Hong Kong Healthcare and Finance Reform

The study Improving Hong Kong's Health Care System: Why and For Whom? (the "Harvard Report") published earlier this year makes it clear that the Hong Kong health system and its financing require reform. The Report also identifies many of the reasons which in my view deserve to be taken seriously why this is necessary and should not be delayed. The Harvard Report proposes a new approach to financing health care that would entail a total reform of the system of health care provision. Its core proposal centres on creating a universal mandatory social insurance system that would allow patients to choose doctors, clinics and hospitals. As a consequence, dollars would follow patients instead of being given directly to health care providers, as is the case at present. The current distinction and separation between public and private care would also basically cease to exist. The social insurance premium would be financed jointly by the patient and the public purse, and the new programme would include built-in income redistribution features to achieve equity objectives. While the Harvard proposal has obvious strengths and addresses some of the shortcomings of the present system, the report's proposal has serious theoretical and practical difficulties. In this article we discuss why the Harvard Report is correct about the necessity for change, but we also explain why the core recommendation of the Harvard Report is not a good solution for the problems of Hong Kong's health care system and go on to propose an alternative scheme.