Despite signs of stabilisation in medical expenses, Hong Kong has experienced a steep rise in staff medical insurance costs—up 55% over the past three years. This increase is mainly driven by a sharp rise in the use of medical services, according to a new study.
The data comes from Hong Kong’s first Staff Medical Insurance Index, jointly launched by The Hong Kong Polytechnic University College of Professional and Continuing Education (PolyU CPCE) and staff benefits consultant GUM. The index provides detailed insights into trends in utilisation, expenses, and premiums in Hong Kong’s group medical insurance market, covering data from 2006 to 2024.
Key Findings from the Index
The Index is made up of three key parts: the Utilisation Index, the Expense Index, and the Premium Index.
A major finding reveals that even though the average cost of medical services has shown signs of levelling off, a dramatic rise in how often people use their medical benefits has significantly increased overall expenses.
The Outpatient Utilisation Index has seen the most dramatic change, rising by 102% over the past two years. This spike followed the lifting of COVID-19 restrictions, especially the mask mandate.
Dr. Ben Fong, Director of the Centre for Ageing and Healthcare Management Research at PolyU CPCE, explained:
“After the pandemic, people’s immunity to common illnesses declined. This led to a noticeable increase in upper respiratory infections, pushing up demand for outpatient care well beyond pre-pandemic levels.”
Medical Expenses Declining — For Now
While usage is rising, actual medical expenses have shown a slight drop.
The Expense Index, which tracks both outpatient and hospitalisation costs, fell by 6% last year—the first decrease in four years. The average hospitalisation cost per surgery dropped to HK$21,851, while the average outpatient expense per visit fell to HK$533.
Dr. Gloria Siu, CEO of GUM, said this decline is partly due to more same-day procedures like wart removal and gastrointestinal endoscopies, which reduce the need for costly overnight stays.
“At the same time,” she noted, “a surge in minor illnesses like colds has led to increased outpatient visits, which helped bring down the average cost per visit.”
Still, Dr. Siu warned that medical costs are expected to rise again in the near future.
Premiums on the Rise
The Premium Index, which tracks insurance premiums, has increased for three straight years. In 2024, it showed a cumulative rise of 55% since 2021. Premiums for hospital benefits have increased more sharply than those for outpatient services—again due to higher utilisation.
Professor Peter Yuen, Dean of PolyU CPCE and an expert in health economics, said the trend is a growing concern:
“Insurers base future premiums on past claims. High usage now leads to higher premiums later. Over time, this could threaten the sustainability of private healthcare and place more pressure on the public system.”
Committee member Lawrence Hung added that rising premiums are becoming a financial strain on employers, especially small and medium-sized companies.
Breaking the Cycle
The study suggests that employers can ease the burden by choosing insurance plans that better match employees’ needs, offering preventive care, and promoting healthcare education.
These steps can improve employee health and help businesses control costs. In turn, this could help break the cycle of rising claims driving up insurance premiums and company expenses.
PolyU CPCE and GUM plan to update the Index every quarter to keep stakeholders informed. Their goal is to encourage smarter use of insurance, support private healthcare sustainability, and ease the load on the public health system.
Ultimately, the initiative supports the broader social goal of “Health for All” by promoting better access, smarter spending, and long-term affordability in healthcare.
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