Voluntary insurance a step in right direction

PUBLISHED : Friday, 29 October, 2010, 12:00am
UPDATED : Friday, 29 October, 2010, 12:00am

The focus of the latest consultation paper on health care reform is a proposed voluntary insurance scheme. The proposal is unique to Hong Kong and, if introduced, all parties to the scheme will be 'crossing the river by feeling the stones', to quote Deng Xiaoping .

Adjustments and new initiatives will be necessary, based on experience, and some features such as the savings element would be better left for later implementation.

For the scheme to succeed and really encourage greater use of the private health care sector, it must be affordable and attractive to as wide a section of the community as possible.

One of the major target groups should be the big majority of the middle class, particularly the younger element, in the family income range of HK$15,000-HK$40,000 a month. This requires more research, though the figures quoted in the document give some ground for optimism.

The proposed scheme does not directly encourage young parents to enrol their children. Consideration should be given to using part of the HK$50 billion fund to subsidise the cost of insurance for young families.

This would both achieve the objective of catching them while they were young and be one small piece of encouragement to increase Hong Kong's birth rate.

If the scheme succeeds, it will, first, relieve pressure on the public system and enable it to improve its service in its main area of focus. Second, it will make a major contribution to the emergence of a well-regulated, professional and trusted health insurance market capable of playing a bigger future role in health care financing. Finally, and potentially of most long-term significance, it will strengthen the government's ability to monitor and, as necessary, influence the quality and cost of services in the private sector.

There are some things it will not do. It will not directly support primary care, which for valid reasons of cost is excluded from the cover, although indirectly it will free up resources to accelerate the reform of the sector.

While it will improve access to health insurance for older people, it cannot solve the overall problem of affordability of private health care for the elderly, which is part of the bigger issue of retirement protection.

There are many hurdles to be overcome. At this stage, our main concerns would be cost and usage containment, issues of governance, the likely take-up rate by both insurers and private hospitals, and the provision of cover for young families and the less affluent among our middle class.

This is just one step in a long journey. The decision to do this on a step-by-step, evolutionary basis is wise, given the complexity of the system and the many often conflicting interests (some valid, some self-serving) and objectives that must be navigated.

While constructive criticism from all of us is needed at this stage, the core message is that this is an important proposal that fully merits support by Hongkongers.

Michael Somerville is a consultant at the Business and Professionals Federation of Hong Kong