A senior official has given a most sensible answer to the Hospital Authority's plea for more funds to plug its budget deficit - the problem will not be solved by an injection of more public money. Permanent Secretary for Health, Welfare and Food, Carrie Yau Tsang Ka-lai, was right when she told a seminar on health-care financing last Thursday that the government should no longer give the authority more money to worsen the imbalance between the public and private medical sectors. Public hospitals are popular because they provide good care and charges are low. As the government subsidises about 97 per cent of the cost of treatment, most patients pay a mere $100 per day, regardless of the severity of their condition. Comparable treatment at private hospitals could easily cost tens, if not hundreds, of thousands of dollars. The upshot is that there is little incentive for people to take out private medical insurance. The Hospital Authority has also become a victim of its own success, as it is inundated with patients both poor and rich. When the authority was formed in 1991, public hospitals had a market share of about 80 per cent. Since then, their share has grown to 95 per cent. But as the authority is financed out of the government's general revenue, which is collected from a very narrow tax base, there is no way its growing appetite for money can be satisfied. As the government tightened the purse strings in recent years to contain its own budget deficit, long queues have formed at public hospitals and the workload of staff has risen. When services are cheap, demand always continues to rise. They must then be rationed - by price or by time. If Hong Kong refuses to ration by price, the queues can only get longer. An added fear is that as the population ages and medical costs continue to rise with technological advances, the problem will only get worse. Since the 1990s, the government has published three consultation papers and conducted numerous studies on how to make our health-care system financially sustainable. Options explored ranged from raising charges, introducing a voluntary or compulsory insurance scheme and prioritising treatment. But there was a lack of political courage to push through any reforms amid irrational opposition from politicians and vested interests. Another major exercise to devise solutions is in the making. Since assuming office last year, one of the key decisions made by Secretary for Health, Welfare and Food York Chow Yat-ngok was to reconstitute the Health and Medical Development Advisory Committee and ask it to review the service models of the public and private health-care sectors and propose long-term financing options. Dr Chow has shown determination to take down the barriers between the public and private sectors to enable patients and money to flow between them. That seems to be the right way forward. As it is, no mechanism exists to allow public hospitals to reduce outlays by such means as partially subsidising patients who are willing to seek treatment at private hospitals and pay a bigger share of the costs. Such compartmentalisation is absurd and should be ended as soon as possible. Hong Kong's spending on health care amounts to about 5.7 per cent of its gross domestic product. Although the figure is low compared with most developed nations, our health indices compare favourably with them. The amount does not necessarily have to go up to maintain our high standards, as long as the money, both from the government and private pockets, is allowed to flow more freely and is properly allocated among both public and private service providers. The committee is due to unveil its preliminary proposals and consult stakeholders in July. It is to be hoped that the government, under the leadership of the new chief executive, will muster the courage to push through much-needed reforms. The unsustainable state of our health-care system is a time bomb that must be defused at the earliest instance.