a study on Hong Kong’s health care system included a mandate for it to make a comprehensive assessment of the current system and to propose alternative options to improve financing and delivery of health care. However, in our view, the Harvard Report failed to address the issue of reforming the system strongly enough.
The Hong Kong Democratic Foundation (HKDF) believes Hong Kong’s health care policy should ensure the maintenance of its traditional undertaking that no member of the community should be denied access to a reasonable standard of health care for want of means and encompass the following fundamental objectives:
Invest substantially in promoting "healthy lifestyle" habits
Encourage a greater emphasis on the practice of good preventative medicine
Improve the effectiveness of primary health care through a more efficient structure and adoption of appropriate technologies
Facilitate the implementation of cost-effective practices by providers of hospital-based health care services
Abolish the present distinction between public and private health care provision, replacing it with a structure of competitive providers funded through compulsory health insurance
Ensure our health care system has the necessary flexibility to accommodate the development of Hong Kong as a centre of excellence and provider of health care services to the Asia Pacific region.
- PREVENTION – the Key to Better Health Care and Cost Containment
Too little emphasis is still being directed towards establishing a culture of effective preventative medicine practice.
The more effective a system of preventative medicine we can build, the less need there will be for hospital care. Of necessity, hospital care is always going to be costly to provide, as it is essentially a service based on people, most of whom require high levels of skills. Around 80% of the cost of hospital care is personnel related. If an effective system of preventative medicine and primary care can be provided, so that the demand for hospital care is eventually reduced, then the cost of provision of health care services will eventually be contained, on a per capita basis.
The HKDF believes there are three major drivers of preventative medicine:
- The fundamental practice of preventative medicine carried out by the individual through the adoption of "healthy lifestyle" habits.
- The continual education of their patients by primary care providers in good health practices at each consultation.
- The adoption and enforcement of beneficial environmental standards by the Government.
To capitalize on the benefits to the community, both in terms of improved health and in eventual reduced health care costs the HKDF recommends the following:
- That the Department of Health undertakes a continuous programme of public health education, both in schools and to the public at-large to promote "healthy lifestyle" habits.
- Hong Kong’s medical schools and college of continuing medical education give the fullest emphasis in their training curricula to the need for primary care physicians to make preventative medicine the priority in the daily practice of their craft.
- The Government adopt aggressive policies to improve the environmental situation, in particular with regard to the quality of our air and coastal waters.
- DEVELOPING PRIMARY CARE GOALS
The Department of Health, the Hong Kong Medical Association and the two Medical Schools should establish a working party to map out primary care goals and effective programmes for realizing these. Primary care should not be focussed solely on western medicine, but Traditional Chinese Medicine practices should also be taken into consideration.
- ENHANCING PRIMARY CARE PROVISION THROUGH INFORMATION TECHNOLOGY
Developments in information technology offer the opportunity for a quantum leap in improving the effectiveness of primary care. This can be achieved by establishing a computer-based common "health database" system. Such a system would be used to record the cumulative case history of each patient. It would incorporate relevant artificial intelligence to flag the need for specific check-ups and alert physicians of the possibility of potential health hazards that should be addressed.
- THE PATIENT HEALTH DATABASE SYSTEM
Every member of the community would be registered on the patient health database system and once it has been established each newborn would automatically be entered into it. As any doctor in the private or public sector should be able to access a specific patient’s records, but only with the patient’s authority, it is important an effective security system is implemented to prevent unauthorized access to information.
Each time a patient visits a doctor or hospital the pertinent details would be recorded in the database. There should also be the provision for auxiliary medical personnel to enter details of treatments carried out, but not to be able to access information other than that related to their speciality. Additionally, patients self-medicating should also be encouraged to enter this information into the database.
The main advantages of this database system would be that the patient’s complete medical history to date would always be accessible for review irrespective of the doctor or hospital providing care. With more complete information automatically available on a patient, medical staff have the opportunity of providing better care and of diagnosing conditions that otherwise might have been missed. The artificial intelligence element provides an "early warning" system that could contribute significantly to more timely diagnosis and through this the possibilities of worthwhile savings in hospital care costs.
Considerable attention will need to be paid to the issue of ensuring full protection and privacy for all patient data contained in the system.
- ESTABLISHING AND RUNNING THE PATIENT HEALTH DATABASE SYSTEM
An independent body consisting of medical personnel from the public and private sectors and other relevant experts, such as IT personnel should be set up to establish and run the database. The Government should initially pay for the database establishment costs, but a fee per access should cover the cost of running it. Consideration should be given to including a set up cost recovery element in the access fee. The fee per access, or at least a portion of it, should also be paid by patients using publicly provided health care.
- ADOPTING A MULTI-CULTURAL APPROACH TO MEDICINE
The Hong Kong community already enjoys the benefit of access to both Western and Traditional Chinese Medicine. We should therefore seek to maximize the benefits of this situation by integrating the practice of these two schools of medicine. The Department of Health should encourage our medical schools and the various relevant professional bodies to cooperate in achieving a closer communion between Western and Traditional Chinese Medicine.
A system of accreditation and regulation, equitable with that in place for Western Medicine practice, will need to be established for Traditional Chinese Medicine practice.
- INTEGRATED HEALTH CARE FOR ALL
Under our present system of provision of health care we have a private sector that is dominant in the provision of primary health care (85%) and a public system that is overwhelmingly dominant in the provision of hospital-based care (92%).
Regrettably, no effective interface has ever been established between these two systems.
- Unify the Systems of Provision
The Harvard Report recommends a high degree of integration of public and private provision of health care services, particularly in its option 5, Competitive Integrated Health Care.
The HKDF believes the Harvard recommendations should be taken to their logical conclusion, with the implementation of a single seamless system of provision of health care in a structure of competing providers funded by compulsory health care insurance.
- Restructuring the Existing Facilities
The Harvard Report recommends reorganizing the HA into approximately 12 to 18 regional Health Integrated Systems. In our view the disadvantage of a regionalized structure is that it is unlikely to offer sufficient choice and thus competition, as patients would prefer to receive health care within their own area.
The HKDF’s recommendation is that that between 5 to 10 cross-regional providers would be created. While not all providers would necessarily cover every region, each region should at least be able to offer provision of health care services by a minimum of two or three alternative providers.
- Health Care Provider Groups
The 5 to 10 provider groups would be formed from existing HA and private facilities. It is envisaged that HA facilities would either be purchased outright from the Government, or leased from them by the new provider groups.
The new provider groups might be formed though investment by Hong Kong business groups, consortiums of HA personnel, existing private hospitals or private doctor groups, local or international insurance companies and USA and other international Health Maintenance Organizations (HMOs).
Funds realized from the sale or lease of these Government assets should be reinvested in a fund to provide income to be used by the Government for subsidizing the cost of health care insurance premiums for those who are unable to afford them.
Existing private practitioners could either join one of the provider groups, form their own consortium as primary care providers and contract their services to one of the insurance schemes, or contract to an insurance scheme on an individual basis.
- FUNDING THE SYSTEM
Just as the system provides for competition amongst providers, so it is also necessary to provide for competition amongst those who are providing the funding.
- Mandatory Health Care Insurance
Funding would be provided through a system of mandatory health care insurance, which would be offered by private groups such as insurers and HMOs, but not restricted to such types of organization. Any insurance cover scheme offer would have to secure Government approval before it could be marketed to the public.
- Premium Rates
Premium rates should differentiate between children, young adults, the middle-aged and the elderly and would also vary depending on the level of cover to be purchased.
Employers would be required to subsidize a minimum of 50% of the cost of their employees premiums, with possibly the minimum requirement being to meet the equivalent of 50% of the HA insurance premium, should they provide such a scheme.
- Premium Rate Subsidy for the Needy
For those who are unable to afford the cost of insurance cover, either in full or in part, financial assistance would be available from the Social Welfare Department, provided they met the necessary criteria to qualify for assistance.
- General Premium Rate Subsidy
The Government would not be having to directly fund the provision of health care and would only be involved in funding the operations of the Department of Health (DoH) and subsidizing those who genuinely cannot afford health insurance cover premiums.
The Finance Bureau indicated in its brief to the Harvard University team that it could assume that the Government intended to maintain it present level of funding for health care indefinitely, at about the present level of 14% of Government expenditure, approximately HK$31 billion. In view of this, after accounting for its funding of the DoH and premium subsidies for the needy, there will still be a substantial amount of funds available.
The HKDF proposes that the initiative, originally put forward by Joel Hay in his 1992 Friedman Lecture Fund Monograph, to provide a subsidy to all purchasers of health care insurance be adopted through the use of these surplus funds.
We estimate that these would be sufficient to provide a subsidy towards the cost of health insurance cover premiums of between HK$1,000 to HK$2,000 per person.
- PROMOTE THE AVAILABILITY OF HEALTH ECONOMICS CONSULTANCY SERVICES
The Harvard Report recommends the establishment of an Institute of Health Policy and Economics. The HKDF fully supports this initiative and suggest that such an Institute is based at one of our universities with a Medical School. We envisage that the Institute would not only serve the needs of developing health care policy, but would also provide consultancy services on a fee-paying basis to any provider that wished to avail itself of these. We believe that this could materially assist in promoting the cost-effective provision of health care.
- IS THERE A ROLE FOR HEALTH MAINTENANCE ORGANIZATIONS?
There is no doubt that Health Maintenance Organizations (HMOs) could make a valuable contribution to the provision of cost-effective private medicine.
Unfortunately, HMOs have earned themselves a bad reputation for pursuing "cost- effectiveness" at the expense of sound medical care. However, it should be possible to recast this type of medical service provision, taking its good points and as far as possible eliminating its less worthy aspects. There is no doubt that this type of medical service provision has a role to play for a significant body of our community. The sector that can afford to pay something towards the cost of their health care and wishes a quicker and more personal service than the public system can provide, yet does not have the means to afford unrestricted private medical care.
We believe HMOs, or their equivalent, should be encouraged to participate in the provision of medical services, as it is our belief that the market will ultimately decide whether they offer services worth paying for and are able to sustain their operations.
- Facilitate the Establishment of Health Maintenance Organizations
The prohibition by the Hong Kong Medical Council, which is supported by the Hong Kong Medical Association, against the formation of closed panels of doctors by medical insurers effectively prevents the development of managed care groups such as HMO and Preferred Provider Organizations.
The removal of this prohibition is essential to our concept of the development of an optimal system of health care for the Hong Kong community.
- ASSISTING COMPETITION
There are a number of additional measures that could be taken to enhance competition is the provision of primary care in particular.
- Relax Referral Requirements
A relaxation of the requirement for doctor referral for certain paramedical services would help create a more open and competitive market.
- Transparency in Fees & Charges
It should be mandatory for doctors to prominently display their list of charges and to ensure any patients referred to hospital by them be fully aware of the hospital’s charges.
- Restrict Drug Dispensing to Hospital & Retail Pharmacies
Consideration should be given to restricting the dispensing of drugs to hospital and retail pharmacies only. This would remove the temptation from doctors to use profit motives, rather than purely clinical reasons, to determine their drug prescribing. It would probably also lead to a reduction in the total consumption of drugs and thus savings in the cost of healthcare provision.
- THE ROLE OF THE DEPARTMENT OF HEALTH
The DoH’s role would focus on the development of health care policy, the promotion of public health information programmes, carrying out various public health initiatives, drug registration and the regulation and monitoring of providers of health care services.
- HONG KONG AS A HEALTH CARE PROVIDER TO THE ASIA PACIFIC REGION
Our health care policies should ensure a suitable environment for facilitating the development of Hong Kong as a centre of excellence for the Asia Pacific region as a whole. Health care providers would thus have the opportunity to build up an infrastructure of quality and reputation that would attract individuals throughout the Asia Pacific region to avail themselves of Hong Kong’s medical services. This would further enhance the SAR’s service sector economy.
If, as suggested earlier in point 6, Hong Kong can become a centre of expertise in the closer integration of Western and Traditional Chinese Medicine, the territory would have a very unique and attractive service to offer to the Asia Pacific community.
- CONCLUDING POINTS
Hong Kong’s health care system should be rooted in the core fundamentals of access for all to a reasonable standard of health care irrespective of means, based on a system of integrated provision.
Great emphasis needs to be directed to improving the practice of preventative medicine and to adopting information technology to enhance the provision and quality of primary and hospital care.
The closer integration of Western and Traditional Chinese Medicine should be a major focus of our health care institutions.
Health care providers should seek to develop Hong Kong into the preeminent regional provider of these services.
Reproduction of this paper is permitted with proper attribution to the Hong Kong Democratic Foundation