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Financing for Universal Coverage

Experiences from Thailand

Phusit Prakongsai, M.D. Ph.D.Viroj Tangcharoensathien, M.D. Ph.D.

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

Presentation to the Partners for Health in South-East Asia Conference

Le Meridien Hotel, New Delhi, India17 March 2011

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ndBackground

• After using targeting and piecemeal approaches for 27 years, Thailand achieved universal health coverage (UC) in 2002 by introducing a tax-financed health insurance scheme, the UC scheme, to approx. 47 million of Thais who were neither civil servant (CSMBS) nor social health insurance (SHI) beneficiaries,

• The benefit package of the UC scheme is very comprehensive comprising breadth and depth of health insurance coverage,

• Financing arrangements of the UC scheme are: – removal of financial barriers to health services; – shift of the main source of HCF from OOP to general tax; – promoting the use of primary care by contracting a PCU

as the main contractor and gatekeeper; – changing provider payment from historical allocations to

close-ended payments.

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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

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Share of public and private sources of health care finance in Thailand, 1994-2008

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

Progressive health financing sources lead to equitable financial contribution:

Kakwani indexes, 2000-2006

Share of health care finance (% ) 2000 2002 2004 2006 Out of pocket payments 33.7 27.9 26.4 23.2 Direct tax 18.0 18.8 20.8 24.5 Indirect tax 33.4 38.2 37.1 35.2 Premium Insurance 9.6 9.2 8.9 9.2 SHI contribution 5.3 5.9 6.8 7.9 Premium insurance & SHI contribution na na na 17.1% Overall Kakwani index 100.0 100.0 100.0 100.0

Kakwani indexes 2000 2002 2004 2006 Out of pocket payments -0.150 -0.076 -0.076 -0.045 Direct tax 0.391 0.416 0.442 0.362 Indirect tax -0.096 -0.069 -0.043 -0.083 Premium Insurance -0.362 -0.391 -0.323 Na SHI contribution 0.165 0.112 0.105 Na Premium insurance & SHI contribution Na Na Na -0.049 Overall Kakwani index -0.0035 0.0374 0.0630 0.0406

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

Financial risk protection (2)Incidence of catastrophic health expenditure 2000-2006

Incidence 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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Financial risk protection (3)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

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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

49% 48%51%

47% 47%

52%50% 51% 53%

55% 55% 55% 56%54%

51%

24%22% 23% 23%

25% 24%22%

18%

30%26% 26%

28% 27% 27% 26%

23%21%

22%20%

24%22%

24% 24% 24% 26%28% 27%

29% 28% 28%

0%

10%

20%

30%

40%

50%

60%

Qtr1

Qtr2

Qtr3

Qtr4

Qtr1

Qtr2

Qtr3

Qtr4

Qtr1

Qtr2

Qtr3

Qtr4

Qtr1

Qtr2

Qtr3

2004 2005 2006 2007

CS

SS

UC

45%47% 48%

50%52% 50% 51%

53% 54% 55% 56%54% 56% 58% 59%

17% 17% 16% 17%18%

20% 20% 22% 21% 20% 19% 20%

16% 16% 17% 17% 18% 18% 19% 20% 20% 20% 20% 20% 20% 21% 21%

0%

10%

20%

30%

40%

50%

60%

Qtr1

Qtr2

Qtr3

Qtr4

Qtr1

Qtr2

Qtr3

Qtr4

Qtr1

Qtr2

Qtr3

Qtr4

Qtr1

Qtr2

Qtr3

2004 2005 2006 2007

CS

SS

UC

Cesarean section Laparoscopic cholecystectomy

The impact of different provider payment methods onThe impact of different provider payment methods onuse of expensive procedures across 3 public insurance schemesuse of expensive procedures across 3 public insurance schemes

Source: Limwattananon et al. (2009)

Angiotensin II receptor blockers

0

5

10

15

20

25

30

35

40

45

50

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

2003 2004 2005 2006 2007

CS

SS

UC

Single source statins and new antihyperlipidemia

0

5

10

15

20

25

30

35

40

45

50

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

2003 2004 2005 2006 2007

CS

SS

UC

Clopidogrel

0

5

10

15

20

25

30

35

40

45

50

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

2003 2004 2005 2006 2007

CS

SS

UC

Coxibs

0

5

10

15

20

25

30

35

40

45

50

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

Jan

Apr Ju

l

Oct

2003 2004 2005 2006 2007

CS

SS

UC

FFS payment of CSMBS and use of expensive OP medicinesFFS payment of CSMBS and use of expensive OP medicinesVariations across 3 public insurance schemesVariations across 3 public insurance schemes

Source: Limwattananon et al. (2009)

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Double-digit cost escalationDouble-digit cost escalationCSMBS health expenditure CSMBS health expenditure (1988-2010)(1988-2010)

13Source: 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

Mismatch between increasing burden of disease from NCD and low investment in HP and disease

preventionDALY lost from Risk factors, Thailand 1999 and 2004

943

838

595

594

440

410

238

169

144

132

91

54

53

29

25

1,310

550

490

490

400

370

220

140

370

120

120

60

70

30

40

0 200 400 600 800 1000 1200 1400

Unsafe Sex

Alcohol

Blood pressure

Tobacco

Non-Helmet

BMI

Cholesterol

Low intake of fruit and vegetable

Illicit Drugs

P hysical Inactivity

Air P ollution

WSH

Malnutrition-Inter

Malnutrition-Thai

Non-Seatbelt

DALYs('000)

19992004 Health administration

and health insurance 8.5%

Medical goods4.3%

Ancillary services 0.4%

Prevention and public health services

4.8%

Services of curative & rehabilitative care

78.1%

Gross capital formation

3.9%

0

50

100

150

200

250

300

350

400

450

500

Q1 Q2 Q3 Q4 Q5

Thou

sand

s

inactivity

low intake fruit

cholesterol

BMI

Blood pressure

smoking

Alcohol0

50100150200250300350400450500

Q1 Q2 Q3 Q4 Q5

Thou

sand

s

inactivity

low intake fruit

cholesterol

BMI

Blood pressure

smoking

Alcohol

DALYs attributable to risk factors

Lessons learnt from Thailand• Mixed health financing arrangements (general taxation, SHI

contribution, community-based health insurance) tend to be the best choice for developing countries to achieve UC,

• Pragmatic approach: Thai experiences indicate targeting different population prior to achieving universal coverage is inevitable,

• Depth (comprehensive benefit package), height (minimum or zero copay) are vital for financial risk protection catastrophic and impoverishment outcome,

• Purchasing and provider payment method vital for long term financial sustainability: stay away from fee for service, and apply close end payment such as capitation, global budget + DRG,

• Strong political support, movement from civil society, and strong research capacity are key success factors ‘Triangle that moves the mountain’

• Health systems capacity to deliver services as promise, translate rhetoric statement into reality.

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Acknowledgements

• National Statistical Office (NSO) of Thailand • National Health Security Office (NHSO) of Thailand• Ministry of Public Health (MOPH) 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