Replies to LegCo questions
LCQ4:Hospital Authority's budget deficit
Following is a question by Dr the Hon Yeung Sum and a reply by the Secretary for Health, Welfare and Food, Dr Yeoh Eng-kiong, in the Legislative Council today (March 12):
Question :
The Administration indicated at the end of 2000 that, according to calculations based on population growth and ageing, the recurrent expenditure of the Hospital Authority ("HA") for the next three years should increase in the region of 2.3 per cent per annum. However, in August last year, the Financial Secretary demanded all policy bureaux to cut their operating expenditure by a cumulative 4.8 per cent over the next four years, and the Chief Executive also indicated in his Policy Address delivered in this January that the Government would cut its spending in the operating accounts by $20 billion in the next three years. In this connection, will the Government inform this Council :
(a) of the respective amounts of HA's budget deficit for the current and the next fiscal years, whether HA will have sufficient reserves to cope with the deficit, and the measures the Government and HA will take in tackling HA's budget deficit;
(b) whether, according to the Administration's assessment, the numbers of beds and health care staff in public hospitals will be reduced in the next three years due to resource constraints; if so, of the numbers and percentages of hospital beds and staff to be reduced; and
(c) whether HA is allowed to retain, or required to deliver to the government coffers, the additional income derived from the accident and emergency service charges introduced at the end of November last year as well as the new charges to be introduced in April this year ?
Reply :
Madam President,
(a)The cuts in the budget of the Hospital Authority (HA) for the three years beyond 2003/04 have yet to be fixed. The Government will work closely with HA to ensure that adequate public hospital services will be provided to meet the health care needs of the community within the reduced budget.
After implementing measures to enhance productivity and generate savings, HA has been able to reduce its budgeted deficit in 2002/03 from the original projection of $582 million to about $220 million. HA is finalising its budget for 2003/04. There will be pressure on the budget. This is because HA has to incur additional staff costs for the annual salary increment for about 40 per cent of its existing staff. HA has to continue to recruit 300 doctors, 250 nurses and 57 allied health professionals to cope with population growth and service demands. Advance in medical technology has resulted in the introduction of new and expensive drugs that can enhance the effectiveness of treatment or for treatment of conditions hitherto not amenable to medication, thus increasing the operating cost. HA will use its general revenue reserve (amounting to $815 million at present) to cover projected deficit.
To meet the efficiency savings target to be achieved over the next four years, HA plans to commence implementation of the following cost-effective measures in 2003/04:
* Develop effective ambulatory and community-oriented care models to reduce reliance on in-patient care
* Rationalise services within hospital clusters to reduce duplications
* Implement the HA Voluntary Early Retirement Programme
* Exercise stringent control on replacement of vacant posts
* Devise a new pay package for new recruits
* Re-engineer business support services, such as catering, laundry, procurement and supplies management
(b) The international trend has been to focus on the development of ambulatory and community care programmes and to replace, where appropriate, in-patient treatment by ambulatory and out-patient services. HA has in recent years stepped up its developments on day surgery, day care, out-patient services, community nursing and outreach programmes. In response to this shift to day community care, HA plans to adjust in-patient general beds in order to rationalise its service provision. In 2003/04, HA plans a net reduction of 1 200 general beds which amount to 4 per cent of the total number of existing beds (29 288 as at March 2003). In this connection, some patients who were previously treated as in-patients can be more appropriately treated as day-patients. HA will step up its day-patient service in 2003/04 by increasing the number of day patients handled by 2.8 per cent. To cope with population growth and service demands, HA will continue to recruit healthcare professionals in 2003/04. The overall number of clinical staff will be maintained at the current level, while managerial and supporting staff will be further reduced. HA is working on its strategy in the provision of beds and manpower requirements for the years beyond 2003/04.
(c) The Government's current arrangement is that HA is allowed to keep 50 per cent of the income from new fees, i.e. the introduction of Accident and Emergency charge, and drug charge. Regarding increase for existing fees and charges, HA can keep 100 per cent of the additional income arising from the fee increases for the years 2003/04 and 2004/05.
End/Wednesday, March 12, 2003
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