An overview on the healthcare landscape in Thailand, the current situation with key issues in the health system and the growth potential

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Prepared by Catapult! August 2014!
Healthcare Landscape in Thailand!
An Overview!

2. 2
Contents!
!
1. Growth Hypothesis for Healthcare in Thailand 03
3. Key Drivers and Challenges 12
2. Current Healthcare Market Context 05
4. Back Up 14

3. 3
null hypothesis – to be disproved!

4. 4
Null Hypothesis!
market potential in Thailand’s hinterland is rather small!
Factors to Examine
* UCS is Universal (Health) Coverage Scheme
Country’s health system is not
yet mature to pursue growth in
the country’s hinterland
1.
Capacity (health infrastructure)
in the hinterland is not ready to
support market development
2.
! Current UCS* mechanism system has not matured, to
warrant pursuing growth (and invest in market
development) in the country’s hinterland
! Government places less emphasis on (disease) diagnosis
and is not likely to change emphasis in the near future
! Current health infrastructure and facilities are not
capable, or adequately developed
! Health services personnel issues exist, both in terms of
personnel shortage and lack of adequate trained
personnel
Market and business key drivers
are yet weak to pursue growth in
the country’s hinterland
3.
! Public hospitals have neither the funds, nor the
mechanism, to expand infrastructure; they are also not
geared to take-in more patients
! Private hospitals are concentrated in/around Bangkok
and therefore, demand in up-country is rather small
This document argues that companies need to push for growth from the hinterland,
albeit in different ways than what has been tried thus far

5. 5
current market context and
evolving scenario!

6. 6
Health System Overview!
!
* refer back up slide for summary on existing health coverage schemes in Thailand
** NHSO is National Health Security Office
Sources: World Bank Report, 2011; Health Insurance System Research Office 2013
Universal
Coverage
Scheme
(UCS)
Since 2001
Its Impact
! There has been a steady expansion in
access to health services, in utilization of
facilities & in financial protection among
patients
- However, significant disparities exist across
geographical regions within the country
! Expenditure on health is significant
- Overall health expenditure is at ~4% of GDP
- Govt. health expenditure, as % of total govt.
expenditure, is at ~14%
Key Challenges for the System
! Comprehensive coverage is provided to Thai people under health schemes*
! Preventive & diagnostic care getting increased emphasis – approx. 11% of
total NHSO** expenditure was in a clinical setting
! Est. only 5.7% of UCS members (of the total ~75% of population) were
registered with private-sector provider network " majority services are
dispensed at public facilities
! NHSO regional offices are responsible for purchase decisions " a critical step in
segregating the purchaser-provider role
Key Features
1. Ensuring greater autonomy within NHSO**
2. Increasing (public) hospital deficits,
leading to financial strain
3. Increasing private sector involvement
4. Addressing the ever-expanding burden of
chronic diseases
5. Collecting, reporting, monitoring data on
quality of care & clinical outcome
assessment

7. 7
Key Supply-Side Indicators!
relative to population!
* refers to Bangkok Metropolitan Region that comprises 50 districts governed under the Bangkok Metropolitan Administration (BMA)
Notes: (column-wise) % totals may not add up to 100%, due to rounding-off error; Some hospitals in the Central region are included
in BMR geographical area
Sources: Thailand National Statistics Office (NSO), Secondary research, Catapult analysis
Thailand Map % of
Population
% of
Hospitals
% No. of
Beds
% of all
Doctors
North 18% 20% 20% 16%
North-
East
34% 28% 20% 20%
Bangkok 09% 10% 20% 25%
Central 25% 26% 25% 28%
South 14% 16% 15% 12%
Though Bangkok* gets disproportionately high share of healthcare
(infrastructure and) resources, other regions are grossly under-served,
suggesting un-tapped demand potential

8. 8
Spread of Hospital Infrastructure!
by type (private, public)!
Thailand Map
Notes: No. of hospitals as of 2011 (best estimates); Central region includes provinces around Bangkok & includes area under BMA
Sources: Thailand NSO, Ministry of Public Health (MOPH), various Secondary research, Catapult analysis
50
215
Private Hospitals Public Hospitals
Northern Region
100
235
Private Hospitals Public Hospitals
Bangkok
35
180
Private Hospitals Public Hospitals
Southern Region
40
320
Private Hospitals Public Hospitals
North-Eastern Region
Public hospitals are ~3/4th of all
facilities, but grossly under-served
due to multiple factors
95
40
Private Hospitals Public Hospitals
Central Region
Total, est.
1300
hospitals
in
Thailand

9. 9
Health Status Indicators!
most recent assessment!
Notes: All data pertains to 2011; health system performance assessment period between 2001-10
Sources: Report on Govt. Spending & Central-Local Relations in Thailand’s Health Sector (Aug 2012) - World Heath Organization (WHO),
MoPH, various Secondary research, Catapult analysis
There is evidence of recognition by the government that better diagnosis would lead to
reduced healthcare expenditure; Further, the NHSO regions – 13 in all – have been given
greater autonomy in financing decisions and management
! Steady expansion of service availability,
combined with broadening health protection
coverage has been associated with an
increase in utilization of health services
! Though there is little evidence of the extent to
which the health system has contributed to
improved health outcomes, data indicates
recent improvement in outcomes
! Measures of primary health care performance
in preventing and managing chronic illness
show a mixed picture
- Diagnosis rates remain much lower when
compared to other upper middle-income
countries (one that Thailand itself is)
- Though chronic disease management has
improved, gaps remain
Top 10 Causes of Death in Thailand
Thailand is among leading countries for death due to
Lung, Liver, Kidney diseases; It ranks #6 in the world
for road accidents as a leading cause of death
14%
10%
7%
6%
6%
6%
5%
5%
4%
4%
Stroke
Coronoary Heart Disease
Diabetes Mellitus
Lung Disease
Road Traffic Accidents
HIV / AIDS
Liver Disease
Influenze & Pneumonia
Kidney Disease
Liver Cancer
Cause of 2/3rd of all deaths
Health System Performance (select)

10. 10
Situation Assessment!
summary!
Overall Goals on
Health Issues
1.
Challenges in Health
Outcomes
2.
Nature of Health
Spending by Govt.
3.
Evolving Role of
Local Administration
4.
Private Sector Role in
Care Delivery
5.
Key Factors Key Observations
! Non-equitable delivery of healthcare, disparities in spending for those
covered under different schemes, variance in quality & capacity of
facilities are only some of the key gaps that remain, as per Thailand’s
11th National Health Development Plan
! While overall health outcomes have improved (studied between
2004-09), management of various chronic conditions have not.
Recent surveys show poor management of various chronic conditions
among existing patients (e.g. diabetes, hypertension – to name only two)
! Though spending under UCS remains equitable*, challenges are in
nature of spending – pre-dominantly on personnel costs – & spending
(or lack of) in the hinterland for specialized services. Bangkok gets a
disproportionately high share due to its high share of patient referrals
! Examples of local administration (e.g. BMA) successfully managing its
funds (staff & facilities) requirement already exist. This was piloted in 2
other regions. This is being further expanded under the
Decentralization Act & when fully expanded will aid decision-making
! Overall participation by the private sector is limited as it serves
mainly the more lucrative segments of the market (e.g. medical tourists,
civil servants). Private sector care givers (& also device, pharma
companies) must look at the systemic changes already taking place
* spending under Universal Coverage Scheme is basis population spread across the country
Note: BMA is Bangkok Metropolitan Administration
Sources: Thailand NSO, MoPH, WHO, various Secondary research, Catapult analysis

11. 11
Impact of Medical Tourism!
is there a greater role for it to play?!
Evaluation in the
Overall National
Context
Negatives
Positives
Key Factors to Consider*
1. Health infrastructure
capacity addition & utilization
of hospital services
2. Training & development of
medical professionals
3. (Best) Practices to improve
treatment outcomes & treat
complex diseases
4. Price of treatment, spc. for
treatment of locals**
5. Overall impact on the health
system (finances, personnel,
care delivery)
Current literature suggests medical tourism business mainly serves foreign patients !
it may well have a limited role to play, unless specific measures are introduced to
benefit the public health delivery system
1. Overall image perception of
Thailand as a high-quality medical
tourism destination
2. Adoption of latest technologies &
treatment practices, albeit in select
areas
3. Other benefits (e.g. indirect
employment generation) that may
have accrued are not studied
1. Private hospital capacity, as a
segment, has in fact declined
2. Majority of in-patient capacity in
the private serves foreign patients
3. Barring arrangements (e.g. for civil
servants) private hospitals remain
out of reach for Thai people
4. Causes health personnel shortage
* in no particular order of importance
** as opposed to medical tourists coming in to country for medical treatment
Reference: 2013 Paper ‘Medical Tourism in Malaysia, Singapore & Thailand’, Centre for Health Economics, Chulalongkorn University

12. 12
drivers and challenges for
future growth!

13. 13
Drivers and Challenges!
!
Macro-Economic
factors
Health Financing
& Sector reforms
Disease Burden
& Treatment
Challenges
Health
Infrastructure
! Despite (political)
challenges, a V-shaped
recovery expected for
the Thai economy in
2015*. GDP is expected
to grow 5.5% (vs. 2014)
& then moderate, going
forward
! Historically, services
sector & private
investments have a
large share to GDP
growth & unless these
revive, growth will be
anemic at best
! Government finances are
troubled & expenditure on
health already makes for
a large share (~14%) of
total govt. spending
! 3 main challenges exist,
overall:
i. Inequalities in utilization &
spending under different
health coverage schemes
ii. Mounting cost pressures
iii. (Still) Unclear roles in
administration / financing
between central & local
authorities
! Thailand is a rapidly
ageing society & also
faces increasing
burden of chronic
diseases
! Though private facilities
generally tend to offer
best-in-class services,
the same has not
necessarily percolated
to public facilities in the
hinterland
! Improvement in skills
among health
professionals remains a
challenge
! Thailand’s health
infrastructure is
predominantly in the
public sector
! Evidence suggests a large
majority of Thai people
(barring civil servants) do
not tend to use private
hospital facilities. This
suggests not only
disparate standards of
care, but lack of
interplay (between
public-private) to benefit
the larger population
* uncertainty remains unusually high given prevailing political situation
Sources: Various news reports, Bank of Thailand, ADB, World Bank reports, WHO reports, Catapult analysis

14. 14
back up!

15. 15
Health Coverage Schemes!
summary !
Scheme /
Details
Universal
Coverage Scheme
(UCS)
Social Security
Scheme (SSS)
Civil Servant Medical
Benefit Scheme
(CSMBS)
Private
Insurance*
Scheme
nature;
Coverage
Citizen entitlement
(those not covered
by SSS or CSMBS);
comprehensive
1.5% of salary equally
by 3-parties;
comprehensive
Non-contributory
scheme;
comprehensive, higher
than UCS & SSS
Private contract
Beneficiaries Thai citizens
Private sector
employees, excl.
dependents
Government employees,
dependents** (and
retirees)
Those insured
% Population
covered (est.)
75% 16% 9% Est. 6-9 Mn.***
Source of
finance; Cap†
General tax;
(US$ 79/ cap)
Pay-roll tax, Tri-party –
Employer, Employee,
Govt.; (US$ 71/cap)
General tax, non-
contributory scheme;
(US$ 367/cap)
Insurance buyers;
as per contract
Management
organization
NHSO, MOPH
Social Security Office,
Ministry of Labor and
Welfare
Controller General,
Ministry of Finance
Private insurance
companies
* Additional coverage by private contract
** Dependents include parents, spouse and up to 2 children under 20 years of age
*** These beneficiaries are also covered under either UCS, or SSS
† Cap show avg. spending/capita/annum, paid by the govt. to a hospital (2010). Amount varies according to type of treatment
Sources: World Bank Report – 2011, Health System Research Institute, various Secondary research

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