DLC Financial Advising Services

2019 1st Edition (Other Editions)

Hong Kong Healthcare Services and the VHIS

Introduction - Hong Kong Healthcare System

Hong Kong has a well-established dual-track healthcare system and is one of the world’s most efficient healthcare system. The healthcare system is composed of two sectors: a private sector and a government sponsored public sector. The private sector offers a large variety and luxurious options, but comes at a very high price. The public sector, subsidised by the Hong Kong Government, is provided to eligible citizens at a very low fee. For example, residents pay $50 per out‐patient consultation at a government hospital clinic, while private clinics typically charge between $180 and $650.

As the public healthcare is much more affordable for general citizens, the preference for it has led to heavy burden in the public sector. With limited resources such as healthcare workers and medical equipments, it gives rise to a number of growing problems, including long waiting times, decrease of healthcare service quality, and workers being over-stressed.

Problems

Aging Population

Hong Kong has a rapidly aging population. The ratio of the working-age population (15 – 64) to the elderly population (65+) is currently at 6:1. By 2030, it is projected to reach 4:1, and by 2033, it will decrease to 3:1. As the population ages, the elderly will require more healthcare services, and therefore more funds will have to be allotted towards them. Additionally, as the population ages, the working-age population will decrease, therefore decreasing the number of taxpayers. As the cost of public healthcare creeps higher and higher, the burden will fall on an increasingly smaller group.

Waiting Time

Public hospitals are constantly crowded, busy, and overburdened. Patients who don’t have emergencies or time-sensitive illnesses often have their appointments rescheduled. These practices create a waiting period of a few weeks, months, or even years depending on the procedure.

Shortage of Manpower

In spite of the funding that goes into the public healthcare system, the shortage of doctors and nurses in Hong Kong is the core problem, especially when the reliance on public in-patient services grows. Facing the overcrowed patients in public hospitals, healthcare workers bear a huge amount of stress. With very little or lack of physical and mental support, this will lead to increase in turnover rate, and further increase shortage of manpower.

Unsustainable Funding

The Hong Kong Government devotes around 17% of its revenue to subsidising public healthcare each year. This percentage increases every year, and from 2010 to 2015 it rose by 50%. On the whole, Hong Kong spends about 5.2% of GDP on healthcare. In particular, the cost for each procedure is significantly high. For example, in accident and emergency, in/out-patient services, the Government subsizies 85-95% of the cost. With the rising demand for public healthcare, such a large percentage is unfeasible for the Government to continue to sustain.

Balancing Public and Private Healthcare Services

The Government has been introducing different methods to address the problems above. Including collaboration between public and private sectors, and increase transparency in price of private healthcare. The Voluntary Haelth Insurance Scheme (VHIS) is a new policy to be implemented soon, also to tackle the problems of healthcare services.

Health Insurance

Purchasing health insurance is one effective method to ease the problem of healthcare services. Most insurance packages can be customized to meet the needs of individuals. By purchasing health insurance, one can have a higher chance to enjoy private healthcare services with cost partially or fully covered. For those who have already purchased, if affordable, one can upgrade the insurance to a greater amount for more and extended options of coverage. For exisiting policyholders of individual hospital insurance, if the insurance company has participated in the VHIS, one can also switch to the Certified Plans after the VHIS is implemented. While enjoying higer quality of service in private hospitals, citizens can also help balance the healthcare services by decreasing demand of public healthcare.

The Voluntary Health Insurance Scheme (VHIS)

What is VHIS

The VHIS is a policy initiative introduced by the Food and Health Bureau to regulate indemnity hospital insurance plans offered to individuals, with voluntary participation by insurance companies and consumers. The VHIS will be fully implemented on 1 April 2019. It is encouraged to consider purchasing Certified Plans under the VHIS so that patients are covered to use private healthcare services when in need.

Objectives

Enhance the protection level of hospital insurance products.
Provide the public with an additional choice of using private healthcare services through hospital insurance.
Relieve the pressure on the public healthcare system in the long run.

Key Features

Guaranteed renewal up to the age of 100 years
No “lifetime benefit limit”
A cooling-off period of 21 days
Premium transparency
Tax deduction

Coverage Includes

Unknown pre-existing conditions
Partial coverage would be provided during a waiting period of three years for unknown pre-existing conditions.
Treatment of congenital conditions
Investigation and treatment of congenital conditions will be treated like unknown pre-existing conditions if they were manifested or diagnosed after the age of 8.
Day case procedures
Surgical procedures (including endoscopy) sought outside of hospitals can still be covered.
Prescribed diagnostic imaging tests
Coverage for CT scans, MRI’s, and PET scans not conducting in a hospital, but subject to a 30% coinsurance.
Prescribed non-surgical cancer treatments
Cover for radiotherapy, chemotherapy, targeted therapy, immunotherapy, and hormonal therapy.
Psychiatric treatment in local hospital
Confinement to a psychiatric ward of a local hospital can also be covered.