Replies to LegCo questions
LCQ4: Health Expenditure
Following is a question by the Hon Kwok Ka-ki and a reply by the Secretary for
Food and Health, Dr York Chow, in the Legislative Council today (June 11):
Question:
The proportion of expenditure on health to the total recurrent public
expenditure (proportion of health expenditure) has been dropping since
2000-2001. The proportion for this financial year is estimated to be 14.3%,
which is lower than the actual proportion of 15.3% 10 years ago. On the other
hand, the Hospital Authority (HA) is facing various problems such as shortage of
manpower and resources, unequal pay for the same work and patients not being
prescribed appropriate medications. In this connection, will the Government
inform this Council:
(a) of the reasons for the proportion of health expenditure to have fallen to a
10-year low in this financial year, and whether it has assessed if this
situation contradicts its repeated claims that it will continue to increase its
commitment for healthcare services;
(b) given that the proportion of health expenditure is lower than that of 10
years ago, whether it has assessed how HA can solve the problems it is facing at
present; and
(c) of the additional resources required to raise the proportion of health
expenditure to the level of eight years ago (i.e. 15.4%), and whether it has
assessed if the provision of additional resources can help HA improve its
existing services?
Reply:
Madam President,
(a) In drawing up the overall budget, the Government determines the allocation
of funding to various policy area groups primarily based on the demand for
public services under the respective policy area groups. The funding needs of
various policy area groups are subject to variation each year to cater for
specific circumstances and the implementation of new policy initiatives. There
exist a host of various factors that can cause the proportion of expenditure of
various policy area groups to the overall expenditure to vary with respect to
each other. It is thus not very meaningful to make a year-by-year comparison of
the proportion of a certain expenditure group alone.
When Hong Kong was experiencing an economic downturn in the past few years with
falling prices, weakening consumption, deflation and a tight government budget,
the civil service pay as well as the remuneration of the staff of subvented
organisations (including Hospital Authority) had to be adjusted downward and the
Government also needed to adopt a number of austerity measures such as the
Enhanced Productivity Programme and the Efficiency Savings Programme. The
expenditure of health policy area group fell as a result. Meanwhile, other
government expenditures such as that on the Comprehensive Social Security
Assistance Scheme had to be increased because of the economic downturn,
resulting in a drop in the proportion of health expenditure to the overall
government expenditure.
The Chief Executive has made a significant commitment to healthcare by pledging
to increase the share of expenditure on healthcare in the government's recurrent
expenditure from 15% at present to 17% by 2011-12. Besides, the Financial
Secretary has also pledged to draw $50 billion from the fiscal reserves to
assist the implementation of healthcare reform after the finalisation of
supplementary healthcare financing arrangements for implementation after
consultation. These significant pledges for funding reflect the Government's
commitment to improving and enhancing our healthcare services. These measures
require an increase in service capacity and manpower in the overall healthcare
system, and strike a balance in meeting the demand for public services under
various policy area groups.
(b) Just now I have explained why there has been a drop in the proportion of
expenditure on healthcare. I have also mentioned that under the Enhanced
Productivity Programme and the Efficiency Savings Programme, the Hospital
Authority (HA) has implemented measures to enhance its efficiency by providing
more services with the same amount of resources.
Meanwhile, the Government takes into account a host of factors in determining
the amount of subvention to be granted to the HA each year. These factors
include population growth and changes in population profile, changes in service
mode and utilisation, advancement in medical technology, expenditure on staff
cost and training as well as equipment replacement and purchase of drugs. The
Government would also, having regard to service needs, consider the grant of new
additional recurrent or one-off funding to the HA each year for launching new
services to the public. Such additional recurrent or one-off funding is to be
used for service enhancement or improvement.
(c) The Chief Executive has pledged to increase government expenditure on
healthcare to 17% of recurrent government expenditure by 2011-12. According to
the current medium range forecast made for the government budget, it is
anticipated that our annual recurrent expenditure will increase by about $10
billion. We believe that these additional resources would be able to cope with
the growth in service needs in the coming few years, as well as to conduct
preparatory works for healthcare service reforms, so as to improve existing
services within possible scope before we put in place any financing
arrangements. We have not made a separate assessment on the amount of money
involved if government expenditure on healthcare is to be increased to 15.3% of
recurrent public expenditure.
Ends/Wednesday, June 11, 2008
Issued at HKT 13:36
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