Developing nations watch Thailand's bold healthcare plan

As a vote-grabbing election pledge, it had a familiar ring: affordable health- care for all. And what worked for former President Bill Clinton in 1992 also proved a winner last year for Thaksin Shinawatra, Thailand's telecom tycoon-turned-populist politician. For Thai voters fed up with rising healthcare costs, the promise that any hospital visit – including surgery – would cost only 30 baht (75 cents) hit the spot.

Prime Minister Thaksin has kept his word, launching an ambitious plan to provide subsidized care and medicine to millions of underinsured Thais. His National Health Insurance Bill is expected to clear parliament shortly. Meanwhile, authorities have already issued 45 million saffron-colored cards that entitle the holder to a 30-baht treatment by a local healthcare provider.

While this puts him ahead of Mr. Clinton, whose healthcare bill never cleared the Senate, Mr. Thaksin has yet to convince everyone that his plan is working, or that it will outlast its architect. Doctors warn of falling standards and cash shortfalls in state hospitals. Economists predict that Thaksin will need to raise taxes to pay for his generosity, and say that this and other pledges are forcing Thailand into debt.

At stake is more than just Thaksin's chance of reelection. Thailand's bold experiment with universal health coverage, an expensive privilege enjoyed by a minority of countries, could prove a model for other developing nations, who are watching closely. Should Thailand succeed in introducing comprehensive healthcare without breaking the bank, other nations may follow, rather than accept the US model of private insurance.

"Thailand is moving towards universal coverage much quicker than other similar countries in the region," says Bjorn Melgaard, country representative for the World Health Organization (WHO).

Proponents of universal coverage argue that Thailand and other developing countries can improve productivity and play economic catch-up by investing early in public health, rather than waiting for growth.

They point to a WHO commission chaired last year by Harvard economist Jeffery Sachs that yielded detailed projections of economic returns – and lives saved – from healthcare spending in poor countries.

Experts also say that while Thailand needs progressive taxes to fund its reforms, more targeted spending can help soften the blow. Thailand has plenty of well-equipped hospitals and trained doctors – at least in urban areas – but it lacks a countrywide network of family doctors to handle routine care. Since the 30-baht plan was launched, city hospitals have complained of a flood of out-of-town patients who want to skip local practitioners – who can provide routine care at lower costs – and head straight to the country's best, and highest-paid, specialists.

By correcting this bias toward hospitals over primary care, which is common to many developing nations, government planners want to encourage people to seek care close to home. "It's the development of family medicine that's going to balance the costs [of universal coverage].... As family healthcare grows, you'll get an increase in access, but a more focused and lower access to secondary and tertiary care because people will realize that they're getting quality [local] care," says Monica Burns, a social security specialist at the International Labour Organization.

Doctors agree that more primary care is needed, but question whether the government is prepared to spend enough to make it work. Thailand already invests more in healthcare than many of its neighbors, who often rely on employee and private insurers for coverage. Nations such as Korea and Taiwan that do provide full coverage are significantly better off than Thailand, which has a per capita GDP of just over $2,000.

"The government doesn't have the money, and it's not the right time to do it," says Dr. Somsak Lolekha, a US-trained pediatrician who heads Thailand's Medical Council. "Making everything free isn't good because people just want more and more.... They should take responsibility and pay their share."

Under the new system, healthcare providers are compensated according to the number of registered patients they have.

This system, known as per capitation, is the way Britain funds its public healthcare service. In addition to an allowance of 1,200 baht ($30) per patient, resource-strapped hospitals can draw on a $122 million contingency fund and claim fees for referral patients.

Dr. Sanguan Nitayarumphong, deputy permanent secretary at the Ministry of Public Health, says that government spending on health is likely to rise over the next two years before leveling out due to greater efficiency in the system.

He says Thailand spends $4.4 billion on healthcare, of which roughly half is government spending and the rest is out-of-pocket payments and contributions by workers and employees to a social fund.

"If the government really wants to invest in people, it has to spend more," says Dr. Sanguan.

"Thirty baht is not a magic number. It can be changed," he says.

One wild card for Thailand and other Asian nations is the AIDS epidemic. Thailand has an estimated 1 million HIV-positive cases and 200,000 AIDS sufferers. Only women and children infected with the virus are eligible for treatment under the 30-baht plan, but activists want the government to provide retroviral treatment for all sufferers.

Sen. Jon Ungpakorn, a long-time campaigner for healthcare reform, says the government should raise its allocation to 2,000 baht per patient in order to guarantee that all diseases are covered, including AIDS.

He argues that unless the 30-baht scheme really is comprehensive, middle-class patients won't use it and therefore may not be willing to fund it through progressive taxation.

"We don't want this to become a third-class form of healthcare for the poor," Mr. Jon says.

"The quality of the service will be critical. If the quality of the service is good ... then it would mean many more people would use it."