Replies to LegCo questions
LCQ19:Hospital Authority budget deficit
Following is a question by the Hon Michael Mak Kwok-fung and a written reply by the Secretary for Health, Welfare and Food, Dr Yeoh Eng-kiong, in the Legislative Council today (November 13):
Question:
It has been reported that the Hospital Authority ("HA") will be in huge deficit this financial year. In this connection, will the Government inform this Council whether it knows:
(a) the current sources of HA's income other than from public funds;
(b) the respective numbers, total amounts and causes of the write-off cases of HA in the past five years and to date this year; whether the Government will propose ways for HA to tackle the problem of bad and doubtful debts; and
(c) HA's plans to create new sources of income and cut expenditure, for examples, by merging hospitals and increasing contracting-out jobs; the timetable for full implementation of such plans; and whether the Administration can ensure that HA will adequately consult its staff before it carries out such plans?
Reply:
(a) Apart from Government subvention, income of the Hospital Authority (HA) include income from fees and charges of its medical services, non-medical income such as interest income, rental income of quarters, kiosks, canteens and car parks, and donations.
(b) The number of write-off cases and the corresponding write-off amounts for the years of 99/00, 00/01 and 01/02 are listed below. The write-off statistics for 97/98 and 98/99 are not readily available, and those for the current financial year are not yet available.
Write-off cases | Write-off amount ($000) | |
1999 / 2000 | 10 477 | 21,491 |
2000 / 2001 | 18 256 | 23,465 |
2001 / 2002 | 11 823 | 14,859 |
Public hospitals will need to write-off outstanding patient fees if patients have deceased or cannot be located after discharge from hospitals, or the outstanding charges cannot be recovered notwithstanding execution of the debt recovery procedures outlined below.
At present, HA requires private inpatients, persons not eligible for subsidised public medical service or persons who could not be established as an eligible person to pay a deposit ($19,000 for non-eligible persons, and $45,000 and $30,000 for private inpatients in first class and second class private wards respectively) prior to or on admission into a public hospital.
If a patient fails to settle the medical bill, HA will contact his next of kin for payment. HA will also follow up with the defaulter by sending the final bill to the patient followed by subsequent reminders, and a final notice by registered mail, to urge the patient on early settlement of the medical bill. Follow-up telephone calls will also be made to the patient or his next of kin. Where appropriate, legal action may be instituted against defaulters, including submission of cases to the Small Claims Tribunal and execution of bailiff. For deceased patients, claims will be made with the Probate Office.
HA's information system also generates on a weekly basis a defaulter report to keep track of those patients currently admitted into HA hospitals but have not yet settled previous medical bills so as to facilitate the collection of the outstanding amounts from such patients.
(c) To reduce cost and enhance productivity, HA has been implementing various cost-saving initiatives on an on-going basis. These initiatives include:
i) implementation of a new cluster management structure to achieve further economies of scale through cluster-based services rationalisation and management reorganisation. In this connection, HA has already appointed Cluster Chief Executives for its seven clusters, and is actively working towards a mega-cluster structure where all public hospitals will ultimately be grouped under five mega-clusters in the next two to three years;
ii) administrative downsizing of HA Head Office and hospitals, in line with the direction of the implementation of cluster-based management;
iii) re-engineering work processes, such as providing catering services for hospitals/institutions through central production units;
iv) streamlining administrative and management processes, such as setting up financial services centres to provide financial services for a group of hospitals;
v) centralisation of procurement function and system to rationalise facilities, enhance inventory management and logistics, and maximise discounts/savings through bulk purchases;
vi) implementing "invest-to-save" projects such as energy conservation and automation projects; and
vii) developing various human resource cost-saving initiatives. In this connection, HA will implement a Voluntary Early Retirement Scheme in December 2002 for all permanent full-time employees with at least 10 years' service in HA.
Arising from Government's decision to restructure fees and charges for public health care services, new fees for Accident & Emergency service, medication prescribed at specialist outpatient (SOP) clinics, and first admission to public inpatient wards and SOP clinics, and revised fees for general inpatient beds, SOP service and general outpatient service will be introduced. As HA is a statutory organisation independent of the Government, the revenue collected accrues to HA. Government will ascertain how much resources will be needed by HA to sustain its service to the public in deciding on the amount derived from the additional revenue to be netted off from Government's subvention to HA.
It has been HA's established practice to consult and communicate with the staff concerned when implementing initiatives that involves organisational changes.
End/Wednesday, November 13, 2002
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