Challenges and recent experience of countries leveraging provider

payments in support of universal health coverage

in ThailandPhusit Prakongsai, MD. Ph.D.

International Health Policy Program (IHPP)Ministry of Public Health of Thailand

Presentation to expert group meeting on provider payments

WHO Barcelona Office, Spain27 February 2011

2

Health financing arrangements and three public Health financing arrangements and three public

health insurance schemes in Thailand after achieving health insurance schemes in Thailand after achieving

UHC in 2002UHC in 2002

Health care finance and service provision of Thailand after achieving universal coverage (UC)

General tax

General tax Standard Benefitpackage

Tripartite contributionsPayroll taxes

Risk relatedcontributions

CapitationCapitation & global

Co-payment budget with DRG for IP

Services

Fee for servicesFee 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

Source: Tangcharoensathien et al. (2010)

Traditional FFS for OPDirect billing FFS(2006+) for OP

FFSuntil 2006, DRG for IP

Capitation for OP

DRG with global budget

Full capitation

Characteristics of three main Characteristics of three main public health insurance schemespublic health insurance schemes

3

CSMBS SSS UC scheme

Scheme nature

Fringe benefit Mandatory Citizen entitlement

Population Gov employees, pensioners and their dependants

(parents, spouse, children) 5 Million (8%)

Formal-sector private employees, establishments/ firms of more than

one worker since 20029.84 Million (15.8%)

The rest of population who are not covered by

SSS and CSMBS47 Million (75%)

Source of finance

General tax (~323 US$/Cap*)

Tripartite from employer, employee, government rate 1.5% of salary (max salary: 441 US$ - health care 37 US$ /Cap, total 63 US$/Cap)

General tax(62 US$/Cap)

Management organization

Comptroller general under ministry of finance

Social security office under ministry of labor and welfare

National Health Security Office (NHSO)

Benefit package

No preventive careNo explicit exclusion Special bed

Small number of exclusion lists eg. Organ transplantation, non medical plastic surgery, etc

Small number of limited conditionPrevention & promotion

Payment OP: Fee-for-serviceIP: DRGs (piloted for only 2 years)

Capitation with additional payments for high utilization rate and chronic illness patients

OP: CapitationIP: DRGs with global budget

•Year 2008, •CSMBS = Civil Servant Medical Benefit scheme, SSS = Social Security Scheme, UC scheme = Universal Coverage SchemeAdapted from: Mills et al. 2005; Srithamrongsawat S. Thammatacharee J. 2009

4

GNI per capita, US$ on a road towards UHC, 1970-2009

390

710

760

1490

2,7

00

1,9

00

0

1,000

2,000

3,000

4,000

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

US $

1997: Asian financial crisis

1990 SHI introduced

1980 CSMBS introduced

1983 CBHI introduced

1975 Low Income scheme introduced

2002 Universal Coverage for entire population achieved

2001: 29% of population are uninsured

5

Historical development: provider payments

1991 Inclusive capitation

Fee-for-service (FFS) 

Mixed allocation  

       

1993-4       Global budget

1995 Adjusted utilization

    Fee-schedule: HC

1998     Per capita allocation

 

1999   Demand side Piloting DRG/ Capitation

DRG system for HC

2000   control     

2001 Adjusted for risks

       

2002     Capitation and DRG weighted global budget

       

2005     Age-adjusted capitation

2006   Fee-schedule Performance-based payment

Year SSS CSMBS MWS Health Card Uninsured

UHC scheme paymentsUHC scheme payments

UC fund

Basic health care

Basic health care

Mental health

(Medicine)

Chronic

(DM/HT)

RRT

ARV drug

Population/patient

Provider

Medicine supply & development plan

Point by no of pt

Fee schedule & development plan

Fee schedule &

development plan

Capitation in OP, DRG with global budget in IP

Basic health care Basic health care Type Payment

Out patient(general Capitation with diff cap by age structure

In patient (general) DRG with global budget

Special budget for special area

Cost function

OP/IP special service Point system with global budget

P&P Capitation, fee schedule, project based

Rehabilitation Fee schedule, project based

Thai traditional health service

Fee schedule with global budget

Capital replacement Capital investment plan

Quality performance Specific criteria

No fault liability for health personal

Specific criteria

No fault liability for patient

Specific criteria

9

Coverage of health insurance: 1991-2003

0

20

40

60

80

100

%

1991 1996 2001 2003

UHC

HC

MWS

other

PI

SSS

CSMBS

Source: HWS 1991, 1996, 2001, 2003

10

Achievements after implementation:

key financing functions

11

Decreasing regressive (OOPs) and increasing progressive sources of finance (direct tax) over time

12

Increasing share of public financing sources in Thailand after achieving universal coverage

56%45% 47% 47% 54% 55% 55% 56%

63% 63% 64% 64%

75% 73%

68%

55%53%

53% 46% 45% 45% 44% 44%

36%36%37%37%

25%

27% 32%

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

Year

Millio

n B

ah

t

Public f inancing sources Private f inancing sources

Achieving UC

Total health expenditure during 2003-2008 ranged from

3.49 to 4.0% of GDP, THE per capita in 2008 = 171 USD

Capitation payment for UC beneficiary in 2010 = 80 USD per capita

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Financial risk protection 1: Household OOP as % household income, 1992-2008

8.17

4.82

3.74 3.65

2.87 2.57 2.451.99

1.641.27

4.58

3.673.29

2.782.38 2.22 2.06

1.68 1.55 1.27

2.05 1.95 1.69 1.66 1.74 1.68 1.66 1.83 1.742.18

0

1

2

3

4

5

6

7

8

Hea

lth

pay

men

t :

Inco

me

(%)

1992

1994

1996

1998

2000

2002

2004

2006

2008

Source: Analysis from household socio-economic surveys (SES) in various years 1992-2008, NSO

14

Financial risk protection 2: Incidence of catastrophic health expenditure 2000-

2006Incidence of catastrophic health expenditure 2000 to 2006,

Thailand, exceed 10% of total household income

0.9%

4.0%

3.3%

5.4%

2.0%

0%

1%

2%

3%

4%

5%

6%

2000 2002 2004 2006

Q1 (poorest) Q5 (richest) All quintiles

Source: Analysis from NSO SES 2000-2006

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Trend of health impoverishment 1996-2008

1996 2008

Per 100 households

0 – 0.5

0.6 – 1.0

1.1 – 2.0

2.1 – 3.0

3.1+

Distribution of budget subsidies for health: BIA, 2001 and 2007

28%

31%

28%

29%

20%

22%

26%

24%

17%

15%

20%

20%

17%

16%

14%

14%

18%

15%

11%

12%

0% 20% 40% 60% 80% 100%

OP&IP

OP&IP

OP&IP

OP&IP

2544

2546

2549

2550

Quintile 1 Quintile 2 Quintile 3 Quintile 4 Quintile 5

Profile of government health subsidies 2004

17

18

Fee-for-service CSMBS experienceFee-for-service CSMBS experienceCSMBS’ OP-IP health expenditures CSMBS’ OP-IP health expenditures (1988-2010)(1988-2010)

18Source: Comptroller General Department, Ministry of Finance

-2%

23%

12%13%

20%

12%

6%

10%

-2%

15%

12%

16%

20%46,588

61,304

37,004

54,904

46,481

17,058

26,043

20,476

16,44013,587

9,954

3,1566,000

4,316

62,196

13,905

21,896

30,833

38,803

9,5097,007

1,729 2,337 3,3745,8664,826

45,531

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Annual growth (real term) Total expenditure (million Baht) Outpatient (million Baht) Inpatient

(Expenditures in nominal term)

1997 Asian economic crisis

and conservative reform

2006 implementation:

- IP DRG system

- OP direct billing

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Summary: achievements• Financing sources

• General tax and SHI contributions constituting 2/3rd THE - are very “progressive” or pro-poor.

• Marked decline in out-of-pocket expenditure to 18% of THE with elimination of rich-poor gap of OOP

• Financial risk protection• Very low level of catastrophic health spending and

impoverishment

• Public subsidies of health facilities• Pro-poor subsidies of out patient and in patient

• Utilization of health facilities• Pro-poor utilization of publicly financed out/in patient facilities• Pro-rich utilization of privately financed out/in patient facilities

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Contributing Factors to Effective Implementation

• Systems design for equity and efficiency– Prakongsai et al, the equity impact of the universal coverage policy: lessons

from Thailand, in Chernichovsky and Hanson (eds), Innovations in health system finance in developing and transitional economies 2009.

• Supply side capacity to deliver services – Extensive geographical coverage of functioning primary health care

and district health systems – Long-standing policy on government bonding of rural services by

doctor, nurse, pharmacist and dentist new graduates– Availability of quality private services for which rich either covered

by private insurance or OOP, can opt out

• Adequate funding– Continued political commitment despite changing political party– UC budget was estimated by actual utilization X actual unit costs

projected for that year

• Financial access is determined by – Comprehensive service package – Zero co-payment at registered provider network

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The increasing health budget

1972

1990

2004National budget

Public health budget

29,000 mil. ฿

986.6 mil. 986.6 mil. ฿฿

(3.4%)(3.4%)

16,225.1 mil. 16,225.1 mil. ฿฿

(4.8%)(4.8%)

335,000 mil ฿

77,720.7 mil. 77,720.7 mil. ฿฿

(8.1%)(8.1%)

1,028,000 mil ฿

In 2011, Public health budget rose to 13% of National budget

23

Long-term financial projection, 2006-2026 based on 1994-2005 NHA, by ILO and Thai experts in

2008Expenditure Share in GDP of Financing Agencies - Long-term Trends

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026

Per

cent

MoPH OthMin LocGovt StateEnterprise CSMBS SocSec UC WCF PrivIns TrafficIns ERBenefits PrivHH NonProfit RoW

Contributing Factors to Effective Implementation

• Strong institutional capacities– Information systems

• Burden of Disease, National Health Accounts, National Drug Account, National AIDS Spending Account, national household datasets for routine equity monitoring

– Health technology assessment • HITAP institutional relation with UK NICE

– Key platforms for evidence informed decision • National Essential Drug List sub-committee • Benefit package sub-committee

• Mandatory economic evaluation and budget impact assessment for new drugs/interventions

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Conclusions • Health systems in Thailand

– equitable and responsive• Full geographic coverage, well staffed and funded PHC• capacity to absorb rapid increase in utilization

– translation and implementation capacity• translate policy into real actions,• M&E and feedback loops for fine-tuning policies

– strong leadership with continuity, • Not only political but financial commitment• Capable technocrats • Active civil society

– long term investment in institutional capacity strengthening in health policy and systems research,

• Evidence generation,• Effective mechanisms for evidence informed policy

decisions

Key challenges of UHC in Thailand

• Data from National Health Accounts (NHA) indicate the majority of health finance was spent on curative care, and low investment in health promotion and disease prevention - only 5% of THE in 2009,

• Inequitable distribution of human resources for health especially medical doctors and nurses is the key challenge in equitable access to MCH care,

• Harmonization of three public health insurance schemes,

• Double burden of disease (BOD) from communicable and chronic non-communicable diseases,

• Aging society and increasing demand for health care,

• Advance in expensive medical technologies including medicines.

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Acknowledgements• Ministry of Public Health (MOPH) of Thailand• National Statistical Office (NSO) of Thailand • National Health Security Office (NHSO) of Thailand• Health Systems Research Institute (HSRI), • Health Insurance System Research Office (HISRO) of

Thailand, • World Health Organization (WHO)• London School of Hygiene and Tropical Medicine (LSHTM),

United Kingdom