MR CHAN KIN-POR (in Cantonese): President, those who are aware of the pressure of an aging population on the health care system will know that it is necessary to implement a health care financing scheme in Hong Kong. I am glad to see in the Chief Executive’s policy address that a voluntary supplementary financing option comprising insurance and savings components will be launched as the main proposal in the second-stage consultation. As a member of the Health and Medical Development Advisory Committee regularly participating in the discussion on health care financing, I would like to express my views on the new main proposal in this session.
Over the years, Hong Kong people have been enjoying inexpensive but quality public health care services. But with the increase in population, spending on public health care has also surged. According to the Consultation Document on Healthcare Reform (Consultation Document), the total health care spending from 2004 to 2033 will increase by 3.6 times, that is, from $60-odd billion to $300-odd billion, with an economic growth of 1.7 times over the same period. In the future, the Government simply does not have enough resources to meet such a huge spending and reform is practically a must. However, as the issue is related to spending with a bearing on the people’s livelihood, any proposal for fee increase is tantamount to slashing welfare, which is hardly acceptable to the public. So, the Government does not have the courage to propose a reform of health care financing, thus leading to delays of the issue. I have heard my predecessors in the medical profession lament that Hong Kong’s public health care system, which is like having a cancer, will be in peril if it goes without treatment.
Finally, the Government submitted the Consultation Paper in March last year, in which six major options on health care financing were proposed. During the consultation process, there were divergent voices on these options in the community. The public generally has reservations about any proposal of a mandatory nature, and according to the Government’s survey, 71% of the respondents support the voluntary health care insurance option, which is also the most popular one. Therefore, the Government has adopted the voluntary option as the main proposal of the second-stage consultation and health care financing has been revised as a supplementary financing option as a practical response to the aspirations of the people.
The Government’s determination to launch the second-stage consultation on health care financing when Hong Kong economy begins to recover has demonstrated its courage and commitment to reform, which is worthy of our support. In the policy address, the Chief Executive has pointed out that the Government will inject the earmarked $50 billion into the future supplementary financing structure in order to provide subsidies and incentives to induce people with the means, including those who are covered by medical insurance, to participate, thus enabling them to patronize private-sector medical services.
First of all, I would like to discuss the merits of the new main proposal in terms of its structure and operation. If the new option is ultimately supported and implemented, it is expected that the Administration will set up a regulatory framework to formulate the implementation details before inviting insurance scheme operators to provide services to the public.
I believe the insurance industry is the most suitable scheme operators because it has been providing medical insurance services to the public. It is well experienced and most efficient in its overall operation for the following reasons. First, given its frequent involvement in designing various medical insurance products, it will be more experienced in product improvement in the future. Second, medical insurance requires an enormous computer system to support its operation. Given that the insurance industry has set up a sound and comprehensive computer system for processing medical claims, costs can be saved as the Government needs not invest a large amount of money in the setting up of an expensive computer system if services are provided by the insurance industry. Third, given that medical insurance may involve a high risk of abuses or frauds, the rich experience of the insurance industry in dealing with claims and prevention of frauds can help reduce frauds and wastage of resources. Fourth, with rich experience in supervision of medical expenses, the insurance industry can ensure no wastage of medical resources. Meanwhile, as it is estimated that at least hundreds of thousands or even one million people will participate in the new option, it will lead to standardization of medical fees and enhancement of transparency, which will be in the best interest of consumers.
In my opinion, there should be representatives from at least four sectors, namely the consumers, the medical sector, the Government and the insurance industry, in the regulatory framework, with the purpose of enhancing operational transparency, in particular to ensure that the yearly fixed premiums should be acceptable to society.
Given that the option is voluntary in nature, it will certainly attract a large number of high-risk participants, such as the chronically ill or elderly, because they often find it difficult to take out suitable medical insurance in the insurance market. So it is necessary to attract a sufficient number of low-risk participants, such as the young and the physically fit, to join the option in order to share the risks. Some people may say that under such an arrangement, the young and the physically fit will be in a disadvantaged position. But we should understand that all young men will grow old and all healthy persons will eventually become sick. Therefore, there is no such thing as who has been taken advantage of. Rather, we should share the risks together. The long-term operation of the option hinges on good risk-sharing arrangement.
Therefore, the Government should make good use of the earmarked $50 million to provide sufficient incentives and formulate a good option. Incentives can be provided in various forms, for instance, participants who have contributed to the option for at least 30 years or turned 60 years old will be provided protection for life at a lower premium. Alternatively, a premium discount which varies inversely with the age of the participants will be offered and an additional charge will be imposed on quitters.
Given that 500 000 to 1 million participants will share the risks, this medical insurance scheme will provide the public with lots of benefits, which I would like to discuss today. First, the new scheme will offer a wider scope of protection. To avoid too high a premium which will deter potential participants, insurance schemes currently operating on a commercial basis will inevitably impose restrictions on the scope of protection by stipulating that congenital diseases or mental illness are not covered, for instance. Owing to the large number of participants in the new scheme, such restrictions can be removed. Secondly, in the existing medical insurance schemes, there are usually clauses providing that diseases currently suffered by the participants are not covered. For instance, people who are now suffering from hypertension and diabetes will not be protected against diseases arising from hypertension or diabetes in the future. In the new scheme, such restrictions may be lifted. Thirdly, there are worries that the premium will be substantially increased after claims have been made. But such a situation can be pre-empted under the new scheme. Fourthly, presently the elderly simply cannot take out insurance because the premium will increase significantly according to their ages. For instance, those who are over 60 years old find it difficult to take out policies. In the future, the elderly may join the scheme for a relatively low premium.
There is another important issue to be solved. Currently about 2.7 million people have taken part in various forms of medical insurance schemes, many of which are provided to employees by employers. However, there are limitations in these insurance schemes. For instance, some of these schemes will be suspended after the retirement or resignation of employees, and some, which are taken out by the employers, fail to provide sufficient protection and are unable to meet the specific needs of the employees. Therefore, in order to attract those who are covered by health insurance to join the new scheme without paying double premium, we need to devise a mechanism so that articulation is possible.
In the first-stage consultation on health care financing, I heard many voices about the grassroots being ultimately victimized. I think such a view is clearly erroneous. The purpose of the new option is to attract the participation of the middle class by means of financial subsidies and incentives so that they will no longer rely on public health care services, thus releasing the relevant resources which will benefit the grassroots. As for the middle class, they also want to have wider choices and access to private-sector health care services. However, as there is much room for improvement in respect of private hospital charges and people using such services will often be caught in an overrun in the bill, they are forced to patronize public hospital services so as to avoid the problem. I believe many middle-class people will be happy to join the new option if it can be launched successfully and transparency in medical charges can be enhanced, thereby releasing more public resources definitely for the benefit of the grassroots.
President, I so submit.