Challenges of the Thai Healthcare System
Updated: Jul 16, 2021
Examining Thailand's current healthcare infrastructure, and the feasibility and likely impact of the government’s announced 20-year plan for achieving Thailand 4.0, in view of attempts at tackling the rising incidence of non-communicable diseases (NCDs) such as cardiovascular disease (CVD) among the Thai population.
by John Battersby, Regional Account Director
Centrally located on the mainland of Southeast Asia, Thailand has a population of almost 70 million, out of which around 53% is urban. Population density is highest in the capital Bangkok but there are large and growing cities in other parts of the country.
The World Bank classifies Thailand as an upper-middle-income economy, with overall life expectancy at birth averaging 74.9 years. Non-communicable diseases such as hypertension, and other cardiovascular diseases (CVDs), cancer and diabetes are among the top five causes of death. However, unlike some of its wealthier neighbours, infectious diseases like malaria, tuberculosis and HIV/AIDS continue to pose significant concerns.
Universal Healthcare Coverage
The government established universal healthcare coverage (UHC) by introducing the Universal Coverage Scheme (UCS) in 2002, which extended coverage to those not covered by existing schemes.
To achieve the extension of health coverage to the whole population it had to merge four separate insurance schemes. The attempt to merge all the schemes was met with resistance from beneficiaries who feared a reduction of their entitlements.
The eventual compromise, resulted in the nation's health insurance being overseen by three separate schemes: (i) the civil servants’ medical benefit scheme (CSMBS) under the finance ministry, (ii) the social security scheme (SSS) under the labour ministry, covering workers in large, tax-paying corporations, and (iii) the universal coverage scheme under the public health ministry, which covers more than 70% of the population; including the poorest.
Since Thailand introduced UHC, it has seen a significant increase in public expenditure on healthcare. By 2017, government healthcare accounted for 14% of government spending, or 4.6% of Thailand’s GDP, one of the highest rates in ASEAN.
Although non-competing, each scheme operates under its own legal framework. The inevitable disparities mean that not all groups of the population have equal access to similar packages of health care. Further amalgamating the schemes would require high-level action, but given the vested interests of beneficiaries, this is a politically sensitive and challenging topic.
However, integration may not be as important as ensuring that all schemes offer the same level of services with similar purchasing arrangements for services. A recent effort to equalise different statutory schemes via fixed fees for emergency healthcare could be a model for other services.
Thailand’s UHC is predominantly non-contributory and financed by general government taxation, with the exception of the social security scheme (SSS). This financial model was chosen because it was considered the only way to extend coverage to the majority of low-income people in need of healthcare coverage and for whom insurance premiums were unaffordable.
Additionally, given the large numbers of people in informal employment, it was thought that it would be too difficult to identify, let alone collect premiums from, those who would be eligible to contribute. It was also felt that if it was a contributory scheme, the inevitable increases in premiums as expenditure rose would create political challenges in the future.
Success of UHC
The UHC has had many successes, it has contributed to rising life expectancy, decreased infant and child mortality, and – at least initially – reduced some of the historical health disparities between the economic classes and rich and poor regions of the country. However, with the rapid expansion of the private healthcare sector catering to a growing urban elite and a booming medical tourism industry, that gap is beginning to widen again as those who can afford it are increasingly opting for private healthcare solutions.
Even so, popular support has given the UHC policy resilience and allowed it to survive government changes and multiple political and economic challenges. However, the predominantly tax-financed policy funding the health system now faces twin socioeconomic challenges that will require radical thinking and action to overcome.
Thailand, like the rest of the world, has a rapidly ageing population which means the number of older people requiring more complex healthcare services is growing while the tax base – the number of working, younger people paying taxes – is getting smaller. The WHO predicts Thailand will become an aged society by 2025. Exacerbating the problem further is the rising cost of providing those more complex healthcare services.
Yet, with around 10% of the population barely living above the poverty line even before the Covid-19 pandemic it seems Thailand will need to continue financing USC from public money for the foreseeable future. That being the case, innovative, and probably radical, measures will need to be taken to raise healthcare revenue sustainably and use it efficiently, effectively and equitably.
The case for a primary and preventative healthcare model
One approach would be reducing the prevalence of preventable and controllable infectious and non-communicable diseases (NCDs), such as diabetes mellitus, hypertension, renal failure, tuberculosis and human immunodeficiency infection, which are currently trending upwards.
Prevention or earlier detection and intervention of such diseases not only offers better outcomes but is more cost-effective and sustainable than managing late-stage disease. A robust primary care system can manage acute, chronic and social conditions affordably and effectively and could be the answer to both controlling costs and improving people’s health and well-being.
“Investing in innovative preventive care is more sustainable and cost-effective than waiting until hospitalization and acute care are needed.” Dr. Wacin Buddhari, President of Cardiovascular Intervention Association of Thailand.
Primary care has been shown to improve the patient’s journey through the health system at a lower cost than specialty-oriented care. Investment and restructuring of the primary-care system in Thailand begun in the 1970s and expanded in the 1990s, including large-scale infrastructure development and workforce retention in the community schemes.
The introduction of Hepatitis B vaccinations for newborn babies and HPV vaccinations for school girls in the 1990s are already paying healthcare dividends in the form of lower rates of liver and cervical cancer. This demonstrates that cents spent on primary care can prevent the need for thousands and even tens of thousands of dollars of acute care decades later. Investments in primary care are shown to deliver greater equity than investments in acute care and the healthcare system in general.
According to Prof. Rungroj Krittayaphong, Vice-President of Cardiovascular Intervention Association of Thailand, primary care also includes educating the public on how to live healthier lives and providing them with an environment where they can practice healthier lifestyles.
“While the government, NGOs and many medical societies are working to raise awareness and to try and promote a healthy lifestyle to prevent people developing CVDs, we are still expecting CVDs and NCDs to continue to increase for some years to come."
"In the future, we hope to see the positive impact of awareness and education efforts in a reduction in disease rates but for that, we also have to create an environment that supports healthier lifestyles. Legislation on tobacco as well as salt and sugar in food would help towards that."
"The Ministry of Public Health (MoPH) has recorded increases in many cardiovascular diseases including chronic coronary artery disease (CAD), arrhythmias and heart failure year by year. This is a trend with NCDs in almost every developing country. For diabetes too, we expect the diabetic population to increase by 20% to 30% over the next five years. It is almost certainly related to changes in lifestyles, urbanisation, lack of exercise, increased rates of obesity, etc."
"Lack of awareness also plays a role. We have public education campaigns but while some campaigns have been effective at bringing down smoking rates for example, other campaigns focused on areas such as obesity and improving people’s diets, have made little impact. We need to make healthier food more easily available and we need stronger legislation on food for both the contents of processed foods and the quality of fresh foods like vegetables.”
Regulating and taxing sugar and salt in processed foods has fairly wide support but some argue that the government's responsibility for providing a healthy environment goes even further. One area where calls for more government intervention have been growing is air quality. According to the Air Quality Life Index, Thailand has the seventh worst air quality in the world. It is a contributing factor in 50,000 premature deaths a year, while the average life expectancy of Thais could be lifted by 2.1 years if average levels reached standards set out by WHO, the index claims.
During the pandemic self-isolation restrictions in Bangkok, air quality improved dramatically. PM2.5 - tiny atmospheric particulate matter mostly produced by vehicles, refineries and other heavy industries – were reduced by more than 20% and the amount of PM10 pollution, typically caused by agriculture, construction and smoke, was also significantly reduced, while carbon monoxide was almost slashed in half, according to Thailand’s leading air quality experts, Dr Supat Wangwongwatana, the former director-general of Thailand's Pollution Control Department.
Campaigners for better air quality in Bangkok point out that maintaining that level of air quality improvement would save far more lives every year than were lost to Covid-19 in Thailand.
What the limits are for the government’s role and responsibilities when it comes to providing a healthy environment for the public has yet to be defined. While there is broad support for improving air quality and providing more green spaces for exercise and leisure activities, the idea of regulating and taxing processed foods to modify people’s behaviour is more divisive.
And if modifying public behaviour falls under the remit of primary healthcare, just which modifiable adverse behavioural factors should be included?
According to WHO, Thailand has the world’s second most dangerous roads with a death rate from road accidents of 20,000 per year; or 36.2 deaths per 100 000 people. Injuries and hospitalization numbers far exceed the number of deaths, creating a significant impact on healthcare services and budgets. That makes improving driving standards and adherence to traffic regulations a public health issue but does it mean it should be a MoPH responsibility?
Know your enemy
Of course, before budgets are assigned to education and preventative measures, it is essential to know what the problem areas are and what measures are succeeding in tackling them; that’s where registries and big data have a role to play.
Says Dr Wacin, “In my hospital, we have been using progressively more preventive care measures over the last 20 years. Anecdotally I can say many of my patients are more stable today as a result. They are experiencing fewer secondary CVD events compared to 20 or even 10 years ago, before we adopted such aggressive preventive measures. But we don’t have official data. There is a need for more longitudinal studies of the efficacy and the cost-benefit of these sorts of treatments. Across the board the national healthcare system needs to have more and better disease registries and to conduct a lot more longitudinal studies, collecting data to see what is working, what is producing improved outcomes, and what is cost-effective.”
Most doctors would agree on the need for registries and the role of big data in the battle to understand and treat disease.
Prof Rungroj certainly does:
“We need to collect more data and have a centralised, big data system so that we can understand the burden of disease across the country, how many people are affected, the financial burden of treatment, and so on. Ideally, we should develop a system like Taiwan’s where all patient records are centrally stored and doctors have to record every drug and test a patient receives. At the moment we don’t even have accurate figures for the prevalence of diseases."
"Currently, we have a rapidly expanding private sector with each hospital or organisation developing their own data systems, plus we have three public systems – universal coverage, civil servant coverage and social security - and those systems don’t even record data accurately internally or even share common IT systems, so they can’t share data between them. Without data, it is very difficult to do research. Without data, we can’t hope to prevent disease or understand how much we spend treating it.”
Finding the money
The popularity of UHC in its current non-contributory form and the likely public outcry and political ramification that would result from any attempt to introduce any form of contributions means that for the foreseeable future the government will have to keep financing the scheme from the public purse. To do so will require managing both costs and expectations but will also inevitably require finding more money.
Prof Rungroj shares: “As well as expanding primary care the government is very pro-technology and there is a lot of investment to encourage R&D in different technologies such as medical devices and healthcare IT, as well as areas which impact health such as food and agriculture and the environment."
"In all these areas, the government is trying to encourage research with practical applications to health and healthcare. In particular, they are interested in technologies that can improve healthcare delivery. There are many ongoing projects in that area including big, centralised data projects and technologies for monitoring the elderly in their homes and predicting health risks."
"The government believes that technology, especially home-grown technologies, will be a cost-effective way of improving the overall standards of healthcare to the wider population. They are also investing in public education and looking at legislation on tobacco and possibly on salt and sugar as well. But none of these measures will solve the problem of an aging society and rising rates of CVD and other NCDs. Eventually, the government will have to spend more on healthcare because even with improved efficiencies and smart IT costs will continue to rise as the population continues to age.”
Greater investment in primary and preventative healthcare does pay off in the long term; as the earlier example of Hepatitis B vaccinations for babies has demonstrated around the world. Across Asia as a whole Hepatitis infection is responsible for 80% or more of liver cancer in males.
But in Singapore, the first ASEAN country to introduce Hepatitis B vaccinations for babies, liver cancer rates are declining and only 50% are caused by Hepatitis infection. Because liver cancer typically presents in men in their 50s to 60s the percentage caused by Hepatitis infection is expected to fall even lower over the next 10 or 15 years as more people inoculated as babies pass through middle age.
Thailand can expect to see reap similar benefits in the coming decades. That’s when the cents spent on vaccinations since the 1990s will really start to save tens of thousands of dollars that don’t need to be spent on expensive oncology drugs.
However, while primary preventive care can and does save money in the long term, in the short- and medium-term, acute and specialist care still need to be provided; as even the most effective primary and preventative care model can’t eliminate all disease and injuries requiring acute and emergency care.
Although it is bound to meet resistance from the beneficiaries of the CSMBS and SSS schemes, a unifying mechanism to control expenditure, and centralise sourcing of medicines and technology could produce cost savings and ensure more equality of service provision across the current multi-tier system.
The variation in utilization and spending across schemes and regions is striking. Individuals in schemes or regions with lower utilization and spending receive lower quality and possibly inadequate services, which may have adverse implications for their health. On the other hand, there is evidence that the populations in schemes or regions with high utilization and spending are receiving significant amounts of unnecessary care which are not providing significant improvements in outcomes.
For instance, there is a growing body of literature documenting significant variation in clinical practice across the schemes. These studies indicate that procedures and brand name drugs are overused in the CSMBS, with the result that higher expenditures are not clearly associated with discernible improvements in clinical outcomes. Along the same lines, elderly CSMBS beneficiaries are more likely to be hospitalized for treatment than those covered by UCS, indicating that either, many CSMBS admissions may be unnecessary, or that UCS members are being under-served.
Under the UHC policy, services offered are deemed to be cost-effective, beneficial for the worse-off and protective against impoverishment to households. Regional administrations and local healthcare facilities in Thailand have the flexibility to align services with the preferences of the community. Yet the focus has been on eliminating and controlling specific illnesses, rather than improving the coordination and responsiveness of the integrated care process.
Most notably, increased utilization of comprehensive services together with financial risk protection has steadily lowered all-cause mortality, but failed to reduce the prevalence of many manageable conditions such as diabetes and tuberculosis; in fact, they are going up not down.
The success of UHC depends on healthcare delivery to improve the well-being of citizens in a way that is efficient for the country. While providing care to the whole population should not lead to government bankruptcy, delivering sub-standard services can also be a burden on public finances.
Focusing on disease processes without consideration of the contexts in which people live, work and cope with their co-existing illnesses, is unlikely to provide clinicians with a complete picture of the problem. Attention to the patient’s problems is as important as attention to their diagnoses. Thus, the quest to deliver value for money could best be led by people-centred primary care.
There are other cost-containment measures that could be adopted or extended to lower excessive spending without lowering net welfare provision. For example, the government has already established a process to assess the merits of high-cost medical advances. The price negotiation working group, under the National Essential Medicines List Subcommittee, has succeeded in bringing down the prices of antiretroviral drugs, intraocular cataract lenses, erythropoietin-stimulating agents and coronary stents, saving the healthcare sector hundreds of millions of dollars each year.
Much more could be saved if negotiations could be extended to even more therapeutic areas. Similarly, an increase in domestic production of generic drugs and more aggressive negotiations to domestically produce patented drugs under special licenses and at reduced prices could help to manage the inevitable increase in demand for therapeutics in the coming years.
Further development of the domestic medical devices industry could also help to manage growing healthcare costs. Especially if aid was focused on helping the industry move up the value chain. Currently, Thailand produces mainly disposables and low-tech equipment but the government has been trying to encourage more investment in, and production of more mid to high-tech electronic devices by supporting entrepreneurs and startups and offering tax incentives for investors. The first decade of UHS demonstrated that investment in healthcare could also help to stimulate the economy, benefiting the transport, pharmaceutical and construction industries among others. In the future, it could help to drive emerging, high-tech industries in the same way.
Also affecting the disparity in service provision is the shortage of facilities and healthcare professionals to meet growing demands; particularly in rural areas where 50% of Thailand’s population still lives.
In general Thailand’s rural population has far less access to healthcare infrastructure and services. Thailand has more than 900 government hospitals and nearly 400 private hospitals, there are almost 10,000 government health centers and over 25,000 private clinics in the country. But around 80% are concentrated in major cities, the Bangkok Metropolitan Area alone – home to only 7.5% of the country’s population – has 40% of its healthcare facilities.
Restructuring and better management could reduce some costs and give better returns on some spending but more investment will still be needed. One solution could be to create new taxes that are earmarked for health spending.
Unhealthy products such as tobacco, alcohol and sugary beverages are obvious targets for such taxes. Some claim that consumption taxes are regressive and fall disproportionally on those in the lower-income bracket but this can be countered by the findings that poorer people respond more than the better off to relatively small increases in the price of such goods. So that as well as providing a revenue stream for healthcare they also have some influence on modifying unhealthy lifestyle choices and behaviours.
In some cases, it would not even require imposing new taxes, just the reassigning of the revenues raised by existing taxes.
Since 2001, just 2%, (equivalent to just US$ 132 million) of the total US$ 6.6 billion of excise taxes on tobacco and alcohol have been earmarked for health promotion projects and education campaigns in Thailand. Given that treating tobacco and alcohol-related diseases will probably account for around 10% of the almost US$ 6.5 billion 2022 healthcare budget agreed in January 2021, there is a powerful argument for both increasing taxes on tobacco and allocating a larger portion of those revenues to healthcare.
The argument for primary care
A robust primary care system can manage acute, chronic and social conditions affordably and effectively and could be the answer to both controlling costs and improving people’s health and well-being. Spending on preventive care and health promotion, as a complement to curative and palliative services, should be prioritized in the primary-care setting.
Primary and preventative care when designed with accessibility, continuity, coordination and comprehensiveness in mind, has been shown to improve the patient’s journey through the healthcare system at a lower cost than acute, specialty-oriented care. The combined effect of these characteristics improves the cost-effectiveness and efficiency of the system, while reducing costs and improving patients’ health.
Moving beyond treating disease to treating society
Moving forward, all of the measures mentioned will need to be introduced or improved upon; increasing revenue, optimising the use of resources, reducing disparities across the different health insurance schemes to provide more uniform and equitable service levels, and a general improvement in quality of care across the system.
Of course, acute and specialty services have to be provided, but people-centred primary care stands out for its beneficial effects on health outcomes, community resilience, and the economy. It is the most cost-effective and pragmatic approach to ensure the long-term sustainability of UHC.
Although primary care has played a central role in Thailand’s healthcare system since the 1970s reforms, it has to grow and adapt in the future.
Its traditional role of providing basic disease-based care is no longer enough. It has to be integrated into the communities it serves and drive education and prevention. It will have to reach beyond what was considered the traditional roles of healthcare services to operate at the intersection of healthcare and community. It will have to have a bigger say in driving government policies towards providing environments that allow healthy choices and healthy lifestyles.
It is hard to eat well and exercise if you live in a dense urban conurbation where the air is not fit to breathe, where there is no access to fresh produce, no sports facilities, and not even green spaces for relaxation and exercise.
It is not enough to focus on primary and preventative healthcare. UHC and society also have to address the many other issues negatively affecting the health and well-being of the population.
This article is part 3 in a series discussing healthcare systems and cardiovascular disease in the APAC region.