healthcare financing and insurance in hong kong€¦ · czech republic denmark estonia finland...

1

Healthcare Financing and Insurance in Hong Kong

1

HA Convention Symposium 2

8 June 2011

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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)


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%


Health programme administration andhealth insurance


Medical goods outside the patient caresetting


Long-term care


Home care

Ambulatory services



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


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


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)


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


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%


Health programme administration and health insurance


Medical goods outside the patient care setting


Long-term care


Home care

Ambulatory services



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


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

healthcare financing and insurance in hong kong€¦ · czech republic denmark estonia finland...

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