Jiraboon Tosanguan International Health Policy Program 22 nd October 2010

1. Jiraboon Tosanguan International Health Policy Program 22nd October 2010 Journal Club:The Policy Formulation Process of Universal Health Coverage in Thailand (Book Section)Source: Pitayarangsarit, S. (2010) Universal Coverage of Health Care Policy in Thailand: Policy Responses.

2. Overview • Introduction- The Policy Elites • Organisation Structure of the policy formulation process • Influence of Actors on important issues of UC • Source of Financing • Budget requirement • Allocation methods to provinces • Provider payment methods • Service delivery system • Primary care as ‘Gatekeeper’ • Private provider collaboration • Conclusion

3. Introduction • Policy Elites: The dominant actors • Government/Politicians • PM (The Agenda Setter) • Health Minister (Policy Ambassador) • Deputy Health Minister (Policy Selector) • The other relevant Ministers • TOP civil servants • Permanent Secretary of MOPH • Secretary General of NESDB

4. Organization Structure of the policy formulation process Communication during Jan-May 2001

5. Influence of actors and the events occurring on important issues of UC Many aspects of UC were discussed during policy formulation but the important issues raised were: • Source of Financing • Budget requirement • Allocation methods to provinces • Provider payment methods • Service delivery system • Primary care as ‘Gatekeeper’ • Private provider collaboration

6. Source of Financing Pre 2001 • Mixed financing system • Contributions for employees in formal sector (SSS) • General tax for welfare scheme for the poor • Health cards (contribution) • Civil Servant Medical Benefit Scheme (CSMBS) (Tax)

7. Source of Financing (2) Roles of TRT • Initially a mixed system of contribution (Bt100 per mth per capita) and copayment at point of service was proposed • However, collection of contribution in the informal sector could be difficult and may prove to be ‘unacceptable’ to the public • Consequently, the contribution part was dropped, the campaign became “30 baht treats all” & The scheme to be financed by general tax revenue

8. Reaction to tax-based financing • Academics: • Contribution is a more sustainable source of financing – no good suggestion on how to collect contribution based on ability to pay • Thai tax system was regressive and so inappropriate to be used to expand coverage • The economic crisis may hamper the government’s ability to afford the scheme However, their fragmented views meant that each idea had little weight

9. Reaction to tax-based financing (2) • Bureaucrats: • The increased burden on the government budget was a major concern- • Budget expected to rise by Bt4billion in 2003 • Level of public debt was already high (56% of GDP in 2001) and expected to increase further. • Bureau of Budget suggested that revenue from private hospital room and board should be used to supplement the increased demand on the budget They were against the increased budget for UC but the concerns were ignored.

10. Reaction to tax-based financing (3) • Opposition politicians • The scheme, referred to as a ‘welfare system’ would create a burden on the government budget • There was not enough money to run the program and other source of financing should also be considered • “The project use government budget to help the RICH!” Despite urging the government to reconsider many times, their call were ineffective

11. Reaction to tax-based financing (4) • General Public • Villagers agreed that the scheme should protect all, and not just the poor. • Some villagers regretted that the rich might have more opportunities to use public resources than the poor. Generally, people seemed to support the policy, as reflected in the poll.

12. Budget requirement • Roles of TRT • Mobilisation and merging of sources from other insurance schemes were proposed but there was a lot of resistance from the MoL, MoF & the Civil Servant Commission, and so in the end, only the internal MoPH budget was merged • They also want to know: “How Much?”

13. Budget requirement • Roles of Academics • In order to estimate budget, cost per capita was calculated. 3 numbers were proposed based on 3 different studies • Bt900 (Pitayarangsarit et al, 2001) • Too specific, estimated from a special type of hospital • Bt1,500 (Siamwalla, 2001) • Overestimate & no consideration for Gov fiscal constraint • Bt1,202 (Tangcharoensathien, 2001) • Unweighted & no consideration for cost of teaching hospital Bt1,202 was adopted for 2002. However, in 2003, all stakeholders were invited to participate in the 2003 cost calculation workgroup

14. Allocation methods to provinces • Moved towards population base allocation from health service-based • There were 3 main policy issues considered • Flat rate as transitional model or Ultimate model? • Should capitation inclusive of staff salary or not? • Same or different allocation criteria (between large and small hospitals)?

15. Allocation methods to provinces (2) Unweighted capitation as transitional model or Ultimate model? • A technical working group did propose a capitation model in 2002 which take into account the different health needs BUT it was rejected • No consideration for provider risk from size of population. • When the above was corrected, it was too complex to explain to the providers and public. • In 2003, another model was proposed but there was political pressure against this from bureaucrats in order to protect the staff wage. Flat rate was adopted which led to financial difficulties in a number of hospitals

16. Allocation methods to provinces (3) Should capitation inclusive of staff salary or not? • There were attempts to try to exclude salary from capitation by the civil servants. • Material budget was proposed as a way to reduce extra budget and to provide incentive for improving efficiency BUT it was rejected because of the difficulty of the dual system management (full capitation system vs. capitation + salary system) MoPH Permanent Secretary with support from health economists and the Health Minister decided to include salary cost in the 2002 budget to accelerate reform. However, in 2003, MoPH changed to capitation on top of salary budget.

17. Allocation methods to provinces (4) Allocation criteria for large and small hospitals • PS agreed to the Provincial Hospital Society proposal that budget for provincial and regional hospital should be separated from capitation and the supply-side based system should be re-adopted (Oct 2001) • However, TRT wanted to achieve equitable resource allocation in order to reform the whole health system which the demand-side system would better serve • The Rural Doctor Society also supported this policy direction

18. Provider payment methods • Inclusive vs Exclusive • ‘For’ inclusive • Low cost of administration (senior MOPH officials) • Familiar & led to expected hospital revenue (Private providers) • Anticipation of treatment cost-saving in the future from health promotion (community hospital) • This system would increase efficiency- incentive to take cost-effectiveness into consideration (SOME academics) • ‘Against’ inclusive • Disincentive for providers to treat severe cases (some academics) • Community hospitals might delay referral (some academics) • Community hospitals in area with small population size may not be able to bear the cost of referral (some academics)

19. Provider payment methods (2) • Inclusive vs Exclusive • ‘For’ exclusive • Case payment is an incentive to admit patient (Regional & provincial hospitals, some chief provincial medical officers, & some academics) • ‘Against’ exclusive • At the time, DRG system was still incomplete and might lead to unfair budget allocation (an officer from Health Insurance Office, some provinces) • Require skills of well trained IT officers which was still lacking No consensus. Decision was down to the provincial committees. Approx. equal no. of provinces adopted each PP system.

20. Primary care as ‘Gatekeeper’ • MoPH researcher played the ‘Agenda Setter’ role instead of TRT which the Health Minister later became a strong supporter of the concept. • Pre-2001: • Health centres had been established covering the whole country, BUT low satisfaction & evidence of bypass • MoPH wanted to improve PCU standard • Increase efficiency • Provide continuity & comprehensive care using holistic approach • An area with population up to 10,000 should have a PCU

21. Primary care as ‘Gatekeeper’ (2) • Reactions to PCU Model • Academics perceived that UC reform is the last opportunity to construct primary care in the provider-contract model • Private Hospital Association preferred contracting units to have at least 100 bed. They also would like to remove the ‘gatekeeping’ feature of PCU • MoPH wanted PCU to be small & easily accessible and not bound to large hospitals. It should be the smallest contracting unit AND ‘gatekeeping’ feature must remain.

22. Primary care as ‘Gatekeeper’ (3) • Reactions to PCU Model (cont.) • Regional & some provincial hospitals saw this as an opportunity to off-load patients and workload to PCU. • ‘Front-line’ health workers support this policy as they wanted to strengthen health promotion. • However, the number of doctors available were seen as the major problem in implementing the model

23. Private provider collaboration • The concept was widely accepted as it would encourage competition between public and private providers -> greater efficiency • Private sector was very keen. • A number of conditions required • Registration system and allocation of capitation • Quality assurance system • Patients allowed to register with public provider of their choice So it could take some time before private providers could join

24. Private provider collaboration (2) • Reactions • Private sector believed that UC would be similar to SSS which was their major source of income and wanted to join asap in order to utilise their excess capacity. The media was used extensively to pressure MoPH for a quick implementation. • PM was supportive of the concept as the under-utilised private providers could help promoting efficiency. • MoPH were concerned with the quality assurance process in UC as the policy was rapidly implemented. They were also worried about the impact on the financial status of the public provider. • Rural Doctor Society was against the decision to allow private providers to join as main contractor because the public providers needed to improve their competitive capacity The private sector was allowed to joined in June 2001 BUT the population size was limited, and the entry of new providers were prohibited to join

25. Conclusion • There was a number of policy elites involved in the policy formulation process including top-level politicians and high ranking civil servants.The policy formulation ‘circle’ started small but later grew in size and number. • TRT was, in many cases, the agenda setter who was in a very powerful position and also enjoyed a lot of public support for the policy • There were numerous opposition to some of the decisions made by TRT but they were either too fragmented, or they could not provide better alternative. However, they did not always get what they wanted.