The Macroeconomic Impact of Healthcare Financing Alternatives: Reform Options for Hong Kong SAR

33 Pages Posted: 18 Dec 2008

See all articles by Dennis P. J. Botman

Dennis P. J. Botman

International Monetary Fund (IMF) - Fiscal Affairs Department

Nathan Porter

International Monetary Fund (IMF)

Date Written: December 2008

Abstract

With much healthcare publicly funded, Hong Kong's rapidly aging population will significant raise fiscal pressure over coming decades. We ask what the implications are of meeting these costs by public funding, or private funding voluntarily or through mandates. Our simulations suggest that without early reform, these costs quickly become unsustainable. Prefunding is key. Whether this is done through the public system or through mandatory private provision is less important. Voluntary schemes are likely to result in insufficient savings without tax incentives. Even then, voluntary accounts are unlikely to yield better macroeconomic outcomes, while mandates tend to produce more equitable consumption.

Keywords: Health care, Hong Kong Special Administrative Region of China, Public finance, Aging, Fiscal reforms, Tax incentives

Suggested Citation

Botman, Dennis P. J. and Porter, Nathaniel John, The Macroeconomic Impact of Healthcare Financing Alternatives: Reform Options for Hong Kong SAR (December 2008). IMF Working Paper No. 08/272, Available at SSRN: https://ssrn.com/abstract=1316740

Dennis P. J. Botman (Contact Author)

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Nathaniel John Porter

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

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