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Integrating Financing Schemes to Achieve Universal Coverage in Thailand:
Analysis of the Equity Achievements
Phusit PrakongsaiSupon Limwattananon
Viroj TangcharoensathienInternational Health Policy Program (IHPP)
Presentation to the 7thWorld Congress of Health Economics
Beijing International Convention Centre, Beijing, China
13 July 2009
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Background• By 2002, Thailand achieved universal coverage (UC) by
introducing a tax-funded health insurance scheme, the UC scheme, to approximately 47 million (~75%) of the population who were neither beneficiaries of SHI or Civil Servant Medical Benefit Scheme,
• Health care financing strategies of the UC policy:– removal of financial barriers to health services; – shift of the main source of HCF from OOP to general tax; – changing provider payment from historical allocations to
close-ended payments; – promoting the use of primary care by contracting a PCU
as the main contractor and gatekeeper. • Benefit package of the UC scheme is quite
comprehensive comprising OP, hospitalization, health promotion and disease prevention, most expensive health services, dental care, medicines and operations.
1945
2000
2002
Informal user fee exemption
1980
1970
User fees
1-3rd NHP1962-76Provincial hospitals
Health Infrastructure extension--wide geographical coverage
Evolution of achieving universal coverage in Thailand:
Infrastructure development + financial protection extension
1975LIC
1990
Establishment of prepayment schemes
1983CBHI
1980CSMBS
1990SSS
Universal Coverage
CSMBS
2002 full achieveUniversal Coverage
SSS
LIC MWS 1994Pub VHI
CSMBS
SSS
Expansion consolidation of prepayment schemes 4th -5th NHP
(1977-86) District hospitalsHealth centers
Health care finance and service provision of Thailand
after achieving universal coverage (UC)
General tax
General tax Standard Benefit
package
Tripartite contributions Payroll taxes
Risk related contributions Capitation
Capitation & global Co-payment budget with DRG for IP Services
Fee for services Fee for services - OP
Population Patients
Ministry of Finance - CSMBS(6 million beneficiaries)
National Health Insurance Office The UC scheme (47 millions of pop.)
Social Security Office - SSS(9 millions of formal employees)
Voluntary private insurance
Public & Private Contractor networks
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Scheme beneficiaries by income quintiles, 2004
4% 1%25%7% 5%
25%
11% 14%
23%
26% 31%
17%52% 49%
10%
0%
20%
40%
60%
80%
100%
CSMBS SSS UC
Q1 (poorest) Q2 Q3 Q4 Q5 (the richest)
Total health expenditure 1994-2005
0
50,000
100,000
150,000
200,000
250,000
300,000
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Mil.
Bah
t
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
%G
DP
public private %GDP
Total health expenditure during 2003-2005 ranged from 3.49 to 3.55% of GDP, THE per capita approx 100 USD
36
64
36
64
3737
63635656
4444
Achieving UC
4545
5555
46
54
53
4747
5355
45
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8.2
4.8
3.7 3.72.9 2.6 2.5
2.01.6
1.32.2
1.8 1.8 1.6 1.4 1.4 1.3 1.4 1.2 1.10
1
2
3
4
5
6
7
8 1992
1994
1996
1998
2000
2002
2004
Household OOP for health, % income 1992-2004
Distribution of ambulatory services at different health facilities between the 2001 and 2003 HWS
1.2 1.0 0.7 0.5 0.1
1.91.3
0.7 0.60.2
0.70.6
0.40.2
0.2
1.8
1.3
0.90.7
0.3
0.70.6
0.7
0.70.6
0.4
0.4
0.30.4
0.3
0.30.4
0.4
0.50.6
0.7
0.6
0.60.7
0.6
0
1
2
3
4
5
6
Q1 Q2 Q3 Q4 Q5 Q1 Q2 Q3 Q4 Q5Income quintiles
Am
bula
tory
vis
its p
er c
ap p
er y
ear
Health centre Community hospital Provincial and regional hospital Private clinic Private hospital
The distribution of ambulatory service use among different income quintiles in 2001 and 2003, by types of health facilities
2001 2003
Concentration indexType of health facilities 2001 2003
Health centers - 0.2944 - 0.3650Community hospitals - 0.2698 - 0.3200
Provincial and regional hospitals - 0.0366 - 0.0802Private hospitals 0.4313 0.3484
Source: Prakongsai P (2008). The Impact of the Universal Coverage Policy on Equity of the Thai Health Care system.
Equity in utilization: Concentration Index of OP service
by type of health facilities: 2001 to 2005
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Note: CI range from -1 to + 1. Minus 1 (plus 1 ) means in favour of the poor (rich), or the poor (rich) disproportionately use more services than the rich (poor).
-0.50
-0.40
-0.30
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
2001 2003
2004 2005
2001 -0.294 -0.271 -0.037 0.431 -0.090
2003 -0.365 -0.315 -0.080 0.348 -0.139
2004 -0.345 -0.285 -0.119 0.389 -0.163
2005 -0.380 -0.300 -0.100 0.372 -0.177
Health centre Community hosp Provincial hosp Private hosp Overall
Equity in utilization: Concentration Index of hospitalization by type of health facilities: 2001
to 2005
10
-0.4-0.3
-0.2-0.1
00.1
0.20.3
0.40.5
Con
c in
dex
2001 2003
2004 2005
2001 -0.316 -0.069 0.32 -0.079
2003 -0.293 -0.138 0.309 -0.121
2004 -0.294 -0.114 0.254 -0.127
2005 -0.266 -0.156 0.366 -0.114
Community hospitals Provincial and regional hospitals
Private hospitals Overall
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Equity in budget subsidies: BIA, 2001 and 2003
A comparison of percent distribution of net government health subsidies among different income quintiles in 2001 and 2003
28
20
17 17 18
31
22
1516 15
0
5
10
15
20
25
30
35
Q1 Q2 Q3 Q4 Q5
Income quintile
perc
ent
2001
2003
Note: -Overall net government health subsidies in 2001 were approximately 58,733 million Baht, and in 2003 were 80,678 million Baht (in 2001-value)- The concentration index of government health subsidies in 2001 was -0.044 and in 2003 was -0.123
The incidence of catastrophic health payments from 2000 to 2007
2000 2002 2004 2006 2007
Q1(poorest)
4.0% 1.7% 1.6% 0.9% 1.9%
Q5(richest)
5.6% 5.0% 4.3% 3.3% 2.8%
All quintiles 5.4% 3.3% 2.8% 2.0% 2.2%
Note: Catastrophic health expenditure refers to household out-of-pocket payments for health exceed 10% of household consumption expenditure
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Kakwani indexes of different health care finance from 2000 to 2006
(Kakwani = Conc. Index – Gini)
2000 2002 2004 2006
Out of Pocket -0.1502 -0.0755 -0.0764
-0.0450
Direct tax 0.3913 0.4159 0.4424 0.3617
Indirect tax -0.0964 -0.0691 -0.0435
-0.0831
Premium Insurance -0.3623 -0.3906 -0.3233 na
Social health Insurance Contribution 0.1650 0.1121 0.1046 na
Premium Insurance+SHI Contribution na na na
-0.0491
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Discussion• Health financing reform strategies of the UC policy
improved equity in health care use (both ambulatory and hospitalization) and financial risk protection.
• Health care use of government health facilities was pro-poor before UC, and was getting better after UC implementation.
• Health services at primary and secondary care levels were more pro-poor than tertiary care and private facilities.
• Out-of-pocket payments for health tended to be less regressive after the UC policy was implemented. – The Kakwani indexes of OOPs significantly decreased from -
0.1502 in 2000 (prior to UC) to - 0.0450 in 2006.
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How equity and efficiency were achieved?
1. Long term financial sustainability
2. Technical efficiency, rational use of services at primary health care
Functioning primary health care at district level, wide geographical coverage of services, referral back up to tertiary care where needed, close-to-client services with minimum traveling cost
In-feasible for informal sector (equally 25% belong to Q1 and Q2) to adopt contributory scheme
1. Equity in financial contribution Tax financed scheme,
adequate financing of primary healthcare
2. Minimum catastrophic health expenditure 3. Minimum level of impoverishment
Breadth and depth coverage, comprehensive benefit package, free at point of services
4. Equity in use of services 5. Equity in government subsidies
Provider payment method: capitation contract model and global budget + DRG
EQUITY GOALS
EFFICIENCY GOALS
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Concluding remarks 1/2• Enabling factors for achieving UC
– Strong political supports – Health systems capacity and its resilience to rapid nation-wide
program scale-up in 6 months – Lessons from predecessors
• SHI capitation contract model • CSMBS “no go” fee for service, due to cost escalation and inefficiencies• Voluntary Health Card Scheme – adverse selection and non-viable
financially– Linking evidence to policy decision
• Integral relationship among researchers – reformists – politicians– Pragmatism
• Limited chance to achieve UC by contributory scheme, especially among informal sector, not feasible for contribution collection and enforcement
• Learning from SHI, UC takes further advanced steps, – Well thought systems design towards efficiency, cost containment,
ensure referral, advocates of primary care contractor
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Concluding remarks 2/2• UC Schemes covers the poor, half belongs to Q1 and Q2
– However, the Scheme faced chronic under-funding, capitation was below than the proposed figures based on cost and utilization
– Significant increase in utilization more on OP than IP – In view of under-funding and increased utilization danger of
poor quality of services and serious hospital financial constraints
• Empirical evidence indicates – Pro-poor budget subsidy, DHS is a major hub of fostering the
pro-poor nature of financing healthcare • Policy msg. invest more in DHS
– (further) reduction in the incidence of catastrophic illnesses – (further) reduction of impoverishment from medical bills
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Key challenges of the Thai health care system
• Long-term sustainability of health care finance for the UC scheme and overall health care finance,
• An increasing disease burden from chronic NCD and the situation of aging society,
• Inefficiency and inequitable access to good quality of health services among beneficiaries of different health insurance schemes,
• Low level of health care finance for health promotion and disease prevention,
• Poor governance of health systems in Thailand,• The unknown impact of economic crisis on health of the
Thai population,• The pandemic of new emerging infectious disease and
unsuccessful control of tuberculosis and HIV/AIDS,• Mal-distribution and internal brain drain of human
resources for health.
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Thank you for your attention