Legislative Council

LC Paper No. CB(2)2677/98-99

Ref : CB2/PL/HS

LegCo Panel on Health Services

Minutes of special meeting
held on Monday, 12 July 1999 at 8:30 am
in the Chamber of the Legislative Council Building
Members Present:

Hon Michael HO Mun-ka (Chairman)
Dr Hon LEONG Che-hung, JP (Deputy Chairman)
Hon HO Sai-chu, JP
Hon Cyd HO Sau-lan
Hon CHAN Yuen-han
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Dr Hon YEUNG Sum
Hon YEUNG Yiu-chung
Hon LAW Chi-kwong, JP
Dr Hon TANG Siu-tong, JP

Member Attending :

Hon Emily LAU Wai-hing, JP

Public Officers Attending :

Mr Gregory LEUNG, JP
Deputy Secretary for Health and Welfare 1

Mr Eddie POON
Principal Assistant Secretary for Health and Welfare (Medical) 3
Deputy Director of Health 1

Deputy Director, Hospital Authority

Attendance by Invitation :

Hong Kong Medical Association
Dr SO Kai-ming
Mrs Yvonne LEUNG

Practising Pharmacists Association of Hong Kong
Ms Scarlett PONG

Hong Kong Association of the Pharmaceutical Industry
Mr Stephen LEUNG
Mr Tom Curtiss
Mr Robert SIU
Mrs Joy Ottway

Faculty of Medicine, the University of Hong Kong
Professor Grace TANG

Alliance for Patients' Mutual Help Organizations
Miss Iris CHAN Sui-ching

Hong Kong Council of Social Service
Professor FUNG Ho-lup
Mr CHUA Hoi-wai

Faculty of Social Science, the Chinese University of Hong Kong
Professor FUNG Ho-lup

Department of Management, the Hong Kong Polytechnic University
Professor Peter P YUEN

Department of Economics, the Hong Kong University of Science and Technology
Professor Leonard CHENG
Professor LEUNG Siu-fai

Clerk in Attendance :

Ms Doris CHAN
Chief Assistant Secretary (2) 4

Staff in Attendance :

Ms Joanne MAK
Senior Assistant Secretary (2) 4

I. Confirmation of minutes of special meeting held on 27 January 1999

(LC Paper No. CB(2)2505/98-99)

1. The minutes of the special meeting held on 27 January 1999 were confirmed.

II. Hong Kong's health care system and direction of future reform

2. The Chairman welcomed the deputations to the meeting.

Hong Kong Medical Association (HKMA)

3. Dr SO Kai-ming of the HKMA said that the HKMA would issue later a position paper setting out its views and comments in response to the recommendations of the Harvard Report. It would provide a copy of the paper to the Panel for reference.

4. Dr SO took the view that the Government should define more clearly the role and scope of public health services. In so doing, the Government might need to set up a working group to conduct objective analyses and to explore the views of the public. After defining the scope of public health services, the Government should decide on the levels of subsidies it was going to allocate to each type of the defined services. In this way, the fees to be charged for these services could be worked out. He pointed out that charging of fees for public health services needed not be on a cost-recovery basis but an increase in charges could help to prevent abused use of the services.

5. Commenting on the proposed Health Security Plan (HSP), Dr SO was of the view that it was just the alternative of increase in taxation. In effect, the HSP would require a group of people in the community to contribute part of their incomes to the pool of public resources to be shared by every one in the community. This principle would be at variance with the principle behind personal insurance and he doubted whether the HSP would be accepted by the general public. Moreover, he was worried that the proposed contribution rate for the HSP would have to increase in the future to meet the public's needs for health services.

6. As regards the proposed savings scheme for long term care (MEDISAGE), Dr SO highlighted that the scheme failed to provide comprehensive health services for the elderly. Instead, it only helped people to meet expenses of a limited range of health services. He considered that the Administration should explain this point clearly to the public to avoid any misunderstanding.

7. Dr SO suggested that the Government, in considering the various financing options in the Harvard Report, did not have to adopt only one of them since these options each had merits and demerits. Instead, the Government could consider adopting a combination of two or more options.

8. Due to time constraint, Dr SO said that he might provide a written submission to the Panel later to further elaborate the views of the HKMA.

Practising Pharmacists Association of Hong Kong
(LC Paper No. CB(2)2521/98-99(01))

9. Ms Scalett PONG, president of the Practising Pharmacists Association of Hong Kong, highlighted the following points of the Association's written submission -

  1. The HSP in combination with the Mandatory Provident Fund would create a heavy financial burden on Hong Kong residents as the aggregate contribution rate under these two schemes would be about 8% of workers' wages;

  2. On health care financing, the Government should consider maintaining the status quo and on this basis slightly raise user fees for some health services;

  3. Doctors upon requests should give patients prescriptions so that they could buy drugs from pharmacies if they wished. Moreover, doctors should list consultation fees and drug charges separately on receipts. These proposals were supported by the findings of a recent survey by the Chinese University of Hong Kong;

  4. The role of pharmacists as primary health care practitioners should be strengthened. For example, they could advise patients about the side effects of the prescription drugs and the choice of drugs; and

  5. There should be separation of dispensing practice and medical practice in five years' time.

Hong Kong Association of the Pharmaceutical Industry (HKAPI)
(LC Paper Nos. CB(2)2521/98-99(02) and (03))

10. Mr Stephen LEUNG of the HKAPI supported the health care reform and appreciated the "patient-centred" approach used in the Harvard Report. He said that the HKAPI also considered that doctors should display at their clinics a scale of fees and that doctors upon request should give patients prescriptions so that patients could choose to purchase drugs from pharmacies if they so wished.

11. Mr LEUNG then briefed members on some of the suggestions made by the HKAPI to address the problem of compartmentalization of Hong Kong's health care system as set out in its submission.

Professor Grace TANG, Dean of the Faculty of Medicine of the University of Hong Kong (HKU)
(LC Paper No. CB(2)2521/98-99(04))

12. With reference to her submission, Professor Grace TANG said that the Faculty of Medicine of HKU was very concerned about the standard of medical care. She briefed members on the steps taken by the Faculty to maintain the standard and to achieve the goal of quality assurance. She emphasized that it was essential for Hong Kong to maintain excellence in health care through innovation and research.

Alliance for Patients' Mutual Help Organization

13. Miss Iris CHAN Sui-ching of the Alliance expressed concerns about the effectiveness and transparency of the existing complaint mechanisms in respect of medical incidents. She quoted as an example that there was a complaint case which had dragged on for more than eight years and yet none of the existing mechanisms had agreed to follow it up. The Alliance advocated the establishment of an independent Ombudsman Office for handling complaint cases which should have greater transparency and more public participation.

14. On health care financing, Miss CHAN said the basic principle to be upheld was that no one should be denied access to health care just because he/she could not afford to pay. She requested the Government to seriously consider the financial predicament of the lower income people especially those suffering from chronic diseases who had greater needs for health care services. She pointed out that the Alliance had also heard from its members that patients generally lacked information on the fees charged by hospitals and therefore had difficulties in planning their budget for medical expenses.

Hong Kong Council of Social Service (HKCSS) and the Faculty of Social Science of the Chinese University of Hong Kong (CUHK)
(LC Paper No. CB(2)2518/98-99(03))

15. Noting that the public were not enthusiastic in responding to the Harvard Report, Mr CHUA Hoi-wai of the HKCSS suggested that when the Administration issued its final consultation paper on health care reform, it should step up publicity to encourage the public to give opinions.

16. Mr CHUA informed members that the HKCSS had recently conducted a survey to gauge opinions on health care financing and the delivery of health care and briefed members on the findings as set out in its submission. It was found that almost all the respondents agreed that equity and quality of the health care services were two very important principles which should be upheld in any system of financing. For the purpose of quality assurance, Mr CHUA urged the Government to strengthen the monitoring of hospital services by establishing accreditation systems for both public and private hospitals. In addition, he expressed support for improvement of the existing complaint mechanism and the establishment of an Ombusdman Office as proposed in the Harvard Report.

17. Professor FUNG Ho-lup spoke on behalf of the HKCSS as well as the Faculty of Social Science of CUHK. With reference to his submission, Professor FUNG pointed out that in considering the health care financing system, the factors of equity, accessibility, cost control, quality assurance and free choices of services, in the order of importance, should be considered and maintained in any system. He further briefed members on his views regarding these five factors.

18. Professor FUNG pointed out that there were about 600 000 to 800 000 people in Hong Kong (10% - 13% of the whole population) who were poor. Amongst them, 200 000 were Comprehensive Social Security Assistance recipients and the rest were the "working poor". Given the growing trend of employment offers being made on contract/part-time basis, it was estimated that at least one million people in Hong Kong were in unstable employment and/or poor living conditions. Professor FUNG called on the Government to take into account these facts in designing the health care financing system for Hong Kong.

19. On health care financing, Professor FUNG said that the HKCSS supported to put in place a centrally operated health insurance scheme instead of the proposed MEDISAGE as the latter could not provide comprehensive care for the low income group and the unemployed.

Professor Peter P YUEN of the Department of Management of the Hong Kong Polytechnic University
(LC Paper Nos. 2518/98-99(01) and (02))

20. With reference to his submissions, Professor Peter YUEN expounded his views on the following health care financing options proposed in the Harvard Report -

  1. the MEDISAGE and HSP;

  2. the proposal of taking 20% to 25% of the recurrent budget of the Hospital Authority (HA) to establish subsidized family medicine clinics in low-income communities; and

  3. the proposal of dismantling the HA and setting up 12 to 18 Health Integrated Systems.

21. While Professor YUEN expressed support for the MEDISAGE, he considered that there were still many details of the scheme that had to be sorted out before one could decide whether or not it should be adopted. For example, it was not sure whether the contribution rate of 1% of salary for the MEDISAGE was really adequate or not. As regards the HSP, Professor YUEN considered that the greatest merit of it was the "money follows the patients" concept. However, he had reservation about it because of the huge administrative cost that it would incur and the likelihood that it would change providers' behaviour and create additional expenses.

22. Professor YUEN expressed reservation about the projection made by the Harvard Team that by the year 2016, public health care expenditure might take up 20% to 23% of the total Government budget. He pointed out that the projection had been made based on some questionable assumptions, such as that the rate of increase in public health care expenditure for the next 20 years would be similar to the rate of increase during 1991 to 1996 which were the first six years after the HA was established. In his paper, Professor YUEN presented an alternative financial projection for the year 2016 assuming the adoption of a mainly population-based public sector health services funding model. Based on this model which assumed that there would be an average GDP growth rate of 2% over the next 20 years, Professor YUEN demonstrated that the existing tax-based financing system would be sustainable by the year 2016.

Professor Leonard CHENG and Professor LEUNG Siu-fai of the Department of Economics of the Hong Kong University of Science and Technology (HKUST)
(LC Paper No. CB(2)2543/98-99(01))

23. Professor Leonard CHENG believed that the growth of public health expenditures was not sustainable and health care financing needed to be revamped. Commenting on the HSP, Professor CHENG took the view that the Plan had an element of income redistribution and therefore it would put undue burden on the middle class. He was of the view that a health care insurance scheme needed not involve any income redistribution. However, he considered that whether and how much income redistribution was to be made part of Hong Kong's health care insurance scheme was mainly a political decision.

24. With reference to his submission, Professor LEUNG Siu-fai elaborated his views on the efficient provision of health care services. He suggested that there should be a rating system to inform consumers of the quality of primary care doctors, specialists and hospitals. In addition, he supported that an Institute for Health Policy and Economics should be set up by the Government to collect health related data, evaluate the performance of the health care system and conduct scientific research on health policy.

Questions raised by Members

25. In response to Professor FUNG Ho-lup's comments that improvement of the accessibility of health care services should include shortening waiting times, Dr LEONG Che-hung sought his views on how to resolve the problem of long waiting times. In reply, Professor FUNG said that as the population continued to grow, longer waiting times could be expected for health services. He considered that the only alternative open to patients was to turn to the private service providers, which, however, would lead to increases in fees for these services. He proposed that the Government should put in place a system which would both work to restrict the waiting times as well as increases in fees charged by the private service providers.

26. In response to comments made in Professor FUNG Ho-lup's submission, Dr LEONG Che-hung questioned how far it was suppliers-led in the market of health services. In response, Professor FUNG considered that the market was undoubtedly suppliers-led such as in deciding what kinds of treatments to be given to patients and in setting the levels of fees imposed on patients . He said that patients with limited information could only decide whether or not they wanted to consult a doctor but nothing else. To protect patients from being overcharged and to avoid wasting valuable resources, Professor FUNG said that in many countries (such as Singapore), the governments had put restrictions on doctors in the use of high-tech medical equipment in their treatment of patients. He considered that this point was worth considering. As regards the amount of fees charged by medical doctors, Professor FUNG pointed out that based on a survey conducted, it was found that the amount was often directly linked to the social status of the doctor concerned. He further pointed out that this way of setting the fees was very much market-oriented and the consequences had surfaced in the United States where the public expenditures on medical services had taken up 16% of their GNP.

27. Dr LEONG Che-hung argued that the market of health services might not be completely suppliers-led as could be seen from the fact that more and more patients nowadays had learnt to demand the doctors to use complicated methods in the diagnosis process, including the use of more sophisticated medical equipment. Referring to a suggestion made by Professor Peter YUEN of limiting the application of high-tech medical equipment to private hospitals, Dr LEONG expressed concern as to whether or not this would be unfair to the poor people who could only afford to seek treatment in public hospitals.

28. Dr YEUNG Sum requested Professor Peter YUEN and representatives from HKUST and HKCSS to elaborate further their views on the proposed HSP. In response, Professor YUEN said that he was against the proposed HSP for the following reasons -

  1. huge administrative cost would be incurred; and

  2. there would be strong incentives for service providers to over-provide and this would incur additional expenses and create difficulties in cost control. Therefore, he had grave reservation about the sustainability of the system.

29. Mr CHUA Hoi-wai of the HKCSS said that the HKCSS had yet to form a view on the HSP for the lack of information and data. He therefore supported that the Government should set up an Institute for Health Policy and Economics to collect health related data without which it was difficult to project the future demands for health services and the cost increases. He pointed out that the model worked out by Professor YUEN had not taken into account the estimated increases in the cost of public health service by 120% from the year 1996 to 2016 as suggested by Professor HSIAO in the Harvard Report. Professor FUNG Ho-lup explained the centrally operated health insurance scheme proposed by the HKCSS and pointed out that it would involve the creation of a public funded organization to collect data and to examine issues like the coverage of the government's health policy, health care financing system and the benefits levels.

30. Professor Leonard CHENG of HKUST reiterated that whether and how much income redistribution was to be made part of Hong Kong's health care insurance scheme was mainly a political decision. However, he was concerned about the financial burden that would be caused to particular segments of the society under the HSP. However, he emphasized that this was a political decision and was outside the purview of economists.

31. Miss Emily LAU Wai-hing considered that the public should have a say on political matters and the decisions should not be made by a small group of people without the public's participation. She was disappointed to find that some representatives had made no comments on the way forward with Hong Kong's health care financing and delivery of health care. She hoped that these organizations would provide their views to the Panel in writing after the meeting. Concerning the "money follows the patients" concept, Miss LAU questioned whether the concept was really workable as patients actually had inadequate knowledge to make an appropriate decision in selecting a provider or in choosing various options that might be open to them.

32. In response, Professor FUNG Ho-lup said that the "money follows the patients" concept was a simple one. However, the implementation of it required the Government to provide more information to the patients first. As an example, he said that in Portugal, information on the consultation fees charged by individual doctors, the number of complaints lodged against them and so on was all provided to patients. Patients were made aware of their rights and there were effective mechanisms to monitor the standards of health services. He suggested that in the future the Government should establish an authority responsible for, among others, negotiating with providers on their fees charged as a way to control cost. He said that the government of Germany had adopted such a policy.

33. Miss Emily LAU Wai-hing further enquired whether it implied that in order to implement the "money follows the patients" concept, all clinics and pharmacies should be required to have information on their fees and complaints received displayed at the clinics/pharmacies In reply, Professor FUNG Ho-lup considered that Hong Kong had not yet developed to such a stage and pointed out that there were different practices in different countries. However, he agreed that there was much room for improvement in the practices of many private medical practitioners. Professor Peter YUEN referred to the United Kingdom where the "money follows the patients" concept had been adopted about ten years ago and pointed out that many shortcomings had been found with the system. He agreed with Professor FUNG Ho-lup that patients in Hong Kong lacked knowledge to make informed choices on providers and he was not in favour of adopting the concept now.

34. Professor Leonard CHENG took the view that the "money follows the patients" concept allowed patients to have a free choice of providers. He did not consider that it was necessary to require clinics to display the number of complaints received as he considered that given there was a free flow of information on the malpractice of the practitioners, there was adequate pressure exerted on them to improve their performance. Dr LEONG Che-hung was worried that if it were made a compulsory requirement for all clinics to display such information at the clinics, the health services would become very commercialized and there would be no more trust between physicians and patients.

35. The Chairman sought the economics academics' views as to what kinds of data had to be collected in calculating the contribution rate for the HSP. In response, Professor Leonard CHENG pointed out that no one could say for sure whether the proposed contribution rate of 2% was adequate or not to meet the future's health care expenses. He pointed out that given the rapid technological progress in medical equipment, it was difficult to estimate the growth rate in medical costs. He suggested that in calculating the contribution rate for the HSP, one would need to know the average increases in the medical cost of individuals. Professor Peter YUEN took the view that there was a great chance for the proposed contribution rate of 2% to be inadequate because medical cost was likely to increase a lot as the HSP would bring about many changes to the health care system, such as the predicted change in providers' behaviour as explained before.

36. In response to Miss CHAN Yuen-han's question, Professor FUNG Ho-lup said in deciding whether the existing health policy should be changed, the Government should first collect more data, such as who were the major consumers of services provided by the HA now so that the Government could further assess the impact brought by changes in the health policy. He suggested that a review could be conducted to evaluate whether the internal distribution of resources within the HA was reasonable or not. He considered that if the HA had conducted such reviews, it should release the findings since it was accountable to the public. He recalled that a former LegCo Member had commented in 1985 that there was much room for cost saving in the public health sector, which could be in the region of 20% of the total budget for the sector.

37. Miss CHAN Yuen-han was concerned about whether the existing health care financing system would be sustainable given the ageing problem of the population. In response, Professor Peter YUEN said that the ageing problem in Hong Kong was relatively mild. Based on the data available, the growth rate would be from 10% to 13% by the year 2016. In any case, he considered that the most important thing to do was to control cost without which the financial burden borne by the society would be exacerbated when it was coupled with the ageing factor. He suggested that the Government could explore alternative ways to enlarge its income for financing health services such as by raising user fees or increasing taxation especially in profits tax. Moreover, he considered that even if the public health expenditure eventually really took up 14% of the Government budget, it might not be unaffordable to Hong Kong as there might be room for savings in other areas of public services. For example, the ageing problem would imply that less would have to be spent on education in the future.

38. Dr LEONG Che-hung invited Ms Scarlett PONG to give her opinions on how to protect customers against the malpractice of some pharmacies such as refusing to give back to customers their prescriptions. He pointed out that the ownership of pharmacies had been largely dominated by businessmen who might be profit-oriented only. To resolve the problem, Ms PONG said that the Practising Pharmacists Association supported the policy adopted by some overseas countries which required by law that at least 51% ownership of a pharmacy should go to a pharmacist for better control and guarantee on the standard of services. She said that at present there were monitoring mechanisms in place involving inspectors from the Department of Health (DH) to check the dispensing done by pharmacists. She took the view if there was separation of dispensing practice and prescribing practice in the future, the Government could consider increasing the level of penalties and tightening the control by the DH on the services of pharmacies to prevent any malpractice.

39. Dr TANG Siu-tong asked whether it was due to inadequate pharmacists in the market now that the Practising Pharmacists Association advocated separation of dispensing practice and medical practice in five years' time instead of immediately. In response, Ms Scarlett PONG explained that the proposed time frame was only intended to give the public a transitional period so that they could adapt to the new changes. She believed that there was no problem to increase the supply of manpower provided that the Government was willing to devote more resources to the training of pharmacists. She reminded members that training on Pharmacy was being provided by the CUHK. In fact, she personally believed that there were now adequate pharmacists for effecting the separation and suggested that the Government could conduct a study to prove this point.

40. Dr YEUNG Sum asked for Professor Grace TANG's views on the criticisms made in the Harvard Report on the quality of health care, the problem of compartmentalization in the health care system, the lack of protection of patients' rights and the problem of overcharging by some private medical practitioners. In response, Professor TANG said that she agreed that the problem of overcharging did exist and that the quality of health care was highly variable. However, she had no data to assess the seriousness of these problems. On health care financing, Professor TANG said that whatever the model was, it was pertinent that the university hospitals should be given special consideration in order to enhance their roles in conducting research on medicine. She said that the medical training in the HKU did not encourage a suppliers-led physician/patient relationship. She found it regrettable that some people had got such an impression.

41. The meeting ended at 10:50 am.

Legislative Council Secretariat
11 August 1999