Economic development and the health care system in Hong Kong

This article describes parallel developments of the Hong Kong economy and its health care system. The purpose is to illustrate how the Hong Kong health system evolved in response to external and internal pressures generated by economic prosperity. The Hong Kong system illustrates the importance of clear policy making in the face of these pressures. In particular, issues of investment, financing and distribution of health services are examined in relation to hospital cost control and service accessibility. In the past, health care costs in Hong Kong have been controlled at the expense of limited accessibility of health services. At present, Hong Kong policy-makers are faced with the challenge of maintaining a sharp focus on cost control as they face pressure to expand and improve health care coverage for the citizens. So far they have responded by emphasizing management efficiency through reorganization. It remains to be seen whether this strategy can be successful without passing increased health care costs to the consumers.     

The effect of centralized hospital administration on financial control and hospital service delivery: the case of Hong Kong.

Administration, financial control and service delivery are three mutually influential dimensions of a hospital system. The centralized hospital system of Hong Kong is a case-in-point that illustrates such influence. By spending only a small fraction of the Gross Domestic Product each year, the government has been able to provide limited modern health care services at nominal financial cost to the public. At the same time, hospitals are subject to a strict system of administrative and financial controls. Consequently, Hong Kong hospitals must utilize their limited facilities effectively to provide modern health services to the public. However, the trade-off between low-cost health services and limited facilities is the incurrence, by the public, of non-monetary costs in obtaining hospital admission.     

Developing and implementing a personnel budget report

Few issues are as vital to the health care industry as those surrounding the notion of cost containment and cost control. If hospital executives are to gain a handle by which to institute programs of cost containment, however, they must have access to pertinent and timely information on hospital operations. Because labor costs represent such a large percentage of total hospital costs, a personnel budgeting report can be a useful first step in gaining valuable management information.     

Health care cost containment strategies: the Jordanian experience

Jordan's relative success in containing costs is the result of public financing of the health insurance system, the health care system reform strategy, and expanding the primary care network, which allows for cost containment and universal access based on the need for services rather than the ability to pay. The shift of costs from the public to the private sector must be curtailed. The determinants of health care (i.e. environment; human biology; life style; and health care system) are the main factors that determine future spending on health.     

Intramural health care budgeting.

In the last years endeavours have been made in several health systems to get a firm grip on the explosive cost development in hospitals which amounts to nearly half of all health care expenditures. The fee-for-service system for doctors coupled with the professional autonomy leads to expansion of quality and quantity of services provided. In many systems hospitals are financed on basis of output items as patient days, examinations and therapies. As hospital costs are in the short run preponderantly constant prices fixed at average costs are higher than marginal costs. This situation favours expansion of services as in that case marginal revenue exceeds marginal cost. Inversely the decrease of services provided generates losses for the hospital. In systems, where financing takes place in the way of budgets like the U.K., Denmark and Italy, the authorities have more influence on the cost development in the system. In systems where the hospitals are financed by social security on basis of output, arrangements are now made to bring budgetary elements in the financing of these institutions. In France the "Budget Global" will be applied to services financed by the Sécurité sociale. In Belgium arrangements have been made to contain the amount of patient days allowed for reimbursement and in the Netherlands in 1983 budget-financing has been introduced for all general and teaching hospitals. In 1984 this system also applies to all other intramural institutions. If a way has been found to focus the financing mechanism of these institutions on budgeted costs, the way is open for budgeting these institutions. A very important problem in this context is the budget formula, which will be used to determine the budgets. In this respect a distinction can be made between internal and external budgeting. Internal budgeting is understood here as a process whereby the hospital itself puts a limit to the use of resources or adapts its resources to budget constraints coming from the outside. External budgeting can be defined as the budgetary constraint given from the outside by third parties to the hospitals. Of course, both internal and external budgeting are narrowly interrelated. The distinction between these two ways of budgeting should be sought in the character of the budget formula. External budgeting should be based on global indications whilst internal budgeting should be more differentiated than the external budget formula.(ABSTRACT TRUNCATED AT 400 WORDS)     

Cost containment for the public health

The U.S. health care system has major problems with respect to patient access and cost control. Trimming excess hospital expenses and expanding public health activities are cost effective. By budgeting well, with global budgets set for the high cost sectors, the United States might emerge with lower tax hikes, a healthier population, better facilities, and enhanced access to service. Nations with global budgets have better health statistics, and lower costs, compared to the United States. With global budgets, these countries employ 75 to 85 percent fewer employees in administration and regulation, but patient satisfaction is almost double the rate in the United States. Implement a global budget for health care, or substantially raise taxes, is the basic choice faced in this country. Key words: global budget control cost containment.     

Global budgeting and the control of hospital costs

This paper attempts to answer the question: Would global budgeting control hospital costs in the United States? It reviews the development of health insurance and the growth of specialization in the United States, as well as the experience of Canada in attempting to control costs in a fee-for-service national medical care program. It concludes that the main causes of cost escalation in the U.S. are fee-for-service and overspecialization, and urges adoption of the NAPHP proposal for payment of physicians in a national program, i.e. global budgeting for the entire package of ambulatory and institutional services. It also presents a nine-point program for immediate State action to lower costs.     

Hospital budgeting in Holland: aspects, trends and effects.

Global hospital budgeting was introduced in 1983 in Holland; it was expected to be a much more effective instrument to cost containment than classic retrospective output reimbursement. Several underlying assumptions of hospital budgeting are discussed: it will encourage hospitals to improve efficiency; it will have no negative impact upon the quality of health care; it restores hospital autonomy to some extent; hospital managers are capable to implement more efficiency. Attention is also paid to the design of external budgeting and its implications for the link between planning and budgeting as well as the relationship between hospitals and insurers. The second part deals with several effects of hospital budgeting. There are indications that hospital budgeting is effective from a cost containment perspective; it goes along with a decrease in hospital production; it also affects the organization and policy-making of hospitals as well as the public-private mix in health care. A general conclusion is that the effects of hospital budgeting far exceed the effects for cost containment.     

DRGs: the road to hospital efficiency

In this paper, the effects of using diagnosis-related groups (DRGs) as the basis of a hospital funding mechanism and within a global budgeting mechanism are reviewed. Most forthcoming is the indeterminate effect of DRGs as a funding mechanism. By controlling only the price of hospital care, such systems remain vulnerable to compensatory increases in patient throughout, cost shifting and patient-shifting. Whether the use of DRGs has substantially reduced hospital cost per case is also not clear cut. Effects on patient outcome have not been adequately assessed. At this stage, use of DRGs within a system of global budgeting will simply focus attention on the current average costs of treating cases without consideration of whether such average costs represent efficient clinical practice. Efficient clinical practice is better established through use of less sophisticated techniques, such as clinical budgeting and cost-effectiveness analysis. The failure of more global budgeting in the past has been that patient outcome has not been monitored. Data on outcome are crucial to determining efficiency. Once efficient clinical practice is established through budgeting, DRGs could be calculated according to efficiency criteria rather than current average cost.     

Health systems in East Asia: what can developing countries learn from Japan and the Asian Tigers?

The health systems of Japan and the Asian Tigers (Hong Kong, Korea, Singapore and Taiwan), and the recent reforms to them, provide many potentially valuable lessons to East Asia's developing countries. All five systems have managed to keep a check on health spending despite their different approaches to financing and delivery. These differences are reflected in the progressivity of health finance, but the precise degree of progressivity of individual sources and the extent to which households are vulnerable to catastrophic health payments depend on the design features of the system - the height of any ceilings on social insurance contributions, the fraction of health spending covered by the benefit package, the extent to which the poor face reduced copayments, whether there are caps on copayments, and so on. On the delivery side, too, Japan and the Tigers offer some interesting lessons. Singapore's experience with corporatizing public hospitals - rapid cost and price inflation, a race for the best technology, and so on - illustrates the difficulties of corporatization. Korea's experience with a narrow benefit package illustrates the danger of providers shifting demand from insured services with regulated prices to uninsured services with unregulated prices. Japan, in its approach to rate setting for insured services, has managed to combine careful cost control with fine-tuning of profit margins on different types of care. Experiences with DRGs in Korea and Taiwan point to cost-savings but also to possible knock-on effects on service volume and total health spending. Korea and Taiwan both offer important lessons for the separation of prescribing and dispensing, including the risks of compensation costs outweighing the cost savings caused by more 'rational' prescribing, and cost-savings never being realized because of other concessions to providers, such as allowing them to have onsite pharmacists.     

Health care in Hong Kong and mainland China: one country, two systems?

Hong Kong and Mainland China are undertaking health reform following recent economic fluctuations and Hong Kong's transformation to a Special Administrative Region of China in 1997. Despite spending only 4.7% of its Gross Domestic Product on health care, one third as much as in the United States, Hong Kong has developed health statistics comparable to those in leading western nations. In contrast, Mainland China's 3.6% of GDP expenditure on health is associated with health statistics and expenditures similar to those found in most developing countries. Hong Kong has adopted health care financing and organizational health systems that are commonly seen in centrally planned economies, while its economy functions as a highly capitalistic enterprise. In contrast, mainland China has integrated many features of health care systems associated with market economies, while its overall economy is largely centrally planned. In this paper we examine the policy factors associated with these disparate health systems and investigate whether they can be maintained according to the 'one country, two systems' approach that has been adopted by Chinese policy makers.     

英国、新加坡和中国香港全民医保的运行及启示

作为医疗保障制度较为健全的国家和地区,英国、新加坡和中国香港三地的全民医疗保障体系经常成为学术界的研究对象。英国是全民免费医疗的典范,新加坡是政府主导的混合型医疗保障模式的代表,香港则凭借着质优价廉的公立医院服务享誉全球。本文将从卫生筹资的公平性、个人的可负担能力、医疗保障的覆盖模式、卫生筹资的可持续性以及个人责任的承担这五个核心维度来评估三地医疗保障系统的优越性和局限性,以期为我国新时期医疗改革的深化提供借鉴与参考。     

What effect does physician "profiling" have on inpatient physician satisfaction and hospital length of stay?

Background  

2002 marked the first time that the rate of hospital spending in the United States outpaced the overall health care spending rate of growth since 1991. As hospital spending continues to grow and as reimbursement for hospital expenses has moved towards the prospective payment system, there is still increasing pressure to reduce costs. Hospitals have a major incentive to decrease resource utilization, including hospital length of stay. We evaluated whether physician profiling affects physician satisfaction and hospital length of stay, and assessed physicians' views concerning hospital cost containment and the quality of care they provide.     

Long-term care and AIDS: perspectives from experience with the elderly

The driving concern of policy thinking in regard to both the elderly and AIDS patients has been cost containment. It has been presumed that the best way to cut costs, as well as to serve the medical and emotional needs of AIDS patients, is to limit hospital and nursing home stays and expand the role of community-based services. The experience of the elderly has demonstrated, however, that these services have had little impact on the use of institutional care, only limited outcome benefits, and have not reduced the overall costs; rather, they have increased the utilization of all services and total expenditures. In the case of AIDS patients, a preoccupation with community care alternatives to hospitalization fails to acknowledge the central role of medical care in the management of the disease.     

Economics, public health and health care purchasing: the Tayside experience of programme budgeting and marginal analysis

In this paper it is shown how the economics framework of programme budgeting and marginal analysis (PBMA) can be used to help formulate a purchasing strategy in health care; in this case, for child health services. The basic premise of PBMA is that to have more of some services it is necessary to have less of others. Therefore, it is important to know how resources are currently spent, what changes can be made, and what are the possible costs and benefits of such changes. Despite a lack of evidence on the effectiveness of services, PBMA provides a pragmatic purchasing framework. This framework permits consideration of national policy, local epidemiology, current spending, and the views both of parents and professionals as to how such spending can be changed.     

Cost containment, solidarity and cautious experimentation: Swedish dilemmas

This paper uses secondary data analysis and a literature review to explore a "Swedish Dilemma": Can Sweden continue to provide a high level of comprehensive health services for all regardless of ability to pay--a policy emphasizing "solidarity"--or must it decide to impose increasing constraints on health services spending and service delivery--a policy emphasizing "cost containment?" It examines recent policies and longer term trends including: changes in health personnel and facilities; integration of health and social services for older persons; introduction of competition among providers; cost sharing for patients; dismantling of dental insurance; decentralization of government responsibility; priority settings for treatment; and encouragement of the private sector. It is apparent that the Swedes have had considerable success in attaining cost containment--not primarily through "market mechanisms" but through government budget controls and service reduction. Further, it appears that equal access to care, or solidarity, may be adversely affected by some of the system changes.     

The impact of alternative cost recovery schemes on access and equity in Niger

The authors examine accessibility and the sustainability of quality health care in a rural setting under two alternative cost recovery methods, a fee-for-service method and a type of social financing (risk-sharing) strategy based on an annual tax+fee-for-service. Both methods were accompanied by similar interventions aimed at improving the quality of primary health services. Based on pilot tests of cost recovery in the non-hospital sector in Niger, the article presents results from baseline and final survey data, as well as from facility utilization, cost, and revenue data collected in two test districts and a control district. Cost recovery accompanied by quality improvements increases equity and access to health care and the type of cost recovery method used can make a difference. In Niger, higher access for women, children, and the poor resulted from the tax+fee method, than from the pure fee-for-service method. Moreover, revenue generation per capita under the tax+fee method was two times higher than under the fee-for-service method, suggesting that the prospects of sustainability were better under the social financing strategy. However, sustainability under cost recovery and improved quality depends as much on policy measures aimed at cost containment, particularly for drugs, as on specific cost recovery methods.     

Kostendämpfungspolitik in den Niederlanden und in Deutschland: Eine Untersuchung von Maßnahmen in drei Leistungsbereichen

Cost containment is an important endpoint of successful health policy. The strategic objectives of cost control, especially the one to reduce statutory charges on labour are not uncontroversial. In terms of operational targets, the Netherlands primarily aim to contain health care expenditure according to the growth level of the gross domestic product, while Germany aims to contain expenditure according to the growth level of premium income of the statutory sickness funds. From the universe of cost containment measures, this paper investigates for both countries concurrent control measures in three health care sectors: budgeting of hospitals and specialized physicians, and fixed-price reimbursement for drugs. Concerning the global policy objectives, only comprehensive fixed budgets with a well defined balancing mechanism turned out to be effective in the short run. In the long run, fixed budgets may incur problems in the flexibility of the system to adapt to changes. In spite of the restricted effectiveness of the individual containment measures, health care expenditures have been, in international comparison and at the level of the national economy, controled quite successfully in both countries over the last twelve years which were investigated here. This relative, long term success of cost containment policy corresponds with the continuous will of the governements in both countries to work, in collaboration with all participants in the health field, towards explicit national expenditure goals. This process features analogies with the principles of quality management.