Thailand’s national healthcare scheme hits financial trouble

Soldiers remove furniture from Bang Saphan Hospital after it was hit by floods. Source: Bangkok Post
Toon Bodyslam undertook a 400-kilometre charity run to raise funds for Bang Saphan Hospital in Prachuap Khiri Khan. Photo: Bangkok Post
Published: 6:15 PM, May 12, 2017

BANGKOK — In December last year, rocker Athiwara “Toon” Khongmalai ran 400km from Bangkok to Bang Saphan in 10 days, to raise funds for Bang Saphan Hospital in central Thailand.

The lead singer of rock band Bodyslam, better known as Toon Bodyslam, has raised 80 million baht (S$3.2 million) so far, with donations still coming in.

“If we did not get the money from Khun Toon, we might have had to shut down,” said Mr Cherdchai Chayawatto, director of Bang Saphan Hospital.

Bang Saphan Hospital is not the only hospital facing a liquidity crunch. Sixteen years after then-prime-minister Thaksin Shinawatra launched Thailand’s Universal Coverage (UC) scheme aimed at providing medical care for all, the system is running out of money.

Managed by the National Health Security Office (NHSO), the UC scheme costs 172 billion baht annually and covers 70 per cent of Thais. It is popular since it enables patients to get treated for certain illnesses for free, bridging the gap between rich and poor in obtaining medical services. But with a rising numbers of patients, an ageing population, rising malpractice insurance and higher costs for drugs, machines and other technology, most state hospitals now spend more than they receive.

Last month the Federation of Physicians and Nurses released a table showing 18 state hospitals were suffering deficits. For instance, Pranangklao Hospital had a deficit of 355 million baht, Saraburi Hospital was 322 million baht in the red, and Uttaradit Hospital suffered a deficit to the tune of 277 million baht.

“The hospital deficit is just the tip of the iceberg. There are many issues in the healthcare system that need to be urgently reformed,” said the president of the Federation of Physicians and Nurses of regional and general hospitals, Pradit Chaiyabud.


State hospitals get income from three sources: The state Budget; operators of three healthcare schemes, namely the universal healthcare scheme, civil servants healthcare scheme and social security scheme; and money earned by hospital operators themselves, such as donations.

Contributions from the universal coverage (UC) scheme account for the largest portion of state hospitals’ income. Hospitals normally receive an annual Budget of about 80 million baht, depending on the size and population of the district. The NHSO also dispenses money according to the number of patients suffering specific illnesses, such as kidney failure or heart disease.

However, such fixed payments do not take into account complications. “The hospital has to absorb surplus medical fees if there is any additional cost of treatment,” said Mr Cherdchai.

He said hospitals need to find additional income streams such as co-payments for those who can afford to pay. They could also increase the number of special beds for patients who can pay for extra services, he said.


Initiated by the Thaksin Shinawatra government in 2001, the scheme was first known as the 30-baht health scheme – so-called because those who could afford it paid a flat 30 baht per consultation – and ostensibly opened access to medical treatment for all.

It was developed by a rural doctor Sa-nguan Nittayarampong, who convinced the Thaksin administration to pilot and fund the programme in 2001, despite objections from the previous government because the economy was still recovering after the 1997 financial crisis.

UC covers healthcare for more than 48 million Thais. The NHSO’s executive board makes decisions on how to run the UC scheme. The board consists of representatives of patients and civil society, government agencies, hospital operators and professional doctors.

However, after more than a decade, the ballooning UC budget has led to questions over the sustainability of the scheme. Some parties claim the UC scheme is a financial burden, a populist ploy and the legacy of Thaksin, a tainted politician.

Dr Orapun Metadilokkul, a member of the Federation of Healthcare Workforce, said the NHSO budget could have been better spent if regulations were amended to fit the reality of the healthcare system.

“For example, the NHSO says that if a hospital has a kidney patient who has to undergo dialysis, then it will give 20,000 baht to the hospital to treat that patient,” she said. “The amount is given to the patient per head. Therefore, some patients would be required to undergo dialysis even though it may not be necessary. The NHSO should not set treatment procedures as the criteria. A doctor should have the final say on how to diagnose and treat each patient. The doctor should only perform the necessary treatment. Opening the patient’s stomach to clean the kidney should only be done if there is no other option available. Some patients administer intravenous treatment at home, causing complications that can be harmful to their health.”

Prime Minister Prayuth Chan-o-cha initially criticised UC for costing too much. He told reporters it is a burden from previous governments and suggested free healthcare should only be given to the poor.

Some state hospital operators say UC has increased the workload of medical staff due to the influx of patients seeking free treatment. The UC scheme is also hampered by politics, with conservative doctors urging changes to the scheme and rural doctors supporting the existing system.

“It’s unfortunate for UC that it is regarded as populist despite being about human rights,” said Mr Nopphanat Anuphongphat, an independent historian who has studied the history of Thailand’s healthcare. “This affects the perception of the current military government towards UC.”

At any rate, the Prayuth government recently approved a 4.28 per cent increase in the Budget for fiscal 2018. The NHSO will receive 3,197 baht for each citizen, a rise of 87.45 baht per head. In spite of the increase, the amount is still low compared to demand for services, say doctors.


For years, rural doctors have pushed the idea of universal health coverage, but it did not gain traction until Thaksin came to power. It became one of his major policies that won grassroots support across the country.

Patients paid only 30 baht for medical services at state hospitals. The NHSO was established using the government Budget to fund medical fees.

After the 2006 coup, 30-baht healthcare was revoked. The scheme was renamed “gold card” or UC by interim governments. The renaming of the universal scheme was seen as an attempt to eliminate the image of Thaksin as icon of the scheme.

Resistance to UC comes from many players, including state administrators who could not exercise power over the NHSO board, civil servants who lost their hold on health funding, and doctors whose status is threatened by the emerging voice of patients.

After the 2014 coup, the political stakes have gone up.

“UC’s goal is good healthcare for everyone. We think it has achieved some success in pursuing that goal,” said NHSO spokesman Atthaporn Limpanyalert. “But if you want it to be better, you need to eliminate the stigma surrounding UC as the legacy of a politician.”

UC’s capitation budget has more than doubled from its first year of operation, from 1,202 baht per head in 2012, to 3,029 baht in 2016. The 2016 fiscal year offered 107 billion baht for UC capitation, equivalent to 4 per cent of GDP.

Despite criticism over an increasing budget, UC reduced household expenditure from 7.94 per cent in 1997 to 2.01 per cent in 2013, according to the National Statistics Office.

The challenge for the NHSO is how to manage the budget efficiently with limited funds and an ageing society.

As a comparison, in fiscal 2017, state military spending accounts for 7.9 per cent of the overall Budget, equivalent to 214 billion baht – up from 184 billion in 2014, the year the military staged the coup. The Labour Ministry 1.7 per cent, the Natural Resources and Environment Ministry 1.2 per cent and the Social Development and Human Security Ministry 0.4 per cent.

Meanwhile, civil society groups have urged the government to invest more in healthcare because it is a matter of long-term human security.

“There’s no exact figure indicating how much we should invest in healthcare. Some numbers you see are political figures. But it is clear that the current health Budget is too low to boost the quality of healthcare services,” said Mr Viroj Na Ranong, research director for the health economics and agriculture sector at the Thailand Development Research Institute.

According to his study, health expenditure of low-income countries is approximately 4 per cent of GDP compared to 8 to 13 per cent for high-income countries. Health expenditure in the US is 15-17 per cent.

The civil service healthcare scheme is more expensive, because its finances are based on open-end funding, meaning beneficiaries can get expensive drugs and treatment.

In 2016, the scheme cost 71 billion baht for 4.8 million civil servants – equivalent to 10 per cent of UC beneficiaries but more than half the UC budget.

The limited UC budget has raised doubts about its ability to pay for quality healthcare. To raise UC to the level of the civil service healthcare scheme will require at least double its current budget, said Mr Viroj.

It is doubtful any government would want to pay for that.

“In fact, our society has never had a consensus on UC. The only common point is not to collect medical fees from the poor. There’s no end in sight for this debate,” said Mr Viroj.


For now, Bang Saphan Hospital can stay afloat. Thanks to donations from the marathon, the hospital can buy an X-ray machine and replace equipment destroyed by a massive flood, which took place after the marathon.

The hospital may survive this year but Mr Cherdchai said the future is uncertain. “We cannot rely on a marathon every year,” he said. BANGKOK POST