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Following is the full text of a speech delivered by Secretary for Health and Welfare, Mrs Katherine Fok, at the Opening Ceremony of the Hospital Authority Convention this (Monday) morning:

Mr Woo, Dr Yeoh, Distinguished Guests, Ladies and Gentlemen,

It is my pleasure to be here today to participate in the Hospital Authority's 1999 Annual Convention. I feel honoured to have this opportunity to address many distinguished guests and delegates from all over the world.

The theme of today's Convention is "Health in Transition - Opportunities and Challenges". As in many other parts of the world, the health care system in Hong Kong has been facing constant challenges during different periods of transition, which in turn has brought opportunities for modifications and transformations. In the 1980s, there were concerns about the varied quality of public hospital services, worries about the low morale of hospital staff and complaints about hospital environments and staff attitudes. The setting up of the Hospital Authority in 1990 has brought considerable changes - government and subvented hospitals were integrated into a unified system; institutional changes were introduced to reorganize the corporate structure of its public hospitals; hospital environment is greatly improved; and a patient-centered culture of service is nurtured.

Such a remarkable transition in our health care system has brought about its own set of opportunities and challenges. As a consequence of heavy demand arising from the improved public health care services, there is now much pressure on the Hospital Authority to provide even better services within a limited budget. The lack of integration between the public and private sectors and among the primary, inpatient and community medicine has given rise to waste of resources and discontinuity of service for the patients. In order to address these problems, the government commissioned the School of Public Health of the Harvard University in 1997 to conduct a critical assessment of the strengths and weaknesses of our existing health care system, to assess the capability of the present financing arrangements to meet future needs, and to recommend reform options for improvement.

Last week, we released the Harvard Consultancy Report on Hong Kong's Health Care System, which, since then, has generated considerable amount of discussion and debate within the community.

The Consultants question the financial sustainability of our existing health care system. According to the Harvard Team's projection, because of our growing and ageing population, adoption of new technologies and rising public expectation, public expenditure on health care is expected to rise from 14% of the overall government budget in 1996-97 to 20-23% by the year 2016. This is a strong warning signal which we cannot ignore. We cannot allow our public health care expenditure to grow in a manner which eventually might displace public funds for other equally important services, such as education, housing, environment and welfare, etc.

The Consultants also question the sustainability of our existing delivery system. The compartmentalization and lack of integrated service in our existing system, according to the Consultants, threaten the quality of service and efficiency of our system. Such a compartmentalized system is inefficient in dealing with the increasing burden of chronic illnesses.

There is a clear need for us to explore alternative financing methods which are sustainable over the long run, and which would not compromise accessibility and quality of our medical care. We also need to introduce other strategic changes which would remove the inefficiencies in our current delivery system. The package of reforms developed must address both the financing and delivery problems in order to achieve long term and sustainable improvements. There is no place for complacency, and as a responsible Government, we have to start giving serious thought to this issue now, before we are faced with a crisis.

In the Report, the Harvard Team has put forward different reform options for us to discuss and consider. These options range from maintaining the status quo, to capping government budget on health, to raising user fees, and to a compulsory health care insurance scheme and personal saving accounts for long term care. The pros and cons of each reform option have been carefully analysed and set out. But I must stress that we are by no means confined to these options. When evaluating each reform option, we must be careful not to compare that to the present highly subsidised public health care services, but compare that to what might happen a decade later when the present financing method could not be sustained.

In contemplating any future reforms, we would continue to ensure that no one would be denied adequate medical treatment through lack of means. This has long been our policy in the past, and will remain as our guiding principle. The Government's financial commitment on public health care will not be cut back. Every resident should have access to reasonable quality and affordable health care through a system of shared responsibility between the Government and the residents.

We however recognize that any health care reform is not going to take place in days or weeks. While Hong Kong is gradually recovering from the recent economic turmoil, it is foreseeable that the amount of additional resources available for meeting the growing demands placed on the public health care sector will be limited. This year, Government has launched an Enhanced Productivity Programme in the public sector, aiming to achieve, by 2002-03, productivity gains amounting to five per cent of the recurrent expenditures. As a public organization with an annual recurrent budget of more than $28 billion, the Hospital Authority is also taking part in the Programme.

The Enhanced Productivity Programme is not about overall expenditure cuts, nor deterioration in the quality of service. It requires us all to look for new and innovative ways of providing cost-effective care, thus to release resources through improved productivity and efficiency, for funding new and improved services for the benefit of patients. In the past, the Hospital Authority has successfully achieved many productivity enhancements through rationalizing medical services within and among hospital clusters; integrating hospital services; and streamlining and reengineering procedures. I urge it to continue.

In the run-up to the new millennium, we once again find ourselves in a period of transition. Past experience has shown the clear need for collective wisdom, shared commitment and political acumen to face new opportunities and challenges, and the difficulties related to transition. This Convention provides a good opportunity for us to share our visions, philosophies, values and approaches on how we can tackle the health care issues of common concern.

I wish you all a rewarding and fulfilling experience at this Convention, and for those joining us from overseas, a pleasant and exciting stay in our dynamic city. Thank you.

END/Monday, April 19, 1999 NNNN