The number of Hong Kong people buying medical insurance has risen 446 per cent in the past six years as health costs have soared to the second highest in the world - behind only the United States. A total of 1.49 million individuals in the SAR had bought medical insurance by the end of 2000, compared with 273,287 in 1994, according to the Hong Kong Federation of Insurers' figures. Individual medical insurance premiums also rose dramatically to HK$2.25 billion in 2000, up 390 per cent on HK$453.46 million in 1994. Martin Garcia, director of medical insurance underwriting agent Goodhealth Worldwide, said the cost of medical services in Hong Kong reflected the fact that the SAR had some of the most advanced medicines and medical facilities available in the world. He said: 'Every time new medical equipment appears in the world, we find it in Hong Kong within months, if not overnight. Hong Kong people are receiving first-class medical treatment, while they are also paying first-class medical bills.' Medical services cost 30 per cent less in Australia than in Hong Kong, and the cost of medical services in India is 90 per cent lower than in Hong Kong. But Mr Garcia said many wealthy people in China and Asia were willing to pay more to receive better medical treatment in Hong Kong. Despite the growing number of people buying medical insurance, less than 25 per cent of the Hong Kong population has done so - much lower than 50 per cent level in the US and Europe. Mr Garcia believed that within two years, medical insurance sales in Hong Kong would rise another 20 per cent to 25 per cent. Set up in 1995 as part of the British-based insurer Primary Group, Goodhealth offers medical insurance to expatriates living and working outside their own countries. Its Asian headquarters were set up in Hong Kong in 1998. People who bought its policies could expect to pay more than those offered by rival firms, but it also provided more specialist cover such as cross-border treatment, Mr Garcia said. 'We are not competing on low price, but we are competing on our services quality,' he said. It could cover clients who worked in Hong Kong but returned to their home countries to receive treatment. The deluxe medical insurance policy also appeals to local Chinese who seek medical treatment overseas. Mr Garcia said the Asian crisis in 1997 and the more recent economic slowdown had an impact on medical policy sales, especially where customers opted for less cover at lower costs. But he believed strong growth in high-end medical cover would occur in Hong Kong with the opening up of the China market. Beijing and Shanghai each had about 400,000 expatriates, who bought medical insurance in Hong Kong and preferred to receive medical treatment in the SAR. Since Goodhealth did not hold a licence in China, it could sell policies to expatriates only in Hong Kong before they travelled to China.