SPH Expert Takes on Hong Kong Health Care System

Dr. William Hsiao, a School of Public Health (SPH) professor and ardent critic of inefficiencies in the US health care industry, offers similar critiques of medicine in Hong Kong in a report to be released today.

The report, segments of which have already been leaked to the press, is especially critical of private doctors in Hong Kong--who he said are the highest paid in the world, earning an average of $3 million per year.

Hsiao, Li professor of economic development and health at the SPH, is now in Hong Kong giving lectures and talking to Chinese government officials to explain and defend his assessment.

Hsiao first attained prominence when his criticisms of Medicare in 1986 led to its reform and brought Health Maintenance Organizations to the forefront of the medical industry.

In papers and books on the topic, Hsiao said Medicare and the health care industry in general gave doctors little motivation to use less expensive means of treatment when more costly ones were available.

When Congress reformed the system, Hsiao was consulted heavily and many of his suggestions became actual policy.

In addition to this work, Hsiao has assisted many emerging nations in developing methods to provide care to poor, rural populations.

However, his current area of expertise is in East Asia, where he is collaborating with UNICEF on a country-wide study of health care for the 100 million poor Chinese.

The Hong Kong government--the territory, long a British colony, reverted back to Chinese possession in 1997--commissioned Hsiao to review its health care system in late 1997. The commission was made in response to rising medical costs.

Hsiao's more than 500-page report says that doctors prescribe needless antibiotics, overcharge and are under-regulated by the government.

In addition, there is no standardized or guaranteed basic health care, meaning problems for the poor and middle-class Hong Kong residents who must shop around among doctors who will charge widely varying rates for the same procedure.

After viewing drafts of the report, Hong Kong doctors responded angrily, calling Hsiao's comments ridiculous and impossible and defending their commitment to quality care.

His suggested reforms would institute mandatory contributions to the system from both employers and employees and provide "old-age insurance" to guarantee care for the elderly and "emergency insurance" to allow those hit with a sudden illness to afford expensive care.

A basic standard of care--moving towards a system like the American one where certain health care services are provided free to the poor--will likely also be part of Hsiao's proposal.

By funding health care reform with the Medicare-style tax revenue, Hong Kong hopes to remedy the inconsistent quality of care provided by public and private hospitals.

Hsiao's solution for Hong Kong seems in many ways an adaptation of his "fix" for Medicare in the 1980s.

In that plan, Hsiao said too much money was spent on patients' visits to specialists. His solution focused on the use of now-familiar primary care physicians, who are supposed to consider cheaper treatment options before referring patients to more expensive specialists.

Under his system, known as the Resource-Based Relative Value Scale, doctors do not receive premiums for performing extremely technical procedures such as coronary artery bypass surgery or pacemaker insertion.

When such premiums are used, he says, they are often responsible for doctors suggesting more complex procedures before considering simpler alternatives.

Doctors both in America and Hong Kong say Hsiao, trained as an economist, is largely ignorant of the realities of practicing medicine. They claim that his system only results in overburdened doctors and a lowered standard of care.

Nevertheless, Hsiao maintains that the same standards of efficiency must be applied to medicine as any other industry.

Rather than being cynical about doctors' monetary motivations, Hsiao says that he recognizes the reality that incentives will effect people's behavior--including doctors.