Legislative Council

LC Paper No. CB(2) 2505/98-99
(These minutes have been
seen by the Administration)

Ref : CB2/PL/HS

LegCo Panel on Health Services

Minutes of special meeting
held on Monday, 27 January 1999 at 8:30 am
in Conference Room B of the Legislative Council Building
Members Present:

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

Members Absent :

Hon HO Sai-chu, JP
Dr Hon YEUNG Sum

Public Officers Attending :

For All Items

Mr Gregory LEUNG
Deputy Secretary for Health and Welfare

Miss Joyce HO
Assistant Secretary for Health and Welfare

For Agenda Item I only

Ms Jennifer CHAN
Principal Assistant Secretary for Health and Welfare

Deputy Director of Health (Ag)

Mrs Kathryn WONG
Assistant Director of Health (Administration)

Deputy Director (Operations)/Hospital Authority

For Agenda Item II only

Ms Jennifer CHAN
Principal Assistant Secretary for Health and Welfare

Deputy Director (Operations)/Hospital Authority

For Agenda Item III only

Deputy Director of Health (Ag)

Clerk in Attendance :

Ms Doris CHAN
Chief Assistant Secretary (2) 4

Staff in Attendance :

Mr LEE Yu-sung
Senior Assistant Legal Adviser

Mrs Eleanor CHOW
Senior Assistant Secretary (2) 4

I. Submission from the Hong Kong China Medicine Association

Members noted that the Hong Kong China Medicine Association had made a submission to the Complaints Division in December 1998, followed by a letter handed to individual Members requesting exemption from the registration examination similar to that for local medical graduates and local residents graduating from medical schools of commonwealth universities. Members agreed to receive the Association at the Panel meeting in March 1999.

II. Implementation of the Enhanced Productivity Programme (EPP) in the Hospital Authority (HA) and the Department of Health (DH)
(LC Paper No. CB(2)1177/98-99(01))

Productivity gains initiatives of DH

2. Deputy Director of Health (Acting) (DDH(Ag)) said that the DH had set up a task group to explore means to improve productivity by 5% between now and the year 2002/03. The broad productivity gain initiatives proposed by the DH included streamlining existing procedures, rationalising organisational structure within departmental headquarters and across regional offices, improving service delivery methods and improving operational efficiency through office automation. It was too early at this stage to report on specific initiatives, but the DH would brief members in due course.Adm

3. In response to Dr LEONG Che-hung and the Chairman, DDH(Ag) said that since it had only been a few months since the announcement of the EPP, the DH had so far been focusing on the formulation of overall strategies and directions for the coming three years. It was expected that specific proposals for 1999/2000 would be ready after the Budget Speech in March 1999. Deputy Secretary for Health and Welfare (DSHW) supplemented that the EPP would be subject to review during the three-year period, taking into consideration current provision of services, service demand of the public, and effect of the initiatives, etc. An overall plan would be drawn for the next three years but the implementation programme for each year would be decided nearer the time.

4. Dr LEONG Che-hung sought clarification on the definition of productivity gain. Assuming that the budget for a department was $100, he asked the Administration to clarify whether the EPP would mean one of the following -

  1. the department would spend $95 and revert $5 to the government; or

  2. the department would spend $100 but productivity would increase to an equivalent of $105; or

  3. the department would be given $100, it would revert $5 to the Government and achieve a productivity gain equivalent to $105.

5. DSHW said that the basic principle of the EPP was to increase productivity without incurring additional expenses and affecting service quality. In this regard, all the scenarios described by Dr LEONG in paragraph 4 above would be applicable to the EPP. He assured members that the purpose was not to cut manpower resources, but to improve operational efficiency.

6. In response to Dr TANG Siu-tong, DDH(Ag) said that the 5% productivity gain would apply equally to the DH and its subvented organisations. Some of the organisations subvented by the Government were the Hong Kong Red Cross, St John's Ambulance Brigade and Prince Philip Dental Hospital.

7. Mr LAW Chi-kwok asked whether it was possible to grant exemptions to organisations which had difficulty to achieve productivity gains. He pointed out that in the past year subvented, charitable and non-government organisations (NGO) had not been able to raise the expected amount of fund because of the economic downturn. He expressed concern that some of the services provided by these organisations might have to be discontinued if the Government further required them to reduce their operating costs by 5%. Dr LEONG Che-hung and Dr TANG Siu-tong expressed similar views.

8. DSHW replied that the Government had not considered the question of granting exemption to any government-funded bodies at all. If negotiation was possible, the EPP would have lost the battle even before it started. He hoped that all the government-funded organisations would strive to achieve the 5% productivity gain, rather than finding excuses to be exempted from the EPP at the start. DDH(Ag) assured members that the DH would discuss with NGOs to explore means to achieve the target and would consider the circumstances of individual subvented organisations. He reiterated that service quality should not be compromised when implementing the EPP.

9. The Chairman and Dr LEONG Che-hung said that if subvented organisations had insufficient funding, their services were bound to deteriorate. For instance, they might organise fewer training rescue courses, the ambulance service for discharged patients from private hospitals might be discontinued, etc. In other words, the level of services provided by subvented organisations could not be maintained which would not be beneficial to the society. The Chairman said that the DH should consider shouldering a higher share of productivity gains rather than applying the same percentage to subvented organisations. DSHW reiterated that the principle was to implement the EPP across the board to all government-funded organisations. DDH(Ag) said that the EPP provided an opportunity for the DH to review together with subvented organisations the scope and operation of their services. He was confident that savings and areas for improving productivity could be identified during the course of the review.

10. In response to the Chairman, DDH(Ag) said that the DH subvented only part of the services such as training and rescue services provided by subvented organisations. The accounts subvented by the Government were kept in a separate book and would be audited annually to ensure that the money was properly spent. As far as the EPP was concerned, the DH would only have a say on services it subvented.

11. Mr LAW Chi-kwong asked whether the DH would consider contracting out evening out-patient service in clinics, as he noted that the operating costs of these clinics were generally higher than that of a general medical practitioner in a public housing estate. DSHW replied that the DH would consider any suggestions which would help to improve productivity and maintain service quality. DDH(Ag) said that the DH would give careful consideration to Mr LAW's suggestion. In response to Dr LEONG Che-hung, DSHW said that whether dental service provided to civil servants should be cut or contracted out was a matter to be decided by the Civil Service Bureau in consultation with civil servants.

12. In response to a further question from Dr LEONG Che-hung, DSHW said that manpower savings from contracting out services would unlikely result in staff redundancy in the DH because of the need to keep on improving health care services in Hong Kong to meet with growing demand. In fact, a number of new initiatives were already in the pipeline and additional funding had been allocated to the DH for the current and coming years.

13. On economies achieved through office automation and computerisation, DSHW explained that before a project was pursued, a department would assess how much recurrent expenditure could be saved and how many years it would take to recover the costs incurred. In response to a question from Dr LEONG, DSHW clarified that the reduction of manpower in the DH as a result of the reorganisation of the structure for provision of municipal services would not be regarded as EPP, as the manpower would be re-deployed and not saved.

Productivity gains initiatives of HA

14. Deputy Director (Operations) of HA (DDHA)said that the HA had introduced productivity measures for years and had achieved considerable gains since then. The HA would strive to achieve the target of the EPP by rationalising medical services in the clusters and among the clusters, and establishing tasks groups to formulate strategies to facilitate the implementation of various productivity gain ideas and initiatives.

15. Mr YEUNG Yiu-chung enquired why the HA was not able to come up with more concrete proposals for the EPP. He asked whether it was because the HA had to wait for the outcome of the review on health care financing.

16. DDHA replied that the HA was actively planning for the implementation of the EPP which the Government would initiate in year 2000. In fact, the HA had taken a step ahead by implementing the "Invest of Save" program in the year 1999/2000. This involved the mobilization of 1% of the recurrent resources from all HA hospitals to form a central pool. This central pool of resources would be allocated to hospitals for implementation of quality improvement programs which could bring about savings in a long run. These programs would then enable the hospitals to meet the requirement of Government's EPP in the following years.

17. DDHA further said that the HA was also formulating plan for rationalization of services amongst hospitals. Once such example was the reorganization of delivery of Obstetrics and Gynaecology services on a cluster basis to achieve optimal utilization, as mentioned in paragraph 6(a) of the paper. Regarding the Government's review of health care financing, DDHA would not rule out the possibility that final decision of the Government might have implication on HA's operation and implementation of productivity measures in future. DDHW said that given that there would be a lot of discussion on proposals related to health care reforms in 1999, the time frame of the EPP in 1999/2000 would not fit in with the study of health care financing.

18. Miss CHAN Yuen-han expressed concern over the heavy work pressure of front-line staff and considered that manpower in the front-line could not be trimmed further. She asked that for the review of improving operational efficiency, whether front-line staff had the opportunity to participate and how the assessment for the EPP was conducted. Miss Cyd Ho asked about the decision process for the EPP and the role played by staff in the process.

19. DDHA replied that the HA had adopted a holistic approach when conducting an assessment on the EPP. In other words, measures to enhance productivity would apply equally to the HA Head Office, hospitals and not to front-line staff only. In fact, most of the initiatives of productivity gain were proposed by front-line staff. The HA Head Office would study the feasibility of these proposals before including them in the EPP. There were staff consultative committees in which representatives of different ranks of staff were given the opportunity to express their views freely. Through this channel, the management of the HA and hospitals explained the objectives of the EPP and solicited views from front-line staff on productivity proposals. In fact, the Chief Executive of the HA had issued a clear directive to hospitals, that the focus of the EPP was on streamlining management and administration process. To relieve work pressure on the front-line, emphasis was on the review of existing ways of delivery of various services in hospitals with a view to identifying more effective modes of delivery. At the same time, consideration would be given to contracting out supporting services which were not directly related to patient care services. For instances, catering, cleaning and transport services, etc.

20. Miss Cyd HO asked that if front-line staff expressed difficulty in achieving productivity gains, what action would be taken by the management. She was concerned that if front-line staff were forced to implement the measures, it would affect service quality. DDHA said that HA was very mindful of the pressure and difficulty faced by front-line staff. He also assured members that HA would always consult with and work with front-line staff when there were difficulties and reform measures would not be unilaterally imposed.

21. On consultant doctors, DDHA said that there were measures to alleviate their administrative responsibilities so as not to undermine the medical service they provided. According to a recent feedback, the administrative workload of consultant doctors had been reduced, which indicated that the measures were working in the right direction. DSHW supplemented that it was inevitable for consultant doctors to be engaged in some administrative work such as selecting a medical equipment because being the user, they were most knowledgeable about the type of equipment to be used. DDHA further said that patients had a high expectation of medical service, and that they wished to be attended by a consultant doctor. To this end, teams comprising three or four doctors led by a consultant doctor were formed to take care of patients.

22. The Chairman sought clarification from DDHA as to whether the arrangement implied that individual patients were given the right to demand a consultant doctor to attend them. DDHA said that before the formation of the HA, the ratio of consultant doctors to patients were already on the low side. Although the HA had requested funding to improve the situation, it had not come to the stage where it could tell patients that they had the right to request to be treated by a consultant doctor. However, the policy direction was for consultant doctors or specialist to lead the service. Under this policy, each patient should be under the care and accountability of a doctor at the level of a specialist, although the treatment procedures might not be carried out by the specialist himself or herself. He believed the public would understand that there was still a difference between public and private hospitals as far as choosing to see a doctor was concerned. DSHW supplemented that there were 28 000 beds in public hospitals and altogether some 400 consultant doctors. It was clear that it was not possible for each patient to be attended by a consultant doctor.

23. Referring to paragraph 6 of the paper, Dr TANG Siu-tong asked whether the target savings of 5% would be achieved through recurrent expenditure as well as non-recurrent expenditure. DDHA said that non-recurrent expenditure usually referred to one-off expenses such as the purchase of medical equipment or improvement of hospital facilities. As mentioned in paragraph 6(c) of the paper, 1% of HA's baseline budget in 1999/2000 would be allocated as 'seed money' for one-off funding for business support reforms. The HA would study whether a reform proposal was feasible, and if so, it would allocate one-off funding to finance the project with a view to achieving real money savings in subsequent years.

24. Dr LEONG Che-hung asked specifically whether for the case of HA, the definition of the EPP would fall under scenario (c) of paragraph 4 above. He expressed concern over the rising demand for public hospital services at the time of economic downturn and staff's sentiment towards the work pressure created by budgetary contraction. He opposed applying the 5% productivity gain across all hospitals and their departments. He commented that the Government should inform the public, instead of just stating in closed door meetings, that the Government accepted the HA had limitation in service provision given its limited budget. He pointed out that while money saved by the concept of 'seed money' would be reverted to the HA, productivity gains from the EPP was entirely another matter.

25. DSHW confirmed that the 5% productivity gains would need to be reverted to the Government. However, additional funding would continue to be allocated to the HA to finance new initiatives through the Government's Annual Resource Allocation Exercise.

26. Dr LEONG said that regrouping of hospital clusters and rationalisation of services amongst hospitals would be the most effective means to facilitate the achievement of productivity gains. He urged the HA to be more decisive in implementing the policy and not to be too sentimental over the discontinuation of certain services, if the provision of such services was regarded as not cost-effective. Mrs Sophie LEUNG added that enhancing communication between the management and staff would be conducive to the implementation of the EPP.

27. DDHA agreed with Dr LEONG that rationalising medical services in the clusters and among the clusters was the direction to improve cost-effectiveness. However, apart from costing issues, there were also social and political concerns when deciding whether certain services should be discontinued in a hospital. In response to members, he clarified that political concerns included the following: views of the management of HA, views of staff, views of the local community on the demand of a service, policy of the government and the economic climate, etc.

28. In response to the Chairman, DDHA and Dr LEONG clarified that the HA had not discussed about closing any hospitals. DSHW explained that rationalising medical services in the clusters would mean better utilisation of resources among hospitals and not closure of hospitals. He said that the HA, DH and the Health and Welfare Bureau would be involved in the discussion with hospitals in the implementation of rationalisation of medical services. Dr LEONG added that LegCo Members should also assist in the matter. He asked the Administration whether the budget for the HA would be reduced if certain service in a hospital was discontinued as a result of rationalisation.

29. DDHA explained that in the past, funding for hospitals was mostly based on the number of beds. If there was a reduction in the number of beds, new services would be introduced as a replacement, for instance, enhancement of day care services to replace inpatient service. The HA considered that using number of beds as the only basis for allocation of funds would have a negative effect on the financial position of the HA and the implementation of productivity initiatives. The Government was receptive to the HA's comment. DSHW confirmed that the Government would be pleased to consider a new method for allocating fund so that through closure of beds gains could be re-deployed to fund new service programmes of the HA.

30. Miss CHAN Yuen-han held the view that public education on the availability of medical services in hospitals should be enhanced, so that patients would know where to go when a need arose. She also asked about the effect of regrouping of hospital clusters in the provision of specialised medical service. In reply, DDHA said that the treatment of specialised medical services such as neurosurgical and cardiac diseases relied on cluster service, the practice of which was universal. It was the responsibility of the HA to provide guideline in hospitals to ensure that patients who required specialised service would get speedy and appropriate treatment. There would be referral arrangement for these patients and the specialists concerned would assess the need of the patient when treatment was being considered. As regards provision of services by hospitals, there was general publicity but not to the details that a patient suffering from certain disease should go to a specific hospital. Since a patient would not know the severity of his illness, the best way was to seek assistance from the nearest hospital. Upon admission, doctors would diagnose the person to decide the type of treatment he needed and whether it was necessary to refer him to a specialised department.

31. In response to the Chairman, the Administration and HA undertook to report to the Panel detailed proposals for the EPP in March 1999.Adm

III. Government's proposal to deduct $114 million from the HA budget
(LC Paper No. CB(2) 1177/98-99(02))

32. The Chairman said that the Panel was not aware of the programme of redesignation of acute beds in public hospitals which was planned in 1995 with the aim of deducting $90 million (at 1995/96 Estimates price level) in 1996/97 and $114 million (at 1998/99 Estimates price level) in 1999/2000 from HA's baseline expenditure. He asked the Administration that in future, whether it would alert this Panel of similar proposals. DSHW replied that consideration could be given to submitting a paper to this Panel. As to whether such proposals would be reflected in the Estimates, Principal Assistant Secretary for Health and Welfare said that the 1999/2000 Draft Estimates would cover the distribution of hospital beds. The normal practice was for Members to raise questions during Budget and Special Finance Committee meetings if they wanted to know more about a proposal. The Chairman suggested that the Administration should include a short paragraph in the Draft Estimates so as to bring the proposal to Members' attention.

33. In response to the Chairman, DSHW undertook to provide information on the number of acute beds that had been converted to psychiatric/infirmary beds in different hospitals, and the composition of the savings of $114 million. Adm

34. Dr LEONG Che-hung said that the Administration had earlier advised that productivity gains through closure of beds could be re-deployed to fund new service programmes of the HA, but now the $114 million savings would be deducted from the HA's baseline expenditure. He said that the Administration was giving contradictory statements. He urged the Administration to introduce a new method for allocation of fund to replace the existing method which was based on the number of beds. Mrs Sophie LEUNG expressed similar views. She urged the Administration to refrain from deducting $114 million from HA's budget by applying a new method of allocation.

35. DSHW replied that there were differences between productivity gains and change of service for which the $114 million applied. For the former, the service in question was still in demand but productivity was achieved through rationalisation. For the latter, the demand for a service in certain hospital had declined due to demographic changes in a district. To meet the changing needs of the local community, part of the service was converted into another service. In this regard, savings were achieved through a redesignation programme. However, the overall expenditure for service had not been reduced because its demand had been shifted to another district which had been allocated with additional funding to meet the rising demand for that service. Against this background, the savings of $114 million achieved through the redesignation programme had to be deducted from HA's baseline budget. As regards a new method for allocation of fund, DSHW said that the Administration and HA would follow up. As this was a complicated issue, a decision would not be reached earlier than mid-1999.

IV. Undesirable medical advertisements
(LC Papers Nos. CB(2)1177/98-99(03) and (04))

36. DDH(Ag) explained the enforcement procedure for undesirable medical advertisements (UMA). As the first step, the DH would issue warning letters to the person who had published or caused to publish UMA which contravened the Undesirable Medical Advertisements Ordinance (UMAO). If the person did not remove the UMA upon receiving a warning letter, the DH would inform the Commissioner of Police, who would investigate and initiate prosecution action where necessary.

37. Referring to paragraph 3 of paper (03), Mr YEUNG Yiu-chung and Miss CHAN Yuen-han asked why the number of successful prosecutions was so low. In reply, DDH(Ag) said that over 90% of the persons who had received the warning letter would stop advertising, therefore the number of successful prosecutions had been very low. In fact, there was only one successful prosecution in the past three years. The UMA in question was related to cancer treatment. The person concerned was fined $4,000. In response to a further question from Mr YEUNG, DDH(Ag) replied that the maximum fine for an offence was $25,000 and imprisonment for one year.

38. Miss CHAN Yuen-han asked whether the law should be amended to strengthen enforcement action. DDH(Ag) said that of the 121 warning letters issued by the DH in 1998, about two-thirds were related to Chinese medicine and health food. The Chinese Medicine Bill had been introduced into LegCo to regulate control on proprietary Chinese medicine. In addition, the Pharmacy and Poisons Ordinance required that pharmaceutical products must be registered before they were sold in Hong Kong. In 1988, the UMAO was amended to list out diseases and conditions in respect of which advertisements were forbidden. The Administration considered that the law for UMA was adequate.

39. Dr LEONG Che-hung and Miss CHAN Yuen-han asked about the existing monitoring mechanism for UMA and the enforcement for repeated offenders. Noting that some advertisements for dental service were placed by dentists in the Mainland, Dr LEONG asked whether they were controlled by the UMAO.

40. In reply, DDH(Ag) said that there was a small team in the DH which was responsible for inter alia monitoring UMA in the media and the Internet. The DH would normally issue one warning letter and repeated offence would be referred to the Commissioner of Police for investigation. He confirmed that advertisements relating to treatment for diseases placed in the local media, including those advertised by service providers in the Mainland, were regulated by the UMAO. In case of doubt, the DH would seek clarification from the Department of Justice. As regards advertisements for treating diseases on the Internet, only companies registered in Hong Kong would be subject to the UMAO but not overseas companies. The DH had advised Internet service providers of the relevant ordinances so that they would also assist in monitoring the situation.

41. Addressing the concerns of Dr LEONG, Senior Assistant Legal Adviser said that the UMAO prohibited the publication of advertisements, in Hong Kong, offering treatment for the diseases and conditions prescribed in the Ordinance. Dental treatment was not included in the list of diseases. The Ordinance only applied in Hong Kong. However, it could also apply to advertisements published in Hong Kong advertising treatment to be provided in the Mainland. In response to Mr YEUNG Yiu-chung, DDH(Ag) said that although diet food was not listed in Schedule 1, its advertisements if involved treatment for diseases were subject to the UMAO.

42. The Chairman said that it was unfair to local dentists if their counterparts in the Mainland were allowed to advertise in local newspapers. On the other hand, he personally considered it not a bad thing for dentists to advertise the types of services they provided and the relevant charges. Dr LEONG said that he had reservation about the second point made by the Chairman. On the first point, DSHW pointed out that dentists were governed by their code of practice as far as advertisements were concerned. The Chairman said that the Hong Kong Medical Council should be invited to give views on the subject. Members agreed to include the item in the outstanding list for future discussion.Clerk

43. The meeting ended at 10:34 am.

Legislative Council Secretariat
7 July 1999