Hong Kong domestic health spending: financial years 1989/90 to 2017/18

Abstract

This report presents the latest estimates of Hong Kong domestic health spending for financial years 1989/90 to 2017/18, cross-stratified and categorised by financing scheme, function and provider compiled based on the guidelines given in A System of Health Accounts 2011.

Current expenditure on health (CEH) was HK$158 466 million in 2017/18, representing an increase of HK$10 372 million or 7.0% over the preceding year. CEH growth is similar to gross domestic product (GDP) growth, such that, CEH as a percentage of GDP, was 5.8% in both 2016/17 and 2017/18. CEH at current prices has doubled in the past 10 years.

During the period 1989/90 to 2017/18, CEH per capita (at constant 2017 prices) grew at an average annual rate of 4.9%, which was faster than the average annual growth rate of per capita GDP (2.8%) by 2.1 percentage points.

In 2017/18, government and non-government schemes CEH increased by 5.6% and 8.3%, respectively when compared with 2016/17, reaching HK$77 722 million and HK$80 744 million, respectively. Consequently, share of government schemes dropped slightly from 49.7% to 49.0% over the year. Of non-government schemes, the largest was the household out-of-pocket payment scheme (34.1% of CEH). The insurance schemes (15.9%), including employer-based and privately purchased, was the second largest as a result of the expansion of the insurance market.

Analysed by function, curative care accounted for the largest share of CEH (66.4%), and comprised outpatient care (33.6%), inpatient care (27.5%), day care (4.8%) and home-based care (0.5%). Notwithstanding its small share, the total expenditure for day care shows an increasing trend over the period 1989/90 to 2017/18, likely as a result of policy directives to shift the emphasis from inpatient to day care. In addition to the HK$158 466 million CEH, HK$9115 million was spent on gross fixed capital formation (ie, infrastructure, machinery and equipment, etc).

Analysed by provider, hospitals accounted for an increasing share of CEH, from 33.8% in 1989/90 to 50.4% in 2003/04 and remained at around 50% in the subsequent periods. As a result of the epidemics that are of public health importance (eg, avian flu, SARS, swine flu, and pandemic influenza) and the expansion of the private health insurance market in the last two decades, payment to providers of preventive care, health care system administration and financing accounted for increasing, though less significant, shares of CEH over the period.

Analysed by financing scheme and provider, government schemes CEH was mostly incurred at hospitals (72.2%), whereas non-government schemes CEH was mostly incurred at providers of ambulatory health care (40.7%) and hospitals (27.7%).

Although both government and nongovernment schemes CEH were mostly spent on personal health care services and goods (90.5% of CEH altogether), the distribution among functional categories differed. Government schemes expenditure was targeted at inpatient care (45.9%) and substantially less on outpatient care (28.1%). In comparison, non-government schemes expenditure was mostly concentrated on outpatient care (44.0%), followed by inpatient care (24.4%) and medical goods (17.6%).

Compared with other economies, although Hong Kong has devoted a relatively low percentage of GDP to health care, it is commensurate with the public revenue collected.