Financing of Hong Financing of Hong Kong’s Future Kong’s Future Healthcare Service Healthcare Service

Presented by:Presented by:Chan Tjin Jien, Cherrio (09410198)Chan Tjin Jien, Cherrio (09410198)

Fung Shuk Woon, Althea (09410228)Fung Shuk Woon, Althea (09410228)Lee Sum Yu, Angel (09428518)Lee Sum Yu, Angel (09428518)

Country Comparison – Country Comparison – Life Expectancy of BirthLife Expectancy of Birth

Rank country (years) Date of

Information1 Macau 84.36 2009 est. 2 Andorra 82.51 2009 est. 3 Japan 82.12 2009 est. 4 Singapore 81.98 2009 est. 5 San Marino 81.97 2009 est. 6 Hong Kong 81.86 2009 est. 7 Australia 81.63 2009 est. 8 Canada 81.23 2009 est. 9 France 80.98 2009 est.

10 Sweden 80.86 2009 est.

Country Comparison – Country Comparison – Infant mortality rateInfant mortality rate

Rank country(deaths/1,000 live births)

Date of Information

215 Anguilla 3.52 2009 est. 216 Finland 3.47 2009 est. 217 France 3.33 2009 est. 218 Iceland 3.23 2009 est. 219 Macau 3.22 2009 est. 220 Hong Kong 2.92 2009 est. 221 Japan 2.79 2009 est. 222 Sweden 2.75 2009 est. 223 Bermuda 2.46 2009 est. 224 Singapore 2.31 2009 est.

Our current medical Our current medical systemsystem

Good health of HongKongers

Our existing health care model has a lot of difficulties to encounter over utilization of the public healthcare services unbalance between the public & private sectors

Very critical issue among those issues is the funding problem of the healthcare services

Aging Population

Aging Population

Advanced TechnologyAdvanced Technology

Why healthcare expenditure keep increasing in the coming

future?

Aging problem It is predicted that in the year 2036 more than 25% of our population is the

people whose age over 65 Medical Inflation

advanced new medical treatments are invented

new drugs having better & effective treatment

Our problems

Healthcare expenditure keeping increase If the government lacks of other

supplementary healthcare financing sourcing to support the changing healthcare services demand of the whole community

We can see that the quality of our medical services would be deteriorated

Goals

Goals

To promote individual responsibility Everyone should share part of their

medical expenses

To provide more choices Enjoy more choices on services provider

and different level of treatment

Goals

To provide better healthcare services

- Relief the finance pressure on public healthcare system

To re-deploy the spending of healthcare services To focus on the elderly, needy group and

advance in medical technology

Proposed new healthcare model

Supplementary Financing Medical Savings Account Healthcare Insurance

Main Financing Tax-funded finance sourcing

Medical Savings Account (MSA)

Definition Strengths of MSA Weaknesses of MSA Suggestions

What is MSA?

Medical Savings Account (MSA)

People save a proportion of their income into their personalized accounts so that they will have a certain amount of savings for their future medical expenses

The Strengths of MSA

Fair & easily acceptance

Reduce burden

Change attitude

The weaknesses of MSA

Insufficiency for serious and chronic disease

Cause administration cost

Other problems

Suggestions

Healthcare Insurance MPFSA Mandatory savings

account Spend individuals’

saving first Decrease price range

between private and public

Healthcare Insurance (HCI)

Healthcare Insurance (HCI)

Definition Strengths of HCI Weaknesses of HCI Suggestions

What is HCI?

Government regulated healthcare insurance

A basic insured plan for the working population (aged from 18-64) to cover the charges for private hospital services and the expenses on the treatment of the serious illness

The strengths of HCI

Fairness and equity To provide more choices Stable financing source Relief the financial burden on

Government and future generation

The weaknesses of HCI

Administration cost incurCoverage on working

population only

Suggestions

Ways to reduce administration cost

Ways to solve the coverage problem for non-working group

Government Funding Funding

Comparison on health expenditure between Hong Kong and selected

economies

Government Funding Funding

Government spent around 2.6% of GDP on health expenditure in the year of 2006

United Kingdom - 7.3% of GDP on health care Canada - 7% of GDP on health care

Main healthcare service financing in HK Government income is mainly collected

by the profit tax and salaries tax We stressed that HKSAR

government should not reduce her financing share in health care system!

Safety NetSafety Net

Strengths of tax-funded system

Safety net “No one should be denied adequate

medical care through lack of means” The under-privileged with lower income

would be provided by the basic healthcare service

Fair and equal Disregard his or her wealth, everyone

is paying the same amount of medical fee for the service with the same quality

Wealth DistributionWealth Distribution

Strengths of tax-funded system

Wealth distribution Tax-funded healthcare system have shifted

the income from high-income class to the low-income class

Low administration cost The resources are more well allocated by the

government to the medical services rather than to the hands of the private insurance companies

Risk sharing Healthy people pay taxes to subsidize those

unhealthy people to use the public health care service

InefficiencyInefficiency

Weakness of tax-funded of tax-funded systemsystem

Inefficiency and mistreatment Little market competition between

different healthcare providers within the private and public sectors

Great demand for the public healthcare service

→Inefficient public medical services mistreatment of the doctors in the

different hospitals lower quality of services

Shortcomings of tax-funded of tax-funded systemsystem

Over utilization of public services Cost for the services is much lower

than the private sector→all the people, no matter they are

affordable→ rely on the public service and

results in further deterioration of the service

Some other suggestions

Tax reform Broadening our tax-base => greater risk-

pooling function Increase tax rate of certain taxes (e.g. tobacco

tax)

Health care services reform (Cost-effective) Reform HA’s structure & operation

develop healthcare delivery system Promote collaboration of public & private

sectors Strengthen the primary care services

(outpatient services & other preventive healthcare services )

Conclusions

A very big question to discuss the long-term solution of our existing healthcare system problem

If the above reform will be taken: reducing the pressure of present public services some affordable patients would tend to shift

from using the public healthcare services to the private healthcare services

the patients would have more choices of different treatments

quality of the public healthcare services