The Hospital Authority (HA) will start a new internal funding system next year that it hopes will improve the transparency of resource allocation and service quality at public hospitals.

But doctors have expressed worries that the new system might lower the quality of public medical service and patients might suffer.

Currently, the HA allocates resources to different hospital clusters according to the population of the respective districts.

From next year on, hospitals will get funding based on each medical case treated under the new system, called "Pay for Performance".

As its name suggests, hospitals will get more funding if they treat more patients.

The new system will only apply to acute inpatient services, which takes up 53 percent of the HA's expenditures.

The patients will be sorted by a computer into one of 23 major diagnostic categories according to body systems, such as "eye" and "respiratory system", adapting from an international classification system.

Principal diagnosis doctors will then decide other procedures for their patients, such as whether surgery is needed.

Introducing details of the new funding system yesterday, HA Chief Executive Shane Solomon said the new system aims to lower patients' waiting time and improve service efficiency at public hospitals.

He denied that the new system will favor big hospitals, which have more resources.

He explained that they will adjust distribution of funding by a 10 percent margin, year-on-year.

For example, if a cluster gets HK$200 million funding this year it will receive HK$20 million less next year.

The HK$20 million will go to a pool and be redistributed to clusters with less funding.

He also said that the system will lead to healthy competition among hospitals without increasing the workload of doctors.

"Hospitals will look at better ways to treat patients, and they will get extra funding for treating extra patients," he said.

He is confident that doctors will behave professionally and not put in false diagnosis on patients' records to get more funding.

Chong Lap-chun, senior medical officer (surgery) at Tseung Kwan O Hospital, said he thinks the new system can help patients without increasing the workload.

The chance of complications will be lowered if patients can shorten their stay at hospitals, he said.

He isn't worried about an increased burden on doctors when the new system is in place because they will do the same clinical jobs.

He also said vicious competition among hospitals is unlikely.

"There are too many patients on the waiting list. There will be no time for vicious competition," he said.

However, the doctors' union argued that the efficiency improvements will come at the expense of quality.

Ernie Lo, chairman of the Frontline Doctors' Union, said hospitals will cut back individual treatment costs to handle more patients.

"Fighting for more funding, hospitals will compete with each other to treat a case with the lowest cost," he speculated.

Frontline doctors will be under pressure to control treatment costs as much as possible, he said.

And in the end, he said, it will be the patients who suffer.

"Quality of service will be undermined. Patients may be given cheaper drugs and less examination, and may be discharged earlier," he said.

The better way to improve efficiency, he suggested, is to send some patients to private hospitals and retain talents at public hospitals.

(HK Edition 11/20/2008 page1)