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Following is a question by the Dr Hon Leung Ka-lau and a reply by the Secretary for Food and Health, Dr York Chow, in the Legislative Council today (May 9):
Question:
The figures of the Government's Estimates of Expenditure 2012-2013 reveal that among the authorities' revised estimates of the service costs of the Hospital Authority (HA) in 2011-2012, the cost per patient day for general inpatient services, the costs per accident and emergency attendance and specialist outpatient attendance have been adjusted upward from $3,830, $830 and $950 to $4,050, $890 and $1,030 respectively, which represent respective increases of 5.7%, 7.2% and 8.4% over the original estimates, reflecting that the cost calculations by the relevant parties differ from the actual costs sometimes. In reply to a written question from a Member of this Council on June 29 last year, the Government indicated that HA adopted a "total cost" accounting approach in calculating its service costs, which included the "direct service costs" of various clinical specialties, the expenses on various clinical support services (including items such as anaesthesia service, pharmacy, pathology, diagnostic radiology and allied health services, etc.), the costs of various non-clinical support services and daily expenses of hospitals (including items such as meals for patients, utility expenses, repair and maintenance of medical equipment and machinery, etc.), some institutional items (including items such as insurance costs and information technology support for clinical computer systems, etc.), the administrative costs of HA Head Office, as well as some charges for services provided by government departments to HA (including items such as building maintenance services provided by the Architectural Services Department, etc.). In this connection, will the Government inform this Council:
(a) what the aforesaid "direct service costs" are;
(b) whether it knows in the past five years, the actual expenditures on the various aforesaid items in the costs per patient day for general inpatient services, the costs per accident and emergency attendance and specialist outpatient attendance, and the percentages of such amounts in the total unit costs, together with a breakdown in table form by year, direct service costs, expenses on clinical support services, costs of various non-clinical support services and daily expenses of hospitals, institutional items, administrative costs of HA Head Office, charges for services provided by government departments to HA as well as other relevant costs; and
(c) given that the authorities' cost estimates sometimes differ from the actual expenditures, whether the Government has studied the formulation of a more reasonable and up-to-date mechanism for costing, so as to maintain effective control over the cost-effectiveness of services; if it has, of the details; if not, the reasons for that?
Reply:
President,
The Hospital Authority (HA) has always attached importance to cost management, so as to ensure that major resources are used on items directly related to patients. In fact, from 2007-08 to 2010-11, the average annual increase of the overall unit costs of HA's services is about 2.6%, which is similar to the increase of 2.7% of the overall Composite Consumer Price Index of Hong Kong in the same period. The increase in cost is mainly due to adjustment of staff remuneration, expansion of coverage of the Drug Formulary, procurement of medical equipment for modernising HA, as well as increase in expenditure for addressing manpower issues.
My reply to the three parts of the question is as follows:
(a) The "direct service costs" of various clinical specialties are one of the key items in calculating HA's service costs. These include the expenditure on doctors, nurses and supporting staff who are directly involved in the services of various specialties, as well as the expenditure required for the daily operation of various specialist services.
(b) The costs per patient day for HA's general inpatient services, the costs per accident and emergency attendance and specialist outpatient attendance, as well as the percentages of various key cost components including direct service costs, expenses on clinical support services, costs of various non-clinical support services and daily expenses of hospitals, institutional items, and charges for services provided by government departments between 2007-08 and 2010-11 are set out in Annex.
The percentages of various cost components for 2011-12 are being calculated by HA and are not yet available at the moment.
(c) HA's mechanism for costing was developed with reference to the practices of global medical institutions and the cost accounting standards. The mechanism has been working effectively and is keeping pace with time. Since its inception in early 1990s, HA has set up a dedicated team internally to review and improve the mechanism on a regular basis for further enhancement. After years of continuous research and development, the mechanism has become more well-established in providing relevant reference for resource planning and service performance management.
Each year, HA projects the costs of services for the coming year on the basis of the corresponding annual plan covering the number of patients and service output indicators, manpower, demand for drugs and medical equipment, as well as estimates on other hospital daily expenses. In determining the cost estimates, HA may not be able to predict certain precipitating factors, such as the additional demand for acute in-patient services arising from influenza peak or cold weather in the coming year. It will also not include in its estimates the annual pay adjustment rate for the coming year. Moreover, the actual number of patients, service output, demand and supply of healthcare staff, and the overall price adjustment are often different from the estimated ones. These are the factors contributing to the shortfall of cost figures between the revised estimates and original estimates.
In fact, despite a difference of about 5.7% to 8.4% between the original estimates and revised estimates of individual service costs of HA in 2011-2012, the revised estimates of HA's various service costs do not differ much from the original estimates after discounting the factors of about 7% actual pay adjustment and increase in various medical costs.
To ensure the overall efficiency of resource utilisation, HA will review regularly the performance indicators regarding to its service activities, manpower, financial situation and implementation progress of its annual plan. HA will examine closely any variations from the pre-determined targets and where appropriate, take remedial actions accordingly. The Government and the HA Board will also closely monitor the overall performance of HA's services, manpower, financial situation to ensure the proper and optimal use of government funding.
Ends/Wednesday, May 9, 2012
Issued at HKT 12:59
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