New land policy urged to increase growth of private hospitals in HK

PUBLISHED : Monday, 17 March, 2008, 12:00am
UPDATED : Monday, 17 March, 2008, 12:00am

Hong Kong is losing out in the region in developing private hospital services because of expensive land and staff costs, hospital operators and investors say.

They are urging the government to consider land premium concessions for the private sector, saying that increasing the sector's capacity is essential to successful health-care reform.

A government consultation document last Thursday called for closer co-operation between the public and private sectors. It said the imbalance between the two meant the public now relied heavily on public services, which take care of 90 per cent of in-patient services. There are 12 private hospitals in Hong Kong providing 3,000 beds and most of the time they are full.

The consultation document proposed that public and private hospitals could in future be built on the same sites, enabling mutual purchase of services and sharing of facilities. It also raised the issue of whether new land arrangements were needed for private hospitals.

The document said: 'In public-private partnership development projects, land is involved and arrangements have to be put in place to ensure that the premium or rental charged for the use of such valuable public resources would be fair to both the private hospital concerned and to the community.'

Alan Lau Kwok-lam, president of Private Hospital Association, said the private sector was saturated and new hospitals were badly needed if the government wanted to attract more public patients.

'We estimate that the number of private beds should be at least 4,500 in five years or even double to 6,000. We need some safety margin, now all hospitals are full,' Dr Lau said.

'Land cost is most important for hospital operators in considering opening new facilities. It is time for the community to discuss if a new land policy should be introduced to help the private hospitals' sector grow. But we can foresee there will be strong political resistance to it.'

The government is exploring a public-private partnership model for a hospital in Lantau. But Dr Lau said private operators were not interested. 'The site is just too remote. No patients want to go there. Nor do their relatives want to visit them.'

Executive councillor Bernard Chan, whose family owns Thailand's biggest private hospital, said Hong Kong failed to attract new investors because the costs were too high.

'Unless there is a new land policy to help the development of private hospitals, Hong Kong cannot attract new investors. Land and staff costs in Hong Kong are too expensive. Most investors prefer to do property projects than hospitals because the returns will be better and faster.'

Mr Chan said offering concessionary land premiums for private hospitals would require community consensus.

'If the government offers good terms to private hospitals, it may raise a concern of collusion between the government and private sector.'

Mr Chan said 40 per cent of the revenue of his group's hospitals in Bangkok came from medical tourism. But he did not think Hong Kong could be a medical tourism hub.

'In Bangkok, for example, private hospitals offer the same level of services, but at a quarter of the prices in Hong Kong. If we talk about developing medical tourism, investors will be more interested in the mainland and India,' he said.