Emergency wards raise maternity fee for non-locals
Summary of the news
Public hospitals agreed to almost double the fees for non-local women giving
birth in emergency wards, to HK$90,000. Pregnant mainland women will have to
show their marriage certificate and their husband’s Hong Kong identity card to book
a bed at private obstetrics departments after The Hospital Authority confirmed that
no mainland woman not married to a local man would be allowed to give birth in
Hong Kong next year.
Introduction
The number of mainland mothers giving birth in Hong Kong is increasing
rapidly, because of the right of abode in Hong Kong and higher quality medical
services offered. This led to a fierce competition for birth places. There is an excess
demand of obstetric services in public hospitals. In order to protect the rights of
Hong Kong pregnant women, Chief executive-elect Leung Chun-ying said that there
would be a quota of ‘zero’ for mainland births next year. Public hospitals agreed to
raise maternity fees for non-local women giving birth in emergency wards, to
HK$90,000 so as to prevent the abuse of emergency childbirth services. Scarcity,
Opportunity cost and excess demand can be applied in this case.
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Economic Analysis
Firstly, we look into the current market of obstetric services in public hospital.
Since the beds in public hospitals are limited, the supply curve of obstetric services is
vertical. The HKSAR government has to fulfill its function on income redistribution; it
runs the public hospitals and provides lowly-charged medical services. The
government controlled price (P1) is set below the equilibrium price (P*). At the
current price (P1), the quantity demanded is larger than the quantity supplied; there
is an excess demand for the obstetric services in public hospital. As the price of public
hospital service is much lower than the private one and the obstetric services in
public hospitals are scarce goods, therefore both the Hong Kong and mainland
mothers compete vigorously for the beds in public hospitals. Many Hong Kong
mothers are discriminated against in the competition, and this results in many
complaints about the exploitation of Hong Kong people’s welfare. Moreover, private
hospitals found that obstetric services are in shortage and they can earn high profits
by offering them. They recruit doctors and nurses from public hospitals with high
income. This leads to a shortage of labour in public hospitals. This creates another
problem, which is the deteriorating quality in services provided by public hospitals.
In order to solve the problem of exploitation of Hong Kong mothers’ welfare by
non-local mothers, the HKSAR government plans to prohibit non-locals from giving
birth in Hong Kong.
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Secondly, we can look into the demand curve for obstetric services in public hospitals
in the future.
Since the non-locals are not allowed to give birth in Hong Kong, with the change in
government policy, the demand curve for obstetric services in public hospitals shifts
to the left. There is a decrease in demand from D1 to D2 (see diagram2). However,
we should aware that emergency delivery services are still available. Some non-local
mothers may take the chance to give birth in Hong Kong by going to the emergency
wards in public hospitals.
As emergency delivery services are a substitute to appointed obstetric services, a
decrease in the demand of appointed obstetric services will lead to an increase in the
demand of emergency delivery services in public hospitals. Its demand curve shifts
rightward from D1 to D2 (see diagram3). In order to prevent the overload on
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emergency wards, all the public hospitals agreed to raise maternity fees for non-local
women giving birth in emergency wards, to HK$90,000.
Thirdly, we can look into the market of emergency delivery services in public
hospitals, to see whether the above measure can help.
The supply of emergency delivery services in public hospitals is fixed, therefore its
supply curve is vertical. The current maternity fee in public hospitals is around
$45,000. At the price of $45,000, there is an excess demand (a). After raising the
price to $HK90,000, excess demand (b) may still occur. From diagram 4, we can see
that the length of b is shorter than a. Therefore, the problem of shortage will be less
serious after the price is increased. In addition, we can see that if the price is raised
to the equilibrium price (P*), there will be no excess demand. Therefore we can
conclude that raising the price can help tackle the problem of excess demand on
emergency delivery services and prevent the abuses of emergency wards. However,
the price should not be set too high. Otherwise, those who are really in need cannot
afford these services. There will also be an excess supply when the price is set above
the equilibrium price.
Although the HKSAR government prohibits non-local women from giving birth in
Hong Kong and raises the maternity fees in public emergency wards, some of the
non-locals try hard to give birth in Hong Kong through illegal ways. They acquire fake
marriage certificates and men’s identity cards through some agencies in Shenzhen at
a low price. Their action can be explained by opportunity cost.
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The benefits of giving birth in Hong Kong are that the quality of obstetric services in
Hong Kong is high and the risk is relatively lower than that of the mainland. The most
important is that children born in Hong Kong can have the right of abode in Hong
Kong. They can enjoy the benefits of free education, social welfare programs, legal
protection and a higher living standard in Hong Kong. In addition, mainland women
are no longer bound by the ‘One-child policy’ in China; they can give birth to more
than one baby in Hong Kong. However, there are also costs. First, giving birth in
emergency wards is not safe and the risk of death to babies and mothers are higher.
Second, using false documents is a criminal act and can result in imprisonment.
Despite a higher cost, the mainland mothers will still give birth in Hong Kong if they
think that marginal benefits are higher than the marginal costs. They will opt for an
illegal way to come to Hong Kong.
Conclusion
The conflicts between mainland and Hong Kong mothers upon ‘beds’ can be solved
after the announcement of a ‘zero’ quota for mainland births in the future. Though
this increases the chance of emergency deliveries, raising the fee for non-local
women giving birth in emergency wards will be effective in maintaining the quality of
emergency services provided by public hospitals. I believe that the workload of
medical personnel can be lowered under this policy; hopefully the quality of medical
services, especially the obstetric area, provided by public hospitals can be improved.
However, private hospitals will suffer from this policy in the short term. They will lose
their high earnings from obstetric services. They should develop other profitable
services in order to maintain their operations. Government intervention brings both
pros and cons to different interest groups in this issue. It protects the rights of Hong
Kong mothers successfully; however, it also hinders the development of some private
hospitals. I agree that this time the government should speak out and protect the
rights of Hong Kong mothers. Nevertheless, the government should be aware not to
abuse its power. Otherwise, the market cannot be run efficiently. This will bring
negative impacts to the Hong Kong economy. In addition, to solve the problem of
mainland women giving birth in Hong Kong entirely, I think the issue of whether to
give the new-born babies the right of abode in Hong Kong or not should be a major
concern.
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