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The Government needs to devise a health care system which embraces the whole community - from wealthy to the poor, and from the sick to the healthy, the Chief Secretary for Administration, Mrs Anson Chan, said today (Friday).

Addressing a luncheon meeting of the Hong Kong Academy of Medicine, Mrs Chan said the rapidly escalating expenditure on health care had pointed to an urgent need for reform.

"Alongside with other services, the good old days of 7% growth per annum are gone. If nothing is done, health care will increasingly crowd out other essential social services or services will slowly deteriorate," she said.

With an aging population, Mrs Chan projected that by 2016 there would be over 1 million people above the age of 65 and that the cost per admission into hospital would be 3 to 4 times higher than normal.

"Doing nothing is not an option. The longer we delay change, the more painful will be the consequences, both for the Government and for the community as a whole," she said.

While noting that the views expressed so far on the Harvard report were very diverse, she was glad to see the emergence of a consensus on the need for reforms.

One of the issues that need to be addressed is that the public health care service attracts a disproportionately large number of affluent people, she said.

"Why does the public sector provide some 92% of the total bed days, including for top income earners while only 8% of the bed days are in the private sector hospitals?"

She pointed out that the current practice of the public paying only 3% of the costs of a hospital bed made it difficult for the private sector to compete.

"This huge Government subsidy for all, irrespective of means is inequitable and unsustainable."

Under the current health care system, Mrs Chan noted that the private sector had played a very important role in the growth and development of health care in Hong Kong.

"We want to see this continue because it offers the public the widest possible choice.

"The Harvard proposals appear to be an attempt to remove unnecessary barriers between the private and public sector health care, whilst still allowing the private sector a character and identity of its own.

In her speech Mrs Chan discussed the risk-pooling concept of a compulsory health insurance plan as highlighted by the Harvard team.

"A risk pooling insurance scheme might be anathema to a society that treasures individualism and freedom of choice. But the government needs to devise a solution that embraces the whole community - from wealthy to the poor, from the sick to the healthy."

She stressed that if the Harvard team recommendations were found not acceptable, then we would need to find another solution to share out responsibility.

Commenting on a suggestion to raise taxes to cover escalating health costs, Mrs Chan said, "Let us be clear what this means. This means widening the tax base to introduce new taxes and bringing more people into the tax net. Those who are already paying will have to pay more.

"Putting aside the issue of equity, such a move is also likely to undermine the strength of our current simple and low tax system and in turn threaten Hong Kong's economic development.

Mrs Chan said that no matter which financing option was adopted in the long run, it would inevitably lead to some form of redistribution of income, with medical costs for those without means being borne by those who do so.

"The so called middle class is not being targeted. They have always shared the costs and changes will not alter that situation.

While addressing her audience Mrs Chan also called on the medical profession not to neglect the structural reforms recommended in the report.

"The report has highlighted inadequacies and inefficiencies in our present organisational structure with its over-emphasis on hospital-dominated curative care.

"It also points to the need to effectively link primary health care with specialists and hospital services. Our current service delivery mode is clearly outdated."

In summing up, Mrs Chan said, "We want to move ahead. To reform the system. To improve on delivery. To target funding at the most needy, and into more productive areas, such as preventive medicine and community-based primary care. And we want to keep a lid on costs."

End/Friday, April 30, 1999

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