Health Care Delivery and Financing: A Model for Reform

Judging from the end results, health care services in Hong Kong can be taken as quite satisfactory. The health conditions of Hong Kong citizens compare favourably with those in advanced economies, and life expectancies of both males and females in Hong Kong rank among the top in the world. Yet, to come up with these accomplishments, Hong Kong people have put in vast amounts of resources in health care. It is thus natural to ask whether the resources put into health care are efficiently allocated, and whether health care services can be further improved given the current input of resources.

On the demand side, population in Hong Kong have been growing fast recently relative to the past, and they have also been ageing constantly. These have greatly increased the demand for health care. At the same time, new medical techniques and discoveries have raised the likelihood of curing some previously fatal diseases. However, health care services are by no means homogeneous in nature. Treatments of chronic illnesses suffered by the elderly and new medical techniques and equipment are in general very expensive. Health care services in Hong Kong have to face the challenge of increasing demand at increasing costs.

Most Hong Kong people turn to the public clinics and hospitals for health care. Hong Kong's public health care system is huge and accounts for a great share of government budget every year. Will the government have to keep funding increasing expenditures in health care, and how would this be financed? Should it raise tax revenues, or should other social services be curtailed? Should the general public shoulder their own spending, or should they be encouraged to rely more on health care insurance? Can there be better co-ordination between the public and private health care systems for more efficient resource allocation?

This book is the result of research and analysis of the above issues and queries. The author, Professor Lok Sang Ho, explores how resources in health care can be better utilized without lowering the standard of services. He also proposes an innovative financing scheme to handle the expected, ever increasing, health-care expenditures. His discussion is based on economic analysis as well as results from a large survey of households, medical doctors, and hospital administrators.

Professor Ho's proposal of financing health care strikes a balance between money from the public purse and money from the consumers' own pockets, while at the same time allowing the consumers the flexibility to choose the level of health care they find desirable and affordable. Health care services are important for the physical well being of the people, but they also account for a large proportion of economic resources. Professor Ho's analysis and proposal are worthy of attention by policy-makers and the concerned public.

Y. F. Luk
School of Economics and Finance
The University of Hong Kong