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1
Healthcare Financing and Insurance in Hong Kong
1
HA Convention Symposium 2
8 June 2011
id9740562 pdfMachine by Broadgun Software - a great PDF writer! - a great PDF creator! - http://www.pdfmachine.com http://www.broadgun.com
2
HK�s Healthcare System
3
Macro-organisation of the HK Health System
30%50%30%
Overall outpatient incl. TCMSpecialistGP
90%80%
Inpatient (bed-days)(admission)
System
Funding sources
Purchasers
Providers
Consumers
Market share
Department of Health& Centre for HealthProtection�Disease prevention and control (communicable and non-communicable diseases)�Elderly health�Health education�HIV/AIDS service�Maternal and child health�Port health�Student health�Tobacco control�Tuberculosis service
General population
Hospital Authority
� 41 hospitals� GOPCs, SOPCs
(predominantly Western allopathic medicine)
Public (Food and Health Bureau)
Private
Employers Individuals
Private insurers/MCOs
Government general revenue
Minimal out of pocket fees (waived for the indigent)
Universal coverage
Mostly individuals from middle and upper socioeconomic strata (except for Chinese medicine use)
Laboratories (3%)
Dental medicine
(10%)
Chinese medicine
(14%)
Western allopathic medicine
(73%)
Private providers
70%50%70%
10%20%
Public Health Personal Health Care
4
HK�s Health Expenditure
5
Health expenditure as a percentage of GDP
1.4 1.6
1.9 1.9 1.9 2.0 2.2 2.3 2.3
2.8 2.8 2.8 3.0 3.0
3.2 2.8
2.6 2.5 2.3
2.2
2.2
2.2 2.2 2.2 2.2
2.3 2.2 2.2
2.4 2.3 2.3
2.3 2.2
2.3
2.4
2.4 2.4
2.4 3.6
3.8
4.1 4.1 4.1 4.2
4.5 4.5 4.6
5.2 5.1 5.1
5.3 5.3
5.5
5.2
5.0 4.9 4.8
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
1
2
3
4
5
6
GD
P (H
K$ b
illio
n)
Perc
enta
ge o
f GD
P (%
)
Fiscal year
Private
Public
Total
GDP
6
Share of THE by source
0
10
20
30
40
50
60
Shar
e of
TH
E (%
)
Fiscal year
Government
Employers
Insurance
Households
Non-profit institutions
Others
7
Share of THE by provider
0
5
10
15
20
25
30
35
40
45
50
Shar
e of
TH
E (%
)
Fiscal year
Hospitals
Nursing and residential care facilities
Providers of ambulatory health care
Retail sale and other providers of medical goods
Provision and administration of public health programmes
General health administration and insurance
Other industries (rest of the economy)
Rest of the world
8
Share of THE by function
0
5
10
15
20
25
30
35
40
45
Shar
e of
TH
E (%
)
Fiscal year
Inpatient curative care
Day patient hospital services
Ambulatory services
Home care
Rehabilitative and extended care
Long-term care
Ancillary services to health care
Medical goods outside the patient care setting
Prevention and public health services
Health programme administration and health insurance
Investment in medical facilities
9
International Comparisons
10
International comparison by public vs private source (2007)
3.14.3
4.85.2
5.866
6.36.3
6.56.8
7.47.57.6
7.87.8
8.18.2
8.48.58.5
8.78.98.99
9.19.1
9.69.7
9.910.1
10.310.4
10.611
15.6
0 2 4 6 8 10 12 14 16
SingaporeChina
Hong KongEstoniaMexicoTaiwanTurkeyKoreaChile
PolandCzech Republic
HungaryIsrael
IrelandSlovenia
Slovak RepublicJapan
FinlandUnited Kingdom
AustraliaSpain
ItalyNetherlands
NorwayNew Zealand
IcelandSwedenGreece
DenmarkBelgiumCanadaAustria
GermanySwitzerland
FranceUnited States
Percentage of GDP (%)
Public Private
11
Hong Kong has spent relatively less on health compared to OECD countries
Source: OECD Health Data 2010, October 2010Hong Kong�s Domestic Health Accounts: 2007/08
2007
11
Australia
Austria
Belgium
Canada
ChileCzech Republic
Denmark
Estonia
Finland
France Germany
Greece
Hungary
Iceland Ireland
Israel
Italy Japan
Korea
Luxembourg
Mexico
Netherlands
New Zealand
Norway
Poland
Slovak Republic
Slovenia
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Hong Kong SAR, China
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000
Per Capita GDP (US$ PPP)
Per
Cap
ita T
EH
(U
S$
PP
P)
12
�although public spending is commensurate with the different levels of public revenue between countries
2007
Source: OECD Health Data 2010, October 2010Hong Kong�s Domestic Health Accounts: 2007/07812
Australia
Austria
Belgium
Canada
Czech Republic Denmark
EstoniaFinland
France
Germany
Greece
Hungary
Iceland
Ireland
Israel
Italy
Japan
Korea
Netherlands
New Zealand
Norway
Poland
Slovak Republic
SloveniaSpain
Sweden
Switzerland
United Kingdom
United States
Hong Kong SAR, China
40
50
60
70
80
90
0 10 20 30 40 50 60 70Public revenue as a percentage of GDP
Pub
lic h
ealth
spe
ndin
g as
a p
erce
ntag
e of
TE
H
13
International comparison byprovider (2007)
0 10 20 30 40 50
HP.1 Hospitals
HP.2 Nursing and residentialcare facilities
HP.3 Providers of ambulatory health care
HP.4 Retail sale and other providers ofmedical goods
HP.5 Provision and administration ofpublic health programmes
HP.6 Health administration and insurance
HP.7 Other industries (rest of the economy)
HP.9 Rest of the world
Percentage of total current expenditure on health (%)
OECD average
Hong Kong
14
International comparison byfunction (2007)
0 10 20 30 40
HC.1.1, 2.1 & 3.1 In-patient care
HC.1.2, 2.2 & 3.2 Day care
HC.1.3 & 2.3 Out-patient care
HC.1.4, 2.4 & 3.3 Home care
HC.4 Ancillary services
HC.5 Medical goods
HC.6 Prevention and public health
HC.7 Health administration and insurance
HC.R.1 Capital formation
Percentage of total expenditure on health (%)
OECD average
Hong Kong
15
HK�s Demographics
16
HK�s population will be ageing rapidly
Population profile in 2009 & 2039
Source: Hong Kong Population Projections 2010 -2039, C&SD
In 2009 � 1 out of 8 persons was an elderly person. By 2039 � 1 out of 4 persons will be an elderly person.
400 300 200 100 0 100 200 300 400
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 - 69
70 - 74
75 - 79
80 - 84
85 +
Age group
Thousands persons
Male Female
Mid 2039
400 300 200 100 0 100 200 300 400
0 - 4
5 - 9
10 - 14
15 - 19
20 - 24
25 - 29
30 - 34
35 - 39
40 - 44
45 - 49
50 - 54
55 - 59
60 - 64
65 - 69
70 - 74
75 - 79
80 - 84
85 +
Age group
Thousands persons
Male Female
Mid 2009
17
Hong Kong will see one of the fastest ageing among advanced economies
EDR of Hong Kong and Selected Economies
0
50
100
150
200
250
300
350
400
450
500
550
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Nu
mb
er o
f eld
erly
ag
ed 6
5+ p
er 1
000
po
pu
latio
n a
ged
15-
64
AustraliaBelgiumCanadaFinlandHong KongJapanSingaporeSwitzerlandUnited KingdomUnited States
Singapore
Hong Kong
JapanActual Projection
Finland
Belgium
18
Health expenditure as % of GDP 1990 - 2033
Source: Hong Kong�s Domestic Health Accounts: 1990 - 2004 Financial projection of Hong Kong�s total expenditure on health from 2004 to 2033
HK�s health expenditure projected to continue to rise as a share of the economy
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 2032
Hea
lth e
xpe
nditu
re a
s %
of G
DP Past
Health expenditure in HKin 1990 - 2004
ProjectionHealth expenditure in HK in2005 - 2033 Total health expenditure
Public health expenditure
Private health expenditure
19
HK�s Healthcare Financing
20
Health spending by financing source
HK�s health expenditure by financing source
0%
10%
20%
30%
40%
50%
60%
70%
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
Hea
lth e
xpen
ditu
re
Government Employer-provided group medical benefitsPrivate insurance Household out-of-pocket paymentOthers
Source: Hong Kong�s Domestic Health Accounts 1989/90 � 2007/08
21
Total Health Expenditure by Financing Source, 1989/90-2007/08 (HK$ Million)
Source: Hong Kong�s Domestic Health Accounts 1989/90 � 2007/08
1989/90 1992/93 1995/96 1998/99 2001/02 2004/05 2005/06 2006/07 2007/08
AverageAnnualChange
1989/90 to2007/08
Government 7,749 15,844 25,316 35,800 39,152 37,090 36,934 37,419 38,809 9.4%
PHI 2,337 3,622 6,016 8,195 8,109 8,394 9,022 9,924 10,883 8.9%
Individuallypurchased PHI
263 419 1,336 2,188 2,721 3,284 3,663 4,213 4,721 17.4%
Employer-provided PHI
2,074 3,203 4,680 6,007 5,388 5,110 5,359 5,711 6,162 6.2%
Out-of-pocket 9,157 14,264 18,882 21,306 20,890 21,872 23,508 25,268 27,522 6.3%
Others 370 375 993 926 568 619 901 1,396 1,732 9.0%
Total 19,613 34,104 51,207 66,227 68,720 67,975 70,365 74,008 78,946 8.0%
22
Total health expenditure of Hong Kong in 2007/08 by financing source and function
Government
Private
household
out-of-pocket
expenditure
Employer-
provided group
medical benefits
Private
insurance Others 8 Total
Public in-patient 1 21,264 968 4 - - 48 22,280
Public specialist out-patient 7,484 1,004 4 - - # 8,488
Public primary care/general
out-patient 4,501 328 4 - - 37 4,866
Private in-patient 1 745 3 3,499 5 2,427 1,488 3 8,162
Private primary
care/out-patient 2 2 10,957 2,452 1,051 4 14,466
Dental care 489 1,938 84 65 9 2,585
Medical goods outside
patient care settings 234 8,635 - - 119 8,989
Others (including ancillary
medical services, investment
and administration)
4,090 193 1,199 6 2,1167 1,512 9,109
Total 38,808 27,522 6,162 4,721 1,732 78,946
(HK$
million)
Notes
23
Healthcare Financing � PresentPublic hospital
(inpatient, specialist out-patient clinic)
30.8bsubsidize rate is 89 - 97%
Private hospital
7.4b
Primary care / GOPC
4.9bsubsidize rate of
GOP is 85%
Accident & Emergency Department
Public
Source: Hong Kong�s Domestic Health Accounts: 2007/08
Public Private
Government budget
Employer provided insurance
Private insurance
Premium[?]b
Tax
User pay16.8b
Public fees 2.3b
Out-of-pocket
3.5b
Private sector(general/specialist
outpatient)14.5b
1.1b1.5b
2.5b2.4b
Out-of-pocket11.0b
Governmentfunding
33.2b
24
Expenditure on private inpatient services by financing source
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
HK
$ M
illio
n
Government subsidies Household out-of-pocket Employer provided PHI
Individually purchased PHI Others
25
% expenditure on private inpatient services by financing source
7% 7% 7% 7% 6% 6% 9% 10% 13% 15% 15% 15% 16% 18% 16% 14% 12% 10% 9%
46% 47% 49% 50% 48% 44% 38% 32% 27% 22% 22% 26% 26% 25% 31%30% 34% 40% 43%
44% 43% 41% 40% 42%43%
43%46%
47%48% 46% 43% 40% 39%
36%37% 35%
32% 30%
3% 3% 3% 3% 3%4% 8% 9% 11% 13% 14% 14% 15% 17% 16% 19% 19% 18% 18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
Government subsidies Household out-of-pocket Employer provided PHI Individually purchased PHI Others
26
Expenditure on private primary care / outpatient services by financing source
0
2,000
4,000
6,000
8,000
10,000
12,000
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
HK
$ M
illio
n
Government subsidies Household out-of-pocket Employer provided PHIIndividually purchased PHI Others
27
Health spending by healthcare function and financing source (2007/08)
Source: Hong Kong�s Domestic Health Accounts: 2007/08
67%
14%
34%
93%
97%
82%
70%
93%
10%
58%
3%
33%
86%
66%
7%
3%
18%
30%
97%
7%
90%
42%
0% 5% 10% 15% 20% 25% 30% 35%
Investment in medical facilities
Health programme administration andhealth insurance
Prevention and public health services
Medical goods outside the patient caresetting
Ancillary services to health care
Long-term care
Rehabilitative and extended care
Home care
Ambulatory services
Day patient hospital services
Inpatient curative care
Public Private
28
Health Insurance in HK
29
Source: HKFI & OCI
$2,800 $3,100 $3,600 $4,000$4,700
$5,300
$2,760 $3,069 $3,443 $3,774 $4,078
$2,500$2,900
$3,300$3,900
$4,500$4,700
$2,858$3,134
$3,817$4,493
$5,398$5,820
$2,548
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
2004
2005
2006
2007
2008
2009
HKFI (group)HKFI (individual)
OCI (plans)OCI (riders)
$10,000 $9,898
PHI premium revenue ($Mn)
30
Average annual premium per member
Source: HKFI
Group plans
Individual plans
All plans
$2,000
$2,200
$2,400
$2,600
$2,800
$3,000
$3,200
2004 2005 2006 2007 2008 2009
31
Size of insured population
HKFI � count by membership
THS � count by identity (concurrent cover of individual & group plans = 0.52mn in 2009)
1.5
1.11.2 1.3
HKFI (Group)
1.4 1.5
2.0
1.31.4
HKFI (Individual) 1.5
1.7 1.8
THS 2.6
THS 2.2
THS 2.4
3.5
2.6
3.1
2.4
HKFI (All)2.8
3.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2004 2005 2006 2007 2008 2009
Year
Nu
mb
er (M
n)
32
Thematic Household Survey 2009: Population Coverage of Medical
Insurance / Benefit
CS/HA staff medicalbenefit only0.30 Million
(4%)
Private employerprovided medical
benefit only0.88 Million
(13%)
Both individuallypurchased PHI &private employer
providedmedical benefits
0.52 Million(8%)
Individually purchasedPHI only
1.16 Million(17%)
No coverage3.84 Million
(57%)
2.56 Million
2.86 Million
Base: Land-based non-institutional population excluding foreign domestic helpers (6.70 Million)
33
% insured by age group
39%
33%
60%58%
52%
36%
10%
35%
29%
55%
46%
29%33% 35%
31%
22%
15%17%
20%22%
17%
57%
6%
25%
19% 21%
4%0%
10%
20%
30%
40%
50%
60%
70%
Aged 0 - 14 Aged 15 - 24 Aged 25 - 34 Aged 35 - 44 Aged 45 - 54 Aged 55 - 64 Aged 65+
Age group
Individually purchased PHI only Both individually purchased PHI & private employer provided medical benefits Private employer provided medical benefit only CS/HA staff medical benefit only
0.86 Million12.8%
0.87 Million12.9%
0.95 Million14.2%
1.08 Million16.2%
1.27 Million18.9%
0.83 Million12.3%
0.85 Million12.7%
Base: Land-based non-institutional population excluding foreign domestic helpers (6.70 Million)Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
34
% insured by household income
33%
43%
51% 53%56%
68%
29%32% 34%
38%
42%
14%16%
21%23%
21% 23%25%
27%
16%11%
37%
48%
57%59%
62%
75%
9%13%
25%21%
9%
17%
8% 8%
0%
10%
20%
30%
40%
50%
60%
70%
80%
<$5,000 $5,000 -$9,999
$10,000 -$14,999
$15,000 -$19,999
$20,000 -$24,999
$25,000 -$29,999
$30,000 -$39,999
$40,000 -$49,999
$50,000+
Monthly Household Income
0.55 Million8.3%
0.83 Million12.5%
1.01 Million15.0%
0.89 Million13.3%
0.79 Million11.9%
0.52 Million7.8%
0.79 Million11.8%
0.44 Million6.6%
0.86 Million12.8%
Individually purchased PHI only Both individually purchased PHI & private employer provided medical benefits Private employer provided medical benefit only CS/HA staff medical benefit only
Base: Land-based non-institutional population excluding foreign domestic helpers (6.70 Million)Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
35
% insured by gender & health status
43% 42%
39% 38%
25% 26%
17% 18%
0%
10%
20%
30%
40%
50%
Male Female
Gender
3.26 Million48.7%
3.44 Million51.3%
36%
45%
31%
41%
20%
27%
14%
18%
0%
10%
20%
30%
40%
50%
Yes No
Chronic Disease
1.89 Million28.2%
4.81 Million71.8%
Individually purchased PHI only Both individually purchased PHI & private employer provided medical benefitsPrivate employer provided medical benefit onlyCS/HA staff medical benefit only
Base: Land-based non-institutional population excluding foreign domestic helpers (6.70 Million)Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
36
% of employed with medical benefit / insurance by monthly personal income
Base: Employed persons excluding foreign domestic helpers (3.23 Million)Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
57%
50%
21%19%
58%
50%
23%
24%
41%
15%
20%
38%
63%
56%
23% 25%
26%
24%15%
7%
17%
13%
15%
3%0%
10%
20%
30%
40%
50%
60%
70%
80%
<$5,000 $5,000 - $9,999 $10,000 - $14,999 $15,000 - $19,999 $20,000 - $29,999 $30,000 or above
Monthly Personal Income
Individually purchased PHI onlyBoth individually purchased PHI & private employer provided medical benefitsPrivate employer provided medical benefit onlyCS/HA staff medical benefit only
0.18 Million5.5%
1.04 Million32.0%
0.89 Million27.4%
0.37 Million11.3%
0.38 Million11.7%
0.39 Million12.0%
37
% of employed in private sector with employer provided medical benefits by company size
14%
26%
36% 37%
52%
75%
18%
0%
10%
20%
30%
40%
50%
60%
70%
80%
1 - 9 10 - 19 20 - 49 50 - 99 100 - 499 500+ No information
Company Size
0.51 Million16.7%
0.38 Million12.7%
0.54 Million17.7%
0.38 Million12.4%
0.59 Million19.6%
0.45 Million15.0%
0.17 Million5.8%
Base: Employed persons excl. CS and HA staff and foreign domestic helpers (3.02 Million)Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
38
Employers with staff medical plans(% by salient features)
Source: Mercer�s 2008 Health and Welfare Survey
59%(by scheme)
Providing children cover
61%(by scheme)
Providing spouse cover
60%Providing supplementary OP, maternity or dental benefits
96%(of which 99% reimbursement plans)
Providing basic hospital plans
2008
39
Private Hospitals in HK
40
Private hospital expenditure by patient type
Note: Expenditure of non-residents prior to 2006/07 were estimated according to the number of mainland China visitor arrivals.
9,4121,709
23
1,196
46.4
31.1
102.6
114.5
3,418 2,907
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
12,000
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
HK
$ m
illio
n / n
o. o
f bed
s
0
20
40
60
80
100
120
140
No.
of a
dmis
sion
s / b
ed-d
ays
occu
pied
per
100
0 po
pula
tion
Non-residents (outside the boundary of DHA)
Residents
No. of bed-days occupied per 1000 population
No. of admission per 1000 population
Number of beds in private hospitals
41
Private hospital expenditure by function
Note: Except for capital, expenditure breakdown prior to 2002/03 were estimated as of 2002/03.
1,059
6,52572
308
257
1,344
321
1,234
46.4
31.1
114.5
102.6
2,907
3,418
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
HK
$ m
illio
n /
No
. of b
ed
s
0
20
40
60
80
100
120
140
No
. of a
dm
issi
on
s / b
ed
-da
ys o
ccu
pie
d p
er
10
00
po
pu
latio
n
Capital Out-patient Day-patient In-patient No. of bed-days occupied per 1000 populationNo. of admission per 1000 populationNumber of beds in private hospitals
42
Private hospital expenditure by provider
Note: Except for capital, expenditure breakdown prior to 2002/03 were estimated as of 2002/03.
937 5,423
451
2,755
321
1,234
31.1
46.4
102.6
114.5
3,418
2,907
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
HK
$ m
illio
n / n
o. o
f bed
s
0
20
40
60
80
100
120
140
No.
of a
dmis
sion
s / b
ed-d
ays
occu
pied
per
100
0 po
pula
tion
Other industries (capital)Visiting doctorsHospitalsNo. of bed-days occupied per 1000 population
No. of admission per 1000 populationNumber of beds in private hospitals
43
HK�s Healthcare Reform
44
Enhance primary care
� Primary Care Development Strategy by end 2010
Promote public-private partnership in healthcare
� PPP projects being launched progressively
Develop electronic health record sharing
� First stage eHR Programme for sharing by 2013-14
Strengthen public healthcare safety net
� Expand Drug Formulary to support patients in need
Over $5 billion committed for service reform
First Stage: Healthcare Service Reform
45
Provide a government-regulated, reliable and sustainable HPS for those who subscribe to private health insurance and use private healthcare services on a voluntary basis
Relieve public queue through private services so that public resources can focus on target services especially to take care of low-income and under-privileged groups
Enable those who voluntarily subscribe to private health insurance to continue to be able to afford health insurance at an older age and use private healthcare services
Enhance transparency and competition in private health insurance and private healthcare sectors for better consumer protection and value-for-money services
Second Stage: Voluntary Health Protection Scheme
46
HPS is � HPS is not �A supplementary financing option for more effective use of private health expenditure, with a positive effect on the sustainability of long-term healthcare financing
Not a panacea that can solve the long-term healthcare financing problem completely given its voluntary nature
A regulated scheme to promote value-for-money services and enhance consumer protection in the private healthcare insurance and healthcare markets
Not a reduction of public health expenditure or public healthcare services which remains the safety net for all
A measure to facilitate healthcare servicedevelopment, enhance service capacity, competition and transparency in private healthcare, relieve pressure on public system, and enhance sustainability of healthcare system
Not a once-and-for-all scheme � it requires continued monitoring and adjustment, including the use of the $50 billion fiscal reserve set aside
Why Health Protection Scheme?
47
Thank You
47
48
Background Reference
49
Total health expenditure (THE)
19,614 23,736
29,320 34,104
39,410 44,742
51,207 56,773
62,163 66,230 65,906 67,299 68,720 66,918 68,976 67,975 70,365
74,009 78,947
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
GD
P (H
K$ b
illio
n)
THE
(HK$
mill
ion)
Fiscal year
THE (current market prices)
THE (constant 2008 prices)
GDP (current market prices)
50
Public and private health expenditure
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
HK$
mill
ion
Fiscal year
Public (current market prices)
Private (current market prices)
Public (constant 2008 prices)
Private (constant 2008 prices)
51
Public and private shares of THE
39.5 42.2 45.7 46.5 47.3 48.2 49.4 50.5 50.9 54.1 54.6 55.0 57.0 57.6 57.8 54.6 52.5 50.6 49.2
60.5 57.8 54.3 53.5 52.7 51.8 50.6 49.5 49.1 45.9 45.4 45.0 43.0 42.4 42.2 45.4 47.5 49.4 50.8
0
10
20
30
40
50
60
70
80
90
100
Shar
e of
TH
E (%
)
Fiscal year
Private
Public
52
Expenditure on public primary care / outpatient services by financing source
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
HK$
Millio
n
Public SOP - Government subsidies Public SOP - Household out-of-pocket
Public primary care / GOP - Government subsidies Public primary care / GOP - Household out-of-pocket
53
78,9461,7324,7216,16227,52238,808Total
9,1091,5122,1161,199 1934,090
Others (including ancillary medical services, investment and administration)
8,989119--8,635234Medical goods outsidepatient care settings
2,585965841,938489Dental care
14,46641,0512,45210,9572Private primary care/out-patient
8,16231,4882,4273,499 745 Private in-patient
4,86637--328 4,501Public primary care/ general out-patient
8,488#--1,004 7,484Public specialist out-patient
22,28048--968 21,264Public in-patient
TotalOthersPrivate insurance
Employer-Provided Group medical benefits
Private household out-of-pocket expenditure
Government
Total health expenditure of Hong Kong in 2007/08by financing source and function (HK$ million)
# less than HK$0.5 million
54
Differences between 2007/08 and 2006/07
Government
Private household
out-of-pocket expenditure
Employer- provided group
medical benefits
Private insurance
Others Total
890 113 12 1,014 Public in-patient
(4.4%) (13.2%) - -
(31.9%) (4.8%) 267 140 406 Public specialist
out-patient (3.7%) (16.2%) - - #
(5.0%) 71 7 16 94 Public primary
care/general out-patient (1.6%) (2.2%) - -
(71.2%) (2.0%) -2 632 147 186 -4 959
Private in-patient (-0.2%) (22.0%) (6.4%) (14.3%) (-58.9%) (13.3%)
333 21 132 -1 485 Private primary care/out-patient #
(3.1%) (0.8%) (14.3%) (-11.3%) (3.5%) 6 119 9 8 142
Dental care (1.3%) (6.5%) (11.5%) (14.3%)
# (5.8%)
-27 896 7 876 Medical goods outside patient care settings (-10.3%) (11.6%)
- - (5.8%) (10.8%)
184 14 275 181 307 962 Others (including ancillary medical services, investment and administration) (4.7%) (7.8%) (29.8%) (9.4%) (25.5%) (11.8%)
1,389 2,254 451 508 337 4,938 Total
(3.7%) (8.9%) (7.9%) (12.0%) (24.1%) (6.7%)
(HK$
million)
55
Health Services in Hong Kong
Private Sector
Hospital Authority
Public Sector
Department of Health
Private Hospital
41 Public hospitals and institutions (providing 26,824 beds as at March 2010)
48 Specialist out-patient clinics
74 General out-patient clinics
14 Chinese medicine clinics (more clinics will be set up in the coming years)
13 Private hospitals (providing 4,000 beds as at Dec 2010)
4,000+ Private doctors/clinics
12,000+ Private Chinese medical practitioners
Other private healthcare providers
The Department of Health monitors the performance of private hospitals through a registration system
Private Clinics
56
Health Expenditure and Manpower
5 : 512 225Allied Health Professionals(5)
8 : 240 011Nurses(4)
5 : 512 620Doctors
Public : Private(3)Registered as at
31 Dec 2010(2)
Health Manpower
Notes: 1. Hong Kong�s Domestic Health Accounts, 2007/082. Boards and Councils3. Health Manpower Survey4. Nurses Include registered and enrolled nurses5. Allied health professionals include pharmacist, physiotherapist, occupational therapist, medical laboratory technologist, optometrist and radiographer
$18.2b$3.1bOther services
$40.1b (51%)$38.8b (49%)Total
$4.9Primary care /General out-patient
$14.5b$8.5bSpecialist out-patient
$7.4b$22.3bIn-patient services
PrivatePublicHealth Expenditure (1)
57
Healthcare System � Present
Public hospital(inpatient, SOPD)
30.8bsubsidize rate is 89% to 97%
Private hospital
7.4b
Primary care / GOPC
4.9bsubsidize rate for
GOP is 85%
Private sector(general/specialist
outpatient)14.5b
AED
Public
Source: Hong Kong�s Domestic Health Accounts: 2007/08
Public Private
Secondary/tertiary
healthcare
Primaryhealthcare
1.Primary health care not comprehensive
enough
2.Bottlenecks in public service
3.Public-private
imbalance
4.Insufficient protection in
safety net
5.Lack of sharing of medical record
58
Comparison of public health expenditure and public spending in different economies
7.47%20.0%13.21.03.0 Singapore
10.317%45.0%18.71.94.2 Mainland of China
15.4-17.0%15.32.34.8Hong Kong
20.05%40.0%17.73.6 6.2Taiwan
12.210%35.4%28.73.5 6.3 South Korea
18.45%47.3%36.06.6 8.1 Japan
12.923%48.6%47.36.1 8.2 Finland
15.620%40.0%44.26.9 8.4 United Kingdom
17.210%45.0%33.45.7 8.5 Australia
16.119%50.0%45.57.3 9.7 Netherlands
15.121%45.3%48.47.3 10.8 Belgium
18.15-15.5%46.4%39.27.1 10.1 Canada
16.220%42.7%48.77.9 10.3 Austria
19.48%37.5%32.26.3 10.6 Switzerland
19.52.9-8.25%41.7%36.77.1 15.7 United States
Public health exp as % of public
expSales tax / VAT
Highest personal income tax
Public exp as % of GDP
Public health exp as % of GDP
Total health exp as % of
GDPEconomies
Source: OECD Health Data 2010 (October 2010), OECD Tax Database (accessed on 4 April 2011), World Health Organization�s National Health Accounts Series, Hong Kong�s Domestic Health Accounts: Estimates of Domestic Health Expenditure, 1989/90-2007/08, Various government sources in the mainland of China, Taiwan, Hong Kong and Singapore
59
% of employed in private sector with employer provided medical benefits by industry
33% 35%
54%
45%
21%
44% 44%
39%
0%
10%
20%
30%
40%
50%
60%
70%
Wholesale,retail &import/export
trades, restaurants& hotel
Community, socialand personal
services
Financing,insurance, real
estate andbusiness services
Transport, storageand
communications
Construction Manufacturing Others* Overall
Industry
0.94 Million31.0%
0.43 Million14.3%
0.59 Million19.6%
0.47 Million15.6%
0.31 Million10.1%
0.26 Million8.6%
0.02 Million0.8%
3.02 Million100.0%
* Including agriculture and fishing; mining and quarrying; electricity, gas and water
Base: Employed persons excl. CS & HA staff and foreign domestic helpers (3.03 Million) Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
60
% of employed in private sector with employer provided medical benefits by occupation
50%
57%
51%
25%
20% 20%
39%
0%
10%
20%
30%
40%
50%
60%
70%
Managers andadministrators
Professionals/Associateprofessionals
Clerks Service workers andshop sales workers
Plant and machineoperators and
assemblers
Others* Overall
Occupation
0.42 Million13.7%
0.68 Million22.6%
0.59 Million19.5%
0.45 Million14.9%
0.19 Million6.4%
0.69 Million22.8%
3.02 Million100.0%
* Including skilled agricultural and fishery workers; craft and related workers; elementary occupations
Base: Employed persons excl. CS and HA staff and foreign domestic helpers (3.03 Million)Source: Thematic Household Survey on health-related issues conducted during Nov 2009 to Feb 2010
61
Health Expenditure: Growth Factors & Projection
62
Average: 0.7%
Nominal health expenditure growth
Health care price inflation
Economy-wide inflation
Excess health care inflation
Real health expenditure growth
Population growth Real spending per capita growth
Real GDP per capita growth
Excess per capita volume growth
Source: Huber M. Health Expenditure Trends in OECD Countries, 1970-1997. Health Care Financing Review 21(2):99-117, 1999.
Public: 0.8%;
Private: 1.6%;
Others: 1.2%
0.2%
Growth factors for health expenditure
63
Projection of total population, elderly population and elderly dependency ratio, 2009-2039
HK�s population will be ageing rapidly
Source: Hong Kong Population Projections 2010-2039, C&SD
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039
Po
pul
atio
n ('
00
0)
0
50
100
150
200
250
300
350
400
450
500
Eld
erly
De
pen
den
cy R
atio
(N
o. o
fpe
rso
ns a
ged
65
and
abo
ve p
er
100
0p
erso
ns
ag
ed b
etw
ee
n 15
- 6
4)
0 - 14 15 - 64 65 or above Elderly Dependency Ratio
64
The elderly population uses on average six times more in-patient care than the population aged below 65.
The elderly population has greater healthcare needs
Source: Data from Hospital Authority
0
2,000
4,000
6,000
8,000
10,000
20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 75 - 79 80 - 84 85 +
Age group
Ave
rag
e n
o. o
f b
ed d
ays
per
1,0
00 p
erso
ns
Average number of public hospitalbed days utilized by age (2009)
65
HK�s public health expenditure is growing faster than the economy �
Gross Domestic Product (GDP) and Total/Public and Private Health Expenditure according to Domestic Health Accounts (in nominal value) (1989/90-2007/08)
Source: Hong Kong�s Domestic Health Accounts 1989/90 � 2007/08
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,00019
89/9
0
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
Tot
al h
ealth
exp
endi
ture
(H
K$
Mill
ion)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
GD
P (
HK
$ M
illio
n)
Public health expenditure Private health expenditureTotal health expenditure GDP
66
HK�s public share of health expenditure has been rising vis-à-vis private
HK�s health expenditure by financing source
Source: Hong Kong�s Domestic Health Accounts 1989/90 � 2007/08
0%
10%
20%
30%
40%
50%
60%
70%
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
Hea
lth
exp
end
itu
re
Government Employer-provided group medical benefitsPrivate insurance Household out-of-pocket paymentOthers
67
Majority of public spending on in-patient & specialist out-patient services
Health expenditure by function and financing source (2007/08)
Source: Hong Kong�s Domestic Health Accounts: 2007/08
67%
14%
34%
93%
97%
82%
70%
93%
10%
58%
3%
33%
86%
66%
7%
3%
18%
30%
97%
7%
90%
42%
0% 5% 10% 15% 20% 25% 30% 35%
Investment in medical facilities
Health programme administration and health insurance
Prevention and public health services
Medical goods outside the patient care setting
Ancillary services to health care
Long-term care
Rehabilitative and extended care
Home care
Ambulatory services
Day patient hospital services
Inpatient curative care
Public Private
68
Health Expenditure: Global Trend & Comparison
69
Health expenditure is rising everywhere
Per capita total health expenditure as percentage of per capital GDP in Hong Kong and selected economies (1991-2006)
0%
2%
4%
6%
8%
10%
12%
14%
16%
1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Pe
r ca
pita
tota
l he
alth
exp
end
iture
as
% o
f pe
r ca
pita
GD
P
United States
Switzerland
Australia
United Kingdom
Hong Kong
Singapore
Japan
Source:1. OECD Health Data 2010 (October 2010)2. World Health Organization - National Health Accounts Series.3. Singapore Ministry of Health, Healthcare Economics, Policies and Issues inSingapore by Toh Mun Heng and Linda Low.4. Hong Kong�s Domestic Health Accounts: 1990-2006
70
Everywhere health expenditure is growing faster than the economy
Average annual real growth rate of total health expenditure and real growth rate of GDP in HKG and selected economies (1996-2005)
Source: OECD Health Data 2009 (Jun 2009); WHO � NHA Series; Singapore Ministry of Health; Statistics Singapore; HKDHA: 1990-2005.
Medical Inflation - advance in medical technology, higher public expectation, rising medical cost -> medical inflation is driving increase in health expenditure everywhere
0%
1%
2%
3%
4%
5%
6%
7%
8%
Japan Switzerland UK USA HK Australia Singapore
Ave
rage
ann
ual g
row
th r
ate Average annual real growth rate of GDP
Average annual real growth rate of total health expenditure
71
Comparison of source of healthcare financing
66.3%#1.8%4.8%27.1%Singapore
19.9%34.6%12.7%32.8%US
31.7%9.2%*42.9%16.2%Switzerland
19.1%5.7%*70.3%4.9%Netherlands
40.9%3.9%42.4%12.8%Korea
17.2%2.5%65.4%14.9%Japan
27.5%4.5%56.1%11.8%Belgium
19.1%4.5%45.1%31.3%Austria
17.0%1.0%82.0%UK
23.4%2.1%14.5%60.0%Finland
17.1%12.6%1.4%68.9%Canada
24.6%7.8%-67.5%Australia
37.0%13.8%-49.2%Hong Kong
Out-of-pocket payments/
other sources
Private health insurance
Social health insurance
General taxation
PrivatePublic
Source of financing
Economies
Source: OECD Health Data 2010 (October 2010); WHO � NHA Series; HK DHA 1989/90 � 2007/08.
Notes: All figures are in 2007.(*) The Netherlands and Switzerland implement mandatory private health insurance system for basic coverage, the
funding from which is classified by data providers into the column of social health insurance. (#) Including Medisave according to WHO�s definition.
72
Government Revenue and Expenditure in Hong Kong
73
Sources of Government Revenue
Notes:� Indirect taxes include bets and sweeps tax, hotel accommodation tax, stamp duties, air passenger departure tax, duties, general rates, motor
vehicle taxes, royalties and concessions, and tax-loaded fees and charges. � Others include fines, forfeitures and penalties, loans, reimbursements, contributions and other receipts, utilities, fees and charges (excluding tax-
loaded fees), and capital revenue (excluding land premium).
Source: Census and Statistics Department website
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1989
/90
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
Go
vern
men
t re
ven
ue
Personal assessment and Salaries tax Profits tax and property taxIndirect taxes Properties and investment incomesLand premium Others
74
Hong Kong tax revenue compared to OECD economies in 2009
23%
0% 0%
26%
13%10%
25% 25%
1%
5%
30%
3%
38%
1%0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Profits Tax Personal IncomeTax
Social SecurityTax
Payroll Tax Property-relatedTaxes
Consumption Tax Others
Tax
com
pone
nts
as %
of
tota
l tax
rev
enue
Hong Kong OECD economies
Notes:� Profits Tax includes Profits and Capital Gains Taxes on enterprises.� Personal Income Tax includes salaries tax, personal assessment and property tax.� Social Security Tax includes all compulsory payments that confer an entitlement to receive a future social benefit. Hong Kong has a Mandatory
Provident Fund Scheme that provides for retirement benefits. For OECD definitional purposes, this is not considered as a social security tax.� Payroll tax includes taxes paid by employers, employees or the self-employed which do not confer entitlement to social benefits. There is no such tax in
Hong Kong.� Property-related Taxes include rates, stamp duties, and estate duty. (Estate Duty was abolished with effect from 11 February 2006)� Consumption Tax includes taxes on all goods and services. In Hong Kong, it includes duties, bets and sweeps tax, hotel accommodation tax, air
passenger departure tax and motor vehicle tax. � In Hong Kong, Others refer to income from royalties and concessions. � Figures for Hong Kong are in 2009/10.� The OECD figure does not add up to 100% due to rounding.
Source: Revenue Statistics, 1965 � 2009, 2010 EditionHong Kong Annual Digest of Statistics 2010, C&SD
75
Total Public Expenditure as Share of GDP
Source: Data from Financial Services and the Treasury Bureau
0%
5%
10%
15%
20%
25%1
989
/90
199
0/9
1
199
1/9
2
199
2/9
3
199
3/9
4
199
4/9
5
199
5/9
6
199
6/9
7
199
7/9
8
199
8/9
9
199
9/0
0
200
0/0
1
200
1/0
2
200
2/0
3
200
3/0
4
200
4/0
5
200
5/0
6
200
6/0
7
200
7/0
8
200
8/0
9
200
9/1
0
201
0/1
1
201
1/1
2
As
% o
f GD
P
76
Recurrent Government Expenditure on Health (2011-12)
Health $39.9 billion (16.5%)
Other Policy Areas
2011-12 Total Recurrent Government Expenditure: $242.1 billion
77
26.005
33.849+7.0%
28.762+10.6%
29.880+3.9%
30.479+2.0%
31.930+4.8%
32.323+1.2%
31.650-2.1% 30.136
-4.8%29.286-2.8%
29.830+1.9%
31.641+6.1%
35.333+4.4%
36.732+4.0%
39.904+8.6%
0
5
10
15
20
25
30
35
40
97-98Actual
98-99Actual
99-00Actual
00-01Acutal
01-02Actual
02-03Actual
03-04Actual
04-05 Acutal
05-06 Actual
06-07 Actual
07-08 Actual
08-09 Actual
09-10 Actual
10-11 RevisedBudget
11-12 Budget
HK
$Bill
ion
Recurrent Government Expenditure on Health
Source: Data from Financial Services and the Treasury Bureau
78
Difference between public health expenditures under DHA and
Government Accounts
less
Public health expenditure under
DHA
Health expenditure under total public
expenditure of Government Accounts
Health expenditure by government department other than FHB and DH, such as �
nursing homes, rehabilitation and medical social services under SWD;
ambulance service under the FSD and AMS;staff cost for monitoring medical and health
projects under Architectural Services Development;
prevention and control measures for vector-borne diseases and pest control under FEHD; and
occupational health care under Labour Department.
79
Government Expenditure on HealthGross Domestic Product (GDP), Public Health Expenditure according to Domestic Health Accounts (DHA) and Government Accounts
Source: Hong Kong�s Domestic Health Accounts 1989/90 � 2007/08
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,00019
89/9
0
1990
/91
1991
/92
1992
/93
1993
/94
1994
/95
1995
/96
1996
/97
1997
/98
1998
/99
1999
/00
2000
/01
2001
/02
2002
/03
2003
/04
2004
/05
2005
/06
2006
/07
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
Tot
al h
ealth
exp
endi
ture
(H
K$
Mill
ion)
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
2,000,000
GD
P (
HK
$ M
illio
n)
DHA - Total public health expenditureGovernment Accounts - Total public health expenditureGDP
HA pay cuts in Oct 2002,Jan 2004 and Jan 2005