I am speaking on Amendment No 676 tabled by the Hon Wong Yuk-man. The Hon Wong proposes to cut Expenditure Group 140 – Food and Health Bureau (FHB) by $6.2 million, roughly equal to spending on further public consultation on health protection scheme (HPS). As we are aware, the Government has been studying HPS for years. To our disappointment, however, the original scheme has been now extensively revised and substantially reduced to become “look-alike” with much less benefits. If FHB did push ahead such “reduced” HPS, it would hardly receive public support and LegCo endorsement. Thus, the Hon Wong’s Amendment is not totally groundless. Let me compare the original plan and reduced plan, and help the public make judgments themselves.
The original HPS, based on outcome of previous consultations, has three major goals. Firstly, it would encourage packaged services and charges in private medicine based on “diagnosis-related grouping” (DRG). They would help address public concerns including surging charges of private medicine, uncertainty of actual bill and poor tariff transparency.
Secondly, it would introduce regulatory framework to improve existing health insurance plans, including deciding major items covered by standard plans under HPS. An obvious advantage is better consumer protection with better healthcare plans. However, the downside, as we may be aware, is pushing up premiums.
Thirdly, it would provide $50 billion for financial incentives or medical reforms under HPS, including high risk pool, enrolment discount, loyalty rebate of 30% on reaching the age of 65, tax concessions for premium payment etc.
Apparently, the original plan has straightforward goals. It would be consumer-based and would control medical inflation through DRG and service packages. It would offer higher transparency, better coverage and better protections. However, the original plan also recognizes that better protection would mean higher premium. To help make HPS more affordable, a sum of $50 billion has been earmarked to provide discounts for both new enrolments and loyal members as incentives. Thus, more young and healthy people would enroll, and risk sharing would be achievable.
Let me turn to the “reduced” or “look-alike” HPS about to be released for consultation.
The consultant appointed by the Government says that means of preparing standard DRG is not yet available. It simply suggests that there would be no DRG. As a result, the public would be losers because medical inflation would still be out of control and private hospitals would still lack tariff transparency. In my view, the Government is simply letting private medicine off the hook and not pressing for improvement in private hospital tariffs.
Secondly, the insurance industry has spent several years of discussions with the Government and has endeavoured to meet the 12 criteria of HPS. Unfortunately, our efforts are not appreciated and the Government suddenly proposed that all new medical products will be required to meet those 12 minimum criteria when the HPS is launched. In simple words, only more costly policies would be available in future and the public would no longer have cheaper choices.
Thirdly, the proposed injection of $50 billion intended for premium discount and other incentives would be reduced to about $4 billion for the high risk pool only. The most welcome and perhaps most practical incentives of enrolment and loyalty discounts would no longer be offered, leaving only tax concession. It is almost certain that the reduced scheme would be less attractive to the young and the healthy and indeed disadvantageous to the public.
Apparently, medical inflation would unlikely be controllable and transparency would unlikely be improved because FHB is no longer pushing for DRG packages and tariffs. Actually, if FHB were resolved to push for DRG, it would still have time as 2016/7 is two to three years away. On the other hand, the more cooperative is the insurance industry, the more stringent are the regulations. It is inconceivable that cheaper plans would have to give way to HPS. If this were the case, it would be infringing free market doctrine and taking away the freedom of choice. They are unfavourable to the public.
On comparing the reduced plan with original plan, we would find that benefits are substantially reduced and the public would be disadvantaged. Eventually, more people would revert to public hospitals. Therefore, the reduced plan does not deserve our support.
That said, I have been looking into healthcare financing since 2005. I fully realize that if efforts spent in the past nine years were written off it is unlikely that Hong Kong would revisit healthcare financing in the next 10 years. Therefore, I am not giving up further consultation but earnestly ask FHB to change its mind and revert to the more advantageous original plan in the coming consultation. As consumers would really benefit from further consultation, I oppose the Hon Wong’s Amendment.
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