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During his recent annual budget address, Financial Secretary John Tsang Chun-wah emphasized the importance that government places on providing high-quality healthcare services to Hong Kong people. But it would be naive to think that simply because budget is being invested in facilities, the quality of healthcare will improve.

It may sound counter-intuitive but a new building does not always bring improvement in healthcare. US and British examples have shown that massive investment in health infrastructure does not always result in increased productivity or better patient outcomes unless optimization of service delivery is considered at the same time.

In order to gain the most benefit from this investment, it is important that the assets developed are designed in a manner that fully optimizes the space so that every square foot is utilized and aligned with the way clinical services are being delivered in the local market. A well-designed asset should also provide a good working environment for staff to allow them to move through the building easily and minimizes the time it takes for patients to move through the appropriate clinical pathway.

While the cost of building is high, the annual cost of operating an asset is actually higher when you consider this is a cost you pay each year for the life of the building. Failure to factor this in at the very outset could ultimately impact the cost and quality of service that operators can offer patients at a later date.

Improvement in community services can reduce the workload of the major hospitals. That's why it was encouraging to see, in the budget announcement, HK$2.54 billion allocated to the Hospital Authority to help meet community demand. Developing a better primary and community-care system is just as important as building new hospitals. Reducing the number of people who visit emergency wards for care when they could be treated in local clinics will reduce the burden on hospital staff and allow them to focus more time on patient care and delivering better health outcomes.

Headlines detailing the increased capital expenditure for new and redeveloped hospitals have followed the budget. However, an equally important point that was largely overlooked concerned the increase in annual operating expenditure within the public sector.

Recurrent expenditure in essential services across education, medical and social services is estimated to reach HK$170 billion this year, which represents an increase of 10 percent on 2012. This is not an insignificant amount and is likely to drive a renewed focus on understanding where operating costs are incurred and how assets can be better managed to keep this cost to a minimum.

Developing an efficient design for modern day healthcare delivery is crucial. By changing the design and some of the established processes around how an asset is used, it is possible to make big improvements both in operational efficiency and in costs incurred from delivering clinical services.

Another way to address rising operational costs is to identify how a hospital is performing both clinically and operationally against the best in the world. A crucial first step would be to carry out an in-depth review of the asset to understand where exactly costs are incurred within a hospital and then benchmarking this against industry competitors. Having this insight allows owners to identify where improvements need to be made and to identify clear and achievable performance targets to work towards.

A final step is to implement a proactive performance-management approach to operating a healthcare facility. By doing this, property operating costs can typically be lowered by 15 percent, which frees up significant capital to invest in other key areas.

There were a lot of positive intentions outlined within the budget on how to improve Hong Kong's healthcare sector. The government has been bold in making capital available for making healthcare improvements, which is extremely positive. However, the challenge now will be ensuring this money is spent wisely and in the right areas.

There are lots of lessons, both positive and negative, that can be taken from international projects. Some of the approaches in other markets can be adopted and applied within the context of this market and will help drive a more efficient and effective delivery of healthcare services in Hong Kong, which is what the government is ultimately seeking to achieve.

The author is head of Social Infrastructure at EC Harris Asia-Pacific.

(HK Edition 04/10/2013 page9)