This article describes parallel developments of the Hong Kong economy and its health care system. The purpose is to illustrate how the Hong Kong health system evolved in response to external and internal pressures generated by economic prosperity. The Hong Kong system illustrates the importance of clear policy making in the face of these pressures. In particular, issues of investment, financing and distribution of health services are examined in relation to hospital cost control and service accessibility. In the past, health care costs in Hong Kong have been controlled at the expense of limited accessibility of health services. At present, Hong Kong policy-makers are faced with the challenge of maintaining a sharp focus on cost control as they face pressure to expand and improve health care coverage for the citizens. So far they have responded by emphasizing management efficiency through reorganization. It remains to be seen whether this strategy can be successful without passing increased health care costs to the consumers.