Executive Summary of the Investigation Report on Provision and Management of Private Medical and Dental Clinic Services in Public Housing Estates



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Executive Summary of the Investigation Report on

Provision and Management of

Private Medical and Dental Clinic Services

in Public Housing Estates


Introduction

In mid 1999, public concern was voiced over the practice of the Housing Department (HD) in giving to members of a private doctors’ association a virtual monopoly in the leasing of medical clinic premises in public housing estates and Home Ownership Scheme (HOS) courts of the Hong Kong Housing Authority (HA). Under this practice, the association would hold an internal ballot among its members and select doctors to be recommended to HD for clinic leasing. Other than medical and dental clinic premises, the leasing of other commercial premises in public housing estates is done through open tender.


2. A preliminary assessment on the subject conducted in July 1999 revealed a number of issues that would merit further examination. These include whether the letting and allocation of medical clinic premises in public housing estates are compatible with current market practice, the relationship between HD and the relevant professional bodies on the provision and management of estate clinics, the ratio of doctor/dentist-to-resident provision, actions taken on the operational problems and concerns identified in previous reviews on the subject, and the adequacy of the monitoring mechanism on compliance with the terms and conditions of tenancy agreement. The Ombudsman decided to conduct a direct investigation into the subject under Section 7(1)(a)(ii) of The Ombudsman Ordinance.


Purpose of the Investigation





  1. The purpose of the direct investigation is to -

(a) conduct an overview study on the provision and management of private clinic services in public housing estates;


(b) assess whether the present leasing arrangements and control measures are fair and effective; and
(c) examine whether and how the current system can be improved for the benefit of residents, practising doctors/dentists and housing estate management.

Provision of Estate Clinics


  1. In the mid 1960s, the Advisory Committee on Clinics under the former Medical and Health Department recommended the replacement of unhygienic mobile clinics which operated in and around resettlement and low cost housing estates by the provision of low cost medical clinics in these estates. From 1966 to 1981, HD made provisions for private medical clinics in public housing estates on the basis of one registered medical practitioner for every 6,000 residents.




  1. Estate clinic premises were originally leased through the Doctors Management Committee formed by a group of private medical practitioners interested in providing medical care in resettlement and low cost housing estates. Whenever a clinic vacancy arose in a public housing estate, the Committee would be asked to nominate a doctor to take up the vacant premises. At that time, the nomination process ensured that there would be doctors to take up the tenancy of clinic premises in public housing estates. In 1976, the Committee was succeeded by the Estate Doctors Association (EDA). In 1984, the Estate Dentists Group (EDG) was formed to operate along similar lines to the EDA in respect of dental clinics in public housing estates. Since 1986, estate dental clinics have been let to member dentists nominated by the EDG.




  1. In a 1981 Review, HD revised the provision ratio of estate medical clinics to one clinic for every 7,500 – 10,000 residents. Another review conducted in 1991 concluded that the planning ratio should be maintained but an increased number of clinics might be considered subject to local demand. The provision ratio of one dental clinic for an estate having a population of up to 20,000 residents and two dental clinics for an estate with a population of 20,000 to 40,000 residents have remained unchanged since 1986. In this context, the term “clinic” in effect means a single practitioner.




  1. EDA represents doctors practising or interested to practise in public housing estates. Its membership is open to all registered medical practitioners. Only EDA members can participate in the allocation ballots for estate clinics. In August 1999, EDA’s membership was 1,550, of which 330 members (21%) operated 326 estate medical clinics (312 in public housing estates and 14 in HOS courts). Similarly, EDG's membership is open to all registered dentists. In August 1999, EDG's membership was 318, of which 82 members (26%) operated 82 estate dental clinics (79 in public housing estates and 3 in HOS courts). 43 other estate dental clinics had been let through open tender to non-EDG members before 1986.




  1. HD has no formal agreement with EDA or EDG for the allocation of estate medical and dental clinic premises. When new or vacant premises become available, HD will write to EDA/EDG for nominations. HD staff attends to witness EDA’s allocation meetings. An EDA member doctor having one estate clinic is allowed to participate in the allocation exercise provided that he agrees to surrender his existing tenancy if he succeeds in balloting for a new clinic in the allocation.




  1. Similar arrangements apply to the EDG in respect of estate dental clinic premises. HD staff does not attend EDG allocation meetings.



Management of Estate Clinics


  1. The terms of the tenancy require estate doctors and dentists to operate their clinics for at least six hours of service each day, except Saturdays and Public Holidays. In addition, estate doctors are required personally to give medical advice and treatment to patients for a minimum of three hours each day.




  1. Estate doctors/dentists are obliged to provide leave relief to cover temporary absences from their clinics. They may employ assistant doctors/dentists, but these assistants must also be EDA/EDG members. There are also restrictions on the period(s) of absence and study leave an estate doctor/dentist may take during his tenancy. EDA/EDG assumes full administrative responsibility for the scheme, including scrutinizing the genuineness of applications. With the approval of HD and EDA/EDG, an estate doctor/dentist may invite not more than one partner to join his estate practice. Fresh recommendation from EDA/EDG is required for tenancy renewal of estate clinics. Although HD normally initiates renewal procedures 9 months before tenancy expiry, the time taken in renewing the tenancies or in re-letting the vacated premises had in some cases been excessively long.




  1. As for monitoring and enforcement of the terms and conditions of tenancy agreement, there is no specific inspection of estate clinics by HD staff. Daily routine inspections by HD estate staff mainly focus on the public facilities of the estate/court.




  1. Regarding the reprovisioning arrangement for estate clinics involved in HA's Comprehensive Redevelopment Programme, one-for-one reprovisioning is offered to the tenant doctors/dentists affected. Tenant doctors/dentists are accorded a priority period of two years or three allocation meetings, and 40% of the sites available are offered to tenant doctors. Ex-gratia allowance and/or lump sum payment may also be offered.



Statistics on the Letting/Re-letting of Estate Clinics


  1. From September 1996 to August 1999, there were 26 and 13 lettings of new estate medical and dental clinics respectively. During the same period, 33 and 7 estate medical and dental clinics had been surrendered by tenants and made available for re-letting. HD estimated that there would be 60 and 34 new lettings of estate medical and dental clinics respectively in the three years after August 1999.




  1. From September 1996 to August 1999, six nominated doctors declined the offered estate medical clinic, and no nominated dentist declined the offered dental clinic.




  1. Apart from estate clinic premises allocated through EDA and EDG, there are also three Single Operator Shopping Centres (SOSCs) in HA public housing estates and HOS courts. Under this arrangement, a Single Operator (SO) tenders for the lease of the shopping centre and he in turn grants non-exclusive licences to business operators. However, the clinic premises in two SOSCs are outside the SO's leasing boundary and their provision and management are governed by the arrangements with EDA/EDG. So far, only one SOSC has any clinic premises (two medical clinic and 1 dental clinic) included within its leasing boundary.



Major Reviews


  1. Four major reviews had been conducted on the subject since 1981. The 1981 HD Review led to the revision of the planning ratio to one medical clinic to every 7,500 to 10,000 residents. Estate doctors and dentists were also required to provide daily service of at least six hours, excepting Saturdays and Public Holidays.




  1. HD conducted a comprehensive review on the policy of private medical clinics in public housing estates in 1991. The 1991 Review had two main objectives. First, to provide estate residents with a reasonable standard of general practice medical services at affordable charges. Second, to ensure no hidden subsidy to practising estate doctors. After considering the merits of open tender, HA decided to retain the existing arrangements with EDA. It also decided to adopt greater flexibility on the level of clinic provision, tighten control on the operation of clinics, revise the reprovisioning arrangement, and explore the feasibility of expanding the number of group practices and polyclinics in selected new estates.




  1. Subsequent to the 1991 HD Review, the Independent Commission Against Corruption (ICAC) conducted a study on the allocation and control of doctors’ clinics in HA estates. The ICAC Report made recommendations on allocation, open tender, long leave, employment of locum, admission of partner, and enforcement of tenancy agreement. HD’s follow up action on some recommendations led to revised policies and agreements reached with EDA.




  1. In late 1999, as a result of public concern expressed over the EDA arrangements, HD initiated another review and made a number of recommendations on the letting/re-letting of new or vacant clinic premises which were subsequently endorsed by HA. The new policies took effect from 1 January 2000 and instituted an open tender system in place of the practice of allocating estate clinics through EDA and EDG. The new arrangements extend tendering eligibility to all doctors and dentists registered for practice in Hong Kong who do not currently hold any tenancy of HA clinic or a licence to operate a clinic in a HA SOSC. Existing provision ratios will be maintained for planning purpose, but HD will introduce additional clinics where there is evidence of demand. Estate clinics must be operated by registered practitioners and open for consultation for a minimum of six hours per day on weekdays except Saturday, Sunday and Public Holidays. Tenant doctors are no longer required to provide personal attendance for the stipulated three hours. Tenant doctors/dentists may employ assistant doctors/dentists or arrange with another registered doctor/dentist to cover his absence and keep the clinic open for consultation.




  1. However, tenancies which commenced before January 2000 will continue to be bound by the old terms and conditions on operating hours, leave taking and employment of assistant doctor/dentist as stipulated in the tenancy agreement until the expiry of their current tenancy. Tenancy renewal no long requires EDA/EDG’s recommendation. As for reprovisioning, doctors/dentists receiving formal notice of redevelopment with a target evacuation date on or after 1 January 2001 will only be eligible for an ex-gratia allowance plus a lump sum payment in lieu of reprovisioning.



Concern of the Community


  1. From the public consultation exercise conducted for this direct investigation, this Office received written submissions from four associations and one individual. With one exception, an open tender system was favoured for the leasing of estate clinics. The exception submission expressed that an open tender system might lead to higher consultation fees, monopolisation of estate clinic services by business consortium, and sub-letting of estate clinics. On the other hand, this submission emphasized the doctor-to-patient relationship and supported the retention of the minimum personal attendance requirement in the tender conditions..



Observations and Opinions

Conformity with Market Practice





  1. The open tender system introduced by HA/HD since January 2000 is in line with prevailing market practices. The new open tender system effectively breaks the monopoly EDA/EDG previously had on the allocation of estate clinics and provides a fairer and more transparent yardstick in considering bids for estate clinic premises. Tenancies commenced before this year will not be affected and upon their renewal, new tenancy terms will apply.



Eligibility and Conditions relating to Personal Service





  1. Concern had been expressed on the fairness of balloting operated through EDA/EDG and the commitment of the nominated doctors. The new tendering eligibility is restricted to doctors who have no current HA tenancies, whether leased directly from HA or licensed through SOSCs. In effect, this takes away from tenant doctors their choice of estates which they previously had on condition that they were prepared to relinquish their existing tenancy.




  1. At most in three years’ time, upon the expiry of old tenancies commenced before January 2000, estate doctors/dentists will no longer have to provide any level of personal service. In pursuance of the market forces principle, tenant doctors are being placed on the same footing as other commercial tenants of HA. The new tenancy conditions will effectively be cleansed of those health care considerations that underlies the original policy on the provision of clinics in public housing estates, as embodied in the old tenancy conditions.




  1. The genesis of the policy on the provision of medical clinics in public housing estates shows clearly that it resulted from the interaction of two programmes of activities, namely the public housing programme and the health care programme. This Office suggests that in dealing with a huge slice of public resources like public housing, there should be room for taking into account non-housing social considerations to enhance the quality of health care services provided in public housing estates. Such considerations may include personal involvement by tenant doctors, or to make use of tenancy conditions to address health care needs indicated by changing social circumstances e.g. provision of medical services at weekends and public holidays.


Adequacy of Provision of Estate Clinics


  1. In addition to the general planning guideline of providing one clinic for every 7,500 to 10,000 residents, there is an internal HD guideline which stipulates that additional clinics can be provided for populations above 15,000. However, this Office notes that the internal guideline has not been consistently applied. This resulted in some anomalies, and an under-provision of medical clinics based on HD’s own planning guidelines. Although the 1991 HD Review recognised that additional clinics should be provided where there is evidence of demand, this Office opines that this commitment should be translated into more definite guidelines for estate management staff.


No Clearly Defined Provision Ratio





  1. By their nature, planning standards cannot be too strictly defined. However, this Office notes that some aspects of the planning standard for estate clinics is capable of arbitrary and even contradictory interpretations. Clarification of these, as illustrated below, will assist the different estate management in maintaining a coherent policy and implementation: -

(a) Whether Government Clinics count for Provision of Medical Clinic


Although HD would usually not take Government clinics into account in planning the provision of estate clinics, it might exercise discretion to reduce the number of clinics in a public housing estate should there be evidence that a Government clinic within or in the vicinity of an estate has largely satisfied residents’ medical needs. This Office considers that there is too much latitude in the interpretation of the sufficiency of demand and might result in inconsistency among different housing estates. This Office believes that a clearer guideline is necessary.

(b) ‘Clinic’ vis-à-vis ‘Doctor’ basis in the Provision Ratio

Another potential area of dispute is what constitutes a ‘clinic’. Hitherto the term “clinic” in the planning standard adopted by HD essentially means “practitioner”. With the emergence of Health Maintenance Organizations, this Office believes that a clearer definition of “clinic” is required because there may be more than one doctor in each clinic.


Problems/Concerns identified in Previous Reviews not adequately acted upon


  1. In the context of the 1991 HD Review, HA/HD decided to explore the feasibility of expanding the number of group practices and polyclinics in selected new estates. According to HD, there had been no follow up or development on this matter. Tender conditions in the new arrangement have limited tendering to individual medical/dental practitioners. This Office believes that the 1991 HA/HD decision on group practices and polyclinics is worthy of further exploration. This is one of those non-housing social considerations referred to in para. 26 above.




  1. The 1992 ICAC Review suggested that the balloting system should give priority to those with no private practice in or outside public housing estates. This is yet another social consideration that appeared not to have been pursued.




  1. The new tendering arrangements introduced in January 2000 represents a major change in previous policy. With the new policy, HD essentially allows market forces to supply services to meet demand. In the absence of social considerations, this approach is fair and transparent. A potential danger of the free market forces principle is that pecuniary considerations may carry too much weight and estate clinics will be seen as business opportunities pure and simple. In livelihood matters such as housing and health care, there should perhaps be room for a broader view to be taken in formulating policies, to allow relevant social considerations to be taken into account. Despite the complexity and inherent difficulties involved in trying to rationalize and co-ordinate the two programmes of activities, HA/HD and indeed the Administration as a whole, should have sufficient breadth of vision to attempt this task.



Disparity in rental level





  1. This Office observes that the lowest, highest and average rental per m2 of the medical clinic premises in a SOSC were 2,566%, 250% and 506% respectively higher than that of similar premises let through EDA. The magnitude of the differential cannot be explained by the 'variation in rents based on specific circumstances in individual estates' as claimed by HD. Although HD claimed that upon tenancy renewal, estate clinic rentals have been adjusted upwards over the years to the fair market level, this is not borne out by our survey results




  1. Upon renewal of their lease, estate doctors whose tenancies commenced before January 2000 would enjoy the more liberal set of conditions introduced under the new tendering

arrangement. However, as before, they would continue to pay HD assessed rents. It is too early to see what impact tendered rents would have on HD assessed rents.


Management of Estate Clinics


  1. This Office notices that HD’s policy papers and operation procedures on the management of medical and dental clinics are not comprehensive and the relevant information is scattered among different circulars and memoranda. This Office recommends that HD should consolidate and compile a set of comprehensive departmental procedural guidelines on its allocation and management of estate clinics.




  1. According to HD, re-letting of vacant estate clinic premises would normally take more than five months to complete. This Office noted that, in some cases, HD had taken 7 to 72 months for re-lettings which involved modification works. This Office considers that, if renewal logistics did require a long lead time, HD should have factored this in its timetable for tenancy renewal.


Conclusion and Recommendations





  1. The new open tendering arrangement is a fairer and more transparent system of leasing of medical clinic premises in public housing estates. This fresh policy embraces free market principles and rejects the health care related social considerations embodied in the previous leasing arrangement. The Ombudsman suggests that in the matters of public housing and health care services which affect a substantial portion of the community and in which the community has made fairly substantial investment, there should perhaps be room for a multi-disciplinary approach to be adopted in formulating the relevant policies. Indeed the policy on the provision of estate clinics owed its existence to such an approach adopted in the 1960s when medical services in Hong Kong were not well developed. Although HA/HD primarily assumes the landlord’s role in respect of public housing estates, social responsibility requires them to see beyond their remit and to seek coordination with other relevant government departments and agencies. A coordinated approach could seek to address social problems and developments that may surface with changing times. As an example, it may be worth exploring whether a nudge or incentive could be given to encourage weekend clinics could help alleviate pressure on emergency services at public hospitals.




  1. The Ombudsman has also identified the following areas where improvements could be made –

(a) Although HD has recently introduced the new arrangements for the letting of new or vacant estate medical and dental clinic premises through open tender procedures, there are still areas of concern for which further consideration is required such as the adequacy of provision of estate clinics, personal involvement of the practitioners and operating hours of the clinics.




  1. The current provision ratios of estate clinic services can be more clearly defined for greater consistency in planning and implementation.

(c) There is ineffective monitoring by HD of estate clinic services provided under the old leasing arrangement.


(d) HD’s assessed rentals for estate clinic premises do not reflect open market values.


Recommendations





  1. The Ombudsman has made the following 10 recommendations for consideration by HD –

(a) Provision of estate clinics




  1. To devise clear definitions of the current clinic-to-resident ratio on the provision of estate medical and dental clinic services, and to make public such definitions.




  1. To critically examine the current clinic-to-resident ratio in public housing estates and HOS courts to see if there are immediate needs to increase or adjust the number of medical and dental clinics in some estates and courts. HD is also recommended to provide specific guidelines on ‘evidence of demand’ and ‘adequacy of service’ for compliance by estate management staff.

iii) To consider reviewing the leasing terms and conditions to encourage estate clinics to operate during weekends and public holidays.


iv) To regularly review the open tender arrangements of letting/re-letting of new or vacant clinic premises for necessary improvement.
v) To streamline the re-letting procedures of vacated clinic premises and to advance the initiation of the letting /re-letting process, after taking into account the lead time required.
(b) Management of estate clinics
vi) For the new or vacant estate clinics let through open tender or the renewal of tenancy of clinics previously let through nomination, to consider requiring the successful doctor/dentist tenderer to be the practitioner-in-charge of the clinic with a certain minimum hours of personal attendance.
vii) To consider devising a comprehensive monitoring mechanism on compliance of tenancy conditions by the estate clinics.
viii) To consider consolidating the relevant circulars and memoranda on the allocation and management of estate clinics to facilitate internal reference by all staff.

(c) Rentals of estate clinics let out through nomination


ix) To review, on a regular basis, the rentals of estate clinics previously let through nomination with a view to achieving market values for such premises.
(d) Group practice and polyclinic
x) To further study the advantages and feasibility of group practice and polyclinic in estate clinic services and take the necessary promoting action.

Response from HD and Health and Welfare Bureau (HWB)

  1. The main thrust of HD’s comments is that opening up to market forces is the underlying principle for its policy on the leasing of estate clinics. It considers that the new policies have already satisfactorily balanced social considerations and market principles. It is not the role of HA to try to impose requirements on personal service etc. which are difficult and expensive to enforce and imply a subsidy from the public purse.




  1. HWB has no comment on this investigation report.



Final Remarks


  1. The Ombudsman notes that HD holds a different view on whether there is room in HA’s new policy on the provision of estate clinics to take account of health care related social considerations embodied in HA’s previous leasing arrangement. The Ombudsman suggests that in the matters of public housing and health care services which affect a substantial portion of the community and in which the community has made fairly substantial investment, there should perhaps be room for a multi-disciplinary approach to be adopted in policy formulating. The policy on the provision of estate clinics itself owed its existence to such an approach adopted in the 1960s when medical services in Hong Kong were not well developed. The Ombudsman urges HA/HD to revisit the social considerations in its future review of the new letting policy which HD has undertaken to do in two years’ time.




  1. The Ombudsman would also like to be kept informed by HD of progress on the implementation of the 10 recommendations, and any major changes in the policy and practice of the provision and management of private medical and dental clinic services in public housing estates in due course. Lastly, The Ombudsman would like to express appreciation to the co-operation and assistance rendered by HD throughout the course of this direct investigation.



Office of The Ombudsman

Ref. OMB/WP/14/1 S.F. 65 II

May 2000






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