The HKU-Shenzhen Hospital "Reform Laboratory" — Package Fees, Contract Employment and Cross-Border Settlement

The University of Hong Kong (HKU) comprehensive information database · Module 11, Medicine/Hospitals This article examines HKU-Shenzhen Hospital (HKU-SZH) in its distinctive role as a pilot site for public hospital reform in mainland China — it is not merely one of HKU's teaching hospitals on the mainland, but a "reform laboratory" (医改试验田) in its own right. For an overview of the teaching hospitals and clinical network (including HKU-SZH's construction cost and bed capacity), see teaching-hospitals.md; for the Faculty of Medicine's five schools and the MBBS programme, see li-ka-shing-faculty-of-medicine-2.md; for the broader Greater Bay Area and national role, see ../09-international/greater-bay-area-and-national-role.md. This module falls within the 00–12 reference area and carries no credibility badge.

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# 1. Origins: Shenzhen pays, HKU manages (2009–2012)

HKU-SZH was born exactly at the dawn of China's "new healthcare reform." In 2009, the State Council launched a new round of national medical and health system reform, of which "public hospital reform" was the hardest nut to crack; in the same year, the Shenzhen municipal government and HKU began talks on a jointly run hospital. A cooperation agreement was signed in July 2011, and the hospital officially opened on 1 July 2012^※.

This is a partnership model rarely seen in mainland China: a local government funds and builds the hospital, while a Hong Kong university supplies the management. According to the hospital's official introduction^※, it sits in Shenzhen's Futian District, with a total investment of roughly RMB 4 billion, a site area of about 192,000 m² and a total floor area of about 367,000 m²^※; the buildings and hardware were paid for by Shenzhen, while the hospital's management structure, clinical governance and professional standards were transplanted from HKU. The hospital currently operates around 2,000 beds, with plans to expand to about 3,000 after the second phase of construction^※ (for a tabulated breakdown of costs and scale, see Section 5 of teaching-hospitals.md).

Its significance goes beyond "HKU opening another hospital on the mainland." At the time, Shenzhen wanted to use a brand-new, top-tier (3A) hospital with no historical baggage to test precisely the things that mainland public hospitals had long wanted to change but found hard to change — how care is charged, how staff are employed, and how doctor–patient relations work. Reforming an existing hospital is usually tripped up by entrenched interests, the iron-rice-bowl staffing system and years of accumulated debt; but a new hospital starting from zero can simply be "founded" on a new set of rules without having to overturn the old ones first. What HKU brought was a complete logic of hospital operation utterly different from the mainland system: tiered care, evidence-based prescribing, fixed salaries and transparent fees. The two sides' needs aligned — Shenzhen wanted a blank slate on which to test new rules, and HKU wanted a foothold for exporting its professional standards to the mainland; hence the "laboratory" label. The founding CEO, Grace Tang (邓惠琼), a senior HKU medical administrator, bore the burden of putting that logic into practice from day one.

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# 2. The institutional core: "no establishment posts" and "sunshine salaries"

If the package fee is the reform that patients can see, what really shook the foundations of the mainland public hospital was the way the hospital hires people and pays them — a layer often overlooked from the outside, yet the hardest core of the "laboratory."

# Why is it called "the first public hospital on the mainland without establishment posts"?

Mainland public hospitals have long operated under the "establishment" (bianzhi, 编制) system: employees who hold an establishment post enjoy an iron rice bowl, with pay, promotion and status all tied to the post. When HKU-SZH opened, it simply had no establishment posts at all. All staff were engaged under a system of "post-based management and full contract employment," with the hospital "free to set posts, set salaries and recruit within an approved total headcount," so that "staff can come and go, posts can rise and fall, and salaries can go up and down"^※. In the mainland public hospital world of the time, this was near-heretical.

The reform later spilled over to the city as a whole. According to media accounts, around 2015 Shenzhen became the first city in mainland China to abolish establishment posts across all newly built public hospitals, shifting to salary- and recruitment-by-post^※; HKU-SZH was widely seen as the "catfish" that stirred this change. In later recollections, Lo Chung-mau (卢宠茂) would describe HKU-SZH as a "catalyst" for Shenzhen–Hong Kong medical exchange — it was itself a reform, and it also loosened the institutional ground around it.

The road was not smooth, however. In the early years of reform, mainland deliberations over "de-establishment" and "multi-site practice for doctors" at times stalled and marked time, and Shenzhen authorities publicly acknowledged that the pace of reform had slowed^※. Whether a hospital can retain staff on contract employment alone, and whether it can keep recruiting without the lure of the iron rice bowl, was itself one of the questions this laboratory had to answer.

# What problem was "sunshine salary" meant to solve?

Mainland China's medical cost structure has long been criticised for "supporting medicine with drugs" (以药养医) — doctors' income tied to the drugs they prescribe, the tests they order and the consumables they use, breeding kickbacks and red envelopes. HKU-SZH's answer was to raise doctors' pay and decouple it from workload, under the banner of "high pay to foster integrity; sunshine salary" (高薪养廉、阳光薪酬): doctors receive a fixed annual salary for their post, with no income from revenue generation, and the hospital explicitly refuses red envelopes, accepts no kickbacks from drugs or consumables, and discourages over-prescription and over-testing (an approach that continues the evidence-based medicine tradition of HKU's parent Faculty of Medicine at Queen Mary Hospital — see teaching-hospitals.md).

According to media reporting at the hospital's ninth anniversary, attending doctors earn around RMB 500,000–600,000 a year, consultants around RMB 1.15 million, and senior consultants up to roughly RMB 2 million^※ — high by mainland public hospital standards, precisely so that "doctors can live decently without resorting to grey income."

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# 3. Two service models "transplanted from Hong Kong"

What the public knows HKU-SZH for most is its introduction of several Hong Kong healthcare practices into mainland public hospitals.

# What did "general practice before specialist" change in patients' habits?

According to materials from the HKU Faculty of Medicine's Department of Family Medicine and Primary Care (FMPC)^※, the hospital pioneered the "General Practice before Specialist" model — patients first go through triage by a general practitioner or family doctor, and are then referred to a specialist as needed, rather than walking in and directly booking a specialist clinic.

This runs against the ingrained habit of mainland patients, who "book whichever specialist corresponds to where it hurts." The intent is to steer care toward a tiered system: common and frequently occurring conditions are dealt with at the general-practice level, while scarce specialist resources are reserved for patients with genuinely complex problems, reducing the mismatch of "minor ailments crowding out the big specialists." Here the GP is not a "second-class outpatient clinic" but the product of a full Family Medicine training pipeline — HKU's Family Medicine and Primary Care department brought Hong Kong's primary-care triage logic directly into Shenzhen, making "first contact at the GP" an institution rather than a slogan. For mainland patients used to "deciding for themselves which clinic to see," this step was not easy in the early days and required sustained communication and adjustment.

# What exactly does the "package fee" bundle?

According to FMPC materials^※, the hospital pioneered the "Package Fee" (打包收费) model, replacing item-by-item, layer-upon-layer billing with a single all-inclusive price. It is not a vague concept but a concrete three-tier price list covering outpatient, inpatient and surgical care:

HKUMed's information page on HKU-SZH for Hong Kong residents^※ likewise records the outpatient package at around RMB 200. The model was designed to curb the chronic ills of mainland medical cost structure — "supporting medicine with drugs" and "over-testing" — by shifting charging from "the more you do, the more you earn" to "one procedure, one price," removing the financial incentive for doctors to do more.

The key to the package fee is not that it is "cheap" but that it severs the link between income and volume ordered. Under traditional itemised billing, each extra test or extra day of medication added a little more revenue to the hospital and the department; with an all-inclusive "one price," the same visit earns the same RMB 200 no matter how many tests are ordered — doing more only adds cost, never revenue. This works in tandem with the "sunshine salary" of the previous section: on the salary side, individual doctors do not rely on revenue generation; on the fee side, departments and the hospital do not rely on it either. Squeezed from both ends, the economic soil of "supporting medicine with drugs" is genuinely removed. This is why outsiders see it not as an isolated pricing measure but as a piece of integrated institutional design.

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# 4. Cross-border settlement: putting Hong Kong's healthcare subsidies to use in Shenzhen

Beyond reform, HKU-SZH performs a special function — serving as an interface for cross-border healthcare under "one country, two systems," so that Hong Kong's healthcare subsidies can be spent in Shenzhen. Over the years it has stacked up three cross-border channels, gradually bringing "Hong Kong money / Hong Kong patients / Hong Kong services" to Shenzhen:

# The Elderly Health Care Voucher: from "pilot" to "permanent arrangement"

According to HKU's Mainland Affairs Office (MAO)^※, HKU-SZH was the first mainland hospital to pilot "cross-border settlement" of Hong Kong medical fees. Concretely, the Hong Kong SAR Government launched the "Elderly Health Care Voucher Pilot Scheme at the University of Hong Kong-Shenzhen Hospital" in October 2015, allowing eligible elderly people to use their vouchers to pay for outpatient services in designated departments at the hospital^※; the pilot was made permanent from June 2019, becoming a long-term arrangement^※. This meant elderly Hongkongers living or seeking care in the mainland could use their Hong Kong vouchers in Shenzhen without making a special trip back to Hong Kong for a few hundred dollars' worth of consultation fees.

Media reports indicate that over the decade since the voucher scheme settled at HKU-SZH, it has served Hong Kong's elderly more than 130,000 visits^※; from 2024, the scheme's "Greater Bay Area pilot" has further expanded to additional medical institutions in Guangzhou, Zhongshan, Dongguan and elsewhere. HKU-SZH remains the earliest and most mature stop on this cross-border healthcare corridor.

# The "Hospital Authority patient special support scheme" during the pandemic

The pandemic magnified the value of this cross-border interface. With quarantine rules making travel between Guangdong and Hong Kong difficult, large numbers of Hong Kong patients living in the Greater Bay Area who ordinarily would have returned to Hong Kong for HA specialist or general outpatient follow-up found themselves "stuck" on the mainland. In response, the Hong Kong SAR Government launched a special support scheme in November 2020, commissioning HKU-SZH to provide subsidised follow-up consultations for these HA patients^※; the scheme was later continued as a pilot programme allowing eligible patients to keep receiving subsidised consultations there. A hospital in Shenzhen had, at short notice, taken over follow-up care that would normally have been the job of Hong Kong's public healthcare system — a live rehearsal of cross-border co-ordination shifting from "convenience option" to "hard necessity."

# Vaccinations during the pandemic

HKU-SZH was also among the first designated sites in Shenzhen to offer COVID-19 vaccinations to Hong Kong and Macao compatriots and foreign nationals. According to reports, on 13 April 2021 Guangdong began vaccinating Hong Kong, Macao and foreign residents in the province against COVID-19, with HKU-SZH among the first batch of designated vaccination sites in Shenzhen, running five vaccination stations and administering about 400 doses a day^※ — the hospital's role as a "cross-border community service hub" was again thrown into relief in a public health emergency. When travel between the two places was disrupted, a Hong Kong-funded hospital in Shenzhen became the place where Hongkongers in the city could obtain basic medical and epidemic-prevention services on the spot — cross-border co-ordination shifting from policy text to daily practice.

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# 5. The "Hong Kong and Macao Drug and Device Access" scheme: another "first" for HKU-SZH

If the package fee changed "how care is charged," then the "Hong Kong and Macao Drug and Device Access" scheme (港澳药械通) changed "which drugs can be used" — the weightiest new pilot to land on HKU-SZH in recent years.

Registration and approval for new drugs and medical devices in mainland China can take a long time, and clinically urgent drugs and devices already on the market in Hong Kong and Macao are often simply "unavailable and unusable" to mainland patients. To break this impasse, in November 2020, with State Council approval, the National Medical Products Administration and seven other ministries issued the "Work Plan for Innovative Development of Drug and Medical Device Regulation in the Guangdong-Hong Kong-Macao Greater Bay Area," commonly known as the "Hong Kong and Macao Drug and Device Access" scheme^※: it allows designated medical institutions in the Greater Bay Area's mainland cities to use clinically urgent imported drugs and devices already on the market in Hong Kong and Macao.

HKU-SZH became the first pilot institution for the scheme, bringing in its first batch of drugs and devices in April 2021^※. The first drug imported under the policy — anti-D immunoglobulin injection — and the first device, a magnetically controllable extendible titanium rod, arrived at the hospital for clinical use in April 2021^※; the anti-D immunoglobulin soon proved its worth — a pregnant woman with sudden premature rupture of membranes who could not travel to Macao as planned for treatment was saved at HKU-SZH thanks to this drug, previously unavailable on the mainland, providing a real-life footnote as the policy's "first beneficiary."

The catalogue of urgently needed imported drugs and devices has since kept growing. According to reports, nearly a year into the policy, HKU-SZH had brought in about 28 "lifesaving" drugs and devices under the scheme^※; by November 2022, a little over a year in, the scheme had brought in 20 urgently needed imported Hong Kong and Macao drugs and 13 medical devices, benefiting patients ranging from an 11-month-old infant to a 90-year-old, with 1,225 patient-visits nationwide^※. The policy has also expanded beyond a single pilot: by 2024 the number of designated institutions in Shenzhen under the scheme had grown to ten^※, with HKU-SZH the "first to break the ice." The hospital was able to take on this "first" precisely because it carried the backing of HKU's clinical governance and international standards — "Hong Kong-style management" here extended from service models to the very gateway for drug approval.

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# 6. International accreditation and scale: a "dual-accredited" 3A hospital

The "laboratory" is not just an idea; it is also embodied in verifiable credentials and physical scale. According to the hospital's official materials and public reporting:

According to reports, HKU-SZH has been among the few public hospitals in mainland China holding both the national 3A rating and ACHS international accreditation — the former being the highest rank on the mainland, the latter the credential for bringing Hong Kong/international standards of hospital governance into the mainland system. The two certificates side by side are the most literal illustration of "Hong Kong-style management + mainland system." The hospital also operates specialist centres for cardiovascular disease, oncology, orthopaedics, reproductive medicine and prenatal diagnosis.

# International Medical Centre: another strand of "Hong Kong-style service"

Alongside its public outpatient services, the hospital operates an International Medical Centre (IMC) providing premium and cross-border care^※. According to reports, the IMC has served more than 45,000 patient-visits in a year, over 15% of them from Hong Kong, Macao, Taiwan or foreign countries^※ — this strand serves precisely the cross-border population accustomed to Hong Kong/international healthcare experiences and based in the Greater Bay Area, complementing the "affordable public" end represented by the package fee.

# Teaching and research: an "HKU-brand" teaching hospital

HKU-SZH is not just a place for treating patients; it is also an extension of HKU's medical education and clinical training into the mainland. According to HKU's Mainland Affairs Office^※, it serves as HKU's clinical base in Shenzhen, bringing the Faculty of Medicine's teaching, research and talent development into the Greater Bay Area; the hospital undertakes tasks such as standardised residency training, allowing young mainland doctors to be trained in an environment of "Hong Kong-style governance." In other words, what it transplanted is not only "how to charge and how to pay" but also "how to teach and how to do evidence-based research" — the same tradition of integrating medicine, education and research that the Faculty of Medicine practices at Queen Mary Hospital (see teaching-hospitals.md). For HKU, the Shenzhen end is both a service window and a teaching outpost for passing professional standards on.

# Leadership: a through-line in Shenzhen–Hong Kong policy

The founding CEO was Grace Tang (邓惠琼); from November 2016 to June 2022, Lo Chung-mau (卢宠茂) served as CEO^※. Lo is a noted hepatobiliary and liver transplant surgeon from HKU; during his tenure the hospital was selected in June 2018 as a Guangdong Province High-level Hospital construction unit, and in July 2021 as a national pilot hospital for high-quality development of public hospitals; his "green healthcare" philosophy was also adopted and promoted, becoming a key project in Shenzhen's 14th Five-Year Plan for health^※; the hospital also received the "Social Category Gold Award" in the 2019 Shenzhen Mayor's Quality Award, approved by the Shenzhen municipal government on 17 June 2020 and announced the following month^※. He went on to become Secretary for Health of the Hong Kong SAR Government in July 2022. From HKU professor, to Shenzhen hospital CEO, to Hong Kong's top health official — the career itself is a microcosm of deep Shenzhen–Hong Kong medical integration, and the hospital's leadership line has doubled as a personal channel for policy co-ordination between the two places.

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# 7. Two verdicts on the laboratory: "model" or "utopia"?

Every reform has two sides. On the results of HKU-SZH, public discussion has always contained two voices; this article presents them side by side from reliable sources and passes no judgment.

The affirmative side holds that it has blazed a trail: de-establishment, sunshine salaries, package fees and refusing red envelopes have systematically suppressed "supporting medicine with drugs" within a 3A hospital, and the de-establishment reform spilled over to become city-wide institutional change in Shenzhen. The hospital has even been named at a National Health Commission press conference to share its public hospital reform experience^※.

The cautious side asks about its sustainability and replicability. The hospital faced financial pressure in its early years: according to media accounts, it ran losses for years, was once questioned as "surviving only on government subsidies," with two-year losses once reckoned in the billions of Hong Kong dollars^※; there has also been public discussion over the renewal of its cooperation agreement and subsidy arrangements, with Jiemian News among others characterising the twists in the ten-year contract's extension under the headline "the dilemma of high pay for integrity and profitability"^※. The core question is this: high pay for integrity depends on sustained fiscal input, and the package fee compressed the space for "supporting medicine with drugs" but also thinned the hospital's own revenue — what a hospital backed by Shenzhen's finances and burnished by the HKU brand can achieve may not be replicable in an ordinary mainland hospital with more modest resources. Whether the reform is a promotable model that pulls public hospitals back from profit-seeking toward public welfare, or a "bonsai" propped up by exceptional endowments, is exactly where the argument divides. Hence the media have posed the question "a healthcare reform model or a utopia?" — and that question mark is itself part of the laboratory's value: what it tests is not just "can it be done here" but "can it be learned elsewhere, and can others afford to learn it."

As a reference section of this site, we merely record the facts and debate above from reliable sources; evaluative narratives about mainland healthcare policy are not developed here. The verdict is left to readers and to professional research.

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# 8. Position in the map of HKU medicine

• Alongside Queen Mary Hospital (the flagship teaching hospital — see teaching-hospitals.md), HKU-SZH forms the Faculty of Medicine's "one in Hong Kong, one in Shenzhen" pair of major teaching hospitals;
• It extends HKU medicine's clinical and teaching capacity into the Greater Bay Area, with a service reach that the authorities say covers tens of millions of people in the region;
• It is also the medical embodiment of HKU's "national role" — bringing Hong Kong's professional standards, governance experience and drug-access gateways into mainland healthcare reform as a form of "soft power export" (compare ../09-international/greater-bay-area-and-national-role.md; for the Faculty's five schools and programmes, see li-ka-shing-faculty-of-medicine-2.md).

Pulling these threads together, what makes HKU-SZH distinctive is not its scale — plenty of mainland 3A hospitals are larger — but the fact that it compressed six things at once into a single "integrated experiment" in one hospital: how care is charged (package fees), how staff are hired (no establishment posts), how they are paid (sunshine annual salaries), how patients flow (general practice before specialist), which drugs can be used (the Hong Kong and Macao Drug and Device Access scheme), and how cross-border settlement works (health care vouchers). It is at once HKU's largest clinical and teaching base on the mainland and a sample of Shenzhen–Hong Kong and, more broadly, mainland public hospital reform that has been watched for years. Its results and its costs are still being debated, but as a laboratory it has already run a complete set of "Hong Kong-style logic" through the mainland system — and that, in itself, is what most deserves to be remembered.

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# Unverified / to be checked

• Latest package-fee and salary figures: this article relies on the hospital's official fee pages (outpatient ~RMB 200 per visit, inpatient ~RMB 255 per bed-day, 67 packaged surgical case types) and media reports from the ninth anniversary; the latest standards are as published by the hospital.
• Assessments of reform outcomes: different sources disagree on the results and replicability of "general practice before specialist," "package fees" and "sunshine salaries"; this article records only the institutional design and the side-by-side debate, and does not adjudicate outcomes.
• Latest scope of cross-border settlement and the Drug and Device Access scheme: this article records the pilot nature and stage-by-stage figures from official and mainstream reporting; the latest coverage, product catalogues and quotas are as published officially.

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# Related reading

• Teaching hospitals and clinical network (Queen Mary Hospital, HKU-SZH cost/beds/history): teaching-hospitals.md
• The Li Ka Shing Faculty of Medicine's five schools and the MBBS programme: li-ka-shing-faculty-of-medicine-2.md
• Research strengths of the clinical departments (liver transplant, infectious diseases, cardiology, etc.): departments-and-strengths.md
• The broader Greater Bay Area and national role: ../09-international/greater-bay-area-and-national-role.md

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