Hong Kong: #12 in the 2022 World Index of Healthcare Innovation

Introduction

Hong Kong ranks 12th in the 2022 World Index of Healthcare Innovation, down from 8th in 2021 and up from 16th in 2020.

Hong Kong excels on measures of Fiscal Sustainability (3rd) and Choice (7th) thanks to its remarkably low debt-to-GDP ratio of 0.3% and many choices in the private insurance market, respectively.

On the flip side, Hong Kong scores poorly in Quality (23rd), due to its troubled public health care system, which suffers from long wait times, overcrowding, and a physician shortage.

Background

Modern Hong Kong was born in 1842, when the Qing dynasty ceded Hong Kong Island to the British Empire under the Treaty of Nanjing. Hong Kong joined the People’s Republic of China under the Sino-British Joint Declaration in 1997, whereupon it became a Special Administrative Region within China. While the PRC promised to maintain Hong Kong’s economic and political system for 50 years after the 1997 handover, a national security law imposed by China in 2020 has fundamentally changed Hong Kong.

Like Australia, the Hong Kong health care system is really two concurrent systems. The socialized public system is similar to the British National Health Service, in which government-run hospitals and clinics provide care at low (subsidized and regulated) prices. For example, residents are billed at HKD 100 ($13 U.S.) per day for hospital stays, with the government subsidizing the other 95% of the cost. Due to this heavy subsidy, the public system covers roughly 90% of inpatient and 30% of outpatient services in the city-state. On the other hand, the heavily subsidized nature of the public system has led to massive overcrowding and a shortage of doctors. A 2019 article in the South China Morning Post described the Hong Kong public system as “teetering on the brink.”

Over the last 50 years, a parallel, free-market system has arisen in Hong Kong. As of 2019, 48% of the Hong Kong population had private insurance. Enrollees receive care in private hospitals and clinics with shorter wait times, newer technology, and superior health outcomes. Indeed, the Hong Kong government is trying to steer more people into private insurance in order to relieve the burdens on the public system.

Private Hong Kong insurers must offer at least one plan that meets certain basic requirements, including: guaranteed renewal until age 100; coverage of pre-existing conditions; and certain other essential benefits. Upon meeting those requirements, insurers can offer additional plans that in addition to meeting the basic requirements, can offer additional benefits. Premiums are unregulated, and average around HKD 4500 per year ($585 U.S.)

Quality

Hong Kong’s low Quality ranking (23rd) reflects its struggles to deliver in the Elements “infrastructure” (30th), “patient-centered care” (20th), and “disease prevention” (21st). In particular, Hong Kong is infamous for chronically overcrowded public hospitals that lead to specialist wait times that in some cases can last years. Regardless, Hong Kong ranks highly in acute care survival, in particular offering high quality care to individuals who suffer emergent cardiovascular events such as heart attack or stroke. And, like many Asian countries, Hong Kong has exceeded the median on pandemic preparedness and response (12th).

Choice

Hong Kong ranks 7th for Choice. The country’s universal health insurance system offers a wide array of choices and makes care generally affordable (13th). However, the vast public system denies patients a choice of providers. In addition, the country ranks 27th in access to new treatments, a product of the system’s tight price controls.

Science & Technology

At 19th, Hong Kong lags behind most countries in the Index on the Science and Technology dimension. It realizes relatively few medical (31st) and scientific (20th) advances and lacks the health-related scientific community prevalent in North America and western Europe.

Fiscal Sustainability

The strength of Hong Kong’s health care system is its relentless pursuit of cost savings, manifest in its ranking on Fiscal Sustainability (8th). It nears the top of the Index on national solvency (3rd) with a debt-to-GDP ratio of only 5.94% with “public health spending” (7th) at a minuscule 3.8% of GDP. It is worth noting that in recent years, Hong Kong’s “growth in public health spending” (24th) has accelerated in an attempt to reduce overcrowding at public hospitals.