Thailand in the Storm: The Cost of Reform

September 2, 2006

A major contributor to his most recent election victory, Thai Prime Minister Thaksin Shinawatra's "30 Baht Health Plan," first announced in 2001, was said to be born more out of populist politics than actual necessity for healthcare reform. This health plan is now draining the state-run hospitals, plunging them into perpetual debt and creating a mass exodus of overworked, underpaid doctors to the private sector. Nonetheless, this unprecedented universal healthcare policy's saving grace has been to provide affordable healthcare to nearly 50 million Thai, according to 2005 estimates by the National Health Security Office (NHSO).

A major contributor to his most recent election victory, Thai Prime Minister Thaksin Shinawatra's "30 Baht Health Plan," first announced in 2001, was said to be born more out of populist politics than actual necessity for healthcare reform. This health plan is now draining the state-run hospitals, plunging them into perpetual debt and creating a mass exodus of overworked, underpaid doctors to the private sector. Nonetheless, this unprecedented universal healthcare policy's saving grace has been to provide affordable healthcare to nearly 50 million Thai, according to 2005 estimates by the National Health Security Office (NHSO).

Under the "30 Baht Health Plan," over 80% of Thailand's 64.6 million citizens are eligible to receive healthcare from over 800 state-run hospitals for just 30 Thai Baht ($0.77 USD) per visit. A recent amendment to the policy has even added coverage for anti-retroviral treatment for diseases such as HIV/AIDS, and the plan is expected to cover brain and heart operations by the end of this year.

Thailand's Public Health Ministry likes to consider the plan a road to preventing diseases rather than an attempt to cure them. Unfortunately, a majority of the doctors working in government hospitals see this as a proverbial highway for patients with a simple headache or a minor rash, and the hospitals foresee a catastrophic outcome.

The state-run hospitals are already struggling to keep their heads above water, and cutbacks have resulted in overworked and underpaid doctors. With the 30 Baht plan, more of a burden is put on doctors, and the understaffing and hospital debts are felt keenly.

"Too many people think they are sick now" a doctor interviewed in Bangkok says. "I left a public hospital because of this, and I will apply for a medical license in Canada, where my brother-in-law is practicing." He went on to express his frustration with working over 80 hours per week for an average pay of $500 USD per month.

Government hospitals report that they are plagued with insufficient funding from the Ministry of Health. Because of miscalculations in the actual operating costs of the 30 Baht plan, the government's initial budget allocation, equivalent to approximately $1.1 billion USD, fell short of the mark, eventually leading several hospitals to near bankruptcy. The Thai government's initial hospital subsidy estimate was $32 USD for each patient covered. Analysts now estimate that it will require the equivalent of $53 USD per patient for the plan to operate and provide the quality of service expected without forcing hospitals into even greater debt. To compensate, the government used tobacco and alcohol tax hikes equivalent to approximately $1.3 to subsidize the plan last year. This ironic display of sin paying for healthcare has brought the average cost per coverage to about $44 USD. Unfortunately, this still falls short of the mark.

Although rife with rhetoric and a clear budgetary drag, the 30 Baht Health Plan does more good than not. With only 2% of Thailand's population on private healthcare and 20% on civil health welfare, the remaining population had little or no option for overcoming sickness and disease. Assuming the Thai Government can sustain increased funding while managing to keep the hospitals in the black and the doctors in white, the 30 Baht Health Plan could become an interesting case study for developing and disease-stricken countries to implement universal health coverage for its citizens. Given Thailand's will to do it, poverty is no longer an excuse for not keeping citizens in good health.

ACKNOWLEDGMENTS

Pharmaceutical Technology and Executive Country Reviews would like to thank all companies and organizations that helped in the preparation of this review.

Indonesia: Novell Pharmaceutical Laboratories, www.novellpharm.com, Kalbe Farma, www.kalbe.co.id, Soho Industri Pharmasi, www.soho.co.id, Sanbe, www.sanbe-farma.com, Mensa Group, www.mensa-group.com, Dexa Medica, www.dexa-medica.com, Combiphar, www.combiphar.com.

Malaysia: Kotra Pharma, www.kotrapharma.com, Apex Healthcare, www.apexpharmacy.com, Scanlab, www.scanlab.com, Dynapharm, www.dynagroup.com.my , Hi-City, www.hi-city.com, Malaysian Pharmaceutical Industries, Antah Pharma, www.antah.com.my, Royce Pharma, www.roycepharma.com, YSP, www.yspsah.com, Idaman, Pharmaniaga, www.pharmaniaga.com, Emerging Pharma, www.emergingp.com, Hovid, www.hovid.com.

Singapore: ICM, www.icmpharma.com.sg

Philippines: Sydenham Laboratories, www.sydenhamlab.com, Philippine International Trade Corporation, www.pitc.gov.ph, Elin Pharmaceuticals, www.elinpharma.com, Hizon Laboratories, Lloyd Laboratories, www.lloydlab.com, YSS Laboratories, www.ysslab.com, Unilab, www.unilab.com.ph, Pascual Laboratories, www.pascuallab.com, Danlex.

Thailand: GPO www.gpo.or.th, Biolab www.biothailand.com, TO Chemicals www.togroupthailand.com, Greater Pharma, www.greaterpharma.com, A.N.B. Laboratories, www.anlab.com, PMS www.pms-group.net, NR Industries Group, www.nr-group.com, Silom Medical, Zuellig Pharma, www.zuelligpharma.co.th, Mega Lifesciences, www.megawecare.com, Siam Pharmaceuticals, www.siam-pharm.com.

ONE STEP FURTHER

For further information on the above companies, please contact us: info@ecreviews.comwww.ecreviews.com

This report was prepared by Executive Country Reviews. Authors are Gilles Valentin gilles@ecreviews.com Emmanuelle Berthemet emma@ecreviews.com Marco Parigi marco@ecreviews.com Amicie de Bodinat amicie@ecreviews.com and Yaz Yazicioglu yaz@ecreviews.com

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