Hong Kong: #16 in the 2020 World Index of Healthcare Innovation
Hong Kong is a tale of two cities: An overwhelmed and overcrowded public health care scheme, alongside a robust free-market private system.
By Gregg Girvan and Avik Roy
Introduction
Hong Kong ranks 16th in the World Index of Healthcare Innovation, with an overall score of 47.35. Hong Kong excels on measures of Fiscal Sustainability (#3, 75.61), ranking only behind Germany and the Czech Republic, thanks to its remarkably low debt-to-GDP ratio of 7.5%.
On the flip side, Hong Kong scores poorly in Quality (#27, 48.36), due to its struggling public health care system, which suffers from long waiting 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 was returned to 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 left that promise in doubt.
Today’s 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 provides roughly 90% of inpatient services 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, enabling enrollees to seek 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 are required to offer at least one plan that meets certain basic requirements, such as: guaranteed renewal until age 100; coverage of pre-existing conditions; and certain other essential benefits. After meeting those requirements, insurers can offer additional plans that also meet the basic requirements, but can also offer additional benefits. Premiums are unregulated, and average around HKD 4500 per year ($585 U.S.)
Quality
Hong Kong’s #27 Quality ranking reflects its struggles to provide the infrastructure (#30) and patient-centered customer service (#30) that its citizens need. In particular, Hong Kong is infamous for chronically overcrowded public hospitals that lead to specialist wait times that can last years in some cases. Regardless, Hong Kong ranks highly in measures of preventable disease (#5), in particular treating individuals who suffer emergent cardiovascular events such as heart attack or stroke. And like many Asian countries, Hong Kong has been the standard on how to respond to the COVID-19 pandemic.
Choice
Hong Kong ranks #21 for Choice. While the country’s universal health insurance system makes care generally affordable, citizens have no choice of provider within the vast public system. In addition, the country ranks tied for last in access to new treatments, a product of the system’s tight price controls.
Science & Technology
At #22, Hong Kong lags behind most countries in the Index on the Science and Technology dimension. It pursues very little medical innovation (#30) 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 #3 ranking on Fiscal Sustainability. It leads all countries in the Index on national solvency with a debt-to-GDP ratio of only 7.5% with public health spending (#7) reaching just 2.8% of GDP. It is worth noting that in recent years, public health spending growth (#19) has accelerated in an attempt to reduce overcrowding at public hospitals.
