Hong Kong's public healthcare system has long been regarded as one of the world's best, offering the city's 7m residents broadly equal access to high-quality, low-cost medical services.

While most advanced economies spend between 8 to 15 per cent of their gross domestic product on healthcare, Hong Kong spends just 5.3 per cent. Public hospitals charge only HK$100 (£6, $12) a night for overnight stays that come with three meals a day.

Health officials say this was possible thanks in part to Hong Kong's hard-working and well-trained physicians. The government has also, traditionally, focused on essential public health services, while subsidising hospitals and specialist care. Primary care, such as preventive medicine or treatment for common illnesses like colds and flu, was largely left to the private sector.

Cracks in the system, however, began to show in the early 1990s, and officials recognised that the good times would not last. Financially, public health expenditure was rising faster than both economic growth and overall government spending. Because they were heavily subsidised, public hospitals took an ever-growing share of the market from private hospitals. Waiting times became longer as doctors and nurses succumbed to overwork and stress.

In 1993, the government launched its first effort at major reform, but was forced to beat a hasty retreat after the plan met with a lukewarm public response. That failure marked the starting point of a 15-year struggle to overhaul Hong Kong's healthcare system, which has finally come to a head this year.

During this period, four separate reform efforts were attempted, using data and findings from dozens of commissioned studies and consultant reports. Shortly after Hong Kong returned to Chinese rule in 1997, the new administration hired a team of economists, physicians, epidemiologists and public health specialists from Harvard University to study the issue.

All the reform efforts, including the measures recommended by the Harvard University team, failed to secure public backing. People were simply unwilling to underwrite long-term, expensive, and significant changes to a system they did not think was broken.

The latest attempt was launched earlier this year by York Chow, secretary for food and health. It is the most ambitious plan so far, as it seeks to reform not only public-sector healthcare but also issues of financing and the private sector's role. Dr Chow said the reform, which began with a three-month public consultation, was about determining "our philosophy and our society's values".

"We have deliberated this for years," added Henry Tang, chief secretary. "We have come to a critical point of action ... the million-dollar question in front of us is what sort of healthcare system we want for ourselves, for our family and for our future generations."

This time, Dr Chow and Mr Tang hope that the political climate will be different, given what they see as the urgency of the situation. They emphasise that the problems that first attracted attention in the 1990s - rising medical expenditure and an increasingly overstretched public health system - have only grown worse since, and will continue to do so if not addressed. In 2006, the waiting time for cataract surgery in public hospitals was three years. By 2015, that is expected to double to six years.

Meanwhile, Hong Kong is facing one of the steepest demographic shifts ever experienced in Asia as its population ages. By 2033, one in four people in Hong Kong will be above the age of 65, compared to one in eight today.

Japan, which has experienced a similar demographic challenge over the past two decades, saw its healthcare expenditure increase from 6 per cent of GDP in 1991 to 8 per cent in 2004. Even today, healthcare financing remains a sensitive political issue in Japan, with prime minister Yasuo Fukuda's political woes linked partly to his failure to address rising healthcare costs for the elderly.

In Hong Kong, the government has budgeted HK$50bn to finance the reforms, although there has, so far, been little detail about what it plans to spend the money on. Some of the suggestions put forward for healthcare financing involve the establishment of a city-wide health insurance scheme.

That suggestion, however, has been criticised for imposing an extra financial burden on an ever-shrinking working population. Opponents also say it could exacerbate the rising medical spending because of the administrative fees it would incur, along with the possibility of insurance fraud.

Chan Kin-por, chief executive of Munich Re's Hong Kong operations and a member of the advisory committee behind the current reforms, argued that drawing on the private insurance sector's expertise could help counter such problems. "There's no need to reinvent the wheel," he said.

Mr Chan added that, even if the responsibility of financing healthcare were shifted from the government to the private insurance sector, the fact remains that healthcare spending would increase given the impending demographic shift. Even under a social health insurance scheme, insurance companies would face little choice but to keep increasing premiums and charges over the next few decades as the working population shrinks in comparison to the number of elderly.

That uncomfortable fact lies at the heart of the problem facing the government.

Political parties of every stripe in Hong Kong are united in their opposition to each of the government's six suggestions for alternative healthcare financing, saying that all would impose a heavy burden on the working population.

Speaking at the end of the three-month consultation period, Dr Chow conceded that the exercise had yielded little more than a vague wish-list of general sentiments on how healthcare financing should be reformed. "The major challenge of the government is to put these important aspirations together [and come up with a plan]," Dr Chow said.