Introduction
Hong Kong has a well-known public healthcare system around the world. People can get reasonably good health care at a low cost. With rapid ageing of the population and escalating costs of new drugs and technology, the Hospital Authority, a statutory body to manage all public hospitals in Hong Kong, is facing the prospect of rising health care expenditures. The major challenge for the authority is to maintain its high quality public healthcare services with limited budgetary in line with the Government’s curb on public expenditure. It highlights the main objective of this project – cost reduction.
Nowadays, management tends to put more efforts on purchasing activities because of recognition of potential contribution to cost cutting. Commodity purchasing is the greatest expenditure for the authority except the payments to personnel as revealed in the spend analysis. The Audit Commission Hong Kong even points out that high costs are attributed to the uncoordinated procurement among hospitals and high inventory carrying costs. It results in proliferation of brands of equipment, lower bulk-purchase discounts, higher maintenance costs, and staff training costs and so on. A brief spend analysis about the authority will be provided as follows to recognize potentials for reducing cost.
Organization Brief
The Hospital Authority is a statutory body under the Hospital Authority Ordinance to manage all public hospitals in Hong Kong. It formally takes over the management of all the 38 public hospitals and institutions. As shown in financial statement (which has been attached in appendix of this project), the authority's recurrent expenditure budget from Government, for 05/06, and net of income is HK$27,145.5 million.
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