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Alison Smith

THE arrival of managed health care - a marriage of medicine and insurance - has sparked a massive row in Hong Kong's medical establishment.

 Last week, insurance giant American International Group (AIG) and equally huge US-based health care-management organisation United HealthCare announced a joint venture to provide managed care in Hong Kong.

 This development dwarfs last year's home-grown consolidation in which four of Hong Kong's largest private medical practices were acquired by outside corporate interests.

 The new venture - AIG United HealthCare - has contracted with five SAR hospitals and 400 specialists and doctors to treat clients on a pre-paid basis.

 Proponents of managed care promise better attention to patients and cost savings to their employers, who often foot the bill for coverage.

 Some doctors question, however, whether high-quality health care, patients' rights and the sanctity of the doctor-patient relationship can be maintained in a tough, business-led environment in which shareholders, management teams and accountants hold sway.

 'If the majority of doctors refuse to participate, these [insurance schemes] will collapse and disintegrate. Unity is the profession's greatest defence weapon,' Donald Li Kwok-tung, chairman of the Hong Kong Medical Association's private medical services committee, wrote recently in the HKMA News.

 Managed health care promises to change the balance of power in the SAR because the key to a managed-care group's success lies with its bargaining power and vertical integration.

 The bigger and more powerful a group is, the deeper the discounts it can demand from hospitals, laboratories and specialists in return for funnelling patients and orders their way.

  Vertical integration means referrals are given only to doctors in the same group, making it much easier to control treatments patients receive.

 This approach can result in sizeable savings. For example, health-care spending in the United States, where managed care has taken deep root, grew by 4.4 per cent in 1996 - the lowest annual rate of increase in 35 years - an achievement credited largely to the new cost-consciousness of managed care.

 'Sixty million Americans have gone into managed care, and the elderly are joining at one million per year,' Henry Loubet, United HealthCare's Pacific-region chief executive, said.

  AIG hopes to enlist its 200,000 existing health-insurance clients to the scheme and to use Hong Kong as a base to expand into the region.

 Hong Kong's leading employers spent up to $20 million a year on health insurance, AIG Far East regional director Arthur Koo Yee said.

 He said the cost of traditional indemnity insurance was rising by 10 per cent to 15 per cent annually but the cost of managed-care coverage was expected to increase by an average of 5 per cent or less.

 This lower price carries other costs, however. For example, in the US patients have complained of having claims for emergency care denied, being sent home early from hospital and being refused access to the specialist of choice.

 Hong Kong's public system of health care is under increasing pressure.

  Outpatient treatments grew by more than 18 per cent from 1994 to 1996, accident and emergency cases by 22 per cent and hospital stays by more than 24 per cent.

 However, with public care still so cheap - a stay in hospital costs just $68 a day - managed care probably will draw only those who already seek private care.

 Even so, Derek Gould, principal assistant secretary in the Government's Health and Welfare Bureau, said he would welcome any high-quality proposal that might relieve pressure on Hong Kong's public system.

  'Any scheme that attracts people who can afford private care rather than relying solely on public health care is a good thing - providing quality is not compromised, which is the big question,' he said.

 Managed care is not yet monitored in Hong Kong because it is so new and because it is a hybrid of two industries.

  But the Hospital Authority's deputy director for management, Geoffrey Lieu, called for government supervision of managed-care schemes.

 'The theory of managed care is fundamentally sound. Only the practices are potentially questionable . . . To protect the public's interest, the Government should quickly implement policies and guide further development.' 



Managed health-care growth fuels debate