The Hong Kong government has recently suffered an angry reaction from the insurance industry in response to its proposed standardised medical insurance plan. Insurers argue that the government has backed down, in this new move, from regulating the costs of private hospitals. Under the new Health Protection Scheme (HPS), insurance companies would offer clients the choice of not paying, or paying a known extra amount, for certain procedures.
The previous government's pressure on private hospitals to provide fixed-price packages seems to have fizzled out under the current administration. Proponents of these packages argue that this would enhance the transparency and certainty of medical costs for those in need.
A recently-revealed preliminary draft of the much-awaited medical reform revealed that the government rejects the idea of pushing private hospitals to issue package prices for similar or related conditions. Instead, the draft proposed that patients should be offered the option of "informed financial consent" before undergoing non-emergency treatment. The draft also revealed that insurers would offer clients the choice of a "no-gap" or "known-gap" plan, referring to the difference between charges and insurance payouts, for certain procedures.
The HPS Standard Plan would standardise health insurance products and impose a basic requirement on insurers that they accept all prospective customers, including those especially likely to require medical treatment, whom the government is considering subsidising through a premium-pool system. Insurers would be free to offer tailor-made plans to customers on top of this. Detractors argue that insurers should remain free to offer insurance packages of different prices and quality.
This draft is part of a series of reforms aimed at encouraging the public to purchase their own medical insurance and use private health care services, which in turn would ease the burden on Hong Kong's public hospitals. At present, these public hospitals care for 90% of the city's patients but with only 40% of its doctors. The proposal, however, comes at a similar time to the announcement that a plan using a HK$50bn reserve used to subsidise young people entering the HPS has been withdrawn.
The proposed plan would have offered early entrants a 30% subsidy. Health official Richard Yuen Ming-fai commented that this subsidy, however, might have caused the government to end up putting money into the pockets of insurers. He commented, "We would have had to supervise the price of the insurance plans in the market ½ I believe it is something the industry would not want to see under a free market." Yuen said the scheme would encourage private healthcare providers to improve transparency in price because of increased competition.
Detractors, however, have expressed doubt over the competitiveness of the market, and suggest that the government instead is putting too much pressure on the insurance industry out of fear of touching the private hospitals. Critics say that the government's move would prevent insurers from providing cheap and varied insurance options tailored to suit customers' needs.