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Hong Kong Private Hospitals Facing Pricing Disclosure

Published on: 25 July 2014 by Michael Lamb

In the latest instalment of Hong Kong’s continuing effort to reform the city’s healthcare system a government proposal has been submitted which would require private medical institutions to disclose the costs of common treatments to the general public, allowing patients to properly budget for their healthcare.

As the latest episode of a discussion which has been ongoing since January, private medical institutions in Hong Kong would no longer be able to treat pricing data as “trade secrets” and would require private sector medical providers to disclose a majority of their charges with steep penalties being proposed for facilities which fail to comply with transparency requests.

Despite excellent low-cost public healthcare services, Hong Kong is plagued by some of highest private medical costs in the world. In fact, according to the claims data from a number of leading international health insurance companies, the city has the second highest average private medical costs in the world – tied with Israel and falling just behind the USA, a nation without any form of publically operated healthcare networks.

Hong Kong has, for a number of years, been attempting to completely overhaul its healthcare system. However, despite the progress made with regards to various public sector proposals, a significant barrier remains in terms of the access given to the wider local population in respect to private medical services – the most frustrating of which is the secret pricing equations implemented by a majority of Hong Kong’s private hospitals.

The cost of treatment at a private hospital in Hong Kong will be based on a number of factors, the most important of which is the room fee – if a patient is staying in a private room, as opposed to a semi-private or ward room, then all of the costs associated with their treatment (not just the cost of their room) will be higher. For example, the doctor’s fee for a patient in a semi-private room are much lower than those for a patient in a private room, where the overall cost of a doctor consultation, no matter the length of time of the room visit, is proportionally rated based on the overall cost and quality of the hospital room.

This, consequently, means that understanding an accurate cost of treatment for any medical procedure conducted at a private hospital will be extremely difficult. This is in turn exacerbated when direct requests for pricing information at medical facilities like The Adventist, Sanatorium, and Matilda hospitals are met with the response “it depends.”

As a result of this lack of transparency within the pricing structure of Hong Kong’s private hospitals, the government is now moving on a proposal which would require these facilities to maintain a comprehensive historical database on actual patient bills for their most common treatments. Private hospitals would also be required to disclose the annual number or common treatments performed, the average length of stay for those procedures (enabling patients to properly assess their room fees), as well as providing the concrete pricing data of every 5th and 9th patient to receive a specific treatment.

The database to be created under the proposal would cover a minimum of 20 common procedures, although no specific information has been provided as to which procedures those would be, and whether maternity would be included as this is the one area where pricing for services is readily available – albeit in the form of “packages” and minimum stays at private hospitals.

Hong Kong aims to follow Singapore’s lead when it comes to disclosing the costs associated with receiving private healthcare. Currently Singapore’s private hospitals publish pricing data for 60 common medical procedures, and Hong Kong’s government intends to follow this practice with regularly updated billing details – with cost information to be regularly updated every 3 months. Hospitals would be expected to issue a fee schedule which would list all normal and expected expenses, which in turn would allow consumers of private medical services to compare the costs associated at any given private hospital and make more informed decisions as to where they receive their treatment.

A public consultation for the proposal is expected to be launched in at some point during the second half of 2014, with legislation on the proposal set to move forward in 2015-2016.



Author: Michael Lamb

Michael Lamb is an insurance industry professional with many years of experience within the Hong Kong Insurance market. Focusing on APAC coverage issues, Michael is able to provide extensive analysis and insight to a range of pressing topics. Previously, Michael provided insurance broker Globalsurance.com with their most highly valued articles and was a key influence in the development of all the content on Pacificprime.com, Michael has a passion for insurance matched by few others in the region.

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