Healthcare financing in Hong Kong and China

1
Healthcare financing in Hong Kong and China

• Raymond Yeung, PhD
• The University of Hong Kong
• 12 December 2005

2
Topic covered

• The Chinese healthcare market an overview
• Analytical framework in healthcare financing
• The Mainland and Hong Kong One-country
  two-systems
• Challenges and issues

3
The Chinese healthcare system

• Over 306,000 healthcare organizations
• 18,000 hospitals and 210,000 clinics
• 5.2 million healthcare professionals 1.8m
  physicians and 1.2m nurses
• 1.5 physicians and 2.4 beds per 1000 people
• 8200 and 46000 community healthcare in urban and
  rural township respectively (mainly outpatient
  services)

4

• MOH at the national level for designing policy
  and regulations with some supports in health
  financing
• Increasingly transparent in information
  dissemination and active in the international
  scene especially for infectious epidemic
• Provincial level government in urban and rural
  township responsible for executing and funding
• However, mainly the healthcare organizations need
  to be self-funded
• http//www.moh.gov.cn

5
Healthcare financing

• National Health Accounts offer a standard
  framework for international comparison
• (http//www3.who.int/whosis/country/indicators.cfm
  ?countrychnlanguageeneconomic)
• Health expenditure / GDP increases 20 in the
  past 5 years (5.8 in 2002)
• Government only contributes 1/3 on total health
  expenditure Half are from Labour Medical
  Insurance Scheme
• Out-of-pocket 66 vs 33 prepaid among the
  private spending

6
Analytical framework
7
One country two systems

• Hong Kong SAR ranked the freest economy in the
  world a perfect benchmark for capitalism,
  stated by Milton Friedman
• China the largest communist country in the
  world the central planned component still
  account for 50 of the economy
• What about their healthcare?

8
Challenges and issues facing China

• Large proportion of OOP expenditure
• How to address incentive compatibility to manage
  physicians behaviour
• Increasing regional disparity in standards and
  financing of care
• Lack of foreign participation in the local
  healthcare system

9
The Hong Kong system

• Public vs private about 50-50 in the ambulatory
  care sector
• Public sector dominates (85) hospitalization
  and tertiary care
• Fragmented system commented by Harvard
• Heavily subsidized public care sector financed
  through general revenue

10
Policy documents for the HK reform

• http//www.hwfb.gov.hk/hmdac/english/dis_papers/di
  s_papers_lhcshk.html
• Rainbow Report 1993
• Harvard Report 1997
• Lifelong Investment in Health 2000
• Building a Healthy Tomorrow 2005