B. WHAT ARE NATIONAL (OR DOMESTIC) HEALTH ACCOUNTS?

C. DEFINITION OF HEALTH EXPENDITURE

D. CLASSIFICATION SYSTEM FOR HONG KONG DHA

A. ESTIMATE OF HEALTH EXPENDITURE : 1989/90 – 2008/09

Summary results:

Based on the OECD guidelines, the Food and Health Bureau has updated the estimates of domestic health expenditure in Hong Kong to the position in the fiscal year 2008/09. The major trend and pattern in breakdown by financing source, provider and function are summarized below.

 

B. WHAT ARE NATIONAL (OR DOMESTIC) HEALTH ACCOUNTS?

• NHA/DHA show the amount of funds provided by major sources (e.g. government, firms, households), and how these funds are used in the provision of final services, organised according to the institutional entities providing the services (e.g. hospitals, outpatient clinics, pharmacies, traditional medicine providers) and type of service (e.g. inpatient and outpatient care, dental services, medical research, etc.).

• In technical terms, NHA/DHA are a set of tables in which various aspects of an economy’s health expenditure are arrayed. Rigorous and standardised classifications of the types and purposes of all expenditures and of all the actors in the health system are adopted in NHA/DHA. NHA/DHA complement other reporting systems to provide a more complete picture of the performance of the health system. A notable example of how NHA/DHA has been deployed in practice is the World Health Report 2000 on the international comparisons of health systems. A principal goal for developing health accounts is to support health system governance and decision-making as the World Health Report argues and shows.

• On the whole, NHA/DHA provide essential data for health sector planning and management, in the same way the national income accounts and vital statistics provide essential data for macroeconomic planning, and population and social service planning respectively.

C. DEFINITION OF HEALTH EXPENDITURE

• Health spending consists of health and health-related expenditures. Expenditures are defined on the basis of their primary or predominant purpose of improving health, regardless of the primary function or activity of the entity providing or paying for the associated health services.

• Health includes both the health of individuals as well as of groups of individuals or population. Health expenditure consists of all expenditures or outlays for medical care, prevention, promotion, rehabilitation, community health activities, health administration and regulation and capital formation with the predominant objective of improving health.

• Health-related expenditures include expenditures on health-related functions such as medical education and training, and research and development.

D. CLASSIFICATION SYSTEM FOR HONG KONG DHA

• Hong Kong’s DHA has adopted the International Classification for Health Accounts (ICHA) developed by the OECD and published in the System of Health Accounts 2000.

• According to ICHA, financing sources are defined as entities that directly incur the expenditure and hence control and finance the amount of such expenditure. It is commonly used in NHA/DHA to record health care financing from the perspective of getting a breakdown of health expenditure into the complex range of third-party-payment arrangements plus the direct payments by households or other direct funders, e.g. government provided, of health care. It will not focus on the ultimate burden of financing borne by sources of funding.

• In operationalising this definition, in general, non-governmental organisations are treated as ultimate financing sources, not the households or other entities that pay contributions to them. Similarly, the Government is considered an ultimate financing source, not the entities which pay taxes to it. Firms or employers provide or pay for health services as part of the regular compensation of employees. These expenditures are treated as being paid by the employer, and not expenditures out of the income of households.

• The financing classification of the ICHA provides a complete breakdown of health expenditure into public and private units of incurring expenditure on health. This classification is derived from the central System of National Accounts framework of institutional sectors of the economy. Following the OECD practice, financing sources in HKDHA are grouped into two mutually exclusive institutional sectors: (i) public and (ii) private sectors. They are further disaggregated as follows:-

HFS.1					Public sector
	HFS.1.1				General government
		HFS1.1.1			General government excluding medical benefits for civil servants and Hospital Authority staff
		HFS1.1.2			Medical benefits for civil servants and Hospital Authority staff
	HFS.1.2				Social security funds
HFS.2					Private sector
	HFS.2.1				Employer-provided group medical benefits
	HFS.2.2				Private insurance
	HFS.2.3				Private household out-of-pocket expenditure
		HFS.2.3.1			Out-of-pocket excluding cost-sharing
		HFS.2.3.2			Cost-sharing: government excluding medical benefits for civil servants and Hospital Authority staff
		HFS.2.3.3			Cost-sharing: employer-provided group medical benefits
		HFS.2.3.4			Cost-sharing: private insurance
		HFS.2.3.5			Cost-sharing: medical benefits for civil servants and Hospital Authority staff
		HFS.2.3.9			All other cost-sharing
	HFS.2.4				Non-profit institutions serving households
	HFS.2.5				Corporations (other than health insurance)
	HFS.2.6				Non-patient care related revenue
	HFS.2.7				Provider own funds
HFS.3					Rest of the world

b. Health Care Providers (HCP)

• Health care providers are defined as institutional entities that produce and provide health care goods and services, which benefit individuals, groups of individuals or whole populations.

• Where relevant and practical, health care providers are classified into three broad categories: (i) public sector (e.g. government and statutory bodies), (ii) private sector, and (iii) non-governmental organisations. This categorisation is applied over the basic classification system proposed for providers in OECD SHA, by adding a third digit. Subcategorising providers by type of ownership is very useful for policy purposes related to the financing of public and private health care. Over time, the evolution of financing mix between government-provided and privately-offered services can be tracked and decision-makers can act accordingly to use policy levers in achieving an optimal balance.

• Some provider categories, such as private psychiatric hospitals may not be relevant to Hong Kong currently, but are retained to anticipate any possible future developments. The following classification of health care providers is adopted:-

HCP.1						Hospitals
	HCP.1.1					General hospitals
		HCP.1.1.1				General hospitals: public
		HCP.1.1.2				General hospitals: private
	HCP.1.2					Mental health and substance abuse hospitals
		HCP.1.2.1				Mental health and substance abuse hospitals: public
		HCP.1.2.2				Mental health and substance abuse hospitals: private
	HCP.1.3					Speciality (other than mental health and substance abuse) hospitals
		HCP.1.3.1				Speciality (other than mental health and substance abuse) hospitals: public
		HCP.1.3.2				Speciality (other than mental health and substance abuse) hospitals: private
HCP.2						Nursing and residential care facilities
	HCP.2.1					Nursing care facilities
		HCP.2.1.1				Nursing care facilities: public
		HCP.2.1.2				Nursing care facilities: private
		HCP.2.1.3				Nursing care facilities: NGO
	HCP.2.2					Residential mental retardation, mental health and substance abuse facilities
		HCP.2.2.1				Residential mental retardation, mental health and substance abuse facilities: public
		HCP.2.2.2				Residential mental retardation, mental health and substance abuse facilities: private
		HCP.2.2.3				Residential mental retardation, mental health and substance abuse facilities: NGO
	HCP.2.3					Community care facilities for the elderly
		HCP.2.3.1				Community care facilities for the elderly: public
		HCP.2.3.2				Community care facilities for the elderly: private
		HCP.2.3.3				Community care facilities for the elderly: NGO
	HCP.2.9					All other residential care facilities
		HCP.2.9.1				All other residential care facilities: public
		HCP.2.9.2				All other residential care facilities: private
		HCP.2.9.3				All other residential care facilities: NGO
HCP.3						Providers of ambulatory health care
	HCP.3.1					Offices of medical practitioners
		HCP.3.1.1				Offices of western medical practitioners
			HCP.3.1.1.1			Offices of western medical practitioners: public
			HCP.3.1.1.2			Offices of western medical practitioners: private
			HCP.3.1.1.3			Offices of western medical practitioners: NGO
		HCP.3.1.2				Offices of Chinese medical practitioners
			HCP.3.1.2.1			Offices of Chinese medical practitioners: public
			HCP.3.1.2.2			Offices of Chinese medical practitioners: private
			HCP.3.1.2.3			Offices of Chinese medical practitioners: NGO
	HCP.3.2					Offices of dentists
		HCP.3.2.1				Offices of dentists: public
		HCP.3.2.2				Offices of dentists: private
		HCP.3.2.3				Offices of dentists: NGO
	HCP.3.3					Offices of allied and other health professionals
		HCP.3.3.1				Offices of allied and other health professionals: public
		HCP.3.3.2				Offices of allied and other health professionals: private
		HCP.3.3.3				Offices of allied and other health professionals: NGO
	HCP.3.4					Other outpatient facilities
		HCP.3.4.1				Family planning centres
			HCP.3.4.1.1			Family planning centres: public
			HCP.3.4.1.2			Family planning centres: private
			HCP.3.4.1.3			Family planning centres: NGO
		HCP.3.4.2				Outpatient mental health and substance abuse centres
			HCP.3.4.2.1			Outpatient mental health and substance abuse centres: public
			HCP.3.4.2.2			Outpatient mental health and substance abuse centres: private
			HCP.3.4.2.3			Outpatient mental health and substance abuse centres: NGO
		HCP.3.4.3				Free-standing ambulatory surgery centres
			HCP.3.4.3.1			Free-standing ambulatory surgery centres: public
			HCP.3.4.3.2			Free-standing ambulatory surgery centres: private
			HCP.3.4.3.3			Free-standing ambulatory surgery centres: NGO
		HCP.3.4.4				Dialysis care centres
			HCP.3.4.4.1			Dialysis care centres: public
			HCP.3.4.4.2			Dialysis care centres: private
			HCP.3.4.4.3			Dialysis care centres: NGO
		HCP.3.4.5				All other outpatient multi-speciality and cooperative services centres
			HCP.3.4.5.1			All other outpatient multi-speciality and cooperative services centres: public
			HCP.3.4.5.2			All other outpatient multi-speciality and cooperative services centres: private
			HCP.3.4.5.3			All other outpatient multi-speciality and cooperative services centres: NGO
		HCP.3.4.9				All other outpatient community and other integrated care centres
			HCP.3.4.9.1			All other outpatient community and other integrated care centres: public
			HCP.3.4.9.2			All other outpatient community and other integrated care centres: private
			HCP.3.4.9.3			All other outpatient community and other integrated care centres: NGO
	HCP.3.5					Laboratories and diagnostic imaging facilities
		HCP.3.5.1				Laboratories and diagnostic imaging facilities: public
		HCP.3.5.2				Laboratories and diagnostic imaging facilities: private
		HCP.3.5.3				Laboratories and diagnostic imaging facilities: NGO
	HCP.3.6					Providers of home health care services
		HCP.3.6.1				Providers of home health care services: public
		HCP.3.6.2				Providers of home health care services: private
		HCP.3.6.3				Providers of home health care services: NGO
	HCP.3.9					Other providers of ambulatory health care
		HCP.3.9.1				Ambulance services
		HCP.3.9.2				Blood and organ banks
		HCP.3.9.9				Providers of all other ambulatory health care services
HCP.4						Retail sale and other providers of medical goods
	HCP.4.1					Pharmacies
	HCP.4.2					Retail sale and other suppliers of optical and other vision products
	HCP.4.3					Retail sale and other suppliers of hearing aids
	HCP.4.4					Retail sale and other suppliers of medical appliances (other than optical goods and hearing aids)
	HCP.4.9					All other miscellaneous sale and other suppliers of pharmaceuticals and medical goods
HCP.5						Provision and administration of public health programmes
HCP.6						General health administration and insurance
	HCP.6.1					Public sector administration of health
		HCP.6.1.1				Public sector administration of health (health and healthcare agencies)
		HCP.6.1.2				Public sector administration of health (Central Administrative Overheads)
	HCP.6.2					Social security funds
	HCP.6.3					Employer-provided group medical benefits administration
	HCP.6.4					Private insurance
	HCP.6.9					All other providers of health administration
HCP.7						Other industries (rest of the economy)
	HCP.7.1					Establishments as providers of occupational health care services
	HCP.7.2					Private households as providers of home care
	HCP.7.9					All other industries as secondary producers of health care
HCP.9						Rest of the world

• Health care services can often be provided in a wide range of settings. For example, outpatient treatment of an acute episode of a common infectious disease (such as urinary tract infection) may occur in clinics of speciality hospitals, offices of western medical practitioners or family planning centres. In such cases, the type of service does not coincide with one specific type of provider. Using both the health care functions (HCF) and health care providers (HCP) classification schemes to develop DHA tables adds substantial richness to health expenditure information.

• Consistent with the OECD SHA approach, all health expenditures are categorised into two types of functions:
  1. Core health functions
  2. Health-related functions
• In line with OECD SHA, HKDHA makes a distinction between inpatient and outpatient care and also makes separate recognition of rehabilitative care, long-term nursing care, ancillary services and medical goods dispensed to outpatients. In the subcategory of over-the-counter medicines, a further distinction has been made between “western” and “traditional and others”.