• Fri
  • Sep 19, 2014
  • Updated: 5:40pm

Health consultation destined to be a chronic condition

PUBLISHED : Sunday, 10 October, 2010, 12:00am
UPDATED : Sunday, 10 October, 2010, 12:00am

Government's consultation paper is sixth stab at changing how medical care is paid for

SCMP headline, October 7

Judging by the initial response to this consultation paper, we are likely to have a seventh within a year or two and then an eighth and then a ninth, all for a question that need not bother us much.

Let us get it straight first of all that we have long settled the basic question of what standard of medical services we will provide through the public sector. It will be all medical services, they will be of a high standard and they will be given free or at highly subsidised prices.

This is the present standing, it is now taken by almost everyone as an entitlement, and I defy any public administration to trammel with such a basic grass-roots service or its pricing. It evolved that way by happenstance rather than planning but no one will change it now.

It is also a mighty good public health system, whatever inconvenience it may sometimes impose on its users, and the one urgent reform it required is now in process - the creation of community health clinics and family doctor arrangements to discourage people from going to hospitals for primary care.

The government's big worry, however, is that the per capita cost of medical care is rising rapidly, much more rapidly than the overall consumer price index, and that we have an ageing population, which will soon mean many more people seeking medical care.

Costs are likely to balloon in coming years. We will need more hospitals filled with fancier machines plus more and higher paid technicians and medical staff. How are we to pay for it all?

Let's put the question into perspective. Overall public health spending last year was HK$38.8 billion. This is double what it was in the mid-1990s, but still only 12.5 per cent of total fiscal expenditure. Education, social welfare and infrastructure are all bigger.

Now put this into the context of the government's fiscal balance, which is at present showing a rolling 12-month surplus of HK$63 billion. At this point we are showing an annual surplus 62 per cent greater than our entire health bill. What other government rolls in money this way? Where is that urgency in health financing?

The contrast can be made even wider. Our total fiscal savings at this point amount to HK$1.15 trillion, made up about equally of government deposits with the Exchange Fund and the fund's accumulated surplus. We are talking of a pool of available funding almost 30 times as great as our annual public health bill. We can take it even further. Those savings generate earnings. If we could get only a 3.5 per cent real return on them after inflation, we could pay the full shot for public health without even dipping into the savings themselves.

Of course, if we waste it all on pointless high-speed railways to the border or frivolities like the Asian Games we might have reason at some time to trouble ourselves about whether we have enough money, but the point is that we do have the money at the moment.

And if our public officials protest that health care should be self-financing, what about their own retirement care? Civil service pensions are almost entirely unfunded. Our bureaucrats make the rest of us contribute to the Mandatory Provident Fund but they impose no such burden on themselves. They just take their pensions from recurrent revenues.

Our public health system, however, is already really self-financing. We, the general public, have saved money in the consistent surpluses of the public purse over many years and by investing these surpluses wisely. Why should we not now treat these savings as a public health fund?

The fact, of course, is that we are already really doing so. And if our bureaucrats now propose to us that we pay more of our own way through voluntary insurance, well, the first thing we will note is that they themselves won't join the scheme as they already have a superb and totally free health scheme as public servants.

And we won't join in the insurance scheme unless we think the extra benefits are worth the cost, which they are unlikely to be unless the scheme is as heavily subsidised as the overall public health system, in which case why bother at all?

So on we go to consultation No 7 and then No 8 and then No 9.

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