Published May 12, 2023, 10:08 p.m. by Courtney
In thailand, health financing comes from a mix of public and private sources. The government provides the lion’s share of funding, with about three-quarters coming from tax revenue and the rest from social security contributions. Private health spending accounts for the remaining one-quarter of health expenditure.
thailand has achieved universal health coverage (UHC) for its citizens, with all residents eligible for free health care at public hospitals. However, out-of-pocket payments (OOP) are still common, accounting for nearly one-third of all health spending.
There are three main health financing schemes in thailand: the National Health Security Office (NHSO), the Civil Servant Medical Benefit Scheme (CSMBS), and the Social Security Office (SSO).
The NHSO is the largest health insurer in thailand, covering about 48 million people, or about 60% of the population. It is funded by general taxation and social security contributions, and provides free or subsidized care at public hospitals.
The CSMBS is a health insurance scheme for civil servants and their families. It is funded by payroll taxes and provides free or subsidized care at public hospitals.
The SSO is a health insurance scheme for private sector employees and their families. It is funded by payroll taxes and social security contributions, and provides free or subsidized care at public hospitals.
All three schemes cover a wide range of services, including inpatient and outpatient care, preventive care, dental care, and traditional Thai medicine. However, there are some important differences between them.
For example, the NHSO covers a larger share of the population than the other two schemes, but it does not cover non-essential services such as cosmetic surgery. The CSMBS covers a smaller share of the population but covers a wider range of services, including cosmetic surgery. The SSO covers a similar share of the population to the NHSO but does not cover as many services.
In addition to the three main health financing schemes, there are also a number of other smaller schemes, such as the Military Medical Benefit Scheme and the Royal Thai Police Medical Benefit Scheme.
The government is currently in the process of reforming the health financing system. The goal is to reduce OOP payments and increase financial protection for households. The reforms are still in the early stages, and it remains to be seen how successful they will be.
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[Music]
hi and welcome back to our series on the
Thai health system in this video we're
going to look at the health financing in
Thailand throughout this video we'll
look at the history of health financing
in Thailand and how it led to the major
health reforms of 2001 we'll look at the
details of Thailand's three health
financing schemes that collectively
provide universal coverage and the
implications of payment mechanisms and
other features on the health system
let's start by looking at some of the
indicators for health financing in
Thailand the current health expenditures
which is the sum of all annual spending
on health equates to about six hundred
and thirty five international dollars in
purchasing power parity or PPP without
getting too technical and economic terms
the idea here in using international
dollars in PPP is to use a common
currency based on relative cost of items
between countries assuming that there is
a single true price for all goods so for
example if a computer costs a thousand
dollars in the US but that same computer
cost thirty thousand baht in Thailand
then we can assume that 30 baht is the
same as one US dollar and use that
in reality we do that for a whole set of
goods not just that one computer and
that's how we can compare health costs
in different currencies in equal terms
it allows us to make equal comparisons
across countries when we compare
Thailand's numbers to the US Japan and
Australia all more developed in
high-income countries we see that
Thailand spends much less on health care
we also see that relative to the
country's GDP which is the sum of all
economic activity in the country it's a
relatively small amount only 3.7 percent
these two numbers tell us that Thailand
is more frugal or efficient in health
care costs than the US Japan or
Australia the overall spending in total
dollars and in percentage of GDP more
resemble that of developing countries
another thing we can look at is where
the money is coming from three major
sources of spending and health any
Health System are general domestic
budget out-of-pocket spending and
voluntary health insurance what we see
is that in this regard Thailand more
resembles a developed countries
Thailand's figures are fairly comparable
to the US Japan and Australia which are
three highly developed economies with
around 80% of health expenditures
shouldered by the government and around
10 to 15 percent out-of-pocket so this
will be the question we'll try to answer
in today's video what is Thailand doing
to have this paradoxical situation in
which their overall spending resembles a
developing country but their financial
protection resembles an upper income
country before that we do that though
I'd like us to quickly compare Thailand
spending status with other regional
peers in Southeast Asia let's look first
at total spending Thailand spends more
on health care than many other Southeast
Asian countries but they're less than
the average here with the dotted line
again highlighting the relative
efficiency of the system if we look at
the share of spending that's
out-of-pocket compared to government
spending as a percentage of GDP we see
that normally as overall healthcare
expenditure increases which is usually
related to economic development we see
that the out-of-pocket spending
decreases this is sort of the average
here with the red dotted line and we can
even break this graph into quadrants
where you have health spending as a
percentage of GDP greater than and less
than 5% and as well as out-of-pocket
spending that's greater than were less
than 20% of total expenditures so in the
upper left or lower right quadrant we
might consider this sort of normal
conditions where most countries lie
either with the less developed and the
more developed economies generally
speaking
but this upper right quadrant is a bad
place to be
it means high spending but still mostly
out-of-pocket on the other hand this
lower left quadrant would be a good
place to be low overall spending and
very little out-of-pocket and that's
where we see Thailand within that lower
left quadrant so by all accounts
Thailand is in a relatively unusual
position with regards to its health
financing it's hailed as one of the best
examples of universal health coverage
and health financing in the world so
what's the secret well the first thing
we have to realize is that the Thai
government has had consistent dedication
to prioritizing government spending on
health care this figure here is reported
in inflation-adjusted dollars so the
increase that's shown here as the annual
increases on health care have outpaced
inflation since the year 2000 and
throughout that time it's been the
government that has annually increased
its commitment to the health system
allowing for out of pocket spending to
continually decrease at the same time a
robust private healthcare and health
insurance market has been maintained
allowing an alternative the public
healthcare system we see that private
prepaid health insurance has actually
increased reflecting the economic
development and the increased purchasing
power of many Thai people in the growing
middle and upper class as you can see in
this graph the year 2001 was a turning
point with regards to health financing
many people attribute the success of
Thailand's health financing system to
the popular Prime Minister of Thailand
taxing who governed from 2001 to 2006 in
that role and he won a landslide victory
he and his party in 2001 and their right
to attribute these successes to him and
his partisan stock scene and his party
campaigned on a platform of universal
health care access with a small
co-payment of 30 baht per visit an
amount that's roughly equal to a US
dollar this campaign promise earned the
resulting program the nickname of the 30
baht scheme which people still use to
this day despite the fact that the 30
baht co-payment no longer exists and
we'll talk about that later but it's
important to understand
and that a lot of important things have
happened prior to 2001 that made it a
perfect storm of events and allowed for
the implementation of those reforms in
2001 and importantly for health
financing Thailand had gained a lot of
experience experimenting with many forms
of health financing prior to 2001 the
road to universal health coverage began
in 1975 with the introduction of the
low-income card by 1981 the Ministry of
Public Health had issued 10 point 9
million low-income citizens a card that
allowed them to receive free or highly
subsidized health care at public health
facilities throughout the years the
program was expanded to include other
vocal groups including the elderly in
1992 children and disabled in 1993 and
veterans in 1994 and at that point the
program was renamed the medical welfare
scheme for the underprivileged the
low-income card scheme or medical
welfare scheme produced many valuable
lessons that helped shape the major
reforms of health financing and the
introduction of universal health
coverage in 2001 one thing they learned
is that it's hard to get people enrolled
while the application for the card was
free and had relatively simple criteria
the voluntary nature of the program
resulted in incomplete coverage of the
targeted poorer population approximately
89% of the eligible low-income group and
64 percent of the total eligible
population held cards in 1998 thus
despite nearly 25 years of effort many
of the targeted groups were still not
receiving the benefits of the program
and furthermore some card holders
avoided using the card due to its stigma
others reported discrimination and
reduced service at healthcare facilities
due to hospitals reluctance to serve
low-income patients on the other hand
the program also suffered from leakage
of ineligible non poor populations into
the program households often
underreported financial assets to meet
the eligibility criteria
by comparing census data for example it
was estimated that around 1/2 or 45% of
card holders were actually above the
poverty line and likely to be ineligible
for the program in both the case of the
under coverage and of leakage the
weakness of the schemes means testing
for income resulted from difficulties in
estimating income in Thailand the
informal employment sector has comprised
and still comprises a significant
portion of the Thai population seasonal
work such as agriculture and informal
work such as street vending and
household labor make it difficult to
estimate income so the experience showed
that using income as a qualifier for
healthcare coverage was difficult with
the informal economy of Thailand finally
in addition to learning how to enroll
people many lessons were learned about
how to purchase health care services or
make payments to the healthcare
providers and to do it equitably in the
early years the low income card formula
was based on healthcare utilization and
on population so densely populated
central region which had good access to
health care would have high utilization
so it received a disproportionately
better amount of funding while leaving
the north and the northeast regions
which had actually the highest
proportions of the poor population being
severely underfunded therefore it was
learned that the healthcare utilization
or demand side funding was not an
equitable way to allocate funding to the
healthcare delivery system
now at the same time in the 1980s
Thailand was also trying to expand
coverage to other target populations of
course the formal sector workers had
compulsory social health insurance
program that began in 1990 and we'll
talk about that later since that still
exists now and the civil servants had
their benefits beginning in 1978
they and we talked about the
underprivileged groups there was still a
significant part of the population that
still had no viable way to get financial
coverage for health services outside of
expensive private health insurance and
that really wasn't viable outside of
Bangkok at that time so in 1983 the Thai
government began piloting a voluntary
community-based health insurance program
the idea was that households would pay
in a small annual premium starting at
that time around five hundred baht and
that would be pooled and organized
locally it's the idea of community based
health insurance the the program
struggled though at first and it did
eventually grow as the national
government began to provide risk pooling
equalization fund and as well as
subsidies much like the low-income
scheme the voluntary health card scheme
provided several valuable lessons for
the 2001 when universal health coverage
was implemented first they learned that
adverse selection is a real risk
particularly following the Asian
financial crisis of 1997 in 1998 they
found that people waited to enroll until
they were sick and so this was another
indication that voluntary systems were
not effective at achieving universal
coverage secondly they learned about
cost reimbursement models for example
reimbursing hospitals with a
fee-for-service model led to high costs
therefore they would take the experience
of the health card scheme and use it to
improve cost control measures and
thirdly they learned the importance of
risk pooling local community-based
health insurance risk pools were
vulnerable there for sustainability
could best be achieved if the risk was
pooled across a large population so to
quickly recap there was a long march
starting in 1975 and culminating in 2001
to achieve universal health coverage
what's also remarkable was that Thailand
did that at the relatively low
development status of less than 2000
dollars GDP per
capita and only a few years in the wake
of the devastating financial crisis of
the late 90s so let's talk about the
three schemes that provide health
coverage to the Thai population today
first is the civil servant medical
benefit scheme this is for the
government employees and it's a fringe
benefit it was established in 1978
second we have the social security
scheme this is for formal workers in the
private sector it's a form of compulsory
social health insurance and it was
established in 1990 and third is the
universal health coverage scheme it's an
entitlement for all people and it's the
default coverage if you don't qualify
for the first two it was established
with the reforms of 2001 each scheme is
financed from a different funding source
and managed by a different organization
so here we can follow the the flow of
funds with these arrows and we can see
the key management organizations for the
three schemes here so I'll point out a
couple things that are important here
the civil servant medical benefit scheme
and the universal coverage scheme derive
all of their funding from the central
government budget taxes are collected
and the legislature allocates budget
annually in the case of civil servants
the Ministry of Finance is the purchaser
they make payments to the providers in
the case of UCS the purchaser is the
national health security office or NHS
OH Social Security also receives budget
allocated from the central government
but that only makes up a portion of
their funding primarily the social
security scheme is funded by payroll
deductions which are automatically
deducted from employee salaries and
matched by the employer the other thing
to note is that the reimbursement models
for each scheme differ and we'll go into
that those details later
let's focus on the civil servant scheme
first I want to point out two important
details here first the specific
Department of the Ministry of Finance
that's responsible for managing the
scheme is called the Comptroller
generals Department secondly I want to
point out that for each scheme they are
only reimbursing for health care
services in the case of public hospitals
which as you know dominate the health
care delivery market in Thailand the
Ministry of Public Health pays the
salaries and the operational budgets of
the hospitals and this concept is known
as a purchaser provider split the civil
servant scheme is eligible for
government officers including into
retirement as well as their dependents
overall it covers roughly 5 million
beneficiaries and it's the smallest of
the three as a fringe benefit it has one
of the most permissive terms for
services beneficiaries have wide
discretion to choose where they receive
their services and they have access to a
wider set of health services and
medicines compared to the other two
schemes importantly outpatient services
are reimbursed fee-for-service therefore
one of the biggest issues with this
scheme is the ballooning costs of
outpatient services as hospitals bill
for expensive imported and brand-name
medicines as you can see the fee for
service model has prevented any ability
for cost containment in addition any
attempts to reform this model have been
resisted as it's quite lucrative for
hospitals switching to the social
security fund we see the so called
tripartite funding that is equal
contributions from the employees the
employers and the government covering
roughly 10 million the social security
scheme is the second largest one in
Thailand
it's eligible for private employees if
an employee works at a private company
they should automatic
enrolled by the employer into the system
and have contributions deducted from
their paycheck for big companies this is
no problem but for small companies there
are sometimes issues and there have even
been cases where employers don't
actually send in the paperwork and
register their employees into the system
and falsely deduct the money from
employee paychecks without registering
into the system although this is
relatively rare Social Security uses
capitation which pretty equally balances
the financial risk between purchaser and
provider because of this as well as the
fact that the social security scheme
tends to cover healthy working age
population Social Security is the most
financially sustainable and stable
scheme of the three finally we come to
UCS here we see that the NHS ou is the
purchaser the universal coverage scheme
covers the largest number of ties
roughly 49 million it's a comprehensive
package that covers nearly all major
services in the case of UCS the payment
model is solidly based on the lessons
learned from prior attempts that we
talked about earlier first there's
automatic enrollment so if you're not
eligible for civil servant or Social
Security you're automatically part of
UCS and secondly the payment mechanisms
are geared towards cost containment they
use a combination of global budget
capitation and diagnostic related group
or DRGs and the UCS approach which uses
closed-ended provider payments radically
changed hospital budgets in 2001 prior
to UCS most operating budgets and
resources were allocated to health
facilities through the provincial Health
Office and they were based on
utilization rates in the number of beds
like I mentioned unfortunately these
figures could be easily influenced by
politicians and result in corrupt
budgets under UCS however the outpatient
budget is allocated based on an age
adjusted capitation and the total
number of UCS members in the locale in
the locality with some adjustments for
inpatient services a global budget is
calculated that they'll spend overall
and for each of the 13 public health
regions an inpatient expenditure is
reimbursed based on the cost weight of
the DRG the reason that a global budget
is necessary to constrain total
inpatient spending is because DRGs alone
can be manipulated by pushing patients
into a higher cost DRG which is a
concept referred to as DRG creep for
example by adding extra procedures or
comorbidities it's a way of gaming the
system by capping a global budget it
reduces this incentive to over bill and
contains the cost for the government
another reason why closed-ended approach
to provider payments helps to control
costs is that it minimizes the risk of
supply-side moral hazard medical
providers have no financial incentive to
induce unnecessary demand which they
would have with a fee-for-service
payment method on the contrary because
providers have a financial incentive to
minimize costs it's actually a concern
with the UCS system that there could be
under provision of services so the NHS
au must remain vigilant with regular
monitoring and audits to protect against
this possibility when we consider the
three dimensions of universal health
coverage according to whio model we see
that on the x-axis Thailand is well
covered virtually the entire population
has had coverage since 2002 on the
y-axis we see that a high proportion of
the costs are covered the system doesn't
rely on deductibles on co-payments or
other fees almost all services in any
scheme are is free at the point of
service and it's for that reason that a
pocket spending remains small at 12% and
in fact this number mostly
flex elective costs for people that
voluntarily choose to access the private
health care system and finally when we
look on the z axis we see that the
benefits packages are very comprehensive
major surgeries anti-retro Rio and many
other expensive services are all covered
in all three schemes the impact of
thailand's health financing is
measurable catastrophic health
expenditures have dropped to affect only
1% of the population with both the
richest and the poorest quintile seeing
improvements health impoverishment has
also greatly reduced it's estimated that
perhaps 80 households per 1000 have
avoided medical impoverishment as a
direct result of the implementation of
universal health coverage
so in conclusion Thailand has used
nearly three decades of experience to
shape its health financing reforms that
it implemented in 2001 and it's used
that to produce an efficient and
equitable system built on three schemes
that achieves universal coverage that's
comparable to wealthy countries but at
the spending level of a developing
country it's been nearly 20 years though
since those reforms in Thailand faces
many pressures demographically
politically and economically we'll look
at some of those challenges in a later
video that's it for this video please
check out other videos in the series on
the Thai health system
[Music]
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