According to a ranking of the Human Development Index (HDI) by the United Nations Development Programme (UNDP), Hong Kong has achieved an average life expectancy of 84.7 years, making it the longest-lived region in the world.
In the same year, the World Health Organization (WHO) conducted a comprehensive comparison of healthcare systems across various countries, evaluating aspects such as "healthcare quality," "accessibility of medical services," and "fairness of medical costs." The resulting report, "World Health Report," revealed that Hong Kong ranked fourth globally overall.
We will analyze the healthcare system in Hong Kong, focusing on various aspects such as the health system, service pricing, and pharmaceutical management.
Hong Kong's Dual Healthcare System
The healthcare system in Hong Kong consists of two main components: a public system that meets the basic needs of citizens and provides universal coverage, and a private system driven by the market and funded by users. The public and private medical services create a dual-track system where high-end demand is managed by the market and emphasizes efficiency, while low-end services ensure a basic safety net.
The public system operates under the principle of "separation of management and service," unified under the leadership of the Food and Health Bureau of the Special Administrative Region (SAR) government. The Bureau's subordinate entities, the Department of Health and the Hospital Authority, are responsible for providing services. The private healthcare system is composed of eleven private hospitals and numerous private clinics throughout Hong Kong, operating in a market-driven manner; it relies on industry self-regulation and is largely free from government oversight.
The Hospital Authority manages 43 public hospitals, 49 specialist outpatient clinics, and 73 general outpatient clinics, providing over 28,355 hospital beds, which translates to 5.4 beds per 1,000 people. It handles 90% of inpatient treatments and 30% of outpatient treatments for the entire region.
Economically affluent individuals and those with commercial insurance can access swift and quality private medical services; private hospitals and clinics accommodate 10% of inpatient treatments and 70% of outpatient treatments.
The advantage of this system design is that everyone has access to medical services without economic barriers. However, a drawback is that, except for emergencies, outpatient appointment waiting times can be quite long, placing significant financial pressure on the government.
Hong Kong Medical Service Pricing and Coverage System
Hong Kong has not established a universal health insurance system. The SAR government allocates a financial budget formed through taxation to support government-operated public hospitals. Public hospitals are managed by the Hospital Authority established by the SAR government. Approximately 93% of public hospital funding comes from the government, 6% from inpatient and outpatient fees, and 1% from training and other income, providing public healthcare coverage for all residents.
Regarding medical costs, there is a significant discrepancy in charges between Hong Kong residents and non-residents.
Public hospitals charge relatively low fees for locals. The emergency charge for Hong Kong residents is HKD 180 per visit, while the actual cost is HKD 1,230, with the government subsidizing 86%.
Inpatient charges are HKD 100 per day (which covers diagnosis, tests, surgeries, nursing, medications, accommodation, and three meals), while the actual cost is HKD 5,100, with a government subsidy of 97%.
General outpatient visits cost HKD 50 each, with a cost of HKD 250, and a government subsidy of 80%.
Specialist outpatient first visits are HKD 135, with a cost of HKD 445, and a government subsidy ranging between 75% to 85%.
However, for those who are not local residents of Hong Kong, prices are generally at the full price or even higher, with no subsidies, making the costs quite exorbitant.
Patients at public hospitals pay only HKD 15 for each medication on the drug formulary, with the difference between the HKD 15 and the actual cost of the medication covered by the government. For certain medications that are necessary during treatment but are extremely expensive and must be purchased out of pocket by the patient, Hong Kong has established two medical assistance funds: the Samaritan Fund and the Compassionate Fund. These two major funds serve as a "safety net" for patients in Hong Kong purchasing medications, with the primary sources of income being government grants, reimbursements from the Social Welfare Department, and private donations.
In the private healthcare system, charges are not differentiated between local and non-local residents. Most clinics in Hong Kong feature general family doctors. The consultation fee generally ranges from HKD 100 to 200, and medication costs about HKD 500 for a three-day supply. If the condition is more complex or requires tests, the doctor will write a referral letter recommending you to a private laboratory for examinations or to a private hospital for further consultation.
Another type of family doctor is a specialist, usually a well-known doctor with years of experience from a public hospital. They have their own clinics, with consultation fees typically ranging from HKD 500 to 600, and medication and testing fees charged separately.
Private hospitals accept patients as long as they can pay, but the costs are very high. Under such high charges, appointment wait times are minimal. The registration fee at a good private hospital clinic may reach HKD 1,500, with daily hospitalization fees around HKD 2,500. A chest or abdominal CT scan costs around HKD 7,000, operating room rental is about HKD 4,000, anesthesia fees are around HKD 3,000, plus other miscellaneous expenses. In summary, no opportunity to charge will be overlooked.
Pharmaceutical Management System
As mentioned above, in Hong Kong, patients using medications listed on the drug formulary in public hospitals only need to pay HKD 15 for each medication. For medications not on the formulary, patients must pay the original price out of pocket, but those facing financial difficulties can have 70% to 100% of their medication costs waived. This policy of "high benefits and low fees" in healthcare is closely linked to its pharmaceutical management mechanism.
There are relatively few local pharmaceutical manufacturers in Hong Kong, and most medications rely on imports. Therefore, the ex-factory prices and wholesale prices of medications are generally set by manufacturers, wholesalers, or importers, with the government not implementing administrative controls. The prices for medications in public medical institutions are based on actual transaction prices generated between the Hospital Authority and drug suppliers, which reflect the procurement prices established through tendering processes.
For drug procurement, Hong Kong employs a quality-related bidding process. The Hospital Authority uses different tendering methods for patented drugs (those protected by patents), drugs whose core patents have expired (which begin to see generics), and generic drugs.
Procurement Categories
Hong Kong categorizes medications into three types, each utilizing different procurement models:
Medications costing less than HKD 50,000 annually: These are directly purchased by hospitals at various levels according to regulations. Although this category accounts for a large proportion of the volume of drugs procured, it represents a relatively small share of total costs.
Medications costing more than HKD 50,000 but less than HKD 1,000,000 annually: The government coordinates quotations, and prices and suppliers are determined through negotiations to reduce the costs of separate negotiations by different hospitals.
Medications costing more than HKD 1,000,000 annually: These are procured through centralized bidding processes. Patented drugs undergo single bidding, while non-patented drugs use open bidding. This method accounts for the largest share of drug procurement costs, making up over 70% of the drug costs in public hospitals.
The specific procurement catalog is determined by the Drug Evaluation Committee established by the Hospital Authority after extensively gathering opinions from various public hospitals. The overall drug procurement activities are implemented by the Chief Pharmacist's Office of the Hospital Authority, with individual hospital pharmacies no longer directly participating in procurement. After aggregating the procurement quantities from each hospital, the Chief Pharmacist's Office directly signs procurement contracts with the winning drug suppliers.
Separation of Pharmacy and Medical Services
Hong Kong's public hospitals implement a separation policy for medical services and pharmacy. Patients pay a fixed consultation fee upon seeking medical care and then use their prescriptions to collect medications from the hospital pharmacy or retail pharmacies. Medications in hospital pharmacies are sold at cost without markup, only considering necessary repackaging, storage, and loss costs. As a result, physicians do not consider medication profits when prescribing; they select medications based solely on the patient's condition.
This practice significantly reduces the patients' medication expenses and ensures the supply of low-cost medications. Private hospitals and retail pharmacies have greater flexibility in their pricing, as the markup percentages fall under their jurisdiction, and the government does not impose administrative controls.
Hong Kong Doctors: High Income but Severe Shortage
The system in Hong Kong classifies doctors similarly to civil servants, offering high salaries to prevent corruption and ensure ethical conduct. As a result, being a doctor is a highly coveted profession in Hong Kong. Among high school graduates, a significant majority opt to study medicine.
The median salary for doctors in public hospitals is HKD 115,700 per month, which translates to approximately HKD 1.38 million annually. Doctors in private hospitals earn even more, with some terms like "planetary people" and "lunar people" coined to describe those who earn HKD 1 million a week or month (where "planet" equals 1 million).
However, despite high salaries, there is a critical shortage of local doctors. Currently, there are only two doctors per 1,000 people in Hong Kong, which is significantly lower than countries like Singapore (2.5), Japan (2.5), the United States (2.6), the United Kingdom (3), and Australia (3.8). The shortage of specialists has resulted in median wait times for patients of at least two months, with some waiting over two and a half years for treatment.
According to the report "Healthcare Workforce Projection 2020," Hong Kong will be short 1,610 doctors by 2030 and 1,949 by 2040. By 2040, public hospitals are expected to be short by 960 doctors.
In response to this situation, the Hong Kong government has proposed amendments to the Medical Registration Ordinance, which includes easing the registration of overseas specialists who are not permanent residents of Hong Kong, allowing qualified overseas specialists to practice in public healthcare institutions without needing to take the Hospital Authority’s qualification exam. Hospitals in Hong Kong also conduct multi-faceted assessments during recruitment, creating a "double-check" system with the Hospital Authority, bringing in more doctors while ensuring local training opportunities for Hong Kong doctors—this is highly beneficial for the current healthcare system.
Strengths of Hong Kong's Pharmaceutical and Healthcare Management System
Overall, the strengths of Hong Kong's pharmaceutical and healthcare management system can be summarized as follows:
Medication Management: The Hospital Authority is fully responsible for managing medications in public healthcare institutions, with clear and detailed divisions of authority during the procurement process, ensuring checks and balances to reduce corruption risks.
Procurement Mechanism: The "volume-based procurement" principle guides procurement based on the quantity of medications needed, establishing a comprehensive "tiered volume-based procurement" mechanism.
High Doctor Salaries: Doctors in Hong Kong earn significantly more than the average salary, and public hospital doctors do not have economic incentives for "overprescribing" or "excessive testing," fundamentally eliminating the issue of "profit-driven medicine."
Information System: There is a complete information system linking medical institutions and administrative bodies, facilitating information sharing and timely feedback on medication usage and quality issues.
Challenges in the Healthcare System
Despite Hong Kong's advanced healthcare conditions, there are various challenges within the system.
In recent decades, the average life expectancy of Hong Kong residents has continued to rise, ranking among the highest globally. While this increase is attributed to excellent public health and advanced medical developments, living a long life does not equate to being healthy.
Hong Kong enjoys world-class medical conditions; however, public healthcare resources are limited. Due to low costs for residents receiving treatment in public hospitals, long waiting times have become common. There is a significant gap in costs between public and private healthcare, creating a misallocation of resources. Even patients with better financial means prefer to queue at public hospitals rather than opt for private care, resulting in public healthcare systems serving patients outside their intended scope, thus increasing the burden on the system.
Each healthcare system has its strengths and weaknesses. Finding a balance, retaining the essence while discarding the dross, and stabilizing various interests is essential for creating an effective system that continuously improves.
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