Global budgeting of hospitals in Hong Kong.

Policy-makers in industrialized countries face the dilemma of having to contain soaring hospital costs while resisting any reduction in the quality and quantity of hospital services. Among the many hospital financing systems, centralized control via global budgeting is advocated by some to be the most effective in containing hospital costs. Containing hospital costs, however, is but one aspect of the trade-off between cost containment and quality of care. The hospital financing system of Hong Kong provides some insights into the extent to which cost control can be achieved through global budgeting; and its impact on the accessibility of hospital care. The case of Hong Kong highlights three necessary conditions for effective cost control: (1) the payer must have a clear policy stance on overall public spending; (2) the payer must have a clear policy stance on the importance of hospital care relative to other goods and services; and (3) the payer must also have the will and ability to limit hospital spending within finalized global budgets. However, successful cost containment in Hong Kong affects the accessibility of hospital care. In a time of population growth and economic prosperity, new community needs seem to have preceded government plans and actions to build hospital facilities.     

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.     

香港地区医疗卫生制度变迁及其启示

香港地区的医疗卫生制度由早期的慈善机构提供演进到现在比较完善的架构,其公平性与可及性受到赞誉。但医疗卫生总费用的上升、公共医疗的过度使用、医疗架构的分裂隔离等弊端也日益凸现。在一国两制的框架体系下,反思香港一百多年医疗卫生制度的变迁与实践,我们可以从香港医疗卫生服务的政府主导、"管办分离"、基层医疗卫生服务、农村及边远地区医疗卫生服务等方面得到有益启迪。     

Advanced Asia's health systems in comparison

There is growing interest in comparing patterns of social and health service development in advanced Asian economies. Most publications concentrate broadly on a range of core social services such as education, housing, social security and health care. In terms of those solely focused on health, most discuss arrangements in specific countries and territories. Some take a comparative approach, but are focused on presentation and discussion of expenditure, resourcing and service utilization data. This article extends the comparative analysis of advanced Asian health systems, considering the cases of Japan, South Korea, Taiwan, Hong Kong and Singapore. The article provides basic background information, and delves into common concerns among the world's health systems today including primary care organization, rationing and cost containment, service quality, and system integration. Conclusions include that problems exist in 'classifying' the five diverse systems; that the systems face common pressures; and that there are considerable opportunities to enhance primary care, service quality and system integration.     

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 promotion for the elderly persons in Hong Kong

By the year 2000, there will be one million elderly persons in Hong Kong. With the rise of an older population, the cost of health care is likely to increase. Studies conducted in Hong Kong have shown that over 30% of health care expenditure is spent on the elderly. Unless steps are taken to slow the onset of chronic illnesses in elderly people, health care expenditure will increase rapidly in the future. The present paper describes strategies that have been adopted for promoting a healthier elderly population in Hong Kong. The paper also reports the results of an evaluative study on the largest health promotion program for older people in Hong Kong. It seems to show that health promotion activities may have the potential to save lives, delay institutionalization, and improve life satisfaction.     

Accountable Care Organizations: roles and opportunities for hospitals

Federal health reform has established Medicare Accountable Care Organizations (ACOs) as a new program, and some states and private payers have been independently developing ACO pilot projects. The objective is to hold provider groups accountable for the quality and cost of care to a population. The financial models for providers generally build off of shared savings between the payers and providers or some type of global payment that includes the possibility of partial or full capitation. For ACOs to achieve the same outcomes with lower costs or, better yet, improved outcomes with the same or lower costs, the delivery system will need to become more oriented toward primary care and care coordination than is currently the case. Providers of clinical services, in order to be more effective, efficient, and coordinated, will need to be supported by a variety of shared services, such as off-hours care, easy access to specialties, and information exchanges. These services can be organized by an ACO as a medical neighborhood or community. Hospitals, because they have a management structure, history of developing programs and services, and accessibility 24/7/365, are logical leaders of this enhancement of health care delivery for populations and other providers.     

Health care financing in Hong Kong: a case for tax‐based financing

With the new government of the Hong Kong Special Administrative Region currently conducting a review of Hong Kong's health care financing system, this article argues that the existing tax‐based system not only works well at present, but is also sustainable in the future. The performance of the system is analysed in terms of cost, health outcomes and access. The arguments for change are discussed, and the case for maintaining the status quo is presented. The author concludes that the way forward would be to fine tune the existing system rather than to replace it with other systems which are known to have higher transaction costs and more serious supply‐side moral hazards. Copyright © 1999 John Wiley & Sons, Ltd.     

Problems of primary health care in a newly developed society: Reflections on the Hong Kong experience

Hong Kong has emerged as a newly developed society in Asia and its modern scientific health care system has had a substantial expansion. Recently, the rise of medical costs has made the health authority come to stress the development of PHC. This paper focusses on three major aspects of the PHC development in Hong Kong: (1) public health and preventive care; (2) food supply and nutrition; and (3) first-contact medical care and referral network.It is argued that in a newly developed society, the emphasis on developing both the quality and the quantity of PHC in the scientific biomedical stream is justifiable. However, at least two kinds of problems need to be taken into consideration, i.e. the prevalence of traditional beliefs and practices and the ever-rising demands of the public for health services.     

Health care costs: the other point of view

Health care delivery in America is not efficient. Hospitals are not efficient and many are still wasteful. Some of the most blatant wastes in hospitals are staffing patterns that developed during the years of cost reports. Spending patterns become the norm, rather than excess, when they continue unabated for years. There are many reasons for cost increases in health care and specifically in hospitals. However, it is difficult to make these reasons add up to the total cost increase. No one has the answers; observation can only be made of what has been occurring and what continues to occur. Whatever the reason for the increase in health care costs, the consumer will bear the burden because of the circular flow of income and expenditures between the business sector and the household sector. Increased health care costs are passed on to the consumer in the form of increased expenditures for household goods and services or taxes. Ford Motor Company President Mr. Peterson says that $1,500 of every new automobile represents employee health care costs. The American consumer created the demand for health care services, and only the consumer can control the demand. One solution would be to let the consumer bear health care costs directly and remove the inefficiencies created by third party insurance carriers. This hypothesizes that the health care consumer is the most efficient shopper for health care services, and that third party insurance carriers are an important source of inefficiency in the health care delivery system. Many other solutions have been proposed by the government and by the insurance and health care industries, but most have only increased the cost of health care. Perhaps some day the health care industry will learn how to control the dynamics of this four-party purchasing decision. Until then, costs will continue to grow dramatically, and the executives of the industries who compete in the two-party purchasing system will wonder why the process is so complicated.     

Primary health care meets the market in China and Vietnam

China and Vietnam developed low cost rural health services between the 1950s and the mid-1970s. These services contributed to substantial improvements in health. Both countries have been liberalising their economies for a number of years. Partly as a result of these changes health facilities have become increasingly dependent on user charges, and they have gained considerable independence from political or bureaucratic control. There has also been a growth in private provision. This has given people a wider choice of health services, but costs have risen and there are greater differences in access to medical care. The Chinese and Vietnamese governments face fundamental questions about the future development of the health sector.     

Health care without managed care in Hong Kong

Although managed care may be more effective than fee-for-service in containing health care costs in the United States, it is less effective in countries with a national health service. In Hong Kong, costs have been contained despite the fact that 95% of general practitioners still practice on a solo, fee-for-service basis. The author describes in detail how the system of tax-based hospitals guarantees universal access without escalating costs.     

Physicians' responses to their changing environment

The loss of physician autonomy, the changing shape of physicians' practices, and efforts to control the cost of health care have left American physicians increasingly dissatisfied with the U.S. health care system. A survey of 300 office and hospital-based physicians shows 59 percent favor reform of the U.S. system; only 31 percent favor retaining the current system. Doctors face increased competition for patients (the supply of physicians has increased three times faster than the population), reduced autonomy because of intervention by government and other third party payers, pressure from patients to provide unnecessary care including expensive new technology, and increased cost containment. Yet a majority of physicians believe the causes of rising health care costs are patient demand for services and the current medical malpractice system. A minority (23 percent) blame hospitals and physicians for rising costs.     

Accountable Care Organizations: Roles and Opportunities for Hospitals

Abstract

Federal health reform has established Medicare Accountable Care Organizations (ACOs) as a new program, and some states and private payers have been independently developing ACO pilot projects. The objective is to hold provider groups accountable for the quality and cost of care to a population. The financial models for providers generally build off of shared savings between the payers and providers or some type of global payment that includes the possibility of partial or full capitation. For ACOs to achieve the same outcomes with lower costs or, better yet, improved outcomes with the same or lower costs, the delivery system will need to become more oriented toward primary care and care coordination than is currently the case. Providers of clinical services, in order to be more effective, efficient, and coordinated, will need to be supported by a variety of shared services, such as off-hours care, easy access to specialties, and information exchanges. These services can be organized by an ACO as a medical neighborhood or community. Hospitals, because they have a management structure, history of developing programs and services, and accessibility 24/7/365, are logical leaders of this enhancement of health care delivery for populations and other providers.     

Survey on death and dying in Hong Kong: attitudes, beliefs, and preferred end-of-life care

Social Workers in end-of-life and palliative care have a particular opportunity to ease the dying process by providing culturally appropriate services to the dying and their families. In today's multicultural social environment, with an ever-increasing immigrant population, social workers are challenged to be knowledgeable about diverse cultures. Recently, a forum of health care professionals and social workers in Hong Kong conducted a survey of the general population to assess death and dying attitudes, beliefs, and preferences for end-of-life care. Four-hundred-thirty Hong Kong Chinese participated in a telephone interview. Responses were compared by gender. The survey results not only contribute to an understanding of Hong Kong Chinese, but can inform social workers who practice with Chinese immigrants to the United States.     

Chilean health insurance system: a source of inequity and selective social insecurity

More than 20 years after its radical market-oriented reform, the Chilean health care system shows serious equity and fairness problems. Private insurance companies have used ex-ante as well as ex-post risk selection to avoid the affiliation of poorer and older enrolees presenting higher risks. The coexistence of a solidarity-driven public sector and a for-profit private sector operating with risk-adjusted premiums has led to a two-tier health insurance system. Unpredictable, often existentially threatening co-payments have become an serious problem for the users of the Chilean health care system, and coverage-lacks have become a major menace for patients. Private insurers supplement “Cream Skimming” and risk selection with contracts calling for significant out-of-pocket payments for health services. This article develops and applies a methodology to measure and compare systematically the impact of user charges for varying levels and complexity of treatment in the public and private health care sector. Co-payments in the private sub-sector show enormous variation, are hyper-regressive and discriminate not only against the ill, but also against the members of the lower socio-economic classes once they have passed the high access barriers. As cost-sharing affects the financial coverage and thus the accessibility of health care, it has become an important mechanism of quality skimping and active disenrolment. Private health insurance companies are relatively well prepared to cover costs for a wide array of traditional health problems; they fail, however, to respond for the costs of other leading diseases in Chile. The private system seems to be poorly prepared to face the challenges of the epidemiological transition in emerging countries.     

Managing health care costs: strategies available to small businesses

Although health care costs continue to rise at an alarming rate, small businesses can take steps to help moderate these costs. First, business firms must restructure benefits so that needless surgery is eliminated and inpatient hospital care is minimized. Next, small firms should investigate the feasibility of partial self-insurance options such as risk pooling and purchasing preferred premium plans. Finally, small firms should investigate the cost savings that can be realized through the use of alternative health care delivery systems such as HMOs and PPOs. Today, competition is reshaping the health care industry by creating more options and rewarding efficiency. The prospect of steadily rising prices and more choices makes it essential that small employers become prudent purchasers of employee health benefits. For American businesses, the issue is crucial. Unless firms can control health care costs, they will have to keep boosting the prices of their goods and services and thus become less competitive in the global marketplace. In that event, many workers will face a prospect even more grim than rising medical premiums: losing their jobs.     

Organizing health care within political turmoil: the Palestinian case

Palestinians were given control over their own health services in late 1994. Since then they have been facing the challenge of reorganizing disordered health services into a cohesive, regulated and sustainable health care system. This paper focuses on the experience of organizing health care during political instability. It considers the ways that health care is currently provided and funded in the Palestinian Territories. The patterns of accessibility to health care services in terms of insurance coverage and provision (physical allocation) of services are discussed. Finally, the major health care policy changes in this transitional period are examined.     

Community health and reform in Hong Kong

In this paper I argue that the health crisis in the underdeveloped world today is not primarily one of shortages of services, but is a result of lack of power and control over economic, political and social institutions by the majority of the population. Hong Kong is presented as a case study in which a plural medical system is dominated by a political economy that shapes patterns of both sickness and health care. As an advanced capitalist colony, a financial center for the Pacific Basin, and a neutral area for China's foreign negotiations, social policies in Hong Kong aim at promoting business growth, often at the expense of the health of the population. Further, government and voluntary agencies attempts at reforming the health system have done little more than further solidify biomedicine and its social relations. Finally an attempt is made to define potential vehicles for change.     

Contract medicine arrangements in Hong Kong: an example of risk-bearing provider networks in an unregulated environment

It is increasingly common in Hong Kong and elsewhere for employers to contract directly with physician networks to provide medical services to employees. These contracts are known in Hong Kong as contract medicine arrangements. In other countries and areas, managed care organizations are generally required by regulation or legislation to ensure that services of adequate quality are provided to patients who are locked in to network providers. There are no such requirements in Hong Kong and concerns have been raised about potential quality and cost trade-offs in contract medicine arrangements. Satisfaction surveys were sent to contract medicine enrollees in one large company in Hong Kong. The response rate was 30% and analysis of non-respondent data shows that respondents were representative of their group. Comparison of satisfaction using logistic regression showed that risk-bearing networks paid by capitation had consistently lower satisfaction ratings across all major dimensions including access, interpersonal care, communication with the doctor, choice of doctor, and outcomes. These findings suggest that quality, at least as perceived by the patient, may be lower in these networks. The issue is of concern in Asia where infrastructures and data systems are not well developed to adequately monitor quality of care or protect patient interests. This study highlights the need to structure pre-paid provider networks and managed care organizations so that quality of care is not compromised. At a time when managed care concepts are being applied throughout Asia, we believe attention needs to be drawn to this problem.