Promoting private insurance still key to health reforms

PUBLISHED : Sunday, 09 June, 2013, 12:00am
UPDATED : Sunday, 09 June, 2013, 2:40am

When the previous government opted for voluntary insurance - to be known as the Health Protection Scheme - as a central element of health-care reforms, it was envisaged private hospitals would offer fixed-price packages for treating common conditions. This would make medical costs more transparent and predictable - a factor seen as important in promoting insurance to the public - and complement the standardisation of coverage provided by insurers.

It was never going to be easy to sell the idea to a free market in which doctors and hospitals set their own fees for service. Nonetheless it is disappointing that in its preliminary draft of the long-awaited reform, the present government has dropped the pressure on private hospitals to offer fixed-price packages. This follows advice from a consultant that it is all too hard because Hong Kong lacks a "sophisticated mechanism" for setting up a fixed-price system. That sounds like lack of political will. Instead, for certain procedures, insurers are to offer a choice of full cover or cheaper plans that leave a gap between cost and benefit, to be met by the patient. Hopefully, before long a wider insurance market will persuade private hospitals to improve price transparency and even offer packages.

Secretary for Food and Health Dr Ko Wing-man confirmed recently that the government will offer tax incentives to encourage people to buy medical insurance. It has abandoned plans to directly subsidise young people's premiums because of concerns about the regulatiory burden and equity of doing so. Insurance should be promoted to younger people with the promise that cheaper premiums now will be sustained later in life. Tax breaks would add to the cost of heavily subsidised public hospital health care for everyone. But greater use of health insurance, and private services, by those who can afford it will lead to better use of resources, instead of public hospitals caring for 90 per cent of local in- and out-patients while employing only 40 per cent of our doctors.