Abstract

The author reviews major health care reform initiative attempts by the Hong Kong government since the 1990’s.  The author applies public choice and other public policy theories to explain the lack of success in these initiatives. The current financing and delivery system is evaluated in terms of its efficiency and its ability to cope with the rapidly ageing population. Government subvention amounts and the number of doctors employed in public hospitals are measured against output. The results of the analyses suggest that, contrary to popular opinion that not enough resources are given to public hospitals, government has, in fact, been providing more resources to the public health care system year after year (measured by subvention amount, doctor to population ratio, doctor to bed ratio, doctor to patient days, etc).  Long standing problems, such as waiting time, appear to be worsening despite increases in funding. The results suggest that the structure of the health care system is too acute-centric, and the current funding mechanism creates perverse incentives. The author concludes that Hong Kong is poorly prepared to cope with the rapidly ageing population, and that the quality of care and accessibility to care are likely to further deteriorate.  Given the existing constitutional arrangement in Hong Kong, the author recommends reforming the existing tax based financing system instead of launching new initiatives to replace it. The restructuring of some existing funding and administrative responsibilities of relevant public bodies to address the compartmentalization and perverse incentive problems and the establishment of an earmarked government future fund to assure the future viability of the tax-based system are suggested as the way forward.