A serious illness, even if not fatal, can easily drag a patient into poverty. How money can be best spent for better health, and how society should share the bills are key issues in the upcoming discussion of a voluntary medical insurance scheme that is set to change the health care landscape in Hong Kong. Health officials in the past two decades - since the first consultation paper on health care reform, commonly known as the 'rainbow document', was published in 1983 - have been grappling with the same unfinished job of trying to make the overburdened public system more financially sustainable. After a long process of discussions, Chief Executive Donald Tsang Yam-kuen, in his policy speech two weeks ago, declared the death of plans for a mandatory insurance scheme. The government believes a voluntary scheme can serve Hong Kong better and is politically safer. Funded by simple taxation and offering low medical charges, the public health care system has been overloaded by an ageing population, medical advances and higher patient expectations. Its problems have been shown in long waiting times, poor quality of some services, medical blunders and long working hours for medical staff. Patients are asked to wait for more than two years for a colonoscopy, four years for a first appointment at a clinic, or five years for a cataract operation. But public patients pay only HK$100 a day for a public hospital stay. The fee covers almost everything from three meals a day and 24-hour nursing care, to operations that may cost hundreds of thousands of dollars in the private sector. The government now wants at least 500,000 people to join a voluntary insurance scheme so their health risks will be shared and more will opt for private services. The HK$50 billion set aside for the financing reform will be used to subsidise the premiums for voluntary private insurance. Emphasising that the reform is not about cutting costs, officials say they want it to achieve two primary objectives: provide choices and better services to patients who can afford private insurance; and to set standards for private medical services and insurance plans. The authorities also hope that by introducing a highly regulated insurance plan covering a high proportion of the population, doctors and hospitals will make their prices more transparent, and service quality more predictable. A new insurance regulator would be created and the scheme would be tightly controlled. Insurance companies would not be allowed to exclude from the scheme people with pre-existing illnesses, or raise the premiums for those who make claims. The plan would cover hospital care and specialist outpatient clinics. Premiums for younger people would be cheaper, to encourage people to join the plan as early as possible. Overseas experience will be studied. For example, Australia has asked its citizens to pay extra tax if they do not buy medical insurance. Medical services providers and insurance companies are the obvious 'winners', with an anticipated boom in business. Insured patients will enjoy services with easier accessibility, shorter waiting times and, in some situations, better quality. 'I have a patient who came to me for a colonoscopy after she was told to wait for more than two years for this at public hospital,' private surgeon Chu Kin-wah said. 'When more people get insurance coverage, they will no longer bother to spend years waiting in the public sector; they will go private. Patients pay the insurance for better health and to buy time.' A booming private health care sector can create jobs and ease the load on the public sector, so it can focus on patients with financial difficulties. But there could be potential market failures and moral hazards. If medical insurance generates unnecessary demand on services, the public will pay the price. Then there is the so-called buffet syndrome, named for buffet meals where everyone wants to pile as much as possible on their plate. A patient with a stomach pain may demand a private doctor do all kinds of examinations covered by insurance even if they are not necessary. Voluntary insurance was one of six options presented by a Food and Health Bureau consultation document in March last year that also included the now-abandoned mandatory plan. Under that option, a 'personal health care reserve' scheme would have required workers to save 3 to 5 per cent of their pay for medical insurance. In comparing the different options, the document said voluntary insurance could pool risk 'in some degree' and give patients choices. But its financial sustainability was rather poor, and access to services was based on the ability to pay premiums. The government has yet to design the plan, and does not say what will happen if the initial HK$50 billion dries up. It also remains unclear how a medical savings component in the proposed medical insurance plan could improve its financial sustainability. Controlling human behaviour is always difficult. Some medical observers doubt whether voluntary insurance can control abuse of services, and fear rocketing medical inflation as seen in the United States. There are also concerns that insured patients will still use public services. For example, cancer patients could have laboratory investigations at a private hospital but return to a public hospital for a major operation that might not be covered by their insurance. The government is to conduct in-depth analysis on how voluntary insurance can increase the use of the private sector - but not at the same time increase the demand on public services. There is also an equity issue. People who receive government subsidies for insurance can enjoy double benefits - better choices and services in the private sector, and the 'always available' public services. For the underprivileged, public services remain their only choices. 'How the government allocates the HK$50 billion fairly across the population is a big issue, and a very political one,' one medical professional familiar with the reform said. 'If only people who want to buy insurance get the subsidy, it will be unfair to those who cannot afford it. Many chronically ill are poor people getting welfare payouts, and private insurance will never be an option for them.' Insurance sector lawmaker Chan Kin-por said the extra business for the industry might not be as much as some expected. 'Most people who join the regulated plans will be those already insured who move their existing plans to the government-regulated one,' he said. Chan believes the industry would generally accept a profit cap under 10 per cent. Most medical insurance plans make single-digit profits. He said a future regulatory body should have representatives from major stakeholders - patients, doctors, insurance firms and other service providers. 'The body should come together every year to discuss the cost of premiums,' he said. Some patients do not think a voluntary insurance scheme is a solution. Tim Pang Hung-cheong, spokesman for the Patients' Rights Association, said patients who could not afford insurance would lose out. 'Those who cannot afford insurance will stay with the public sector, while the middle class can get better services with a government subsidy,' he said. 'It is unfair. Senior public doctors will switch to private practice for high profits, leaving the inexperienced in the public sector taking care of the poor.'