Replies to LegCo questions
LCQ11: Health expenditure
Following is a question by the Hon Cyd Ho and a written reply by the Secretary
for Food and Health, Dr York Chow, in the Legislative Council today (March 16):
Question:
A study in the United States indicates that medical inflation has long been two
to three times higher than general inflation. The trends in the United States as
well as other member countries of the Organisation for Economic Co-operation and
Development also show that medical inflation has been on the rise. There have
been comments that the plan of the Government of Hong Kong to allocate $50
billion for subsidising members of the public to buy medical insurance will
definitively push up the public's demand for private healthcare services, and
both the public and private healthcare systems will also raise their expenditure
on staff so as to increase manpower and to train and retain staff. As a result,
the proposed medical reform measures will definitively aggravate medical
inflation in Hong Kong. In this connection, will the Government inform this
Council:
(a) of the inflation figures of Hong Kong's healthcare expenditure in the past
three years, and the basis adopted by the authorities in arriving at such
figures;
(b) given that there have been comments that the Hospital Authority (HA) can
reduce the impact of new drugs on medical inflation by not including all the new
drugs in its Drug Formulary, of the medical inflation in Hong Kong in the past
three years as estimated by the authority if all the new drugs needed by
patients had been included in the Drug Formulary;
(c) given that there have been comments that the authorities' subsidising
members of the public to buy medical insurance will push up the demand for
private healthcare services, thus aggravating brain drain from the public to the
private healthcare system, how the authorities will tackle the problem of
competition for talents between the public and private healthcare systems, and
whether it knows HA's measures to ensure that public hospitals can retain
talents;
(d) whether it has assessed the anticipated market shares of the services
provided by the public and private healthcare systems when the $50 billion is
used up; whether it has assessed if patients will return to the public
healthcare system from the private healthcare system when the Government ceases
to subsidise members of the public to buy medical insurance; if the assessment
result is that such situation will happen, how HA can increase its manpower
within a short time to cope with the demand; and
(e) whether it knows HA's expenditure on the payroll for healthcare staff in
each of the past five years, with a breakdown of the expenditure and the payroll
by rank and grade (i.e. consultants, doctors, registered nurses, enrolled
nurses, chemists/laboratory technicians, physiotherapists, occupational
therapists, pharmacists, medical social workers, radiotherapists, other allied
health professionals and healthcare supporting staff), and the authorities'
plans to speed up staff training for various grades to ensure sufficient
manpower supply?
Reply:
President,
(a) "Medical inflation" generally refers to the rise in medical costs due to
advances in medical technology and public expectations for healthcare to keep up
with such advances. It is a common phenomenon, and in no way unique to a certain
place or region. The characteristics of a healthcare system would have a bearing
on its medical inflation. In Hong Kong, our healthcare system operates on a
dual-track system with both the public and private healthcare sectors providing
services to the public.
The concept of "net medical inflation" (i.e. medical inflation rate over and
above per capita real Gross Domestic Product (GDP) growth) was adopted when
projection was made on the future growth of health expenditure (up to the year
2033) in the Consultation Document on Healthcare Reform published in March 2008,
having regard to international experience as well as local trend of health
expenditure. The assumption is that, in the long run, the net medical inflation
rate of public health expenditure would be 0.8 percentage point per year on
average over and above per capita GDP growth rate while the net medical
inflation rate of private health expenditure would be 1.6 percentage points over
and above per capita GDP growth rate.
(b) The Hospital Authority (HA) has implemented the Drug Formulary (the
Formulary) with a view to ensuring equitable access by patients to
cost-effective drugs of proven safety and efficacy through standardisation of
HA's drug policy and drug utilisation. HA has been expanding the coverage of the
Formulary under an established review mechanism in order to benefit more
patients. In the recent two years, there has been an annual increase of more
than 10% in HA's overall expenditure on drugs owing to an increase in the number
of patients, changes in the prices of drugs, expansion of the clinical
applications of drugs and inclusion of new drugs into the Formulary, etc. The
expansion of clinical applications of drugs and inclusion of new drugs into the
Formulary have brought about an increase of around 5% in the overall drug
expenditure.
(c) to (e) The second stage public consultation on healthcare reform ended on
January 7, 2011. We are now analysing the views of the public received and
collated in the second stage consultation on healthcare reform. We will take
into account the analysis in working out the way forward including any specific
proposals to be taken forward. The use of the $50 billion earmarked in the
fiscal reserve for implementing healthcare reform, and the possible provision of
financial incentives for any supplementary financing proposals to be
implemented, as well as long-term healthcare manpower planning, will be
considered as part of the way forward of healthcare reform.
As stated in the healthcare reform second stage consultation document, the
Government's commitment to healthcare is set to continue to increase as we
reform the healthcare system with a view to enhancing the long-term
sustainability of the healthcare system. We will continue to uphold the public
healthcare system as the safety net for the whole population, which is strongly
supported by the public. The Government's annual recurrent expenditure on health
will increase from $30.5 billion in 2007-08 to $39.9 billion in 2011-12, with
substantial increase in resources being allocated to improve public healthcare
services. The funding provided to HA by the Government will also be increased to
$36.1 billion.
Healthcare reform and service enhancement have to be supported by human
resources. HA has always been striving to enhance the professional competence of
its healthcare staff, improve their working environment, promotion prospect and
remuneration package so as to attract and retain talents. Following the
implementation of new career development structures for doctors, nurses and
selected grades of allied health practitioners since 2007, HA has, in recent
years, launched a series of training programmes to support the development and
career advancement of its healthcare staff under the new structure.
For doctors, HA has implemented a new career structure for the grade since
October 2007. The initiatives include introducing a new "nine-year training
contract" to cater for the needs of specialist training and ensure that doctors
undertaking specialist training have enough time to complete their training, as
well as raising the starting pay points of Residents and Associate Consultants.
Apart from filling all vacancies of doctors in recent years, HA has created
additional posts of Associate Consultants and Consultants to address actual
needs and enhance the promotion prospect of doctors. Besides, HA has been
actively carrying out the Doctor Work Reform to rationalise doctors' working
hours and improve their working environment.
HA is now in active discussion with staff representatives and doctors' unions on
measures to retain talents and improve manpower. The proposals under
consideration include creation of more promotion posts of Associate Consultant,
grant of special honorarium for extra duties, and provision of more supporting
staff to assist doctors in ward duties, etc.
As for the nursing grade, HA has introduced a new career development structure
for nurses by phases from June 2008 to broaden their promotion pathway. The
relevant initiatives include the creation of the post of Nurse Consultant to
broaden the clinical career development pathway of nurses; adjustment of the
management duty allowance granted to Department Operations Managers;
establishment of additional Advanced Practice Nurse positions in clinical
departments to provide more supervisory support; provision of more flexible
terms of employment; extension of the contract period of Registered Nurses to
six years; and provision of permanent employment terms to eligible full-time
contract Registered Nurses, etc.
As for the allied health grades, HA introduced in 2008-09 a new model of
professional development for the Diagnostic Radiographer, Physiotherapist and
Occupational Therapist grades and created such senior posts as Consultant
Therapist/Diagnostician in individual grades. In addition, to tie in with the
development of the allied health grades, HA established the Institute of
Advanced Allied Health Studies in 2007 to devise structured long-term training
plan for allied health practitioners, including a three-year in-service training
course organised for new recruits of 13 allied health grades.
HA's total expenditure on payroll for healthcare staff in the past five years is
set out at Annex.
We expect a substantial increase in the demand for healthcare practitioners in
future. The Government has been working in tandem with the triennial academic
development planning cycle of the University Grants Committee (UGC) and has
encouraged the relevant tertiary institutions to increase student places for
publicly-funded programmes for healthcare disciplines. In 2009-10, UGC increased
the number of places for degree programmes in medicine and nursing and associate
degree programmes in nursing from 250, 550 and 110 to 320, 590 and 160
respectively. In 2010-11, the number of senior year places in nursing has also
been increased from 40 to 100. Furthermore, having considered the Government's
advice, UGC increased the number of student places for several health
professions in 2009-10. The number of first-year degree places for
physiotherapists, occupational therapists and radiographers were increased from
60, 40 and 35 to 70, 46 and 48 respectively in 2009-10. On the other hand, HA
nursing schools will continue to organise Registered Nurse Higher Diploma
programme and Enrolled Nurse training programme to ensure continuous supply of
nursing manpower.
In the light of the various measures to be implemented to improve the healthcare
system, including the proposed Health Protection Scheme, if implemented, we will
continue to assess the demand for manpower and conduct manpower planning to
ensure the availability of sufficient healthcare practitioners to meet service
needs.
Ends/Wednesday, March 16, 2011
Issued at HKT 15:01
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