Healthcare Reform Consultation Prof. Stephen Cheung City University of Hong Kong

Two Questions Do we need the healthcare reform? The consequences of Status Quo?

Question One 1.Medical Inflation 2.Aging Problem Life Expectancy 3.Dependency Ratio increases - One out of four >65 year old Year Male Female

Average annual real growth rate of total health expenditure and real growth rate of GDP in Hong Kong and selected economies ( )

Population Pyramid

Average number of public hospital bed days utilized by age (2006)

Projection of total population, elderly population and elderly dependency ratio

International comparison with OECD countries Total healthcare expenditure is relatively low Public healthcare expenditure is in line with the public expenditure

OECD Countries HK’s Healthcare Expenditure HKSAR

Public Healthcare Expenditure VS Public Revenue HKSAR

Question Two Projection (from 2004 to 2033) –GDP grow 1.7 times –Total health expenditure 3.6 times –Public health expenditure 3.9 times From 2.9% to 5.5% / GDP

Question Two Assume total public expenditure below 20% of GDP –Share of public health expenditure from 14.7% to 27.3 / total public expenditure –Government's commitment 15% to 17% –The gap will be 10.3%

Consequences on Public Finance Rising tax bills –Increase in salary tax and/or profit tax –New tax, e.g. GST Reduce funding for other public services –Education (23.8%) –Social welfare (17.6%) –Security (11.8%)

Sustainable Development of Healthcare System

Control healthcare expenditure Reduce the need of healthcare services –Promote healthy life style –Own commitment –Enhance primary care –Enhance elderly healthcare services Ensure efficient and cost-effective healthcare spending in both pubic and private sectors

Promote sustainability of the healthcare system Healthcare expenditure mainly funded by government Promote public-private partnership in healthcare –More choice for the public Develop sustainable financing options

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