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LCQ12: Total health expenditure
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    Following is a question by the Hon Federick Fung and a written reply by the Secretary for Health, Welfare and Food, Dr York Chow, in the Legislative Council today (October 26):

Question:

     Regarding the health care expenditure and demand for public and private out-patient services in Hong Kong, will the Government inform this Council:

(a)  of the respective percentages of expenditures on private, public and overall health care services in the Gross Domestic Product (GDP) in the past five years, and whether the authorities have compared these figures to those of other developed countries or regions; if so, of the results; if the results show that Hong Kong's figures are lower than those in other countries or regions, the reasons for that;

(b)  of the percentage of the expenditure on primary health care in the total public health care expenditure in each of the past five years; if these figures have shown a downward trend, the reasons for that; whether it is partly attributable to the Government not accepting the view that primary health care can help to reduce public demand for the more expensive secondary and tertiary health care services;

(c)  as the authorities have pointed out, in the consultation paper on the future service delivery model for the health care system, that if the existing service models are not reformed, the estimated percentage of the expenditure on health care services in the tax revenue will increase from the current 22% to more than 50% by 2033, of the relevant assumptions and statistics on which this estimate is based, and the respective estimated percentages of expenditures on private, public and overall health care services in GDP by then; and

(d)  how the total number of attendances at private specialist and general clinics in the past five years compares to that at public specialist and general clinics?

Reply:

Madam President,

(a)  The percentage of total health expenditure as a percentage of GDP from 1999/00 to 2001/02 was around 5% (see Table 1).  These figures are derived from the Domestic Health Accounts (DHA) which adopt the International Classification for Health Accounts (ICHA) developed by the Organization of Economic Co-operation and Development (OECD) in 2000 in coming up with the figures.  All health expenditures are grouped according to standardised classifications.  DHA can provide a more complete picture of the health expenditure and facilitate international comparison.  However, the DHA data are only available until 2001/02.  Figures on health expenditure for 2002/03 and 2003/04 are being compiled and will be available later.  At present, we can only preliminarily estimate the figures for 2002/03 and 2003/04 based on the public expenditure on the policy area group of health and the estimates of private consumption expenditure on medical care and health expenses.  The estimated total, public and private health expenditure as a percentage of GDP in 2002/03 are 5.2%, 2.7% and 2.5% respectively.  The corresponding figures in 2003/04 are 5.3%, 2.8% and 2.5%.  Given the different basis for calculation, the figures of these five years are not directly comparable.  

     The total health expenditure as a percentage of GDP varies substantially among selected economies, ranging from 4.3% to 14.6%.  The variations are accounted for by the differences in health care financing sources, modes of provision of services and efficiency of the health care systems.  

     Compared with other economies, Hong Kong's total health expenditure as a percentage of GDP is not particularly high.  However, it should be noted that our public health expenditure is financed mainly by tax.  Hong Kong has a low tax rate when compared to other economies and a narrow tax base.  The ratio of our public health expenditure to our total tax revenue is also among the highest when compared to other developed economies.  For every $100 we have received from tax revenue, we are spending about $22 on health care.

(b)  The scope of public Primary Health Care services is very wide, including maternal and child health service, student health service, elderly health service and health promotion activities of the Department of Health, general out-patient clinics, community nursing service, community psychiatric service and community geriatric service of the Hospital Authority (HA).  At present, the Administration does not have the costing data for individual service items.  Similar figures are also not available from other countries.  

     The Administration has always emphasised the importance of primary health care.  As a result, the Administration has in recent years allocated extra resources in strengthening the public primary health care services, e.g. the setting up of an integrated computer system for patient registration, consultation, prescription and dispensary, together with the increase in the number of pharmacists in general out-patient clinics, and the development of Visiting Medical Officers scheme in residential care homes for the elderly.  In the recent Discussion Paper "Building a Healthy Tomorrow" released by the Health and Medical Development Advisory Committee, chaired by the Secretary for Health, Welfare and Food, the importance of primary health care to the entire medical system and people's health has been emphasised at great length.  

 (c)  The Administration has since 2003 commissioned the Department of Community Medicine & Unit for Behavioural Sciences of the University of Hong Kong to update the DHA.  The same Department has also worked closely with the Administration to project the health expenditure of Hong Kong through 2033, including the development of best possible assumptions.  The assumptions adopted are as follows:-

* the total government expenditure maintains at a maximum of 20% of GDP;
* 65% of government revenue comes from tax revenue;
* population demographics in 2033 is the same as projected by the Census and Statistics Department;
* the health care utilisation rate of the public remains at the present level, and
* a net 1% annual increase in medical cost.

     According to the above assumptions, the total health expenditure will stand at about 10% of GDP in 2033, 6.4% of which will be public spending and 3.6% will be private spending.  The projected increase in public expenditure will amount to more than two folds from the present 2.8% to 6.4% in 2033.  There is therefore a need to develop new health care financing options to meet the increased expenditure.

(d)  The number of attendances at public general outpatient clinics (GOPCs) and specialist outpatient departments (SOPDs) for the past 5 years (with year-on-year comparison) are listed in table 2.

     Although a decrease in attendances at the GOPCs is noted, it does not reflect any reduction of public resources injected into the corresponding service.  The drop in attendances can be accounted for by various factors:-

*  After the transfer of GOPCs from the Department of Health to the HA, there has been much smoother transfer of patients among the different levels of medical care.  HA also put in additional resources at GOPCs to enhance the effectiveness of service, including the deployment of more pharmacists and establishment of new nurse clinics, etc.  As a result, the need for follow-up consultation has decreased.  

*  HA has also implemented a number of measures to improve the quality of GOPCs services, which include the introduction of 'family medicine' concept at some GOPCs and the improvement of medical record system for evening sessions to allow for individual medical records to be kept at clinics.  All the above measures have allowed patients to be seen by doctors for a longer period of time.  This has caused a corresponding reduction in the total number of cases that could be seen per day but at the same time, these measures have provided more comprehensive and all-rounded care to patients hence have reduced the need for follow-up consultation.

*  HA has also computerised their registration system which reduces instances whereby patients attend several GOPCs on the same day.

The Administration does not have statistics on the attendances at private specialist and general clinics.

Ends/Wednesday, October 26, 2005
Issued at HKT 17:06

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