1. Payment methods of health insurance system in Thailand
Samrit Srithamrongsawat
Health Insurance System Research Office

2. Outline of presentation
Overview of payment methods of the Thai health insurance schemes
Universal Coverage Scheme
Civil Servant Medical Benefit Scheme
Social Security Scheme
Effects of payment methods: the Thai experiences

3. Thailand: historical development
Establishment of prepayment schemes
User fees
Informal exemption
1945
Expansion of prepayment schemes
1970
1975
LIC
1980
CSMBS
1-3rd NHP
Provincial
hospitals
1983
CHF
1990
SSS
1980
SSS
CSMBS
LIC  MWS
4th -5th NHP
( )
District hospitals
Health centers
1990
Universal Coverage
1994
PVHI
Before 2001, health care system in Thailand is a public-private mixed system. A user fee was introduced at the beginning of establishment of government health facilities in At the early phase of development, the government put emphasis on expansion of basic health infrastructure starting by establishing provincial hospitals in all provinces, expanding district hospital to cover all districts and health center in all sub-districts throughout the country,
For social health protection, various health insurance and welfare schemes were established for specific target population during 1970 – Private employees were the first group being protected for work-related illness in 1974 followed by the poor in 1975 and government workers and their dependents in A voluntary community health insurance started in 1983 as a choice for those who were not eligible to the Low Income scheme. For those in private sector, the social security scheme was established in 1990 to cover non-work related illness.
From 1990 onward, there was rapid expansion of health insurance coverage according to the expansion of low income scheme to cover other groups i.e. older people, children under 12, students, disabled persons, veterans, monks, evolving of the Health Card scheme from a community financing to be a publicly subsidized voluntary health insurance scheme , and expansion of the Social Security Scheme to cover workers in small enterprises. In addition, there were strong social movements toward universal healthcare coverage during this period and after the 2001 general election, the government announced the UC policy by incorporating the Low Income Scheme with the Health Card Scheme and extend to cover those previously uninsured.
SSS
2000
2001
Universal Coverage
CSMBS
Health Infrastructure
2001

4. Coverage of health insurance: 1991-2003
Currently, there are three main health insurance systems which cover 95% of the Thai populations.
The Civil Servant Medical Benefit Scheme cover around 9% of the populations similar to the Social Security Scheme.
And the UC scheme covers around 47 million or around 75% of the populations.
Source: HWS 1991, 1996, 2001, 2003

5. Age distribution by insurance scheme
Distribution of age group by insurance scheme is presented in this slide. Age group distribution of the UC scheme is comparable with that of total population, 28% are those aged below than 15 years old and those aged 60 years old and above account for 10%.
For the SSS, nearly all of them are aged between 15 – 59 years old, only 1% of them are aged 60 years old or above.
Those aged 60 years old or above are more prevalent among CSMBS members, 20%

6. Civil Servant Medical Benefit Scheme (CSMBS)
Nature
Fringe benefits, tax-based system
Financing model
Public reimbursement model
Beneficiaries
Government workers, pensioners and their dependents (5.4 million)
Benefit package
Comprehensive package including OP, IP, and private ward in public hospitals
Service providers
Free choice of public facilities
Access to private hospitals only in case of emergency
Payment method
Retrospective fee-for-services
This slide summarize characteristics of the Civil Servant Medical Benefit Scheme. It is a fringe benefits to compensate low salary of public workers and financed from tax-based system.
The scheme employs a public reimbursement model. Beneficiaries include government workers, pensioners and their dependents. Currently, it covers around 5.4 million people.
The scheme provides a comprehensive health services package, including ambulatory care, medicines, dental care, and hospital care. Beneficiaries have free choice of public facilities and can access to private hospitals for inpatient care only in case of emergency but will be reimbursed up to a ceiling. The scheme pay providers by retrospective fee-for-services.

7. Social Security Scheme (SSS)
Nature
Social health insurance, compulsory contributions from employer, employee, and the government
Financing model
Public contracted model with both public and private hospitals
Beneficiaries
Private employees (8.47 million)
Benefit package
Comprehensive package including OP, IP, maternal care, dental care
Service providers
Contracted public and private hospitals with 100-bed or above
Payment method
Inclusive capitation
Additional payments for utilization rate, chronic conditions, fee schedule for high cost services, and fixed amount for AE, dental care, maternity
For Social Security Scheme, this is a compulsory health insurance for private formal sector. The contributions are equally paid by employees, employers, and the government.
The scheme employs a public contracted model with both public and private hospitals. Currently, it covers around 8.5 million populations.
The scheme provides a comprehensive health services package, including ambulatory care, medicines, dental care, hospital care, and maternal care.
Beneficiaries have free choice to register with both public and private hospitals. Hospitals with 100 bed or over are chosen as main contractors since majority of beneficiaries are residing in urban areas.
The scheme pay contracted hospitals mainly by inclusive capitation covering both outpatient and inpatient services provided to registered members. The contracted hospitals also receive additional payments according to utilization rate, severity of cases, and providing high cost services. The scheme also reimburse beneficiaries by fixed amount for services received outside their contracted hospitals in case of emergency, dental care, and maternal care.

8. Universal Coverage Scheme (UCS)
Nature
Entitlement, tax-based system
Financing model
Public contracted model, capitation 1,899 THB in 2007
Beneficiaries
Thai citizens uncovered by SSS and CSMBS (47 million)
Benefit package
Comprehensive package including prevention and promotion services (PP) and accredited alternative medicines with an exclusion list of some services
Service providers
Contracted public and private hospitals and requiring all hospital to establish one primary care unit (PCU) for every 10,000-15,000 registered population
Payment method
OP,PP - Capitation
IP - DRG weighted global budget
A/E and HC OP – point system,
AE/HC IP –DRG weighted global budget
For the UC scheme. It is an entitlement, tax-based system.
The scheme employs a public contracted model with both private and public hospitals. In 2007, the scheme receive government budgets of 1,899 Baht per capita, equivalent to 54USD.
All Thai citizens not covered by the SSS and CSMBS will be covered by this scheme, currently it covers around 47 million or 75% of the populations
The scheme provides a comprehensive health services package, including ambulatory care, medicines, dental care, hospital care, and prevention and promotion services. It should be noted that personal health promotion and prevention services are provided to all Thais not just only those covered by the UC scheme.
All public hospitals and accredited private hospitals are chosen as main contractors and all of them are required to set up one primary care unit for every 10,000 – 15,000 registered members.
Capitation payment is chosen to pay for ambulatory care and prevention and promotion services. A Diagnosis Related Group with global budget is employed to pay for inpatient care. In order to enable access to accident emergency services and high cost care, a reinsurance system is also established and paying hospitals by point system for outpatient services and DRG with global budget for inpatient services.

9. Historical development: payment methods
1991
Inclusive capitation
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
This slide summarize historical development of payment methods in Thailand. Inclusive capitation was first introduced in 1991 by the Social Security Scheme and additional payments were added in later to collect the problem of selection bias according to free choice of beneficiaries to register with contracted hospitals.
Per capita budget allocation was first implemented by the previous Health Card scheme, a public subsidized voluntary health insurance scheme, in 1994 when the government started to provide equal matching funds for the scheme.
The Medical Welfare Scheme for the poor and other vulnerable groups also moved away from supply-side allocation formula to a per capita budget allocation later in A system of Diagnosis Related Group with global budget and capitation payments were piloted by the Medical Welfare Scheme and the Health Card scheme in 1999 and these two payment methods have been adopted as main payment methods by the UCS.

10. Aim and objectives of purchasing
Ensuring good quality and efficient services are provided to beneficiaries
Objectives
To ensure good health
To solve health problems
Response to social expectation
To control cost
Theoretically, payment method is a major tool of purchasing apart from other components which aims to ensure that good quality and efficient services will be provided to beneficiaries. A good purchasing function should bring about good health of beneficiaries, and once they get health problem, it will be solved appropriately. Furthermore, providers should response to the expectation of society and it should be able to control costs to an appropriate level.

11. Payment methods and provider risk
Per Discharged
Per member
IP and OP DRGs
Retrospective Full cost
Full Capitation
Bundled Hospital -MD DRGs
Discount per diem
Different payment methods and unit of services purchased provide different financial risk on providers. Retrospective fee-for-services system will put all financial risk on payers, in oppositely, a full capitation or inclusive capitation will shift all financial risk to providers. Other payment methods are in between.
Hospital IP DRGs
Minimum
Provider Risk
Maximum

12. Payment & provider behavior
Prevent health problem
Deliver services
Responsiveness
Contain costs
Line item budget
+/ -
- -
+ /-
+ + +
Global budget
+ +
Capitation
DRGs
FFS
- - -
Concerning effects of payment methods on provider behavior, this slide summarize incentives effects according to different payment methods. A more aggregated payment methods such as global budget and capitation payment likely to provide more incentives of providers to contain cost since they bear all financial risk but they may have less incentives to provide services to beneficiaries. For less aggregated payment methods like fee-for-services will provide more incentives for providers to provide more services to gain more revenues and providers will have no incentives to control costs as all financial risks are born on payers, particularly when the payments are made by third payers.
WHR 2000

13. Effects of payment methods: the Thai experiences

14. DALYs 1999: 2004 Male Female 1999 2004 HIV/AIDS 960,087 641,000
372,974
293,000
Traffic accident
510,907
600,000
114,963
136,000
Stroke
267,567
300,000
280,673
302,000
Liver cancer
248,083
295,000
118,384
141,000
Diabetes
168,372
166,000
267,158
263,000 TB
93,695
89,000
60,643
61,000
Cataract
96,091
41,000

15. Use of ambulatory care Use of ill persons
For service utilization, seeking ambulatory care once getting ill was comparable by insurance scheme but it was different by age group. Once getting ill, children and older persons were more likely to receive care from health facilities, 80% compared with only 70% of working age populations. It should be noted that SSS old beneficiaries were excluded from the analysis due to small number of populations.
For services utilization covered by insurance scheme, children covered by CSMBS were less likely to get care covered by their scheme than those covered by UC did.
Use of services covered by insurance scheme of working age populations was comparable by insurance scheme, 50% of overall use. For older beneficiaries, they got care covered by insurance scheme 60% and comparable between the UC and CSMBS.
Use of ill persons
Use of ill persons covered by the scheme
Source: 2005 HWS

16. Use of appointed services of patients with chronic conditions
For getting appointed care of those with chronic conditions, it was different by age group and type of insurance for both overall use and use of services covered by insurance scheme.
Older beneficiaries were more likely to get appointment and visit health facilities in the previous month than younger beneficiaries did, and CSMBS beneficiaries were more likely to get appointment and care than those covered by the other two schemes were. SSS beneficiaries with chronic conditions sought less care than UC and CSMBS beneficiaries did.
Take-up of insurance benefit among those with chronic conditions was much higher than those getting ambulatory care, more than 80-90% compare with only 60% of ambulatory care.
Take-up of benefits
Use services
Source: 2005 HWS

17. Hospitalization Days of stay Being admitted Take-up of benefits
For hospitalization, the probability of being admitted of UC and CSMBS was comparable among children and working age groups; however, among older people, CSMBS beneficiaries were more likely to be admitted than those covered by the UC in addition to frequency of admission. SSS beneficiaries were less likely to be admitted than those covered by the other two schemes.
Length of stay was different by type of insurance. Number of days stayed in hospital of CSMBS beneficiaries were greater than those of UC and SSS beneficiaries among working age group and older people.
Take up of benefit for admission was similar to that of getting chronic care, 80-90% and comparable between types of health insurance.
Number of admission
Take-up of benefits
Source: 2005 HWS

18. Responsiveness Enabling access Equal treatment Financial protection
Prompt treatment*
ABAC (2006)

19. Responsiveness Equal treatment* Financial difficulties* Good quality*
Satisfaction
ABAC (2006)

20. FFS: CSMBS experiences
Cabinet resolution, full pay for non ED, limit ceiling LOS of private R&B and stringent private admission
Cost escalating according to FFS payment system is good demonstrated by CSMBS. Health expenditures of the scheme increased rapidly around 15% annually. This is a major concern of the government, however, few efforts have been made by the government in order to contain the costs.
In 1999, when the country when into economic crisis, demand side measures were introduced, limiting prescription to ED drugs and days of stay in private ward; however, experiences show that the demand side measured had effect on in the first year of its introduction then the costs continued to increase.

21. SSS: Per capita expenditures 1998-2005
Experiences from the SSS show that the scheme was quite successful in controlling health care costs. Mark increase in the per capita expenditures was partly due to increase in the capitation rate, for example the capitation rate in 2005 was increased from 1,100 Baht to 1,250 Baht, in addition to increase in reimbursement rate of additional payments and expanding of benefits i.e. dental care, maternal benefit.

22. UCS: approved capitation budget and estimated expenses 2002 - 2006
Difference from the other two schemes, the UC scheme faced with inadequate budget provided by the government.
The capitation budget provided by the government in was 1,202 Baht, and even thought it increased subsequently to 1,308, 1,396, 1,659, and 1,899. it was estimated that the annual shortfall during of the scheme was Baht per capita. This is partly due to totally depending on government budgets and have to compete with other social objectives.
Average annual increase in per capita estimated expenses could be explained by increase in utilization rate and cost inflation.

23. Conclusions
There were both improving and worsening health problems among Thai populations .
Provider’s bias in service provision was evident by insurance scheme, particularly for chronic conditions and hospitalization. Remaining issues of concern
Quality of medical are
Outcome of treatment

24. Conclusions
Health insurance systems in Thailand provide fairly responsiveness to their beneficiaries and need further improvement.
Close-end payment methods are more effective in controlling costs than open-end payment method.