1 - Actuarial Society of Hong Kong

ASHK Best Paper Award 2007
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Executive Summary
Hong Kong’s Health Care System has been reputed as high quality of medical services and fair
access of medical resources within the society for long. However, many statistics appeared to show
that the sustainability of the system may not be able to maintain for long in terms of finance and its
flexibility to respond the potential threats posted on it. Immediate reform is urgently needed to
build up a healthy Health Care System.
The 360 o
Reform mainly focuses on quality assurance, efficiency, risk pooling as well as
financial sustainability.
By introducing the Family Doctors Scheme (FDS), the imbalance of burden between the
public-private hospitals and also the financial burden to the public sector can be successfully
reduced. Besides, the FDS proposed, also helps further consolidate the status of Chinese Medicine
and incorporate it into the core Health Care System. In addition, Health Information Infrastructure
(HII), as a supplementary tool, encourages the collaboration of the different entities within the
health care sectors with a centralized and computerized system. As a result, all the
compartmentalized institutions with a lack of interface can increase their collaboration through the
system.
Due to the severe aging population and increasing demand for health care services, a long-term
financing should be developed to help maintain financial sustainability.
Health Protection
Account (HPA) and Public Medical Fund (PMF) are proposed to be the most optimal projects
suiting Hong Kong environment.
Every part of the 360 o Reform are mutually correlated and benefited as they form a whole picture
of the most suitable health care model for Hong Kong. It is believed that the comprehensive reform
is dedicated to solve the present and potential threats posted on the health care system.
Medi-Reform, With You Carry On!
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Present Health Care Delivery System
Overviews
Supported by the Harvard Report in 1997, the current Health Care System of Hong Kong is
undoubtedly renowned for its high quality of medical services and fair access of medical resources
across different income groups at low fee. However, the Report and the Department of Health 1
coincidentally expected the public health expenditure would reach 20-23% in 2016. The burden
would also increase everlastingly due to the aging population and severely increasing demand for
health care services. And now, the forecast comes true.
In 2001, the Hospital Authority first experienced a deficit of HK$250million, while recently raised
to HK$1billion 2 . It is undoubted that the sustainability of the sector has already been posted a great
concern to the public. Instant response and proper reform should be carried out immediately.
Several problems are identified in contributing to the current “unhealthy” Health Care System.
First, currently over 90% of the secondary and tertiary cares in Hong Kong are predominated by
public sector, extensive and long-term cares are even exclusively provided by the Hospital
Authority. The serious imbalance of burden between the public and private hospitals leads to
financial non-sustainability and there is a rising tendency to attach increasing importance to private
primary care.
Second, the Chinese Medicine has posted a great importance on health care of Hong Kong people.
Demand is not satisfied and yet so far there are only 3 public clinics providing Chinese Medicine
outpatient services, which is far from the plan of promised by the government in 2001. There are
about 5133 Registered Chinese Medicine Practitioners in Hong Kong 3
and the government has an
obligation to cater for their needs. Also, Chinese Medicine is playing a more important role in the
international Health Care. Hong Kong is definitely the most suitable place to firstly incorporate
and promote the “Combination of Traditional Chinese Medicine and Western Medicine” with high
1 Announced by the Secretary of the Department of Health in 1999
2 Hospital Authority, Annual Report 2005-2006
3 Statistics released in 2005 and with additional 2957 Listed Chinese Medicine Practitioners in Hong Kong
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quality of medical services and acts as a role model to the international. Therefore there is a great
need to qualify, consolidate and systemize the Chinese Medicine in the reform so as to
accommodate the needs of the public.
Third, Hong Kong’s health care system composes of compartmentalized institutions with a lack of
interface across different levels of care. Professional, informational and price differentiations lead
to a lack of cohesion and cooperation between the public and private sectors.
Forth, the public always confuse of the roles and responsibilities of different health care entities,
and this lead to the problem of “doctor-shopping”, which means the public know little about from
which doctors they should seek for help. As a result, patients are not assured to receive the best
medical treatments and protection.
Performance Reviews
SWOT analyses provide a framework for analyzing the internal and external environments of the
Health Care Delivery System so as to give a clear direction for reform.
Strengths: 1. Optimal Health Care Model with high cost effectiveness and efficiency
2. Well-established health indicator and fair access of medical resources
Weaknesses: 1. Heavy subsidization covers 90% medical services from government
2. Weak collaboration within the whole Health Care Sector
3. Imbalance burden between the public sectors and the private sectors
Opportunities: 1. Support future Chinese Medicine development
2. Increasing and consolidating international status with health profession
Threats: 1. Increasing demand for health care services due to aging population and mainland influx
2. Increasing budget deficit which leads to financial non-sustainability of the sector
To sum up, the weaknesses of the internal environments lead to the financial non-sustainability and
improper resource allocation of the Health Care System while the external environments post
potential threatening risks.
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Key Issues
Strategic reform focuses on balancing the burden between the public and private sectors and
consolidating financial sustainability of the Health Care System.
A New Business Model for Hong Kong’s Health Care – 360 o Reform
Mission
To create a sustainable Health Care Delivery System with optimal resource allocation.
360 o Reform – Medi-Reform, With You Carry On!
Consider every part of the Health Care System, the all-rounded 360 o Reform
can be symbolized as an equal triangle with 4 parts, Structure, Management,
Finance and Marketing which are highly correlated and linked. Structure
refers to the underlying modification of the fundamental System.
Management refers to how the Reform is going to be managed and ensure the smoothness of
implementation while Finance refers to the Financing for the public. Lastly, the Marketing refers to
the Action Plans, including the education, promotion, public relations for the whole Reform.
Objectives
The 360 o Reform emphasizes on quality assurance, efficiency, risk pooling as well as financial
sustainability.
1. To reallocate resource from the public sector to the private sector by Repositioning and
Family Doctors Scheme (FDS)
2. To raise the status of Chinese Medicine in Health Care Sector and increase the
collaboration with present Health Care entities
3. To improve the collaboration within the Health Care Sector by Health Information
Infrastructure (HII)
4. To maintain financial sustainability and to decrease financial deficit by Health Protection
Account (HPA) and Public Medical Fund (PMF)
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Modified Structure of the Health Care System
A clear position of different health care sectors could result in better utilization of limited medical
resources and ensure the quality of medical services. Besides, the public will no longer confuse
their different functions and responsibilities so that money and time would be saved from
doctor-shopping. Therefore, more specific roles and responsibilities should be firstly established
and educated to the public before the whole reform. The chart below shows the most optimal
structure of Health Care Sector in Hong Kong:
Public Sector: With high subsidization from the government, the public health sector should
continuously target its services at tertiary care, acute care (A&E services), and secondary
treatments to illnesses that entail advanced medical techniques and high cost as well as nurturing
medical professionals. Therefore, it can provide long-term and quality medical services to the
public. In addition, public health sector should always act as a safety net to the low-income and
under-privileged group with the subsidization from the government.
Private sector: Private Sector includes all private hospitals, private clinics and private medical
specialists. This sector should promote its quality services to most secondary and tertiary care and
share the burden of extensive and long term cares in an affordable price to most medium income
group.
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Family Doctors Scheme (FDS): FDS is a scheme promoting the adoption of Family Doctors.
Family Doctors provide patients with primary, holistic, preventive, comprehensive and continuous
care. In the scheme, it includes two streams of services, Western Medicine and Chinese Medicine.
Fund Authority: The Authority would be responsible for holding the two proposed financing plans
for the public, Health Public Account (HPA) and Public Medical Fund (PMF).
With this new positioning structure, people would be clearer to the different roles and
responsibilities of the public-private sectors and therefore reduce the misallocation of resources. In
addition to the modification of the Health Care Structure, the roles of medical practitioners and
pharmacists should also be repositioned so as to increase the overall quality of health care services.
Commission on the Future of Health Care: The commission is set up for the planning and
implementing the whole 360 o Reform.
Medical Council (MC): As an independent entity from the Hospital Authority, MC would
monitor the health care services from different sectors by holding Performance Evaluation Scheme
(PES) in a continuous basis and handling complaints from the public by the modified Complaint
System, in which more representatives from the public and non-government organization (NGO)
would be invited as the advisors in order to increase the transparency of the Health Care Sectors
and the public’s confidence to the reform.
Department of Health: The department will continue and strengthen to safeguard the health of
community through preventive, curative and rehabilitative services.
Family Doctors Scheme (FDS)
According to the statistics released from the Hospital Authority (HA), there is an estimation of
2.6million person-time using the Accident and Emergency Services while 9.5million person-time
using the General Out-patient services in one year. In 2000, the HA conducted a survey and found
out that there was more than 20% of abuse of A&E services which costs HK$200million of
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government expenditure 4 . It shows that the abuse of A&E services and outpatient services has been
serious for years and it has posted severe but dispensable financial expenses to the public health
care sector. The convenience and low charges of A&E and outpatient services contribute a lot to
the abuse of the service use.
While in the eyes of the public, the key factor lies on the inaccurate and not well-established
concept on distinctive and unique functions of different health care entities.
In addition, as mentioned in Overviews, the development of Chinese Medicine should be further
rooted into the major Health Care System. It is definitely the most optimal and appropriate time to
develop a systematic collaboration with the existing Health Care entities through concrete action.
In order to reduce the abuse of the two mentioned public services, as well as to develop a clear
concept of use of health care services for the public and to raise the status of Chinese Medicine,
enhancing the amount and quality of Family Doctors is the most cost effective measure. Its
ultimate goals also contribute to the balancing of burden from public sector to private one and
provide the best medical care in the long-term.
Features
In the 360 o Reform, Family Doctor Scheme aims at
upgrading the clinical knowledge of all private general
practitioners to equip them to be the community health
gatekeepers and ease the heavy burden of out-patient
services in public hospital. At the same time, it is a
strengthened network between doctors in all clinics by a
computerized system – HII that would be introduced
later. Every diagnosis to the patients should be recorded through the computerized system and
shared by appointed doctors in giving medical treatments. The complete and chronological medical
records would help in investigating chronic and hereditary diseases. Family doctors are also
4 According to the HA, the average cost for the A&E services for one patient’s visit is HK$800
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esponsible for referring the patients to different medical specialists if necessary. There are two
streams of FDS, the Western Medicine and the Chinese Medicine. It is compulsory that all western
general practitioners in Hong Kong should join this Family Doctor Scheme while it is optional for
yet encouraged the Chinese Medicine Doctors to join this scheme. This serves to respond the
increasing demand on primary health care in Chinese Medicine and provide a more systematic
management on its development.
According to the international standard 5 , every family doctor can take care of 2000 patients.
Presently, there are about 100 Family Doctors of Western Medicine are in Hong Kong, which is
1% of the total medical practitioners. Under the present situation, it would take more than 40 years
for every HK citizen to have their own family doctor 6 . Therefore, the FDS is suggested to provide
and promote the Diploma of Family Doctors (Western Medicine) for Western Medicine and
Certificate of Family Doctors (Chinese Medicine) for Chinese Medicine while instantaneously
develops a Family Doctors Development Fund for continuous and more extensive Vocational
Training Programme.
Diploma of Family Doctors (Western Medicine): A 2-year programme provided by the Hong Kong
College of Family Physicians includes the general knowledge of Family Medicine. The
qualification of the diploma ensures the clinical doctors have the ability and infrastructure to deal
with all the primary care. The primary care here refers to the Level V - Non-urgent and Level VI -
Semi-urgent according to the Triage System in Accident and Emergency Department. Besides, the
diploma ensures the family doctors would be capable to refer the patient to different medical
specialists.
Certificate of Family Doctors (Chinese Medicine): Current Chinese Medicine can take the
Certificate which lasts for 6 months to learn about the present Health Care System in Hong Kong
so as to be more incorporated in the structure. They also learn about the use and functions of the
5 According to the standard from the World Health Organization (WHO)
6 The Vocational Training Programme takes 6-year in Family Medicine of the Hong Kong College of Family
Physicians and present maximum quota for the programme is about 80 every year.
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computerized system, Health Information Infrastructure (HII) to record diagnosis. As the Chinese
Medicine becomes more well-developed in Hong Kong, the Family Doctor (Chinese Medicine)
can use the HII system to refer the patient to different Chinese Medicine specialists.
The diploma mainly targets at the current 4500 Western and while the Certificate targets the 5000
Chinese Medicine clinical doctors in Hong Kong, so as to upgrade their qualification on providing
primary, comprehensive and continuous care to the patients. Combining with distance-learning and
clinical diagnosis, the diploma can be provided to 800 clinical doctors every year. In sever years
time, about 50% of the clinical doctors will achieve the qualifications of the Diploma of Family
Doctors.
Implementation
Collaboration: There will be a close contact with the Medical Specialists of Chinese Medicine like
the Registered Chinese medicine practitioner (Acupuncture)” and “Registered Chinese medicine
practitioner (Bone-setting)” as the Family Doctors of Chinese Medicine can refer the patients to
different specialists of the sector. As a result, patients can receive the most appropriate and
comprehensive medical treatments.
Participation of the Public: To successful shift the burden of out-patient services and retargets the
A&E services to the people in real need in public hospital by FDS, supportive participation from
the public is a must. Public will be educated on the distinct roles of different health entities and
there are also financial incentives to encourage a proper use of A&E services in public hospital by
approaching their family doctor.
Family Doctors Development Fund: As mentioned, the number of family doctors should be
uplifted. A funding should be available for the training of family doctors with subsidization.
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Education: Education is another important tool to the development. Starting from schools and mass
media, the Hong Kong citizens would be well educated about the benefits of joining the scheme.
Benefits
FDS acts as the health gatekeepers of the community and therefore helps in soothing the great
demand for public health care services, especially the Accident and Emergency services.
According to the Hospital Authority, HK$200million would be saved by shifting the “non-urgent”
and “second urgent” services to the private sectors. Besides, the family doctors can act as a
promotion channel of any health messages delivered to the patients like the prevention of flu to the
whole family. It is also noteworthy that FDS helps providing a concrete status and a clearer
direction for the future development of Chinese Medicine in Hong Kong.
Health Information Infrastructure (HII)
Compartmentalization problem obviously undermines the efficiency and quality of Hong Kong’s
health care services. Integration of and collaboration among all health care entities are necessary to
recover the public’s confidence towards the general health care in Hong Kong.
Besides, currently only some public outpatient services produce hand-write medical records for
further referral. The immobility of patients’ records attributes to the poor continuity of care and a
higher total medical expense for the public.
Features
Health Information Infrastructure
(HII) is a giant information
system which aids the current
problem of compartmentalization
and aims to bridge all health care
bodies in Hong Kong and accelerate the cooperation within them.
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Database of patients’ records: Upon the implementation of HII, once a patient utilizes any medical
service, either public or private, his/her personal information and medical history would be
systematically recorded and afterwards, his record would be accessed by the physicians.
Referral system: Physicians can utilize this web-based referral system to request further medical
treatments by making online appointment with the corresponding health care parties like X-ray
analysts or referring the patients to appropriate medical specialists.
Health care network: Different counterparts of the Health Care Sector can deliver the latest
health-related news such as implementation of new health care policies and outbreak of infectious
diseases to all health practitioners and front-line physicians.
Implementation
Establishing the Health Information Infrastructure Advisory Board (HIIAB) is highly
recommended in order to supervise the agencies which may be the technology providers and
system developers on the adoption and use of electronic health records.
The government could take reference on the experience of implementation of similar computerized
system in other regions such as Florida 7 . The first stage which takes 3 years will be sufficient to
build the physical infrastructure component of the network, install the master patient index,
develop the web portal, and install the database software around a central server that maintains
connectivity within the network. In the second stage, training to access to the network is provided
in the Diploma and Certificate of the Family Doctor Scheme and it is expected that the whole
system would start its operations in 5 years. Technical support is necessary to maintain and
evaluate the establishment of the network onwards.
7 Architectural Considerations for the Florida Health Information Network Infrastructure
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Benefits
Undoubtedly HII will address the problem of compartmentalization of health bodies in Hong Kong.
The referral system can facilitate the collaboration within the health care sector by effective
referral and transmission of patients. The database of patients’ records provide the physicians with
better comprehending to their patients by studying their medical history, drug allergies, previous
illnesses, etc. so the patients will receive the most suitable medical treatments which are properly
determined by the physicians. As a result, the quality assurance of Hong Kong’s health care will be
enhanced.
Lastly, HII brings some subsidiary benefits to the whole health care system. The Health Protection
Account (HPA) and Public Medical Fund (PMF), which are the two important elements in our
proposed health care financing model, rely HII on supporting the expenses-calculation work for
patients of different income groups.
On public’s side, patients can be referred to their further specialized medical treatments through
HII without delay and unnecessary procedures in which efficiency of medical services is achieved.
In addition, HII would help assist the regulator to monitor the health practitioners in which the
public’s worries of being treated incorrectly by the doctors can be relieved.
Limitations
Law of Privacy: Since HII possesses highly sensitive medical records, to protect the privacy of
patients, the Board will conduct the Privacy and Security Project before the inception of HII. The
project defines the authorities of information access for different parties. For instance, doctors are
only allowed to access the patient’s medical profile at the time they meet the patient and the access
time should also be recorded by the system.
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Financing
Health Care is an important portion of macro-economy. However, a sustainable health care model
should be financially sound in all economic situations. To achieve this, developing long term
financial strategies are necessary. Here we propose the Public Medical Fund (PMF) and Health
Protection Account (HPA).
(I)Public Medical Fund (PMF) + Restructuring of User Fees
Due to the imbalance of public-private health sector, the Health Care services incur an amazingly
large portion of the government financial budget to over HK$25 billion (about 14%) each year.
The heavy reliance on one particular source of fund would result in a potential risk of receiving
insufficient fund in case of fiscal deficit during economic downturn.
Features
In order to ensure the financial sustainability of our proposed model, introducing new sources of
fund to our medical system to enhance the risk diversification as well as the risk pooling effect is
necessary. To cater this, establishing the Public Medical Fund (PMF) together with restructuring of
user fees in public medical services is highly recommended.
Adoption of PMF: PMF is a pool of fund that consists of 1% monthly regular salary contribution
from the working population in Hong Kong as well as further subsidization from the government.
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By then, government will subsidize the public health sector through the fund instead of providing
direct subsidies to Hospital Authority. PMF supports the operations of all public medical services
financially and help reprioritize the resources by direct subsidization to needy which will be
explained in next paragraph. As the fund balance accumulates with time as well as a relief in the
public health care usage caused by the repositioning of public-private health sector and FDS,
government’s contribution to public medical expenses through PMF will gradually decrease with
the public participation increase.
Restructuring of User Fees: To ensure the resources can be prioritized to the patients of greatest
needs, a restructuring of user fees mechanism should be carried out in parallel with implementation
of PMF. It is suggested that the quote fees in public sector should be raised to at least 60% of those
of similar services in private sector. At the same time, PMF effectively targets the resources by
directly subsidizing patients on their payments of public health care treatments according to their
income levels. In other words, patients would be charged differently in public health sector by a
progressive subsidization from PMF towards the less wealthy group.
Implementation
Throughout the implementation of PMF, HII would take a very important supportive role, for
example, subsidies from PMF to the public would be determined by the HII system according to
the personal information recorded and special formulas in HII. As mentioned before, the Fund
Authority would be responsible for overseeing the running of the fund.
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Benefits
Better reallocation of financial resources: By directly subsidizing the public according to their
income levels, the public medical resources can be prioritized to the most needed. And at the same
time encourage the use of private medical services.
Enhancement of financial sustainability: By introducing direct participation from the public,
government subsidization can be reduced by at least 12% in the first year, which still have not
taken into account of the effect of restructuring of user fees, and the percentage is expected to grow
in future Appendix I .
Facilitate the reform on structure: By keeping the prices in public sector close to the market,
middle to high income group will be encouraged to seek medical services in private sector and
therefore facilitate our reform in repositioning the heath entities.
Enhancement of risk diversification and risk pooling: It is successfully achieved by the medical
fund with equal contribution weight from the working groups.
Facilitate the reform on structure: By keeping the prices in public sector close to the market,
middle to high income group will be encouraged to seek medical services in private sector and
therefore facilitate our reform in repositioning the medical structure.
(II) Health Protection Account (HPA)
To reduce the burden on our next generations caused by heavy heath care utilization by the aged, a
medical savings through the scheme of Health Protection Account (HPA) 8
should be implemented
to assist the individual and the spouse for their post-retirement medical expenses.
Features
Health Protection Account is a mandatory medical saving scheme that requires every individual
contributing 2% of the earnings to the personal account. The operation of this account will be
similar to the existing MPF scheme in Hong Kong and one can only withdraw the savings until the
8 HPA is first suggested by government in the Health Care Reform Consultation Document in Dec-00. But the features
of it have been modified in our proposed model.
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age of 65. Upon withdrawal, one is encouraged to purchase medical insurance to secure the
post-retirement health care from private insurers. After taking into consideration of different
insurability and savings across the community, different measures would be carried out
accordingly. The following table summarizes the effect.
Sufficient
savings in
HPA
Positive
Insurability
Purchase
Medical
Insurance
Final outcomes
Yes Yes Yes Medical expenses largely reimbursed by insurance and the
cash outflow of HPA would be limited.
Yes Yes No Pay the medical expenses directly using savings in HPA. Yet
if one access public medical services, he or she will receive
no subsidy from PMF, this is to encourage the use of
insurance to enhance risk pooling.
Yes No N/A Pay the medical expenses directly using savings in HPA.
And this group is eligible to receive the subsidization from
PMF when using public medical services.
No N/A N/A Receive assistance of the medical safety net provided by
government if one has difficulty in paying medical
expenses.
Implementation
A Fund Authority is established to manage the HPA of the individuals. The contribution can be
incorporated into the collection of MPF as to minimize the administrative cost and simplify the
collection procedures
Benefits/Expected Result
From an actuarial analysis conducted, 82% of those start contributing HPA before age 40 have
more than sufficient fund to cover their medical expenditures after retirement AppendixII . Currently,
about 45% of the HK$30 billion total health expenditure 9
is consumed by those aged at 65 or
above. In long term, over 90% of this amount will be self-financed by individuals with the
implementation of HPA, and government can save over HK$12 billion per year.
This financing option responds to the unique Chinese culture that individuals are more willing to
contribute to their personal accounts instead of a social health insurance; we would expect support
from the community to this program.
9 Source: Annual Report 2005-2006, Hospital Authority
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Limitation
Moral Hazard: An encouragement of the use of medical insurance would further increase the
demand on health care due to lower out-of-pocket expenditure. But this can be soothed by
introducing deductibles in the insurance coverage.
HPA need longer time to take effect: When the HPA is first implemented, those start contributing in
their middle age may not have sufficiently long period to accumulate medical savings, therefore,
the full effect of HPA will take time to effect.
Marketing - Action Plans of 360 o Reform
To carry out the whole reform, a comprehensive plan with education, promotion and public
relations is essential to gain support from the general public.
Education: Education helps deliver information of the advantages of the reform to the community.
Inviting lectures to the schools and sending health ambassadors to the community centre are 2 of
the ways to achieve this. “Universal coverage for all, not coverage for everything”, as proposed by
World Health Organization on the health issue in the world, would be our focus. On one hand, we
educate the public the long-term benefits of the policies to everyone in the society, on the other
hand, everyone is to contribute a part to their own health, such as through the implementation of
HPA and PHF.
Promotion: It is the most appropriate method to package the 360 o Reform. Mass Marketing would
appeal to the most number of the public. Through TV and Paper advertisements before the
consultation of the whole reform, information could be well disseminated. Next, Direct Marketing,
such as telemarketing and direct delivery of brochure, would be the most effective for promoting
the reforms which are more personal and tailor-made to the individuals such as HPA.
Public Relations: It plays an important role before and during the implementation. A 2-year
consultation period provides chances for the public to express their comments. The government
must well response to the reaction of the public as the reform is to benefit the whole community.
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Budget
General acceptance from the public is the result of the clear understanding on a well-planned
budget, which plays an important role in the visionary 360 o Reform.
HK$ million
Family Doctors Scheme (FDS) 2,075
Fund Authority 200
Health Information Infrastructure 1,000
Total 3,275
Expected Expenditure on FDS = Subsidization on Diploma + Subsidization on Certificate
= ($250,000/yr x 2yrs x 90%sub x 4500) 10 + 50 million 11 = HK$2,075,000,000
Referencing Mandatory Provident Fund Schemes Authority, the administration expense of the
Fund Authority is estimated as HK$200 million.
Referencing the Health Information Infrastructure (HII) system in other countries such as USA 12 ,
and considering the factor in population, number of doctors and country size, the cost of
implementing HII is estimated as HK$1 billion.
The major total cost underlying the whole reform is HK$3.275 billion.
Risk Assessment
The implementation of the whole reform may undergo certain scenario with uncontrollable risk.
Economic downturn is one among these risks.
A research in 2004 13
shows that the low-income group have a higher acceptance on Health
Protection Account (HPA) because they believe the system secure better medical protection.
10 Referencing the cost of receiving education on Degree of Medicine every year
11 Referencing the cost of receiving a certificate each module
12 U.S. Department of Health & Human Services, Health Information Technology
13 From “A Study on Health Care Financing and Feasibility of a Medical Savings Scheme in Hong Kong” by Health,
Welfare and Food Bureau in 2004
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However, as the Mandatory Provident Fund (MPF) has been in operation for just a few years, the
general public is still adjusting to this contributory scheme. The timing of implementation of
Health Protection Account (HPA) and Public Medical Fund (PMF) should take into account of the
prevailing economic situation. When economic downturn comes, citizens may not support
contributing a part of their salary into the two funds.
Despite many long-term benefits, the establishment of Health Information Infrastructure and
Family Doctor Scheme cost large amount of capital. It may face some resistance in the Legislative
Council especially when the overall economic situation is not good.
To successfully benefit the community, a suitable and lengthy timing of consultation and
implementation is needed. It is suggested to choose a time when the prospect of economy is
satisfactory and so the benefits and financial concerns are well-balanced during discussion.
Conclusion
After analyzing the current health care system, we have identified areas in the system which has
room for improvement. To ease with the imbalance of the two health sectors and to maintain the
financial sustainability, 360 o Reform definitely can continuously help the health care system to
fulfill the community’s needs in the long run. The proposed changes are mutually correlated and
benefited as they support each other and form a whole picture of the most suitable health care
model for Hong Kong. It is believed that the comprehensive reform is dedicated to solve the
present and potential threats posted on the health care system.
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To Look Ahead
Other than the concrete structure and supportive financial strategies proposed above, there are
always further steps under consideration after the success of the 360 o Reform, Separation of Drug
Prescribing from Dispensing is among one of them.
Separation of Drug Prescribing from Dispensing
Currently, the clinical doctors are responsible both in prescribing and dispensing. Due to the
potential existence of moral hazard in this practice, the concept of the separation of drug
prescribing from dispensing should be adopted. Similar to many Western countries like U.S. and
Canada, the responsibility of dispensing medicine is borne by the qualified pharmacists. Being
applied in the primary care of the health care system, the new practice would reduce medical error
due to drugs dispense by unqualified party. Being no longer influenced and deviated by the
financial incentive, the medical practitioners would appropriately prescribe drugs with optimal
treatment instead of gaining high profit margin from dispensing drugs. Patients can, in addition,
benefit from getting extra opinions on their medication from pharmacists; and this mutual
monitoring system on medication would definitely promote the quality assurance.
To Sum up, focusing on quality, efficiency, risk pooling and financial sustainability is the core idea
of the 360 o Reform. With the support from health sectors, government and the public, we would
expect a huge success in the 360 o Reform that creates a well-fit health care model in Hong Kong. It
is hoped that Hong Kong’s health care system can continue to improve, and provide its citizens
with the best it can.
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Appendix I
Contribution to PMF by Public
Here we take MPF in the situation of year 2005 as an example to illustrate the contribution to
Public Medical Fund (PMF) by the public.
HK$ 3.2 billion is about 10.5% of the total public medical expenditure in year 2005.
Sources:
“Mandatory Provident Fund Schemes Statistical Digest”
http://www.mpfahk.org/tc_chi/quicklinks/quicklinks_sta/files/Dec_2005_SD.pdf
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Appendix II
Actuarial Illustration of the HPA Scheme
This actuarial study was conducted by the Health, Welfare and Food Bureau aimed to assess the extent
of protection offered by HPA contributors for their post-retirement health care spending. The
simulation model assumes 2% contribution of income, 2% annual interest rate and 1% annual medical
inflation.
Starting Age of
Contribution
20-29
30-39
40-49
50-64
Monthly Income % of HPA Accounts
with Positive Balance*
Average Surplus with
Positive Account Balance**
$5000-$9999 83.0% $128000
$10000-$19999 95.3% $226000
$20000 or above 96.6% $252600
Overall 90.3% *** $192200
$5000-$9999 53.7% $54900
$10000-$19999 86.9% $128000
$20000 or above 93.5% $162600
Overall 81.8% $130900
$5000-$9999 26.8% $26600
$10000-$19999 65.6% $61800
$20000 or above 81.7% $86000
Overall 58.6% $67200
$5000-$9999 7.5% $11200
$10000-$19999 26.2% $23900
$20000 or above 44.7% $34500
Overall 22.2% $26900
* “% of HPA Accounts with Positive Balance” means savings in the account are sufficient to cover
all the post-retirement medical expenditure
** “Average Surplus with Positive Account Balance” means average amount left in the HPA after one
is died. Only those with residue in the accounts after death are taken into consideration. And the
surplus would be passed to the inheritors of the individual.
*** In the long run, 90% of the population will have sufficient medical savings to secure their health
care after retirement at age 65; therefore, government’s financial burden due to excessive usage of
medical services by the aged will be reduced by 90%.
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A diagram further shows the effect of HPA across different income groups with different starting age
of contribution is as follow.
Starting Age of Contribution
% of HPA Accounts with sufficient
amount to for medical expense after
retirement
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
20-29
30-39
40-49
50-64
0.00%
5,000-9,999 10,000-19,999 >20,000
Monthly Income
This graph clearly illustrates the benefit to the individuals. For those who start contributing at age 20
to 29, over 90% can self-finance their medical expense after retirement. This does not only ensure the
majority has a secured protection against medical expense, but also eases the financial burden of the
government.
Source:
“A Study on Health Care Financing and Feasibility of a Medical Savings Scheme in Hong Kong” by
Health, Welfare and Food Bureau in 2004
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