A grand health scheme doomed to wither and die

The government expects about 1.5 million people to benefit from a long-awaited voluntary health insurance scheme which will cost the public purse more than HK$4.5 billion per year in subsidies and tax breaks.

SCMP front page, December 16

It comes down to a matter of mindset. There are two ways of looking at this, they are very much the opposite of each other and, yes, I hold some views on which is the right way.

One mindset says that, having saved a lot of money, we had best keep it in the kitty in case we need it to fight off speculators against the Hong Kong dollar, although, perhaps, we can also legitimately use the money for big infrastructure projects to promote the growth and good name of Hong Kong.

Unfortunately, says this mindset, more and more people cannot seem to take care of themselves or, anyway, say they cannot, hah! If we cannot get social security off our backs, at least we should make people pay their own doctors' bills. It is money down the drain for the public purse and gets in the way of showing up Singapore and Shanghai.

This is one mindset. The other one, mine, says the HK dollar does not need defending. It is not the rouble. Its defence is a soundly administered economy and, if that won't do, then nothing will and we shall have to take a rate other than HK$7.80 to the US dollar. It won't be the end of the world.

Our infrastructure, in addition, is overbuilt and what we have now are mostly wasteful concrete-pouring projects to reward the good ole boys with lucrative contracts so as to keep them onside in the legislature.

We are almost in a position, however, to impress the entire world with its first universal, fully funded, full-service health plan. It would be a knock-them-back-on-their-socks achievement.

It won't be cheap. Our total public expenditure on health in the last fiscal year was HK$67.4 billion. But let's say we put HK$1.5 trillion into a health fund and target a 3 per cent annual return on that money. We would almost be there in that case.

And we have that HK$1.5 trillion to hand. Our fiscal savings, plus accumulated income on investments, come to HK$1.64 trillion. Ridiculous, you say. Well, perhaps it is not you who say so, but certainly our bureaucrats. They will not countenance any use of the money other than locking it away and gloating over it.

But consider this. We already have a universal, full-service health plan. You can go to any public hospital and get full treatment of whatever ails you for a mere HK$100. Prepare to sit around for a long time if that ailment is not serious. Prepare to wait a year if the surgical procedure is not urgent.

But don't delude yourself that Hongkongers will give up this medical plan for any complicated insurance plan that lifts a greater portion of the cost from the general public's shoulders and places it on the shoulders of individual members of the public.

It will not happen and, since this latest insurance scheme appears to envision an even costlier deal for individual Hongkongers than the last rejected one did, it has all the hallmarks of another scheme designed to fail.

What we are talking about is not what sort of medical plan the public will enjoy, but only how it will be financed. We can either continue to pay for it out of recurrent government income or set up the big fund for investment income that will cover most of the costs.

And the benefit of a formal financial arrangement over the hop-along, day-to-day funding we now employ is that we can then more easily deal with the thornier questions of providing enough facilities, paying doctors well enough to keep them in public hospitals and dissuading irresponsible use of the system.

But endlessly proposing new health schemes that are set to fail is as bad as building bridges and roads to nowhere.