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Following is a speech by the Financial Secretary, Mr Donald Tsang, at the joint annual dinner of Hong Kong Public Doctors' Association and Government Doctors' Association this (Thursday) evening:
Ladies and gentlemen,
Thank you for inviting me to speak at this joint annual dinner. I am very pleased to have the opportunity to share my views on public health care spending with so many front-line providers.
Hong Kong often prides itself on having a healthy population which forms the backbone of our vibrant economy. Our people enjoy good health and life expectancies among the world's longest. Much credit for this situation goes to our medical profession.
Over the years, public facilities have grown, improved and served the population well. We have gradually come to take these services too much for granted.
Most people now associate the health care system with the public sector alone and this, of course, is wrong. The health care system embraces the public and private sectors, both working together to achieve common goals.
As a responsible Government, we are committed to safeguarding and promoting the health of our community. We provide medical services to those in need so that no one is denied adequate treatment simply through lack of means.
Our commitment requires the public sector to provide a safety net for the sick who do not have adequate financial resources, but under the present system, we are providing heavily subsidised services to everyone.
As our population ages and increases, with greater numbers of people seeking treatment from the public sector, we will simply not be able to afford it.
The fact is that our elderly population is increasing since people now live longer. At present, 10 per cent of the population is 65 years or over. By 2015, it will reach 13 per cent. Elderly people need four or five times as much medical attention and treatment as younger people.
Added to this, consumers demand constant improvements in the quality of services and facilities, as well as access to new technology. Together, these factors are pushing up the cost of health care, especially public health care.
Some figures illustrate this cost escalation best. A decade ago, in 1988/89, the Government spent $5 billion or 10.6 per cent of its total recurrent public expenditure on health. In the current financial year, expenditure is estimated to be $29 billion and 14.6 per cent. In other words, we are now spending nearly six times as many dollars on health as we did 10 years ago -- and its share of the Government budget has increased by 40 per cent.
This increase in Government spending indicates that health ranks higher on the community's priority list compared with other public services.
However, such growth cannot be sustained indefinitely. Over 90 per cent of public health care expenditure is funded through Government general revenue -- that is, from taxation.
As the economy matures and our workforce shrinks in relation to the number of elderly people, the rate of GDP growth on which Government general revenue depends will be unable to keep up with demand.
On the other hand, we cannot afford to keep increasing the percentage the Government spends on health care, at the expense of other equally important public services, such as housing, education, social welfare and law and order.
This will present us with an enormous challenge in the next century. All of us in this community must realise that we cannot depend solely on the public sector and the public sector cannot depend solely on the public purse for funding. Public resources must be put to best use. The health care system will have greater potential for growth only if the community realises that paying for health care should be a shared responsibility between taxpayers and individual users.
As I mentioned earlier, the Government has to look after those patients who need subsidies. We cannot continue to shoulder this responsibility effectively unless we can target priorities and provide subsidies accordingly.
Some may argue that if the General Revenue proves insufficient, we should increase tax rates. In theory, we could do this -- but it goes against our established principle of ensuring a low-tax and competitive economy in Hong Kong. That principle is a key factor for Hong Kong's prosperity and success.
Experience elsewhere in the world has shown that health care financing is not a straightforward topic lending itself to easy answers. There is no single "right" formula. We may find that our system operates best with a mix of different approaches.
The Government is committed to reviewing the current health care system. Given the scope and complexity of the issues involved, it has commissioned experts from the Harvard University School of Public Health to examine our present health care financing and delivery system, and to recommend options for change.
These experts will produce Hong Kong's first Domestic Health Account. This is a set of figures showing the current availability and distribution of resources, and the direction of their flow, in the entire health care system.
Simply put, it is an account that shows who is paying whom to provide what services or goods. We lack detailed information on this at present. The consultancy will also help us forecast the consequences of maintaining the status quo or adopting different financing options.
We expect the study to be complete by the end of this year. After the consultants submit their report, the Government will consider the findings and recommendations. We will consult all related professions and different sectors of the community. We are well aware that, whatever system we eventually opt for, the success of reform relies heavily on the support of the community.
As public health care providers, your support is particularly necessary. You are in the front line, among the first to experience increasing workload and pressure. As demand grows, you have quite rightly always put patients' well-being first.
But you are also acutely conscious of the pitfalls -- and even abuse -- of the present system which no society, however well endowed, can sustain in the long term.
To ensure that the future system keeps what is good and improves what is not, the Harvard consultants will come to you and other concerned parties for help and advice during their study. We want them to take your informed views into consideration in preparing their report.
Health care is an issue which concerns every member of society. Hong Kong's continued prosperous development depends very much on a healthy population. This can occur only if we have a system which ensures that everyone truly treasures the value of quality health care and can access it at an affordable price.
The Government must play a key role through subsidy. However, we must define the level of subsidy and set it within clear boundaries which the economy can sustain over the long term.
It must also be a level with which a full range of vibrant and alternative private medical practice can co-exist.
Thank you.
End/Thursday, June 4, 1998
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