Why Hong Kong has an excellent health care system and how not to reform it

The government of Hong Kong has been trying to reform the territory’s health care financing system since the early 1990s and is finally on the verge of succeeding. The objective of the paper is to assess the reform efforts and explain the causes of repeated failures and eventual success. It will argue that the government’s fortunes changed only after it abandoned the core reform goal and decided to pursue peripheral objectives. It will explain the abandonment with reference to the peculiar political system in Hong Kong which makes it difficult for the government to adopt substantial policy reforms in the face of even moderate opposition. The reason for the government’s policy incapacity is the existence of Liberalism in a non-democratic setting which allows the government to neither suppress opposition nor mobilize popular support. This has been illustratively evident in its health care reforms when its proposals to improve the system’s fiscal sustainability invariably met early death because they imposed costs on employers or the population or both. The current proposal has fared better not only because it addresses a simpler peripheral problem but also because it offends almost no one and pleases many among the powerful.