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Following is the full text of the speech (English only) by the Financial Secretary, Mr Antony Leung, at Hong Kong Academy of Medicine David Todd Oration today (December 14):

"Commitment to excellence: a public / private sector partnership"

Doctor (C H) Leong, Doctor (David) Fang, Fellows and Honorary Fellows, Distinguished Guests, Ladies and Gentlemen,

I am delighted to have been invited here tonight and to be present at the ceremony for the conferment of Fellowship upon physicians from the 15 Colleges of the Hong Kong Academy of Medicine. The admission of so many new specialists is testament to the work of the Academy and to the vitality of our medical profession.

Next year will see the tenth anniversary of the founding of the Hong Kong Academy of Medicine. Over this past decade, the Academy has made a huge contribution to the professional training of our medical specialists and to the maintenance of high standards in the medical profession. Hong Kong's specialists are now recognised both at home and overseas for the originality and quality of their research. In your support for the Academy, you have demonstrated your commitment to the excellence of your profession.

It is a great privilege for me to have been asked to give this Oration in honour of Professor David Todd, who did so much to create this Academy and to build Hong Kong's reputation for medical excellence.

We in Hong Kong have every reason to be proud of our system of healthcare. Hong Kong people enjoy a high standard of health and have ready access to a healthcare system, which is equitable, efficient and affordable. Our health indices - such as life expectancy and infant mortality - have a comparable or sometimes even better record than many of the most advanced countries in the world.

The credit for achieving these impressive results must go to all of you. They have only been possible because of your dedication and pursuit of excellence. So please give yourselves a big round of applause.

But it is really a great challenge for me to address this distinguished audience. The only medicine I can name is Panadol. And don't even ask me how many bones there are in the human body. So I had better stay with what I am good at and share with you my thinking about the development of healthcare services from a business and financial perspective.

Currently, total healthcare expenditure in Hong Kong is about 5% of our GDP, or about 56 billion Hong Kong dollars per annum. Of this, about 54% is financed by the public sector and 46% by the private sector. However, the public sector provides a high proportion of the services. In fact, most of our hospital in-patient services, 93%, are provided by the public sector.

Public healthcare spending has risen significantly over the past 15 years. It now accounts for 15% of our recurrent public expenditure, at some 30 billion Hong Kong dollars each year, compare to 10.5%, or 3.8 billion Hong Kong dollars, 15 years ago. The Government remains committed to investment in health, and to the provision of quality, equitable, accessible and affordable healthcare to the entire population. But if we are to succeed in our aim of maintaining and improving the level of services, we must be alert to the challenges, which face us, and work out how to overcome them.

One of the greatest challenges we face is our ageing population. In 1977, only 6% of our population was over 65 years of age. Today, the figure is about 10%. In 2016, it is estimated to be around 13%. Under our current healthcare financing model, we are dependent on tax revenue, which is mainly paid by the young, healthy, working population. If we continue our reliance on tax revenue at the same level, we will put undue pressure on our next generation.

Another challenge is the continued improvement and cost of technology, particularly in dealing with chronic diseases and disabilities, which - as is normal in prosperous, developed societies - now present a greater threat to our citizens than the communicable diseases, which threatened our parents and grandparents. New treatments and better technology bring ever-rising public expectations of service quality.

It has therefore been clear for some time that it will be difficult to sustain the current level of public spending on healthcare. This is particularly so at a time when our economy is not growing as it did in the past and when we are faced with record budget deficits. We must also work within the constraints of the Basic Law, which requires us, over time, to keep the increase in total government expenditure in line with GDP growth.

The Government has therefore been studying ways in which we provide healthcare services in order to develop a strategy for reform, which meets the needs and expectations of our community. The study undertaken by the economists and public healthcare experts at Harvard University have identified three main weaknesses: questionable financial sustainability, compartmentalization in delivery and variable quality of care.

Following the public consultation of the report in 1999, and our own consultation on healthcare reform in December 2000, the public response has shown an acceptance of the need for reform to maintain the sustainability of our healthcare system. However, there is an absence of consensus on how to proceed. Many people held the view that mandatory financing options were not in keeping with Hong Kong's free market philosophy. Others believed that some form of savings scheme was essential if we were to create a supplementary funding source to relieve the burden on tax revenue.

Nevertheless, there is general agreement on the need to encourage change in the involvement of the private sector in healthcare provision.

Hong Kong is renowned as one of the world's best examples of a market-led economy. We have been chosen as the world's freest economy by the Heritage Foundation for eight consecutive years. Most of our critical infrastructure, such as electricity and telecommunications, is run by private operators. Our tourist attractions, tunnels, port and airport facilities are in the hands of the private sector to different degrees and are run on commercial principles.

Even one of the biggest headaches for many city and national governments - the railway system - gives us great reason to be proud. Our railway systems are clean, efficient and run on time. Our Mass Transit Railway has been successfully listed in the stock market and has become a favourite pick of the investors. Most importantly, passengers have found that service quality keeps on improving, thanks to the mandate for the railway corporations to operate on prudent commercial principles and the flexibility that they enjoy.

With the creativity and resourcefulness of Hong Kong people, I am convinced that the private sector can play a much more important role in the provision of healthcare services in Hong Kong. Indeed, if we are to improve the quality of healthcare services and keep pace with sociological and technological change, the private sector must play a greater role.

Private businesses are more entrepreneurial, innovative, adaptable and efficient than public businesses. Greater private sector involvement in healthcare would share costs, raise efficiency, promote competition, increase choice and ultimately, help to lift the quality of healthcare in Hong Kong. For instance, private hospitals might be able to help public hospitals meeting public demand, and add diversity to hospital services.

There are many examples of private / public participation in healthcare services overseas and Hong Kong can learn from them. For example, in the United Kingdom, the Government has encouraged plans by private hospitals to build fast-track surgery centres for the state-funded National Health Service. These will either be in purpose-built new buildings or on whole floors of existing private hospitals. To get them running quickly, the private sector will fund, build and staff them at their own risk, but NHS consultants will at first perform the operations.

There is much room for better co-operation and integration of our existing public and private systems. We can find creative ways to improve the interface of the public and private sectors through such means as the creation of a common clinical protocol, shared training, shared patient records and other information databases. This would bring direct benefits to patients.

The use of advanced telecommunications and database systems to store, process, retrieve and share health information will clearly be of increasing importance in the years ahead. An electronic Health Information Infrastructure that links the public and private healthcare sectors, welfare and community groups and medical academia, can be used not only to share and exchange information but also to develop an electronic, lifelong health record for each individual citizen. I hope the medical profession will remain mindful of the wider applications of information technology, including such new developments as tele-medicine and electronic medical records. And as examples in other industries have shown, private sector involvement will help drive the adoption of new technologies.

In the long term, greater collaboration between the public and private sectors will ensure the continuity and quality of healthcare. It will lead to the development of new and better healthcare products and give patients more choice. But as we consider how best to serve the people of Hong Kong from a welfare perspective, we should also consider the business opportunities of developing a healthcare industry.

Hong Kong has become the regional leader in many other professional service fields - financial, legal, trade, commerce - because we provide world-class services in a place with a world-class infrastructure. Over 85% of our GDP is now generated by service industries. There is no reason why we could not also become the regional leader in the provision of world-class healthcare services.

We have thousands of highly-qualified, well-trained medical professionals in Hong Kong. We have advanced medical facilities served by an excellent telecommunications and transport infrastructure. We have the capability for - and the capacity for further investment in - advanced medical and biotechnological research. With these advantages, we can export healthcare services to our neighbours - especially the Mainland - and develop Hong Kong into a healthcare services hub for Asia.

The United States has proved very successful at selling healthcare services to wealthy individuals from all over the world. Singapore is developing medical specialisms in an attempt to do the same in Southeast Asia. They are sending their doctors and nurses to many parts of the regions to set up clinics to provide consultation services. These clinics provide direct treatment for simple cases, and refer the complicated cases to Singapore for the more sophisticated treatment. In this way, they are exporting their healthcare services to the region.

We must take advantage of our own geographic location - and our unique position as a Special Administrative Region of China - to develop our own world-class healthcare services industry. China, in particular, offers a huge opportunity as its population becomes more prosperous with its accession to the World Trade Organisation. Today, as it happens, Hong Kong is the largest exporter of accounting services to the mainland. In ten years' time, we could also be the largest exporter of healthcare services.

By developing our own indigenous healthcare industry, we will help to create jobs and to develop a new research-based sector of the economy. This would not only improve the quality and reach of our local healthcare services - it would also create wealth for Hong Kong. I urge the medical community, and the medical private sector, to seize this opportunity.

Just now, I mentioned the importance of research. Many of you here tonight have made contributions to research of international importance in your chosen specialist fields. Professor David Todd was himself revered in Hong Kong and overseas both as a teacher and for his achievements in medical research. Professor Wu Jie Ping and Professor Ma Ho Kei, who were both admitted as Honorary Fellows of your Academy this evening, are known around the world for their pioneering research and surgical innovation in their fields of urology, and obstetrics and gynecology.

They will be pleased to know that Hong Kong follows in their giant footsteps today, with a number of remarkable achievements in medical, surgical and pharmaceutical research. For example, Hong Kong has long been known internationally for its expertise in treating several kinds of cancers which are peculiarly prevalent in Southeast China. Our specialists have pioneered surgical techniques for dealing with these kinds of cancers, and are recognized worldwide as leaders in their field.

These achievements often also help to create business opportunities. Just over a month ago, the Secretary for Health and Welfare officiated at the opening of the new state-of-the-art AmMed Cancer Centre, built to serve patients from Hong Kong and the surrounding region. This Centre is a joint venture between the Hong Kong Adventist Hospital and the private firm AmMed International. As such, it is an excellent example of the entrepreneurialism and responsiveness of the private sector. They saw an opportunity to fill a market niche and did so. This is just the kind of research-based, innovative project, which draws on Hong Kong's strengths and will help to turn Hong Kong into a regional centre of medical excellence.

Nor should we forget the contribution of traditional Chinese medicine, in which Hong Kong is naturally a leader. We have enacted the Chinese Medicine Ordinance to regulate the practice, use, trading and manufacture of Chinese medicine, and set up the Chinese Medicine Council and its two Boards to implement the regulatory measures. Since its inception, the Council is already considering the 8,000 applications received, with a view to announcing the first batch of listed Chinese medicine practitioners shortly. Details of a registration system for proprietary Chinese medicines and a licensing system to regulate the trading of Chinese medicines will also soon be in place.

By creating an accepted regulatory framework, we hope to encourage research and to facilitate the development of Chinese medicine practice. In future, we also hope to promote more collaboration between Western and Chinese medicine in the public sector. Hong Kong can play an important role in promoting the acceptance and understanding of Chinese medicine within the region and the wider world.

Ladies and Gentlemen, tonight I have indicated some of the changes I would like to see in the way we run our system of healthcare. The Government remains committed to the principle that no-one should be prevented, by a lack of means, from obtaining adequate medical treatment. We are working hard on reforms to improve the quality and efficiency of the service we provide through our public hospitals. But Hong Kong, like the rest of the world, must move with the times.

This is nothing new for the people of Hong Kong. We are known for our flexibility and our responsiveness to change. We have overcome many challenges in the past. I have no doubt that we will overcome the different challenges, which face us today. We will do so by responding to change, by renewing our entrepreneurial spirit and by restating our commitment to excellence and professionalism in all that we do. You have made your own to commitment to excellence through the work of this Academy and through the quality of care you give your patients every day of your working lives. I would like to take this opportunity to congratulate all the fellows conferred today and the prize-winners. Your profession represents many of the values, which have made Hong Kong prosper. In the years ahead, those values will be the bedrock of our success.

Thank you.

End/Friday, December 14, 2001

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