LCQ13: Resource allocation of Hospital Authority
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Question:
In the Policy Address she delivered in October this year, the Chief Executive indicated that the Government would adopt a new funding model to increase the recurrent funding for the Hospital Authority (HA) progressively on a triennium basis, having regard to population growth rates and demographic changes. Regarding funding for HA and its allocation of resources to various hospital clusters (clusters), will the Government inform this Council:
(1) of the factors, apart from population growth rates and demographic changes, that the Government will consider in determining the amount of recurrent funding for HA in future; whether such factors include patient attendances, and the weightings of various factors; whether the aforesaid new funding model has fully considered the non-linear relationship between medical and health expenditure and age, so as to ensure that the amount of funding is sufficient in meeting the demand for medical services;
(2) as the Government indicated in the 2007-2008 Policy Address that it would increase the percentage of Government recurrent expenditure on medical and health services from the then 15 per cent to 17 per cent in 2011-2012, whether it has currently set an upper/lower limit or a target for such percentage; if so, of the details; if an upper limit has been set, whether it has plans to review such limit, and the measures to ensure that the recurrent funding for HA will still increase progressively even when the Government needs to formulate a deficit budget due to an economic downturn;
(3) whether it will set up a mechanism (such as establishing a stabilisation fund for medical and health expenditure) so that medical and health expenditure need not decrease in tandem with reductions in Government recurrent expenditure, and may even increase at such times;
(4) whether it knows (i) the funding for, (ii) the population covered by, and (iii) the per capita medical expenditure of patients in, the various clusters in each of the past five years;
(5) whether it has studied if the new funding model can ameliorate the problem of uneven distribution of resources among the various clusters; of the measures put in place to ensure that HA will allocate resources based on the population growth rates and demographic changes in the clusters; and
(6) whether it has estimated the changes in (i) population and (ii) population aged 65 or above in various clusters in the coming decade; if so, of the details, and whether it knows how HA will adjust its resource allocation work in response to such changes?
Reply:
President,
My reply to the various parts of the question raised by the Hon Wu Chi-wai is as follows:
(1) The model adopted by the Government and the Hospital Authority (HA) in estimating the overall operating expenditure of public hospitals and the funding required is based on the population of Hong Kong, taking into account factors such as the overall demographic and age distribution, the burden of chronic diseases on different population groups, and the increase in service costs as a result of changes in modes of service delivery with the introduction of advanced medical technology.
(2) and (3) The Government has devoted substantial resources to medical and health services. In determining the level of funding for public healthcare services, the Government will take into account a number of factors including the population growth and ageing of population in Hong Kong, the demand for public healthcare services, the need for service enhancement and the Government's overall fiscal position. The Government will continue to maintain close liaison with stakeholders including the HA in its overall consideration of the funding for medical and health services.
(4) Internal resources allocation within HA are generally determined by the HA. The table below sets out the recurrent budget allocation for each cluster of the HA in the past five years:
| Year | HKEC | HKWC | KCC | KEC | KWC | NTEC | NTWC |
| ($ billion) | |||||||
| 2012-13 | 4.39 | 4.53 | 5.47 | 4.12 | 9.00 | 6.49 | 5.20 |
| 2013-14 | 4.63 | 4.80 | 5.84 | 4.49 | 9.72 | 6.91 | 5.56 |
| 2014-15 | 5.01 | 5.17 | 6.25 | 4.94 | 10.65 | 7.44 | 6.08 |
| 2015-16 | 5.37 | 5.56 | 6.65 | 5.28 | 11.46 | 8.13 | 6.71 |
| 2016-17 | 5.63 | 5.89 | 7.10 | 5.66 | 12.06 | 8.62 | 7.27 |
Abbreviations:
HKEC - Hong Kong East Cluster
HKWC - Hong Kong West Cluster
KCC - Kowloon Central Cluster
KEC - Kowloon East Cluster
KWC - Kowloon West Cluster
NTEC - New Territories East Cluster
NTWC - New Territories West Cluster
The recurrent budget allocation as shown in the table above represents the funding allocated to clusters for supporting their daily operational needs, such as staff costs, drug expenditure, medical supplies, utilities charges, etc. On top of the recurrent budget allocation, each cluster has other incomes, such as fees and charges collected from patients for healthcare services rendered, which will also contribute to supporting the cluster's day-to-day operation. Capital budget allocation such as those for capital works projects, major equipment acquisition, and corporate-wide information technology development projects is not included in the above table.
"Per capita medical expenditure" is calculated by dividing the total healthcare expenditure (including the expenditure for the public and private sectors) of an economy (a country or a region) by its overall population. It is used to compare the overall medical expenditure of different economies, and is not directly comparable at the cluster level.
(5) The model mentioned in Part (1) of this reply, hereinafter referred as the basic model, is applicable to the global recurrent allocation of the Government's funding to the HA. Regarding the resource allocation exercise within the HA, the HA followed the recommendation of the Steering Committee on Review of HA in 2015 and commissioned the School of Public Health and Primary Care of the Chinese University of Hong Kong to help develop a refined population-based model (refined model). Building on the basic model which is used to assess the overall changes in public healthcare needs of the Hong Kong population, the refined model takes into account additional factors affecting the healthcare service utilisation pattern of the public so as to analyse the healthcare needs of the local population and project the service demand in various clusters, and therefore provide reference information for resource allocation exercise in the HA.
The refined model was built using local population data. Apart from demographic and age distribution figures, the refined model also takes into account other factors affecting healthcare service utilisation (such as the socio-economic situation, distance to the facilities and service supply in the locality) and cross-cluster flow of patients, with a view to projecting the service utilisation and loading in different clusters. To assure a like-with-like comparison between the resources available to and the core services provided by different clusters, the refined model also takes into consideration the impacts of 13 designated services to individual clusters. For example, most organ transplantation services are provided by the Queen Mary Hospital. Starting with the 2018-19 planning cycle, the refined model along with other relevant factors (such as the strategic priorities, service directions and implementation timetable of the HA) would be considered comprehensively for service and capacity in short and longer terms, which would in turn inform resource allocation to clusters.
In response to the concern as to whether the resources allocated to the clusters are commensurate with their workloads, the HA has analysed the resources and scale of utilisation of each cluster in the four years from 2012-13 to 2015-16. The results show that, with the exclusion of the designated services and after adjustment for case mix differences among the clusters, each cluster's resources are fairly commensurate with its scale of services, with a deviation gap not exceeding ±0.5 per cent. It indicates that under the current service planning and budgeting mechanism, the clusters' expenditures are broadly comparable with respect to their scale of services.
(6) The projected population by hospital clusters in 2017 and 2024 is set out in the following tables.
Projected population in 2017 (as at mid-2017)
| District | Corresponding hospital cluster | Total population | Population aged 65 or above |
| Eastern, Wan Chai, Islands (excluding Lantau Island) | Hong Kong East | 762 900 | 153 400 |
| Central and Western, Southern | Hong Kong West | 521 200 | 94 800 |
| Kowloon City, Wong Tai Sin, Yau Tsim Mong | Kowloon Central | 1 159 700 | 220 000 |
| Kwun Tong, Sai Kung | Kowloon East | 1 138 100 | 177 600 |
| Sham Shui Po, Kwai Tsing, Tsuen Wan, Lantau Island | Kowloon West | 1 350 400 | 234 400 |
| Sha Tin, Tai Po, North | New Territories East | 1 328 000 | 194 400 |
| Tuen Mun, Yuen Long | New Territories West | 1 150 300 | 148 600 |
| Overall Hong Kong | 7 411 300 | 1 223 400 | |
Projected population in 2024 (as at mid-2024)
| District | Corresponding hospital cluster | Total population | Population aged 65 or above |
| Eastern, Wan Chai, Islands (excluding Lantau Island) | Hong Kong East | 708 600 | 198 200 |
| Central and Western, Southern | Hong Kong West | 515 400 | 125 300 |
| Kowloon City, Wong Tai Sin, Yau Tsim Mong | Kowloon Central | 1 180 700 | 279 500 |
| Kwun Tong, Sai Kung | Kowloon East | 1 221 500 | 239 900 |
| Sham Shui Po, Kwai Tsing, Tsuen Wan, Lantau Island | Kowloon West | 1 406 900 | 309 600 |
| Sha Tin, Tai Po, North | New Territories East | 1 480 600 | 300 100 |
| Tuen Mun, Yuen Long | New Territories West | 1 241 300 | 230 800 |
| Overall Hong Kong | 7 755 800 | 1 683 400 | |
Note 1: The projected population figures are calculated based on the data of the Projections of Population Distribution 2015-2024 of the Planning Department. Individual figures may not add up to the total due to rounding and inclusion of marine population.
Note 2: Wong Tai Sin District and Mong Kok areas have been re-delineated from Kowloon West Cluster (KWC) to Kowloon Central Cluster (KCC) since December 1, 2016. The service units in the concerned communities have therefore been re-delineated from KWC to KCC to support the new KCC catchment districts with effect from the same date. As a transitional arrangement, reports on services/manpower statistics and financial information continued to be based on the previous clustering arrangement (i.e. concerned service units still under KWC) until March 31, 2017. Reports in accordance with the new clustering arrangement (i.e. concerned service units grouped under KCC) started from April 1, 2017.
In the course of planning hospital services and facilities, the HA has taken into account a number of factors including the projected demand for healthcare services having regard to population growth and demographic changes in all districts, the increased incidence of chronic diseases, possible changes in healthcare service utilisation pattern, and organisation of services of the clusters and hospitals. The HA will continue to regularly monitor the utilisation rate and demand trend of each healthcare service, re-organise the delivery mode of hospital services, and undertake hospital development projects and other suitable measures to ensure that the services provided can meet the public needs.
Ends/Wednesday, December 13, 2017
Issued at HKT 17:40
Issued at HKT 17:40
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