Both on the Chinese mainland and in Hong Kong, the subject of healthcare reform is getting more and more urgent as population aging continues, and growing aspirations for government spending compete for limited fiscal resources.
Essentially, the current system in both Hong Kong and on the mainland allows patients to pay very little to get medical help for most ailments. For example, in Hong Kong’s public hospitals, for eligible people, acute/general care inpatient care requires only HK$75 ($9.55) on admission plus HK$120 per day. For convalescent/rehabilitation, infirmary and psychiatric beds, the cost is only HK$100 per day. These fees cover virtually everything, including meals, doctor’s fees, nursing care and medications. There are no extra charges for most surgeries. However, some medications and items that are very costly may not be covered, and there are very long waiting times for specialist visits and for such diagnostic procedures as magnetic resonance imaging. A private insurance company that promotes its private medical insurance currently has a posting on its website that reads (translated from Chinese): “For such common diagnostic procedures for cancer detection as the CT scan and the MRI, waiting time is typically over four years and 2.8 years respectively for stable cases. For semi-urgent cases, the median waiting time would exceed eight months and seven months respectively.”
On the mainland, a recent uproar in Wuhan has to do with a proposed reform that would require patients to pay more out-of-pocket costs upfront but promises to provide better protection for costly care if needed. Initially, the latter point was not so apparent to the public. As a result, protests appeared when people found that their personal accounts suddenly appeared to have less money. The official explanation was that the apparently “disappeared” savings were moved from individual accounts to a social pool of funds from which costly care can be paid for when people need it. In particular, on the mainland, medical charges that are covered by public health insurance consist of two parts. One is the responsibility of the patient; the other is the responsibility of the medical insurance fund. Workers and their employers regularly deposit contributions into the insurance fund. The patient normally pays his/her share from the personal medical savings account out of which he/she pays his/her share, while the “socialized” medical insurance fund pays the rest. The people were worried that their personal medical savings had been appropriated by the government because the government was running out of money.
It has been noted by some commentators that at this juncture, there is indeed a need to rebalance individual accounts and the social account. Many people have money in their individual accounts because they are young and healthy, and they do not spend much on healthcare. On the other hand, those who need expensive care often are short of funds, and they could run into the predicament where they cannot pay for needed care.
Although the Hong Kong healthcare system is not like that on the mainland, the same principle applies. Most people can and are ready to pay a bit more when they use Hong Kong’s publicly funded healthcare services. But many of those who need more-costly services are forced to have to wait a long time or are even denied the services (dental care is a case in point) that matter a lot to their well-being. This is the rationale for my proposal for excessive burden protection (Hong Kong Must Aim to Offer Timely, Affordable Healthcare, published in China Daily Hong Kong Edition on Aug 2, 2022). The idea is to raise health service fees while capping the annual eligible healthcare expenses, with the government shouldering all expenses beyond the annual cap. As long as the annual cap is reasonable, affordability will not be a problem. I proposed that even for those on Comprehensive Social Security Assistance, a fee should be applicable, and annual eligible expenses should be likewise capped at, say, half the normal level. I also proposed that CSSA recipients can be given an upfront increase in their annual allowances that offsets the maximum payment they may have to pay. This way there is no additional burden on them at all.
Thus, after introducing “excessive burden protection” by raising charges to more-reasonable levels and by capping annual eligible healthcare spending, the coverage of healthcare can be expanded and waiting time can be shortened. Today, insurance companies charge a rather onerous premium for older people, reflecting the higher probability and higher cost of elderly healthcare. Older people will have to pay more just to get the insurance. Given the higher expected healthcare costs for the elderly, it makes sense that the annual cap be progressively higher for the elderly up to some point. Just for the sake of illustration: Suppose the annual cap is HK$10,000 for those up to age 60. The annual cap can be raised by HK$1,000 each year beyond age 60 to HK$15,000. This means that the very old may have to pay up to HK$15,000 per year. The government will then have more resources so it can offer more-comprehensive healthcare plans and more-timely care. The arrangement may also prompt young people to take better care of their health to avoid higher medical bills when they get old.
The author is the director of the Pan Sutong Shanghai-Hong Kong Economic Policy Research Institute, Lingnan University.
The views do not necessarily reflect those of China Daily.
