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as financial data, will be critical in creating a meaningful strategic purchasing role for
progressing to UHC. Therefore, many health systems will need to increase data and
measurements available and create a method of data collection and centralisation.
Policymakers will also have to consider how varying payment structures will incentivise (or
disincentivise) efficient and effective care.

In the context of the more technical questions that strategic purchasing presents, strategic
purchasing also offers a framework for better system integration through the purview of
population health needs and financing (WHO, 2005a). By linking purchasing of health
services to the health needs of the population, strategic purchasing offers a vehicle
for more precise health system development that can be targeted to the
vulnerable and/or underserved.

1.6.2 STRATEGICALLY DEVISING HEALTH FINANCING
POLICIES TO PROPEL PRIMARY HEALTHCARE
DEVELOPMENT IN HONG KONG

While the WHO has set out overarching approaches to improve the quality and affordability
of healthcare services in accelerating progress towards UHC, the unique context of each
health system renders it necessary to consider the best financial levers to implement.
A localised strategy to promote innovative and effective financing of
healthcare that is context-specific for the pluralistic health system in
Hong Kong focused on accelerating PHC development is necessary.

In Hong Kong, the FHB has projected that Hong Kong’s total health expenditure averages at
an annual growth rate of 1.5% from 2004 to 2033 when healthcare is estimated to make up
27.3% of total government spending by 2033 (FHB, 2008a). The increasing prevalence of
chronic conditions, underdeveloped primary care system and health system fragmentation
have intensified our healthcare burden and associated costs. Our shrinking workforce and
narrow tax-base would foreseeably mount pressure on our financing system. To that end,
efforts need to be directed at how to better design our health financing system such that
available resources within our current portfolio are used effectively and directed towards
prioritised health services aligned with health system goals and maximise health system
performance. In particular, exploring how the public and private healthcare sectors can be
incentivised to achieve intended health system outcomes is important in transforming
Hong Kong’s pluralistic health system.

It is evident that we need to move beyond simply injecting additional funds into a health
budget, which will not be sufficient even if can be sustained. This report examines how the
purchasing of services could be a financing lever to propel PHC development in Hong Kong’s
pluralistic health system. Specifically, we investigate how strategic purchasing
could serve to transform Hong Kong’s segmented health system to be
fit-for-purpose.

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