Yesterday the government promulgated the consultation document of medical reform which recommends a medical saving plan. Under the plan, citizen, aged between 40 and 64, have to save 1% or 2 % of monthly earnings as deposit for medical expenditure of post-retirement age. Yeung Wing Keun, secretary of medical welfare, said that the saving deposit can help cover a part of future medical expediture and thus lower the burden of next generation.

Yeung Wing Keun emphasized that the government would adjust the fees of public medical services, but would not raise up them dramatically on the basis of medical costs; even some services fees might be reduced. Currently 97% of the public medical expenditure is financed by the government allowance. Instead of being fixed, a ratio of the government allowance could be adjusted on the basis of economic development, public expenditure, cost/benefit and technological development.

Some professers criticized that the medial saving rate is too low for citizen to cover the post-retirement medical expeniture. Yeung Wing Keun defended that the saving rate should not be set too high because the future public medical service is still financed by the government and the medical saving could be used only by depositors whose age reaches 65; therefore the medial saving plan which only sets a low deposit rate is highly feasible. Since this, the plan is very different from the Singaporan one which allows singaporan to use such medical saving before retirement age and sets a higher saving rate, 6% to 8%.

The consultation document remarked that after implementing the medical saving plan, according to an average usage rate of medical services, any couple who comes from families having median household income can afford public medical services fees. Yeung Wing Keun introduced the plan to legislative councilors that those who had median household income could accumulate more than $HK40000 in their medical saving deposits. Nevertherless Mr Yeung is not willing to disclose the details of calculation method and the way of managing those deposits. He said that unless citizen supported the plan, the detail disclosure was useless; provided that citizen accepted the plan after the consultation period, the details of the plan would be discussed.

To provide the second insurance for citizens, the government would set up a funding mechanism as similar as the Samaritan one. Under this mechanism, those who use up the medical saving deposit after 65 can apply for the fund. Yeung Wing Keun admitted that those who are qualified for fund application must take an asset review test but do not necessarily use up other savings. For example, some patients with some savings can apply from the Samaritan fund to pay for special medial services fees.

The document also noted that in the current financial year, the expenditure of public medical services accounted for 308 billion, covering 14.7% of the total public expenditure; forth sixth of public hospital patients are above 65. Thus it was predicted that in the coming years, the medical cost would rise up by 1%, despite the perfert management mechanism and the new medical technology applicaton. Some studies show that if the GDP per capita increases by 1%, medial expenditure per capita will increase 1.67%.

The Harvard think-tanks pointed out that the total public medical expeniture would rise up, covering 28.4% of the total public expenditure in 2016. Some familiar with the source of the government information thought that the prediction calculated by the Harvard think-tanks was overestimated as the 1980s expenditure of the Hospital Authority was set as the base number. According to the government's prediction, within furture eight or ten years, the public medical system can maintain a current level of service with a current level of expenditure. Still 40% of public medical service users cannot afford a bed fee which amounts to HK$ 65 per day.

The document also recommended that the professional outpatient unit originally managed by the Department of Health should be transfered to the Hospital Authority to serve those in financial difficulty or patients who have life-long illness; medical staff can undergo training in such outpatient unit. From then on, the Department of Health would be responsible for tackling complaints, and providing professional opinion and assistance, instead of managing the outpatient service.

Morever the government suggested establishing an electronic medical information system for public and private medical organizations in sharing the patients information and hereby conveniently transfering patients to different medical units; Lastly she recommended to establish Chinese medicine service in the public medical system.

Remarks: the original article is not well-organized!

The article is translated from the original one published in Hong Kong Economic Journal