HEALTH policy ELSEVIER Health Policy 53(2000)147-15 www.elsevier.com/locate/healt Health care in Hong Kong and mainland China: one country, two systems? Karen A. Fitzner a.b., c, d, e, Sheryl Coughlin a, b,,,d, e, Cecilia Tomori a, b, c, d, e. Charles L Bennett a, b c. d, e, *k Department of Community Medicine, Faculty of Medicine, Unicersity of Hong Kong, Hong Kong, SAR, China b School of Health Services Management, University of New South Wales, Sydney, NSW, Australia VA Chicago Healthcare System/Lakeside Division, Northwestern University School of Medicine, Chicago, IL, USA The Robert H. Lurie Comprehensive Cancer Center, Northwestern University School of medici Chicago, IL, USA e Institute for Health Services Research and Policy Studies orthwestern Unicersity School of Medicine, Chicago, IL, USA Received 15 December 1999; accepted 10 April 2155 Abstract Hong Kong and Mainland China are undertaking health reform following recent eco- omic fluctuations and Hong Kongs 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 main- tained according to the one country, two systems' approach that has been adopted by Chinese policy makers. C 2000 Elsevier Science Ireland Ltd. All rights reserved author. Present address: Lakeside vA Medical Science Building. 400 E Ontario Av l,USA.Tel.:+1-312-9436600;fax:+1-312-6402496 cbenne(anwu.edu(C L. Bennett) 0168-8510/00/S- see front matter o 2000 Elsevier Science Ireland Ltd. All rights reserved PII:S0168-8510(00)00090-7
Health Policy 53 (2000) 147–155 Health care in Hong Kong and mainland China: one country, two systems? Karen A. Fitzner a,b,c,d,e, Sheryl Coughlin a,b,c,d,e, Cecilia Tomori a,b,c,d,e, Charles L. Bennett a,b,c,d,e,* a Department of Community Medicine, Faculty of Medicine, Uni6ersity of Hong Kong, Hong Kong, SAR, China b School of Health Ser6ices Management, Uni6ersity of New South Wales, Sydney, NSW, Australia c VA Chicago Healthcare System/Lakeside Di6ision, Northwestern Uni6ersity School of Medicine, Chicago, IL, USA d The Robert H. Lurie Comprehensi6e Cancer Center, Northwestern Uni6ersity School of Medicine, Chicago, IL, USA e Institute for Health Ser6ices Research and Policy Studies, Northwestern Uni6ersity School of Medicine, Chicago, IL, USA Received 15 December 1999; accepted 10 April 2155 Abstract 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. © 2000 Elsevier Science Ireland Ltd. All rights reserved. www.elsevier.com/locate/healthpol * Corresponding author. Present address: Lakeside VA Medical Science Building, 400 E Ontario Ave, Chicago, IL 60611, USA. Tel.: +1-312-9436600; fax: +1-312-6402496. E-mail address: cbenne@nwu.edu (C.L. Bennett). 0168-8510/00/$ - see front matter © 2000 Elsevier Science Ireland Ltd. All rights reserved. PII: S0168-8510(00)00090-7
K.A. Fitzner et al./Health Policy 53(2000)147-1 Keywords: Hong Kong: China; Healthcare policy; Healthcare reform; Health economics 1. Introduction When Britain returned Hong Kong to China in 1997, Deng Xiao Ping stated that China will maintain a one country, two systems'policy. The unification of Hong Kong and China presents an opportunity to address the impact of political changes on health care policy in the Pacific Rim, analogous to the situations described in eastern European countries a decade ago [1]. The two regions differ in overall goals of health policy. Mainland Chinas health policy objectives include prevention of communicable diseases, achievement of 90% coverage of childrens immunization [2 and development of programs targeting AIDS [3] and smoking [4), goal common to most developing countries. To meet these objectives China plans to adopt health care structures commonly associated with market economies. [5] In contrast, Hong Kongs health care system has a well-developed immunization program and comprehensive infectious disease control, but, like most developed countries, faces escalating expenditures and limited public financial resources [6] Hong Kongs current approach incorporates many aspects found in centrally planned economies [7]. The 'one country, two systems'concept provides a frame- work for comparing the development of mainland health care practices and policies with those of Hong Kong. In this paper, we examine the current state of health care in the two regions, describe their health policy objectives, and consider whether the divergent health care funding, policies, and objectives will continue in the 21st 2. Health care in mainland China and hong kong 2. Health status In China life expectancy rose from 34 to 69 years between 1931 and 1989 and infant mortality (under 5 years) decreased from 173 deaths per 1000 live births in 1960 to 44.5 per 1000 in 1990 [8]. Currently, inadequate housing and sanitation, lack of a clean water supply, a large number of absolute poor in rural areas living in extreme conditions, and a recent emergence of an urban underclass plague the population's health Because Chinas present health policy emphasizes combating communicable diseases, it does not provide for the increasing demands of the aged in either current or future policy. In addition, the dependency ratio of children aged 0-14 years is 38.5%[8], further straining health care resources due to costs associated with increasing immunization and childbirth and infancy In comparison, life expectancy and infant mortality in Hong Kong are compara ble to those of other market economies, with a life expectancy of 79 years, a decade
148 K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 Keywords: Hong Kong; China; Healthcare policy; Healthcare reform; Health economics 1. Introduction When Britain returned Hong Kong to China in 1997, Deng Xiao Ping stated that China will maintain a ‘one country, two systems’ policy. The unification of Hong Kong and China presents an opportunity to address the impact of political changes on health care policy in the Pacific Rim, analogous to the situations described in eastern European countries a decade ago [1]. The two regions differ in overall goals of health policy. Mainland China’s health policy objectives include prevention of communicable diseases, achievement of 90% coverage of children’s immunization [2] and development of programs targeting AIDS [3] and smoking [4], goals common to most developing countries. To meet these objectives China plans to adopt health care structures commonly associated with market economies. [5] In contrast, Hong Kong’s health care system has a well-developed immunization program and comprehensive infectious disease control, but, like most developed countries, faces escalating expenditures and limited public financial resources [6]. Hong Kong’s current approach incorporates many aspects found in centrally planned economies [7]. The ‘one country, two systems’ concept provides a framework for comparing the development of mainland health care practices and policies with those of Hong Kong. In this paper, we examine the current state of health care in the two regions, describe their health policy objectives, and consider whether the divergent health care funding, policies, and objectives will continue in the 21st century. 2. Health care in mainland China and Hong Kong 2.1. Health status In China life expectancy rose from 34 to 69 years between 1931 and 1989 and infant mortality (under 5 years) decreased from 173 deaths per 1000 live births in 1960 to 44.5 per 1000 in 1990 [8]. Currently, inadequate housing and sanitation, lack of a clean water supply, a large number of absolute poor in rural areas living in extreme conditions, and a recent emergence of an urban underclass plague the population’s health. Because China’s present health policy emphasizes combating communicable diseases, it does not provide for the increasing demands of the aged in either current or future policy. In addition, the dependency ratio of children aged 0–14 years is 38.5% [8], further straining health care resources due to costs associated with increasing immunization and childbirth and infancy. In comparison, life expectancy and infant mortality in Hong Kong are comparable to those of other market economies, with a life expectancy of 79 years, a decade
K.A. Fitzner et al./Health Policy 53(2000)147-155 longer than in Mainland China, and a ten-fold lower infant mortality rate of 4. 1 per 1000 in 1990. Table 2) Similar to mainland China, the percentage of elderly persons in Hong Kong is expected to increase to 13.3% by 2016[9]. Hong Kong olicy makers are currently developing Long Term Aged Care Policy to respond to this demographic shift. 2. 2. Morbidity and mortality Mainland China's morbidity is largely attributable to infectious diseases such neumonia in the rural areas and cerebrovascular diseases and cancer in the urban areas, while Hong Kongs major causes of morbidity are cancer and heart disease (Table 2). Hong Kongs population is affected by chronic illnesses, such as diabetes, more rapidly than that of mainland China [11] 23. The economic situation and healthcare Chinas government budgetary expenditure dropped from 33. 8% of GDP in 1978 to 14. 1% of GDP in 1994, reflecting government decentralization. China's bud getary expenditures on health (3.6% of GDP or US Sll per capita) and public expenditures on health care(2.0% of GDP)are significantly lower than in industri lized nations, other Asian countries and Hong Kong (Table 1)Nonetheless, such emphasis on economic development may ultimately improve the populations health and welfare by increasing financial resources for public health measures and medical care Table I Health indicators selected countries. 1990 Health Public sector Life expectancy Child mortality xpenditure ( health expenditure at birth (years) (under fives, pe 1000) China(1993 3.6 69(M=679,44.5 F=71) Hong Kong 79(M=76 2) Other Asian 62 Economies Established market 9.2 European former 3.6 Latin American 4.0 economies Source: World Bank, The Chinese Economy. 1996. p.54. Source: Hong Kong Census and Statistics Provisional 1997 figures by the Department of Healt
K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 149 longer than in Mainland China, and a ten-fold lower infant mortality rate of 4.1 per 1000 in 1990. (Table 2) Similar to mainland China, the percentage of elderly persons in Hong Kong is expected to increase to 13.3% by 2016 [9]. Hong Kong policy makers are currently developing Long Term Aged Care Policy to respond to this demographic shift. 2.2. Morbidity and mortality Mainland China’s morbidity is largely attributable to infectious diseases such as pneumonia in the rural areas and cerebrovascular diseases and cancer in the urban areas, while Hong Kong’s major causes of morbidity are cancer and heart disease [10] (Table 2). Hong Kong’s population is affected by chronic illnesses, such as diabetes, more rapidly than that of mainland China [11]. 2.3. The economic situation and healthcare China’s government budgetary expenditure dropped from 33.8% of GDP in 1978 to 14.1% of GDP in 1994, reflecting government decentralization. China’s budgetary expenditures on health (3.6% of GDP or US $11 per capita) and public expenditures on health care (2.0% of GDP) are significantly lower than in industrialized nations, other Asian countries and Hong Kong. (Table 1) Nonetheless, such emphasis on economic development may ultimately improve the population’s health and welfare by increasing financial resources for public health measures and medical care. Table 1 Health indicators, selected countries. 1990 Health Public sector Child mortality Life expectancy expenditure (% at birth (years) (under fives’, per health expenditure GNP) 1000) (% of total) China (1993) 69 (M 3.6 58 =67.9, 44.5 F=71) 4.1 Hong Kong 79 (M= a 4.6 76, a 54a F=82)b Other Asian 4.5 97 39 62 Economies Established market 60 9.2 76 11 economies European former 3.6 71 72 22 socialist economies Latin American 4.0 60 70 60 economies a Source: World Bank, The Chinese Economy. 1996. p.54. Source: Hong Kong Census and Statistics Department. b Provisional 1997 figures by the Department of Health
K.A. Fitzner et al./Health Policy 53(2000)147-155 考 :二
150 K. A . Fitzner et al . / Health Policy 53 (2000) 147–155 Table 2 Leading causes of death in China 1996 and Hong Kong 1991/1992 Chinaa Rank Hong Kongb Urban Rural Total deaths (%) Disease Total deaths (%) Disease Total deaths (%) Disease Malignant neoplasms Cerebrovascular disease 31.6 22.3 Respiratory disease 25.2 1 15.1 17.3 Heart disease 2 Cerebrovascular disease Malignant neoplasms 21.7 Pneumonia Heart disease 13.1 16.4 Malignant neoplasms 16.4 3 9.6 4 Respiratory disease 15.3 Trauma and toxicosis 11.1 Cerebrovascular disease 5.2 10.8 Heart disease Trauma and toxicosis Trauma and toxicosis 6.5 5 a Source: state statistical bureau. China Statistical Yearbook 1997. pp.732–733. b Source: Hong Kong digest of statistics 1997
K.A. Fitzner et al./Health Policy 53(2000)147-155 For over 20 years, until the Asian economic crisis of 1997, Hong Kong had a prosperous and steadily growing economy [12]. Today, growth is slower but Hong Kong continues to be relatively prosperous compared to other parts of Asia. Hong Kong currently spends 4.6% GDP on health [13](Table 2) 2. 4. Health care systems and policies China and hong Kong have contrasting health care structures. The majority of Chinas population obtains health care on a fee-for-service basis [14, while Hong Kong has a mixed medical economy, in which 85% of primary care is provided by the private sector and 92% of hospital care is provided by the public sector [6] Chinas current health care policy, carried out by its Ministry of Health, focuses on prevention and public involvement and a balance between western and traditional medicine. Future Chinese policy goals include continued reforms to improve health care and increase health investment [2] Hong Kongs health care policy, implemented by its Health and Welfare Bureau and Hospital Authority, has until recently focused on ensuring public provision and eliminating access barriers [7]. The 1999 Consultancy Report prepared by a Harvard University team assessed the capability of financing arrangements to meet future needs and recommended reform options for consideration [6]. The Harvard Team suggested five possible options for the future of health care policy in Hong Kong [15]. The first three options maintaining the status quo, capping the government budget on health and raising user fees- were not recommended by the Consultants. The first recommended reform option includes compulsory enroll- ment in a Health Security Plan(HSP)and establishment of an individual savings account, called MEDISAGE. The HSP, paid jointly by employers and employees, would offer protection against catastrophic events and certain chronic diseases and MEDISAGE would be available for purchasing long term care insurance upon retirement or disability. The final recommended option suggests a move toward competitive integrated health care. 2.5. Health care utilization Chinese medical practices differ substantially from those in developed countries In China, the average length of hospital stay in 1994 was 15 days [16, 17], which esulted in an average occupancy rate of 96% with wide variations between urban and rural hospitals [16] Kongs citizens frequently use health care services, indicated 960 800 hospital discharges in 1996[18 and a per capita yearly average visits to doctors practicing western style medicine. Many seek care fror western and traditional practitioners for the same illness episode [6, 19]. The average length of stay was eight days in Hong Kongs public sector hospitals and 3 days in the private sector, significantly shorter than stays in mainland China. Public patients in Hong Kong are more likely to have complicated or costly illnesses than those in private hospitals. Despite over-utilization of premier facilities in 1996-1997
K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 151 For over 20 years, until the Asian economic crisis of 1997, Hong Kong had a prosperous and steadily growing economy [12]. Today, growth is slower but Hong Kong continues to be relatively prosperous compared to other parts of Asia. Hong Kong currently spends 4.6% GDP on health [13] (Table 2). 2.4. Health care systems and policies China and Hong Kong have contrasting health care structures. The majority of China’s population obtains health care on a fee-for-service basis [14], while Hong Kong has a mixed medical economy, in which 85% of primary care is provided by the private sector and 92% of hospital care is provided by the public sector [6]. China’s current health care policy, carried out by its Ministry of Health, focuses on prevention and public involvement and a balance between western and traditional medicine. Future Chinese policy goals include continued reforms to improve health care and increase health investment [2]. Hong Kong’s health care policy, implemented by its Health and Welfare Bureau and Hospital Authority, has until recently focused on ensuring public provision and eliminating access barriers [7]. The 1999 Consultancy Report prepared by a Harvard University team assessed the capability of financing arrangements to meet future needs and recommended reform options for consideration [6]. The Harvard Team suggested five possible options for the future of health care policy in Hong Kong [15]. The first three options — maintaining the status quo, capping the government budget on health and raising user fees — were not recommended by the Consultants. The first recommended reform option includes compulsory enrollment in a Health Security Plan (HSP) and establishment of an individual savings account, called MEDISAGE. The HSP, paid jointly by employers and employees, would offer protection against catastrophic events and certain chronic diseases and MEDISAGE would be available for purchasing long term care insurance upon retirement or disability. The final recommended option suggests a move toward competitive integrated health care. 2.5. Health care utilization Chinese medical practices differ substantially from those in developed countries. In China, the average length of hospital stay in 1994 was 15 days [16,17], which resulted in an average occupancy rate of 96% with wide variations between urban and rural hospitals [16]. Hong Kong’s citizens frequently use health care services, indicated by the 960 800 hospital discharges in 1996 [18] and a per capita yearly average of nine visits to doctors practicing western style medicine. Many seek care from both western and traditional practitioners for the same illness episode [6,19]. The average length of stay was eight days in Hong Kong’s public sector hospitals and 3 days in the private sector, significantly shorter than stays in mainland China. Public patients in Hong Kong are more likely to have complicated or costly illnesses than those in private hospitals. Despite over-utilization of premier facilities in 1996–1997
K.A. Fitzner et al./Health Policy 53(2000)147-155 Table 3 Health care inputs in China and Hong Kon China Hong Kong" 51 312(above county level) 8065° (all categories) 16 l8919 Students 242000 Secondary health schools 364000 Hospital beds/1000 population 2.34b report on Hong Kongs health care financing and delivery system, 1999. b Source: State statistical bureau. China Statistical Yearbook 1997. p. 726. Source: Hong Kong Census and Statistics Department d Source: Geng D. 1996. p.44 Hong Kongs Hospital Authority maintained a surprisingly average low occu pancy rate of 82%. 2. 6. Assessing the effectiveness of health policy Implementation of health care policy in both China and Hong Kor xamined in the context of four goals that apply to all medical economies demand barriers, technical efficiency, adequacy of supply, and allocative effi ciency [20]. Optimizing these goals can lead to economic efficiency in the health ystem. Demand barrier sediments to receiving medical care, are shared by Hong Kong and mainland China with price as the prime barrier, and time and travel costs forming secondary obstacles. Technical efficiency refers to the production at minimum cost at a given level and quality of output and is usually measured in monetary terms [20]. While few measures of technical effi- ciency exist to enable compar of Hong Kong and China's health care sys- tems, inefficient case management and work practices in China, and administrative disincentives indicate under-utilization of resources. Adequacel of efficiency and quality and primw depends nr provide care at a given level of supply is the availability of sufficient resources pon financial incentives [21]. In Hong Kong, there are 4.7 beds per 1000 but only 234 beds per 1000 in China [8] (Table 3). Inadequate supply and access barriers, in turn, limit allocative effi ciency, the allocation of resources to produce the greatest health benefit. In sum, these four factors suggest that both Hong Kong and mainland China requ structural reform to increase the efficiency of their respective health systems
152 K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 Table 3 Health care inputs in China and Hong Kong China Hong Konga Input 51 312 (above county level)b Hospitals 56 Doctors 8065c 1.9 mb 1.16 m 18 919 Nurses (all categories) b 132 2 Medical schools d /Universities 242 000 200 year d Students 551 n/a d Secondary health schools Students 364 000 n/a d Hospital beds/1000 population 2.34 4.7 b a Source: Consultancy Report on Hong Kong’s health care financing and delivery system, 1999. b Source: State statistical bureau. China Statistical Yearbook 1997. p. 726. c Source: Hong Kong Census and Statistics Department. d Source: Geng D. 1996. p.44. Hong Kong’s Hospital Authority maintained a surprisingly average low occupancy rate of 82%. 2.6. Assessing the effecti6eness of health policy Implementation of health care policy in both China and Hong Kong can be examined in the context of four goals that apply to all medical economies — demand barriers, technical efficiency, adequacy of supply, and allocative effi- ciency [20]. Optimizing these goals can lead to economic efficiency in the health care system. Demand barriers, i.e. impediments to receiving medical care, are shared by Hong Kong and mainland China with price as the prime barrier, and time and travel costs forming secondary obstacles. Technical efficiency refers to the production at minimum cost at a given level and quality of output and is usually measured in monetary terms [20]. While few measures of technical effi- ciency exist to enable comparison of Hong Kong and China’s health care systems, inefficient case management and work practices in China, and administrative disincentives indicate under-utilization of resources. Adequacy of supply is the availability of sufficient resources to provide care at a given level of efficiency and quality and primarily depends upon financial incentives [21]. In Hong Kong, there are 4.7 beds per 1000 but only 234 beds per 1000 in China [8] (Table 3). Inadequate supply and access barriers, in turn, limit allocative effi- ciency, the allocation of resources to produce the greatest health benefit. In sum, these four factors suggest that both Hong Kong and mainland China require structural reform to increase the efficiency of their respective health systems
K.A. Fitzner et al./Health Policy 53(2000)147-155 153 3. Implications for the future Both Mainland China and Hong Kong will require significant changes to contain the growth of health care expenditure, due to rising cost pressures associated with new technologies, and increasing and aging populations. Mainland China will have to address policy and practical considerations related to the epidemiologic transi- tion that accompanies developed countries faced with cancer and heart disease as the primary causes of death, in contrast to developing countries where infectious diseases are the most common causes of death. On the other hand, Hong Kong faced these concerns several years ago and, with the assistance of a well-developed public health system and improved living conditions for the majority of its population, completed this transition phase Despite these differences, policy options under consideration in both countries are strikingly similar. Economically, both systems face increasing pressure for use of health care services. From a public policy perspective, Hong Kong and mainland Chinas systems provide care inefficiently because they have incentive systems that encourage overuse of health services, and financial support for health care that is half as great as in most developed countries. Consequently, many parts of China are considering implementing some features of managed care, which may help reduce incentives for over utilization Another policy option is the creation of insurance companies that will encourage uptake of private health insurance. In mainland China, a large portion of the population cannot afford health care despite low fees. Chinas health care reforms that shift responsibility onto the individual further impede access to care for the poor. Although health care reform is currently secondary to economic develop- ment, reforms that alleviate poverty may improve the population's health and allow individuals to purchase private health insurance. Several pilot insurance programs have been initiated in mainland China over the past decade o A third option includes government interventions to contain the growth of health re expenditure. This option includes increases in user fees, raising the cost of care at the point of service, and improving the coordination of care. This option is unlikely to develop rapidly, however, as improving interfaces does not appear to be a priority in either system At present, both systems are undergoing significant changes, in strikingly similar fashions. Despite overall expenditures on health that are among the lowest in the world, both countries are looking towards containing health care costs. Hong Kong is questioning whether it can maintain its policy of subsidized health care in light of the recent Consultancy report recommendations. The Harvard Report generated considerable debate during the Government's formal consultation period, which ended July 1999. Of the five options proposed by Harvard, the first three would do little to improve the existing health care systems fragmentation. Capping the budget would control overall health expenditure inflation but is likely to result in reduced quality as demand rises over time. Raising user fees could resolve equit and financing concerns but would not redistribute resources to preventive care nor facilitate integration across the health care system. The final two recommendations
K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 153 3. Implications for the future Both Mainland China and Hong Kong will require significant changes to contain the growth of health care expenditure, due to rising cost pressures associated with new technologies, and increasing and aging populations. Mainland China will have to address policy and practical considerations related to the epidemiologic transition that accompanies developed countries faced with cancer and heart disease as the primary causes of death, in contrast to developing countries where infectious diseases are the most common causes of death. On the other hand, Hong Kong faced these concerns several years ago and, with the assistance of a well-developed public health system and improved living conditions for the majority of its population, completed this transition phase. Despite these differences, policy options under consideration in both countries are strikingly similar. Economically, both systems face increasing pressure for use of health care services. From a public policy perspective, Hong Kong and mainland China’s systems provide care inefficiently because they have incentive systems that encourage overuse of health services, and financial support for health care that is half as great as in most developed countries. Consequently, many parts of China are considering implementing some features of managed care, which may help reduce incentives for over utilization. Another policy option is the creation of insurance companies that will encourage the uptake of private health insurance. In mainland China, a large portion of the population cannot afford health care despite low fees. China’s health care reforms that shift responsibility onto the individual further impede access to care for the poor. Although health care reform is currently secondary to economic development, reforms that alleviate poverty may improve the population’s health and allow individuals to purchase private health insurance. Several pilot insurance programs have been initiated in mainland China over the past decade. A third option includes government interventions to contain the growth of health care expenditure. This option includes increases in user fees, raising the cost of care at the point of service, and improving the coordination of care. This option is unlikely to develop rapidly, however, as improving interfaces does not appear to be a priority in either system. At present, both systems are undergoing significant changes, in strikingly similar fashions. Despite overall expenditures on health that are among the lowest in the world, both countries are looking towards containing health care costs. Hong Kong is questioning whether it can maintain its policy of subsidized health care in light of the recent Consultancy report recommendations. The Harvard Report generated considerable debate during the Government’s formal consultation period, which ended July 1999. Of the five options proposed by Harvard, the first three would do little to improve the existing health care system’s fragmentation. Capping the budget would control overall health expenditure inflation but is likely to result in reduced quality as demand rises over time. Raising user fees could resolve equity and financing concerns but would not redistribute resources to preventive care nor facilitate integration across the health care system. The final two recommendations
K.A. Fitzner et al./Health Policy 53(2000)147-155 are based upon market oriented organizational aspects of health care. From experience elsewhere, it appears that options 4 and 5 would position the Hong Kong health care system to be financially viable and able to meet the future need of its population in an equitable way Coincidental to the debate about the Harvard report, the Government health care sector undertook a major management shuffle. The Secretary of Health and Welfare(H&W) stepped down and some Secretariat staff were reassigned to other departments. The CEO for the Hospital Authority was named as the new Secretary for H&w. a physician administrator who was described as 'a man without any outstanding achievements, was selected as Hospital Authority CEO following an extended application period. [22] The new management team may or may not be receptive to Harvard's recommendations for reshaping Hong Kongs health care system. However, some changes are inevitable because policy and financial issues remain to be resolved. Mainland Chinas health care policy will be shaped by long-term economic reforms, but will undoubtedly restrict medical expenditures to less than 5% of the GDP of the country. In the future, it would not be surprising to see one country and one health care system in Mainland China and Hong Kong References [1 Albert A, Bennett CL, Bojar M. Health care in the Czech republic: a system in transition. Journal of the American Medical association 1992: 267: 2461-6 2 Geng D. Overview of the medical and health services in the People's Republic of China. In: Forbes I, Braithwaite J, editors. Interhealth: Proceedings of the First International Conference on the Changing Face of Health Services Management in Asia and the Pacific Rim. Sydney: University of New South Wales. 1996: 44 3 Tomlinson R. China recognises AlDS problem. British Medical Journal 1998: 14: 493 (World Conference on Tobacco or Health, 24-28 August 1997, Beijing, China, Press Release WHO/61, August 1997 5 Wu C, Maurer C. Wang Y, Xue S, Davis DL. Water pollution and human health in China Environmental Health Perspectives 1999: 107: 251-6. 6 Harvard University Consultancy Team. Consultancy report on Hong Kongs health care financing and delivery system, Health and Welfare Bureau, Hong Kong Special Administrative Region Government. 1999 [7 Bennett CL, Pei GK, Ultmann JE. Western impressions of the Hong Kong health care syster Western Journal of Medicine 1996: 165: 37-42. 8 The World Bank. Financing health care: Issues and options for China. The World Bank Washington D. C, 1997 9 Provisional Legislative Council Secretariat. Long term health care policy. Hong Kong, October [10 Xu w. Flourishing health work in China. Social Science and Medicine 1995: 41: 1044 [ll Chan J, Cockram CS. Diabetes in the Chinese population and its implications for health Diabetes Care 1997: 20: 1785- [12] Comparison of the economic and social situation of Hong Kong with eleven selected economies, 98 edition. 1: 3, Hong Kong [13 Health and Welfare Bureau, Government Secretariat, Government of the Hong Kong SAR
154 K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 are based upon market oriented organizational aspects of health care. From experience elsewhere, it appears that options 4 and 5 would position the Hong Kong health care system to be financially viable and able to meet the future needs of its population in an equitable way. Coincidental to the debate about the Harvard report, the Government health care sector undertook a major management shuffle. The Secretary of Health and Welfare (H&W) stepped down and some Secretariat staff were reassigned to other departments. The CEO for the Hospital Authority was named as the new Secretary for H&W. A physician administrator who was described as ‘a man without any outstanding achievements’, was selected as Hospital Authority CEO following an extended application period. [22] The new management team may or may not be receptive to Harvard’s recommendations for reshaping Hong Kong’s health care system. However, some changes are inevitable because policy and financial issues remain to be resolved. Mainland China’s health care policy will be shaped by long-term economic reforms, but will undoubtedly restrict medical expenditures to less than 5% of the GDP of the country. In the future, it would not be surprising to see one country and one health care system in Mainland China and Hong Kong. References [1] Albert A, Bennett CL, Bojar M. Health care in the Czech republic: a system in transition. Journal of the American Medical Association 1992;267:2461–6. [2] Geng D. Overview of the medical and health services in the People’s Republic of China. In: Forbes I, Braithwaite J, editors. Interhealth: Proceedings of the First International Conference on the Changing Face of Health Services Management in Asia and the Pacific Rim. Sydney: University of New South Wales, 1996:44. [3] Tomlinson R. China recognises AIDS problem. British Medical Journal 1998;14:493. [4] World Conference on Tobacco or Health, 24–28 August 1997, Beijing, China, Press Release WHO/61, August 1997. [5] Wu C, Maurer C, Wang Y, Xue S, Davis DL. Water pollution and human health in China. Environmental Health Perspectives 1999;107:251–6. [6] Harvard University Consultancy Team. Consultancy report on Hong Kong’s health care financing and delivery system, Health and Welfare Bureau, Hong Kong Special Administrative Region Government, 1999. [7] Bennett CL, Pei GK, Ultmann JE. Western impressions of the Hong Kong health care system. Western Journal of Medicine 1996;165:37–42. [8] The World Bank. Financing health care: Issues and options for China. The World Bank. Washington D.C., 1997. [9] Provisional Legislative Council Secretariat. Long term health care policy. Hong Kong, October 1997. p. 32. [10] Xu W. Flourishing health work in China. Social Science and Medicine 1995;41:1044. [11] Chan J, Cockram CS. Diabetes in the Chinese population and its implications for health care. Diabetes Care 1997;20:1785–90. [12] Comparison of the economic and social situation of Hong Kong with eleven selected economies, 1998 edition, 1:3, Hong Kong. [13] Health and Welfare Bureau, Government Secretariat, Government of the Hong Kong SAR, personal communication
K.A. Fitzner et al./Health Policy 53(2000)147-155 [14 Liu Y, Hsiao WC, Li Q, Liu X, Ren M. Transformation of Chinas rural health care financing. Social sciences and medicine 1995: 41: 1086. [15] The Harvard Team, Im Hong Kongs health care system: why and for whom? Executive data. 1997 [17 Hsiao W. The Chinese health care system: lessons for other nations. Social Science and Medicine 95:41:1053-5 [18 Wai WT, Lan WS, Donnan SP. Prevalence and determinants of the use of traditional Chinese medicine in Hong Kong, Asia Pacific. Journal Public Health 1995: 8: 167 [ Lo AY, Hedley Aj, Pei GK, Ong SC, Ho Lm, Fielding R, Cheng KK, Daniel L Doctor-shopping in Hong Kong: implications for quality of care 1994: 6: 371-81 [20 Feldstein PJ. Health Care Economics, 4th edition. New York, NY: Delmar Publishers Inc, 1993. [21 Jacobs P. The Economics of Health and Medical Care, 3rd edition. Gaithersburg, MD: Aspen Publication. 1991: 274-5 [22 Lee, E, Doctors angry at choice of hospital chief, South China Morning Post, Hong Kong
K.A. Fitzner et al. / Health Policy 53 (2000) 147–155 155 [14] Liu Y, Hsiao WC, Li Q, Liu X, Ren M. Transformation of China’s rural health care financing. Social Sciences and Medicine 1995;41:1086. [15] The Harvard Team, Improving Hong Kong’s health care system: why and for whom? Executive summary. April 1999, p 10. [16] Hong Kong Hospital Authority data, 1997. [17] Hsiao W. The Chinese health care system: lessons for other nations. Social Science and Medicine 1995;41:1053–5. [18] Wai WT, Lan WS, Donnan SP. Prevalence and determinants of the use of traditional Chinese medicine in Hong Kong, Asia Pacific. Journal Public Health 1995;8:167–70. [19] Lo AY, Hedley AJ, Pei GK, Ong SC, Ho LM, Fielding R, Cheng KK, Daniel L. Doctor-shopping in Hong Kong: implications for quality of care 1994;6:371–81. [20] Feldstein PJ. Health Care Economics, 4th edition. New York, NY: Delmar Publishers Inc, 1993. [21] Jacobs P. The Economics of Health and Medical Care, 3rd edition. Gaithersburg, MD: Aspen Publication, 1991:274–5. [22] Lee, E., Doctors angry at choice of hospital chief, South China Morning Post, Hong Kong, 9/2/1999.