The Fight to Save Private Healthcare in Thailand

In recent years, various agencies within the Thai government have made concerted efforts to curb private medical institutions’ independence by installing burdensome regulations -- most recently by seeking to control what these businesses can charge for specific medicines, procedures, and supplies. Their basic rationale is that cost controls and other measures are necessary to ensure the best service for the Thai people. However, implementing these types of controls threatens the success of the crucial private healthcare sector, which contributes substantially to the Thai economy.
On Tuesday, January 22^nd  2019, the Commerce Ministry succeeded in a preliminary plan to control prices of medical supplies and services in private hospitals under the guise of increasing access for the general public. However, many foresee the negative consequences of such a move, concerned over economic ramifications and loss of quality in privately-run hospitals and other providers.

Moving forward, the government has convened a sub-committee with members of the Public Health Ministry, the Commerce Ministry, the Thai Life Assurance Association, and others to hammer out the details of the plan to limit private hospitals’ freedom to set their own prices according to market demand.

Background

As Thai Private Hospital Association president Pongpat Patanavanich noted during a January 11 meeting with the Commerce Ministry in an attempt to delay the potential devastation caused by a move toward fixed prices, “… all Thai people are eligible for free basic medical services under the universal healthcare scheme.”

There are currently over 1,000 operational public hospitals across the nation and around 10,000 so-called “healthcare stations”. Since 2002, healthcare coverage has been nearly universal in the Kingdom, with an impressive 99.5% percent coverage rate as estimated by the World Bank in 2010. Thailand compares favorably to neighboring ASEAN countries in terms of doctor-to-patient ratios. This ratio, a key metric for determining healthcare-delivering capacity, falls within the recommended range set by the World Health Organization.
In light of these facts, critics of the government plan to impose mandates on the private healthcare system argue that the major issue at hand is not access to care as various agencies claim, but rather the quality of the care provided by the government. Moving forward, addressing issues like state mismanagement of resources, less than ideal working environments for doctor and other crucial support staff in government facilities, and inadequate allocation of resources across the land are ways to improve the healthcare system for the public – not hamstringing private providers which fuel innovation and drive Thailand into the modern world.

Many analysts in recent decades have lauded the innovative Thai dual public-private healthcare system. In fact, the author of a comparative study published by the National Institutes of Health (NIH) even suggested that “Canada could benefit by examining some of Thailand's innovations”.

The Financial Impact on Vital Business

Consider, for example, the impact that such measures would have on the medical tourism industry -- which employs tens of thousands of doctors, nurses, and administrative staff in well-paying jobs.

Medical tourists from all over the developed world (UAE, United States, Qatar, Australia) come to Thailand for the quality of the care paired with the low cost. Putting cost-control burdens on private providers will likely have a detrimental effect on the overall quality of experience for medical tourists, which in turn may threaten the success of Thailand’s model medical tourism industry.

“Why is Thailand so popular? It’s because of the Thai health care system. It’s advanced and affordable, and these are the two most important criteria for would-be medical tourists,” said Adele Kulyk, CEO of Saskatchewan-based Global Healthcare Connections Inc.

In its own study, the World Health Organization concluded that:

“For the Thai economy, medical tourism generates a value-added approximately equal to 0.4% of the GDP. It helps raise income for the medical services sector, the tourist sector and all related businesses, and it provides other intangible benefits.”

The Tourism Authority of Thailand estimated that, in 2019, the number of medical tourists visiting for medical services Thailand would increase by 10% to 40 million, generating 3.4 trillion Baht. This represents an economic output that cannot be gambled away with unnecessary meddling by supervising authorities.

Many economists have warned of potential losses for the Thailand Stock Exchange (SET), which leans heavily on the continued growth of the private healthcare sector for its health. Following the initial January 9, 2019 announcement of impending price caps, the SET closed with losses while the markets of ASEAN competitors Singapore and the Philippines spiked – as a direct result of the price control plan. 

Unfair Impacts

As many analysts have pointed out, fixing prices in the same way for all public and private healthcare providers will have disparate impacts. While public healthcare providers like public hospitals can provide lower-cost medicine and services because of government subsidy, private hospitals cannot. There is no government support for private hospitals, which are funded entirely by business investment. Putting the same restrictions on private hospitals as public hospitals will place them at an unfair competitive disadvantage, leading to cuts in quality, staff, and ultimately threatening their long-term viability.

Moreover, many private healthcare advocates have argued that simply integrating private providers into the public scheme by force, through the imposition of price controls and other means, will only serve to complicate and exacerbate the public healthcare crisis rather than alleviate it. State hospitals across the nation from Khon Kaen Hospital in the rural northeast to Songkhla Hospital in the South are each over 100 million baht in debt, with operational deficits growing. These problems have nothing to do with private healthcare operators. Underfunding of public institutions -- and mismanagement of the funds that do exist due to a lack of accountability -- will not be fixed by a takeover of private medicine. Indeed, the loss of tax revenue paid by these private providers, as a result of profit losses, will only compound the problem.

Ways to Improve Thai Healthcare

Rather than restricting the activities of private enterprise, health advocates have prescribed a variety of other tactics to optimize the system:

Demand increased transparency

Thai public services, from the education to agriculture sectors, have long been plagued by widespread corruption. This hampers efficiency and drags quality. In a 2017 report, Transparency International reported a 41% bribery rate for Thai public services.

Streamline Service with Technological Innovation

A la Thailand 4.0, efficiency and outcomes will be vastly improved with an improved innovation-driven administrative overhaul. Poorly designed delivery services currently account for billions of baht in wasted taxpayer money.

Encourage Better Options for Public Healthcare

Overcrowding in public hospitals can be alleviated with a public information campaign to promote the use of general practitioner doctors in the nearly 10,000 healthcare stations around Thailand rather than the emergency room. In addition, the strategic redesign of locations for these health stations to achieve universal access across regions like the northeast can greatly improve results and reduce the burden on public hospitals.

The challenges facing Thai healthcare cannot be overcome by simply seeking total control over the public-private system by national agencies. Comprehensive efforts involving a number of public and private entities, acting in good faith, are needed. Private healthcare in Thailand has and -- given the opportunity to operate unobstructed -- will continue to propel the overall Thai healthcare system forward and improve the quality of life for all Thais.