INTRODUCTION
1. The Consumer Council is pleased to submit its comments on the captioned consultation document, for consideration by the Health and Welfare Bureau (HWB). In this submission, the Council has directed its response to those proposals that
- have a bearing on the consumer issues raised by the Council in its previous two submissions, in August and December 1999; and
- address the general issue of financing health care services.
CONSUMER ISSUES
Develop an electronic health information infrastructure
2. In its August submission, the Council recommended that the level of information dissemination to consumers on the range of health care services and providers in Hong Kong should be improved. It suggested this could be done by enhancing access of information and allowing for the principle "records follow patients" to apply. The Council suggested that a study be conducted to examine how information technology can be deployed, thereby enabling information flows of patient records, and the utilisation of advances in computerised databases and computer software to provide health care information to consumers.
3. The Council is pleased to note the Government has taken up a similar initiative in the form of developing an electronic Health Information Infrastructure for linking up all relevant health care service providers in a community network to facilitate their communication and the provision of care in continuity. The Council offers its support to this initiative as a means of providing a comprehensive and integrated service to patients.
4. An important aspect of this initiative will be the security and privacy safeguards of patient records. According to the consultation document, the Government is planning to develop the information network beginning with the public health sector and extending to allow access to all health care providers, including those in the private sector, and eventually to the welfare sector. This network will provide a platform for sharing of medical knowledge, information and clinical protocols, for quality assurance and patient care audit, and for the sharing of patient records. However, the consultation document has not provided any information such as who will administer the network and what privacy safeguards will be in place with regard to the sharing of patient records and whether consent from patients for sharing information is a prerequisite.
5. The Council urges the Government to closely consider the privacy aspects of the proposed network and seek public consultation on the safeguards it intends to introduce.
Complaints handling mechanisms
6. With regard to complaints handling mechanisms, the Council previously expressed concerns on the lack of information regarding the effectiveness of redress mechanisms, which could substantiate or clarify whether problems exist across the spectrum of existing redress mechanisms. Accordingly, the Council recommended that the proposed Ombudsman Office in the Harvard Report should not be perceived as being limited to examining individual complaints against healthcare service providers. The Council considered that it should also extend to include practices that have a detrimental effect on consumer interests by healthcare service providers, and institutions in general. In the long run, it was proposed, the Ombudsman should operate as a 'neutral third party' as this would enhance credibility of the overall redress system, and lessen the use of more formal action.
7. In the current consultation document, the HWB proposes to set up a Complaint Office in the Department of Health to investigate patient complaints and to assist the complainants to obtain expert advice. This is only a slight improvement on the current system as the function of the Complaint Office is restricted in scope, and seems that it will function mainly as a 'post office' in redirecting complaints to various parties. In effect, the power to conduct disciplinary proceedings, deliver a verdict and apply sanctions will remain with the professional regulatory bodies.
8. The Council is still of the view that an Ombudsman is a preferred option, not only to provide an impartial complaints handling body, but to serve other functions in improving the delivery of health services by all those involved in the area, including:
- health care professionals (e.g. doctors, nurses, dentists, pharmacists);
- hospitals and clinics;
- health insurance providers; and
- government officials engaged in the industry.
9. A properly conceived Ombudsman Office should be seen not only as a place where complaints can be adequately addressed by an impartial third party. While such an Office is an ideal focus point for consumers to make complaints for an array of health service complaints, without worrying about issues of jurisdiction, a Health Ombudsman Office could also serve the function, because of its ubiquitous role in the health industry, to
- conduct investigations into the practices and procedures of health insurance funds;
- publish information about the range of complaints made against all health care service providers;
- provide information to the Health and Welfare Bureau about industry professionals, and the practices of health funds, and in doing so
- provide an overview of the industry through annual reporting that identifies systemic problems
10. This submission discusses the issue of public health care funding in another section. A point is made in that section that there is a problem in discussing the issue of funding and appropriate pricing policies to achieve low cost health care, without knowing the full extent of costs, and the effects of ongoing productivity improvements. The same point can be made in relation to the quality factor of the health care industry. An Ombudsman Office is the ideal focus point in which this other aspect of the health care industry can be properly dealt with to ensure that the industry is evolving at an appropriate level, as far as quality of service is concerned.
11. Moreover, in circumstances where there is an increasing reliance on private health care, and insurance, there is a need to take a more comprehensive perspective as to the need for transparency, and consumer redress in the industry.
12. In these circumstances, if the Government is minded to continue with the Complaints Office concept, rather than an Ombudsman Office, consideration should be given to expanding its role to be more comprehensive, as indicated above. Moreover, an indication by the Government of their regard for consumer interests would be given through having one or more consumer representatives on the decision making body in the Complaints Office.
Continuing medical education
13. The Council recommended in its previous submission that health service providers should either obtain or continue with medical education, or demonstrate through other means that in order to be eligible for practising certificate renewals, that they have maintained standards in their field of activity, during the course of their career. The requirements should also require development of effective communication skills appropriate to current social needs.
14. The idea has been incorporated in the current consultation document, but there is no indication as to whether this will be a mandatory requirement. The Council considers that in order for the benefits of continuing medical education to be realised, then it either must be made mandatory, or a means found by which consumers can be informed as to whether their medical practitioner has undertaken continuing medical education. For example, by the display of appropriate certification as is currently the practice with regard to initial training.
FINANCING HEALTH CARE SERVICES
Scope of the financial problem
15. The consultation document does not provide the public with extensive data on current costs of medical programs, future budget projections, and the expected reductions in costs that will arise when proposed reforms to enhance productivity and reduce costs take effect. For example, there is little in the consultation document that provides concrete figures under different probability outcomes as to the cost savings, productivity enhancement, and enhanced income due to fee revisions. The document also lacks statistics to support the notion that a mandatory contribution of 1-2% of an individual's earning to a personal Health Protection Account (HPA) is adequate to cover future medical needs, or whether the HPA is a viable long term solution.
16. Without this information it is difficult to estimate the degree of reform that is required and what objective the Government is aiming for. This is particularly the case in regard to the HPA when the present economic climate is considered and consumers already have the burden of the mandatory provident fund to finance future needs. Moreover, the consultation paper only indicates one financing option for the future, and does not provide a range of financing options for the public to consider and on which to provide comments. Accordingly, the Council has difficulty in approaching this issue other than to indicate its views on broad strategic directions.
17. In general, the Council supports the direction of health care financing reform in the current consultation document, insofar as it:
- proposes efficiency enhancing measures to reduce costs;
- maintains the principle of universal health care; and
- strives to encourage a degree of responsibility on the part of consumers, to have regard to the costs of financing such a system.
18. Therefore, the Council welcomes measures taken by the HWB to closely monitor current projects on cost containment mechanisms, in order to enhance productivity and reduce costs, in addition to the restructuring of public fee charging system to appropriate pricing of services to influence provider and patient behaviour.
19. It may well be that if costs can be contained and income generated to a satisfactory level, the dimensions of the problem that the HPA is designed to address will be clearer, and options other than HPA could be considered.
Options for financing health care
20. The issue of financing health care is one that has been problematic for similar advanced economies, with an ageing population. Invariably, the policy debate has centred on the extent to which, on the one hand, the Government will provide services either free of charge, or at a substantial discount to their real cost, or on the other hand, the extent to which the market will provide for such services. The Council has reservations concerning the current proposal on the HPA, given the uncertainty as to the scope of the problem.
21. Nevertheless, for the purposes of contributing to the general discussion on future financing options, the Council has considered the questions that arise within the parameters of market based solutions and government funding, and offers the following views for the Government's consideration. The views are noted under the headings of
- financing through general revenue versus direct taxpayer contributions; and
- market based solutions.
General revenue vs. direct taxpayer contributions
22. Hong Kong currently funds its universal public health care from general revenue, and as a consequence there is an absence of transparency as far as taxpayers are concerned with regard to how much of their tax payments go to health care. Direct taxpayer contributions along the lines proposed by the Harvard Team would bring about some degree of transparency as far as funding is concerned, but the payments would be made from income tax, and those on higher taxable incomes would be paying a high proportion of the funds.
23. The essence of universal health care is that all members of the community should have equal access to the same level of service provision. However, there is inherent pressure with individual tax levies, to keep the levies low. A low tax levy would invariably mean that the quality of services will be effected, to a corresponding degree by this pressure. This would result in some taxpayers feeling the need to purchase insurance to raise the standard of health care. Taxpayers on higher incomes could be expected to be in a better position to buy health insurance than those on lower incomes. As a consequence, a situation would arise where those in the community who make higher proportional payments to fund universal health care, would most likely be the ones who pay extra for health insurance; leading to a higher proportional contribution to overall health care funding from that group.
24. Funding from general revenue, being broader in its scope of collection would mean that funding would be more evenly spread throughout the community. While those on higher incomes might still be expected to buy health insurance to improve their level of health care, the proportion of their income tax payments would not be as high as they would be with the levy; and would be generally fairer.
Market based funding
25. Applying market based principles to funding health care would bring benefits in terms of placing competitive pressure on the costs of meeting the demand for and supply of health care. However, what this means, in effect, is that consumers would be expected to buy insurance to meet their health care needs. The general policy approach would be that, while basic health services will still be made available, disincentives would be introduced to avoid over reliance on the basic health care system.
26. For example, this applies at the moment, where basic cover for hospital accommodation and treatment does not necessarily allow a patient choice in the manner of treatment, the attending surgeon or other specialist, or the institution at which the service is rendered. Accordingly, many taxpayers choose to pay for separate insurance, to provide them with a broader range of choices.
27. The disincentive approach, when taken to extremes, for example by applying stringent means tests, can impose hardships on some consumers whose access to insurance is limited, given their low salary. Insurance companies would be expected to apply commercial principles to their approach to consumer contributions. Accordingly, the chronically ill or the elderly, as high risk groups, might be expected to find the cost of insurance prohibitive. There is also a class of persons, commonly referred to as the "working poor" who would find that the cost of insurance premiums are a substantial percentage of their salary. When the cost of health insurance is compared to the percentage of salary that has goes for food, clothing, shelter and transport, health insurance would be categorised as a prohibitive luxury item.
28. One means of overcoming problems in consumers meeting insurance premiums would be to introduce policies that encourage the purchase and continual maintenance of insurance, with the one company, at the early stages and throughout the period of a consumer's working life. Incentives to encourage persons to take out, and keep insurance at an early age, could be through making it impossible to take out full insurance (for choice and higher standard of care) at a later age. In effect the HPA approach is somewhat similar to the insurance incentive approach, in that insurance companies would have the benefit of premiums to build up an asset base on which to fund the provision of services at the time when consumers generally most need them; in the later stages of life 1 .
29. However, the success of a market based/insurance approach requires that the insurance industry has reached a stage of maturity, in terms of its asset base and its actuarial expertise, that makes the approach viable. The Council is not satisfied that the Hong Kong health insurance industry currently has the attributes that would warrant reliance on it as a viable means of providing the majority of Hong Kong consumers with affordable health care.
30. Therefore, reliance on this approach would pose risks that substantial numbers of consumers would be denied access to insurance, and would have to rely on the public health system. The means by which this impasse might be overcome would be to begin the process of nurturing an environment where consumers begin the evolution towards a greater reliance on insurance, and the industry is empowered to take a greater role in creating a satisfactory environment.
SUMMARY
31. With the HPA policy, Hong Kong is seeking an approach to funding by forcing consumers to save for their long-term health care needs, by way of separate personal accounts, when they will most need them, i.e. in old age. However, questions remain as to:
- whether the system will cope with the demands for medical treatment prior to old age;
- whether all taxpayers will be able to contribute sufficient funds, because of the disparity in earnings, to cover their needs;
- whether the costs of making up the shortfall from public revenue will be so great that the problem of funding from general revenue will still exist, even with personal health accounts;
- how best design a system that would help capture escalating costs and avoid moral hazard; and
- how proposals to increase health care contributions by the public relate to other proposals such as the MPF.
32. The Council considers that for the time being, the current policy initiatives to enhance productivity and reduce costs, in addition to the restructuring of the public fee charging system to influence provider and patient behaviour, should be monitored to provide a clearer picture of the problem at hand. A review of the effects of those initiatives, after an appropriate period of time, for example, two years, would provide a basis upon which the question of incentives to encourage more insurance, as well as the costs of health services, upon which insurance policies will be based, will be clearer.
Notes:
- The Council considers that for the time being, the current policy initiatives to enhance productivity and reduce costs, in addition to the restructuring of the public fee charging system to influence provider and patient behaviour, should be monitored to provide a clearer picture of the problem at hand. A review of the effects of those initiatives, after an appropriate period of time, for example, two years, would provide a basis upon which the question of incentives to encourage more insurance, as well as the costs of health services, upon which insurance policies will be based, will be clearer.
