I am going to say something politically incorrect towards the end of the column, but first let me wade into the health care finance debate. We are all familiar with Hong Kong's problem. I believe the solution is two-pronged: first, apportion more of the health care burden to the private sector by reducing some non-emergency and highly specialised services in public hospitals; and second, change the public mindset from 'entitlement' to 'user pays'.
The Bauhinia Foundation's plan for a mandatory medical savings scheme forces citizens to put money aside for future medical bills. The problem is that, unlike the Mandatory Provident Fund, the time when the money will be needed, and how much, cannot be predicted. A few people will never need it; for those who do, the chances are that it will not be enough.
The plan also basically contravenes the user-pays principle, since everyone would pay the same, regardless of use. And it would involve high administrative costs due to the constant stream of withdrawals.
The foundation also recommended a three-pillar system - three tiers of health care with varying degrees of government subsidy. The problem with such a complicated system is the proverbial 'devil in the details'. All therapeutic treatments affect the well-being of an individual, and it is difficult to rank them in order of importance.
It makes more sense to put the money into a universal insurance plan that provides basic medical coverage in public facilities for every Hong Kong citizen. Offering tax rebates would encourage citizens to buy additional insurance that allows them access to private doctors as well, shifting more of the workload away from public hospitals.
Currently, insurance companies' schemes are open to abuse, but a tailor-made and revamped universal insurance plan would be more versatile and flexible than mandatory medical savings. And, most of all, it follows the user-pays principle.
In theory, health care funded by taxes is more cost-effective than that funded by private insurance, because the latter involves high costs associated with developing packages, marketing, processing claims, salaries for top executives and the inevitable profit imperative. On the other hand, health care funded from taxes is wrought with the usual bureaucratic baggage and, in the case of our Hospital Authority, unreasonably high salaries for many senior doctors.