Topics: Health care, Medicine, Health economics Pages: 6 (1286 words) Published: November 16, 2013
International Journal of Public and Private Healthcare Management and Economics, 1(2), 17-25, April-June 2011 17

The Politics of Health Finance
Reform in Hong Kong
Raymond K. H. Chan, City University of Hong Kong, Hong Kong

Since the late 1950s, Hong Kong’s public health services have increased. They are mainly funded by taxes, supplemented by minimal user fees. In the late 1980s, the government recognized the limitations of this financing model and subsequently proposed alternative methods of funding. Their proposals have been rejected by various stakeholders, who represented different, and even conflicting, values and interests. This paper describes the development of health services and the debates that have surrounded health financing since the late 1980s. It shows that the health finance debate in Hong Kong is not a simple issue that can be tackled by rational planning; instead, it is a complex consequence of welfare politics in an increasingly mobilized society. Keywords:

Health Finance, Health Policy, Health Services, Hong Kong, Public Health Services

The earliest public health services in Hong Kong
were mainly devoted to combating communicable diseases. As the government was largely unresponsive to demands for further services,
the gap in provision was filled by traditional
Chinese medical practitioners and hospitals
operated by local philanthropic organizations. It
was not until the late 1950s that the government
expanded its role and investment in health care.
During the past five decades, a system of
service provision has developed with a clear
division of labour: the private sector oversees
primary health care, and the public sector is
responsible for the more expensive secondary
and tertiary health care services. In terms of

DOI: 10.4018/ijpphme.2011040102

financing, the private sector is mainly funded
by user fees and the public sector by taxes.
From the 1990s onwards, there has been
a heavier reliance on public health services
in Hong Kong, due to improvements in these
services and to the increasing number of people
without the funds for private care. The burden
of financing these services will soon become
even heavier due to the aging population.
Facing these challenges, the government has
repeatedly called for health finance reforms.
However, all its proposals, with the exception
of a medical fee increase, have been met with
strong resistance, and no decisions have been
reached. In the process, conflicts have arisen
among various stakeholders and social classes,
though all agree that some types of reform is
This paper describes the development and
characteristics of public health services in Hong
Kong since the 1960s, various proposals for

Copyright © 2011, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited.

18 International Journal of Public and Private Healthcare Management and Economics, 1(2), 17-25, April-June 2011

health care reform, and key conflicts among
stakeholders. It will be shown that efforts for
reform have been impeded by the welfare
politics of this increasingly mobilized society.

The first long-term plan for the development of
health services was initiated in 1957. Since that
time, the government has played an increasing
role in health services provision. In the 1960s,
government financing was primarily devoted
to the construction of clinics and hospitals.
According to the White Paper “Development
of Medical Services in Hong Kong”(1964) the
government planned to construct a network
of clinics, supplemented by specialists and
hospital facilities, that would be operated by
the government or by government-assisted
voluntary organizations (Chan, 1996, p. 98).
The document also laid down the principle that
users were required to pay only a nominal fee...
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