Redistribution or horizontal equity in Hong Kong's mixed public-private health system: A policy conundrum

Abstract

We examine the distributional characteristics of Hong Kong's mixed public-private health system to identify the net redistribution achieved through public spending on health care, compare the income-related inequality and inequity of public and private care and measure horizontal inequity in health-care delivery overall. Payments for public care are highly concentrated on the better-off whereas benefits are pro-poor. As a consequence, public health care effects significant net redistribution from the rich to the poor. Public care is skewed towards the poor in part not only because of allocation according to need but also because the rich opt out of the public sector and consume most of the private care. Overall, there is horizontal inequity favouring the rich in general outpatient care and (very marginally) inpatient care. Pro-rich bias in the distribution of private care outweighs the pro-poor bias of public care. A lesser role for private finance may improve horizontal equity of utilisation but would also reduce the degree of net redistribution through the public sector. Copyright © 2008 John Wiley & Sons, Ltd.