• 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..
  
• The ICHA has been designed to be compatible with a number of existing classification schemes and practices in international economic statistics, e.g. national income accounts. It is a comprehensive classification system in three important dimensions. Expenditures are classified according to the following three dimensions of analysis:
  
  a. Health Financing Sources
  b. Health Care Providers
  c. Health Care Functions

a. Health Financing Sources (HFS)

• 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:-

b. Health Care Providers (HCP)

• 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:-

• 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.
  

c. Health Care Functions (HCF)

• 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”.

The following classification of core health functions and health-related functions is adopted:-

Remarks: Total health expenditure comprises Core Health Functions (HCF.1 - 7) and Investment in Medical Facilities (HCF.R.1). HCF.R.2 though HCF.R.7 are excluded from total health expenditure.