Hong Kong’s
healthcare system has long prided itself on its dual-track approach: a robust public sector providing affordable care, and a private sector offering speed and choice – if you can afford it. In theory, this model gives patients the best of both worlds. In practice, it is struggling: an overburdened public system, an inadequately regulated private sector and a health insurance framework failing to bridge the gap.
The
Voluntary Health Insurance Scheme (VHIS) launched in 2019 was designed to encourage residents to meet more of their healthcare needs privately. Yet years later
, the impact remains marginal. Public hospitals still account for more than 80 per cent of all hospital beds, and patients still rely overwhelmingly on the public system. While more than a million VHIS policies have been bought, many appear to be reluctant to use them due to high co-payment amounts and gaps in coverage, especially under the
standard plan.
This problem is structural. People are being pushed to choose between the public system or buying a plan to go private. But this binary choice doesn’t reflect how people experience illness or navigate care. Life is not dual-track; it’s blended. Our financing system should be too.
Basic VHIS plans often fail to cover the full cost of private care, particularly when a hospital stay or complex procedure is involved. Policyholders are frequently left 30 per cent or more out of pocket, including for diagnostic imaging and specialist fees. For middle-income families, these costs can be prohibitive. This undermines the core purpose of insurance: to provide financial protection and choice.
Moreover, the VHIS was introduced without any meaningful
reform of private healthcare. Fee-for-service remains the dominant payment model, which incentivises over-servicing and drives up costs. Many private doctors operate across multiple hospitals under the visiting doctor system, making it difficult to track performance or hold providers accountable for outcomes. Transparency is limited and price variability is high, adversely affecting patient trust
.It doesn’t have to be this way. Around the world, governments are finding smarter ways to integrate public and private financing, regulate quality across settings and drive better outcomes. Hong Kong should do the same. Five reforms are urgently needed.
