Implications on ph from mode 2 c pachanee -6-oct2009

Implications on Public Health from Mode 2 Trade in

Health Services: Empirical Evidence

[A Case of Thailand]

By

Cha-aim Pachanee

Ministry of Public Health, Thailand

This paper is supported by the World Health Organization

and presented at the Workshop on the movement of patients across international borders -

emerging challenges and opportunities for health care systems

24-25 February 2009, Kobe, Japan

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Contents

1. Introduction ............................................................................................................................................................................. 4

2. Framework of analysis ....................................................................................................................................................... 5

3. The Thai health systems and their implications from Mode 2 international trade in health

services ....................................................................................................................................................................................... 7

3.1 Supply and Demand for Health Services ......................................................................................................... 7

3.1.1 Health facilities............................................................................................................................................. 7

3.1.2 Health workforce ........................................................................................................................................ 8

3.1.3 Demand and Access to healthcare services ................................................................................ 10

3.1.4 Implications of Mode 2 trade in health services on access to services ........................ 15

3.2 Quality control ........................................................................................................................................................... 19

3.2.1 Quality control for medical services and facilities in Thailand ........................................ 19

3.2.2 Implications of Mode 2 trade in health services on quality of services ....................... 20

3.3 Overall implications ................................................................................................................................................ 21

4. Discussion and Recommendations ........................................................................................................................... 22

Acknowledgement .................................................................................................................................................................... 24

References .................................................................................................................................................................................... 25

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List of Tables

Table 1 Health facilities in the public sector, 2007 .................................................................................................... 7

Table 2 Number and proportion of doctor loss in relation to newly graduated doctors,

1994 -2006 ................................................................................................................................................................. 10

Table 3 Healthcare seeking behaviours of Thai population during 1991-2007 ..................................... 11

Table 4 Projected demand for medical doctors by Thai patients .................................................................... 12

Table 5 Number of foreign patients entering Thailand by country, 2001-2007 ..................................... 13

Table 6 Demand for medical doctors by foreign patients ................................................................................... 14

Table 7 Scenarios of international trade in health services and human resource development .... 17

Table 8 Comparison of monthly salary in public and private health facilities ......................................... 19

Table 9 Competitive Advantage of health facilities in Asian countries providing health care ...........

services to foreign patients ................................................................................................................................ 20

Table 10 Estimate of revenues from different products and services (million baht) ........................... 22

List of Figures

Figure 1 Model of trade in health services in Thailand, including related regulatory framework ... 6

Figure 2 Geographical distribution of population : doctor, population : dentist, population : ............

pharmacist, population : nurse ratios, in 2004 ........................................................................................ 9

Figure 3 Proportion of medical doctors working full-time in the private sector .................................... 18

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1. Introduction

Nowadays, we witness a large number of patients from the developed world obtaining medical

services in world class hospitals in some developing countries and extending the visit with an

impressive holiday. Comparing the costs of selected services between countries, the cost for

heart bypass graft surgery in Thailand is three times less than what it would cost in the United

States, or one cosmetic surgery in India is one tenth of the cost in the United States without long

wait-listing (1). With this, we can clearly see one of the factors driving such an extensive ‘medical

tourism’ phenomenon - world class service at reasonably lower costs (2). In addition, good

quality services with warm hospitality and availability of alternative treatment area, the number

of foreign patients rapidly increases. Smith et al (2009) (1) estimated that there were around 4

million foreign patients every year. Thailand attracted the highest number of patients in Asia

with a figure of more than 1 million each year since 2004 (1, 3, 4). The worldwide market for

medical tourism is about USD20–40 billion, with predictions topping USD100 billion by 2012.

Thailand, the present leading health services exporter in Asia, has the market at USD615 million

(1).

In Thailand, the business of private hospitals was on the rise during the period of economic boom

in mid the 1990’s. The promotion of medical services to foreign patients started aggressively

during the economic crisis in 1997 when facilities in big private hospitals were not fully utilized

by Thai patients. These hospitals then shifted their target customers to foreigners and conducted

extensive marketing campaigns. Since late the 1990’s, the growth in demand for medical services

in Thailand among foreign patients, expansion of service specialties, and expansion of service

facilities along with marketing campaigns rapidly increased.

From the economic point of view, influx of foreign patients generates income, as indicated with

the amounts mentioned above. However, negative impacts particularly on the health system also

occur in parallel. Although some constraint situations on the health system have been in

existence outside international trade in health services, the growth of international trade does

take part in aggravating the situation.

Implications of Mode 2 international trade in health services in Thailand have been studied

sporadically and mostly focussed on a few specific issues or were included in studies on

implications of international trade liberalisation. For instances, Mongkolporn et al 2005 (5)

studied the demand and supply of medical services for foreign patients, focusing on Japanese

patients, and implications on the health system and health workforce in Thailand, Pachanee and

5

Wibulpolprasert 2006 (6) projected the additional demand for medical doctors for foreign

patients in Thailand, Na Ranong et al 2008 (7) studied implication of the Thailand medical hub

policy, Kanchanachitra et al (8) studied implications on health from free trade policy, and

Wibulpolprasert et al (9) studied implication of liberalisation of trade in services on the health

workforce in Thailand.

This paper presents a case of Thailand on the implications of Mode 2 international trade in health

services on the health systems. As mentioned above, Thailand is a leading exporter of health

services with the highest number of foreign patients in Asia, and possible implications arise.

With the promotion of the medical hub policy supported by the government, export of health

services will expand.

2. Framework of analysis

The analysis was carried out by literature review and direct communication with related

organisations and informants. It covers implications in terms of opportunity and risk for access,

price and quality of health services, and the health workforce

Mode 2 of trade in health services does not occur just in isolation. Instead it also stimulates, as

well as is influenced by, other modes of services particularly Mode 3 and Mode 4. The

characteristics of trade in health services in Thailand can be modeled as in Figure 2.

The study analyses supply, demand and access for health services by Thai and non-Thai, how

these are affected in order to answer the following research questions:

o What have been the implications on the access to health services?

o What have been the implications on the prices of health services?

o What have been the implications on health workforce?

o What have been the implications on the quality of health services?

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Figure 1 Model of trade in health services in Thailand, including related regulatory framework

Note: OOP = Out of pocket

SSS = Social Security Scheme

UC = Universal Coverage

CSMBS = Civil Servant Medical Benefit Scheme

Mode 2 Mode 4

• Health Facilities • Drug Act • Insurance Act • Local Admin.

Foreign Business Act

Health Prof. Foreign Investors

Local Investors

Mode 1

Brain drain

Mode 3

Transfer o

f Capita

l

Private health services

Local Patients

Public health services

Immigration Act

Workers

Labour Act (Work Permit)

Health Prof. Act

Service / payment

OOP / Private

insurance

SSS/ UC/ CSMBS

Border Border

Premise Control Acts

Foreign providers

Mode 1,2

Mode 3

Mode 4

Foreign patients

Practice

Border

(Internal)

(External)

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3. The Thai health systems and their implications from Mode 2

international trade in health services

Thailand, like many other countries, has a pluralistic health system. Ministry of Public Health is

the main national health agency and owns the majority of health resources and facilities, while

private health facilities are operated under supervision of the Medical Registration Division,

Department of Health Service Support of Ministry of Public Health. Existing public health

facilities provide good coverage throughout the country at all levels of care – primary, secondary

and tertiary levels. Medical services costs are paid through one of the health insurance schemes1.

3.1 Supply and Demand for Health Services

3.1.1 Health facilities

Table 1 provides information on a number of public health facilities in the countries in 2007.

These facilities are available throughout the country with full coverage. Health centres are

operated by health workers who are trained to provide primary care services to people of

communities covered by that health centre.

Table 1 Health facilities in the public sector, 2007

Administrative

Level Health Facility No. Coverage

• Medical school hospitals 5

Bangkok Metropolis • General hospitals 26

• Specialized hospitals/institutions 14

• Public health centres/branches 68 / 77 All districts

Regional level and • Medical school hospitals 6

Branches • Regional hospitals 25

• Specialized hospitals 47

Provincial level • General hospitals (under MoPH) 70 100%

(75 provinces) • Military hospitals under the Ministry of Defense 59

• Hospital under the Royal Thai Police 1

796 districts and • Community hospitals (Mar, 2007) 730 91.7%

81 minor districts • Branch hospital 1

1 Important health insurance schemes in Thailand are 1) Universal coverage of health insurance [UC], 2)

Civil servant medical scheme [CSMBS], and 3) Social security scheme [SSS]

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Administrative

Level Health Facility No. Coverage

• Municipal health centres (Oct, 2003) 214

7,255 sub-districts • Health centres (2006) 9,762 100%

• Community health posts 311

74,435 villages • Community PHC centres (2003)

- Rural 66,223 89.0%

- Urban 3,108

Source: Thailand Health Profile 2005-2007 (10)

In the private sector, the number of private hospitals expanded rapidly from around 10 percent

of total beds in the entire health system in 1985 to 23 percent in 1997, largely influenced by the

rapid double-digit economic growth in the early 1990’s. After the 1997 economic crisis, a number

of private hospitals were closed and many of them reduced their capacity. It was during this time

when a number of big private hospitals started aggressive marketing to attract more foreign

patients who have higher affordability for medical costs.

The proportion of private hospital beds was reduced to 21 percent in 2000. In 2006, there were

344 private hospitals providing a total of 35,806 beds, of which 43 percent were in Bangkok.

Besides, there were 16,547 private clinics (without inpatient bed) throughout the country (10).

3.1.2 Health workforce

Inequitable distribution and insufficient number of health workforce remains a major problem in

the Thai health systems (11, 12). In 2006, there were 21,051 medical doctors, 4,187 dentists,

7,940 pharmacists, 101,143 registered nurses and 12,882 technical nurses in the country (10).

Out of 21,052 doctors, or 20.5 percent (4,309 doctors) are in the private sector; however this

does not cover those who work part-time after hours in the private sector while registered in the

public sector. On average, the number of doctors per hospital in the private sector is higher than

the number in public hospitals, while bed occupation in the private hospitals is lower. There is

uneven distribution of the health personnel: population ratio between geographic regions. In

2005, the doctor : population ratio in Bangkok was 1 : 867, eight times better than the ratio in the

Northeast (1 : 7015) (10). Figure 1 illustrates population covered by each doctor, dentist,

pharmacist and nurse in 2004.

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Figure 2 Geographical distribution of population : doctor, population : dentist, population :

pharmacist, population : nurse ratios, in 2004

Source: Thailand Health Profile 2005-2007(10)

Loss of medical doctors due to resignation is also an alarming problem of the public health sector

(13). Part of the loss is due to shifting to the private system especially major private hospitals in

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urban area as a result of expanding exportation of health services to foreign patients (11). In

2005, a net loss of 667 doctors through resignation occurred, accounting for 56 percent newly-

graduated doctors [Table 2]. This creates an insufficient number of medical doctors in some

areas, particularly in the rural areas where the population are relied on medical services at

public facilities.

Table 2 Number and proportion of doctor loss in relation to newly graduated doctors,

1994 -2006

Year

Number of doctors

Net loss (No)

Net loss (%)

Increased Decreased (resignation)

New graduates

Re-appointed

Total Civil servants

State employees

Total

1994 526 - 526 42 - 42 42 8.0

1995 576 - 576 260 - 260 260 45.1

1996 568 - 568 344 - 344 344 60.6

1997 579 30 609 336 - 336 306 52.8

1998 678 93 711 299 - 299 206 33.3

1999 830 57 887 204 - 204 147 17.7

2000 893 98 991 201 - 201 103 11.5

2001 883 82 952 193 83 276 194 22.0

2002 878 38 916 401 163 564 526 59.9

2003 1,013 39 1,052 287 508 795 756 74.6

2004 998 32 1,030 468 - 468 436 43.7

2005 741 37 778 663 - 663 626 84.5

2006 1,188 110 1,298 777 - 777 667 56.1

Source: Thailand health profile 2005-2007 (page 273)

3.1.3 Demand and Access to healthcare services

3.1.3.1 Demand and access by Thai patients

According to health and welfare surveys conducted by the National Statistical Office since 1991

to date, Thai people increasingly depend on health facility-based services. The proportion of

using facility-based health services increased from 40.2 percent in 1970 to 78.5 percent in 2005

as shown in Table 3 (14-21). The proportion of self-medication and traditional healing reduced

steadily.

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Table 3 Healthcare seeking behaviours of Thai population during 1991-2007

Health care seeking behaviours

1991 1996 2001 2003 2004 2005 2006 2007

Not seeking health care 16.8 7.1 5.1 5.7 5.3 4.6 5.1 4.4

Traditional healing 5.3 3.4 2.4 2.8 2.0 1.5 1.5 1.4

Self-medication 37.8 37.2 25.8 22.5 20.9 20.5 25.0 25.4

Health Centre (public) 9.9 14.1 13.9 17.7 24.6 25.0 16.2 15.4

Public Hospital 12.9 11.4 34.6 32.3 30.2 31.0 30.0 26.4

Private Clinic / Hospital 17.5 26.9 17.7 22.5 22.7 22.5 26.4 25.3

Sources: National Statistical Office. Reports of health and welfare survey, 1991, 1996, 2001,

2003, 2004, 2005, 2006, 2007

The demand for health services and health personnel in Thailand is expanding, contributed by

the universal coverage of health insurance which has been implemented since 2001 of which

more than 70 percent of the population are registered with the public facilities to utilise health

services (6). Besides, the economic recovery enabled people to obtain private medical services

and services not covered by the insurance. In 2003, two years after implementing the universal

coverage policy and a time of rapid economic recovery, outpatient visits increased to 3.62

visits/capita/year (17). In addition, increases in specific health problems and diseases such as

chronic diseases and diseases in elderly people also increased demand for specific types of

medical services (5).

A projection on demand of medical doctors by Thai patients shows that 1,815-2,083 additional

doctors are required for 2009 and an increase to 1,891-2,175 doctors in 2015.

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Table 4 Projected demand for medical doctors by Thai patients

Year Visits / capita / year Population (million)

Total visits (OP equiv.)

that require MD (million)

Number of additional medical doctors Required

Outpatients (OP)

Inpatients (IP)

Total In private sector

1996 2.87(1) 0.066

(1) - - - -

2001 2.84(1) 0.076

(1) 62.0 198.65 - 208.07 - -

2003 3.62(1) 0.086

(1) 63.3 247.50 -258.39 2,443 -2,795 1,002 - 1,146

2005 3.87(2) 0.092

(2) 64.5 270.18 -282.07 1,134 -1,315 465 – 539

2007 4.29(2) 0.099

(2) 65.7 302.10 - 315.15 1,596 -1,838 654 – 753

2009 4.77(2) 0.106

(2) 67.0 338.40 -352.65 1,815 - 2,083 744 – 854

2011 5.16(2) 0.113

(2) 68.2 371.17 -386.66 1,639 - 1,889 672 – 775

2013 5.59(2) 0.120

(2) 69.4 407.78 -424.55 1,830 - 2,105 750 – 863

2015 6.03(2) 0.127

(2) 70.7 445.59 -463.70 1,891 - 2,175 775 – 892

(1) Data from Health and Welfare Survey by National Statistical Office

(2) Projecting rate of future increase in Outpatient (OP) and In-patient (IP) visits by using

average rate in the previous three biennial periods giving equal weight to each period.

Conditions for projection:

1. Population growth rate = 1 percent / year (National Statistical Office 2004)

2. 70 percent of OP and 100 percent IP require medical doctor services (Wibulpolprasert 2002)

3. One IP visit equivalent to the work load of 16-18 OP visits (Wibulpolprasert 2002)

4. One medical doctor services 18,000 - 20,000 OP equivalent visits / year (Wibulpolprasert 2002)

5. 41 percent of patients visit private hospitals/clinics

3.1.3.2 Demand and access by foreign patients

Together with high comparative advantages of good hospitality, quality of human resources, and

the lower cost with good quality of services (22), business of these private hospitals has been

successful. This is clearly seen by the number of more than 1 million foreign patients in Thailand

since 2004 with 20 percent increase between 2004 and 2007 (3, 4) as shown in Table 5.

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Table 5 Number of foreign patients entering Thailand by country, 2001-2007

Country / Region 2001 2002 2003 2004 2005 2007

Japan 118,170 131,684 162,909 247,238 185,616 233,389

USA 49,253 58,402 85,292 118,771 192,238 136,248

UK 36,778 41,599 74,856 95,941 108,156 110,286

Taiwan /China 26,898 27,438 46,624 57,051 57,279 24,392

Germany 19,057 18,923 37,055 40,180 42,798 41,313

ASEAN NA NA 36,708 93,516 74,178 68,420

India 20,310 23,752 35,528 NA NA 36,645

Middle East NA 20,004 34,704 71,051 98,451 126,215

Bangladesh 14,547 23,803 34,051 NA NA 32,313

France 16,102 17,679 25,582 32,409 36,175 37,251

Australia 14,265 16,479 24,228 35,092 40,161 42,668

Scandinavia NA NA 19,851 20,990 22,921 NA

South Korea 14,419 14,877 19,588 31,303 26,571 26,259

Canada NA NA 12,909 18,144 18,177 22,907

Eastern Europe NA NA 8,634 6,728 6,120 NA

Others 220,367 234,460 315,018 204,219 302,834 435,503

Total 550,161 630,000 973,532 1,103,095 1,249,984 1,373,087

Source: Department of Export Promotion, Ministry of Commerce, Thailand.

Note: 1. 1,373,807 patients were reported for 2006. However, only the figure by hospitals

is available, the figure by countries therefore does not appear in the table.

2. NA = Not applicable

The data were collected annually by the Bureau of Service Business Promotion, Department of

Export Promotion, Ministry of Commerce2. The Bureau sent out a letter with questionnaire [see

Annex 1 for questionnaire] to request private hospitals to provide the number of foreign patients

disaggregated by nationality. However, only hospitals where the Bureau anticipated receiving

foreign patients would receive such questionnaire. These included hospitals in major cities and

tourist detinations of Bangkok, Chiangmai, Chonburi, Phuket, Chiangrai, Songkhla, Trad,

Mookdaharn, Prachuabkirikhan, Khonkhaen, Udonthani and Surat Thani. Forty-nine hospitals

provided the data in 2006, and the same hospitals with an additional one (total of 50 hospitals)

provided data in 2007. Of this, three hospitals (Siriraj, Maharaj Nakorn Chiangmai, and

2 The information was obtained from personal communication [two telephone conversations] with the

Director of Bureau of Service Business Promotion, Department of Export Promotion, Ministry of

Commerce.

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Srinakarin Khonkaen) are public hospitals with more than 1,000 beds (3,000 beds for Siriraj

Hospital).

The figures in Table 4 also included foreign patients who revisited. It is estimated that one

patient might have 3-4 visits each year. Since the data covered only about 50 private hospitals, it

is very likely that the actual figures might be higher if taking into account number of foreign

patients in big public hospitals as well as other private hospitals. In addition, each hospital has

different patient registration systems; the figures reported by these hospitals could be either the

number of individual or re-visited patients. However, the Bureau of Service Business Promotion

has revealed that they have asked the hospitals to report the number of individuals from 2008

(collected by the Bureau in 2009) onward.

Foreign patients in this context cover expatriates (60 percent), foreign visitors with medical

purpose (30 percent), and foreign tourists who become ill while travelling (10 percent) (5).

With increases in the number of foreign patients, the projection by Pachanee and

Wibulpolprasert (2006) (6) found that in 2009 the percentage of additional medical doctors

required by foreign patients will be 6-8 percent of total doctors in the health system or 17-21

percent of the private system. In 2015, the requirement will increase to 9-12 percent of the

health system or 23-34 percent of the private system. However, Na Ranong et al 2008 (7) argued

that this estimation might be low. The figures could be five times higher.

Table 6 Demand for medical doctors by foreign patients

Year

Foreign patient visits (million) Total visits (OPD equiv.) require MD

(million)

Additional medical doctors required by foreign patients

Outpatients (OP)

Inpatients (IP)

Total % of those required in the private sector

% of those required by the whole system

2001 0.61(1) 0.030 1.22 - - -

2002 0.82(1) 0.041 1.64 - - -

2003 1.26(1) 0.063 2.53 109 - 131 11 4

2005 1.76 - 1.82(2) 0.088 - 0.091 3.52 - 3.64 83 - 111 18 - 21 7

2007 2.45 - 2.62(2) 0.122 - 0.131 4.90 - 5.25 115 - 160 18 - 21 7 – 8

2009 3.18 - 3.53(3) 0.159 - 0.176 6.37 - 7.06 123 - 181 17 - 21 6 – 8

2011 4.14 - 4.75(3) 0.207 - 0.237 8.89 - 9.50 159 - 244 24 - 31 9 – 11

2013 5.01 - 5.96(4) 0.250 - 0.298 10.03 - 11.92 145 - 242 19 - 28 7 – 10

2015 6.06 - 7.48(4) 0.303 - 0.373 12.13 - 14.95 176 - 303 23 - 34 9 – 12

(1) Figure from the survey by Ministry of Commerce plus 30 percent of the under-surveyed.

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(2) Estimation with the assumption of increase at the rate of 18-20 percent per year (3) Estimation with the assumption of increase at the rate of 14-16 percent per year (4) Estimation with the assumption of increase at the rate of 10-12 percent per year

Conditions for projection:

1. IP visit is equal to 5 percent of OP visits and 20 times of OP workload

2. Every patient requires a medical doctor

3. One medical doctor provides services to 10,000 – 12,000 OPD visits / year

(Wibulpolprasert 2002)

3.1.4 Implications of Mode 2 trade in health services on access to services

Implications on access to medical services involve equity of access, price and health workforce.

This section analyses opportunities and risks of access (including prices) and health workforce

separately.

3.1.4.1 Implications on access and price of services

• Opportunities

Mode 2 trade in health services helps increase revenue from a high number of foreign patients

with higher prices of medical services. Using the revenue to reinvest in the health system to

promote its reform, particularly in the area of human resource management for health, can

create better access to health services (23). Na Ranong et al 2008 (7) noted that increasing

demand for medical services could raise prices of services, hence an increase in revenue.

However, this could as well create a barrier of access to services among Thai patients who cannot

afford high prices. The same authors conducted a survey on price changes of caesarean section,

appendicitis operation, hernia operation, gall bladder operation and knee joint replacement

operation four hospitals that provide medical services to foreign patients and found that the

prices increased every year [the survey covered a period of 2003-2008). Some hospital charged

foreign patients higher prices and the author noted that this would be a good measure to prevent

increasing prices for the case of Thai patients and encourage more access to services.

Besides, with the increased demand, service providers also increase supplies of service

specialties that can, at the same time, benefit Thai patients.

• Risks

The creation of two-tier system with the better quality services reserved for foreign clients with

a higher ability to pay could lead to a decrease in quality and an increase in price for the poor if

the lower tier is not properly subsidised (8, 23, 24).

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As mentioned above, increasing demand for medical services from foreign patients could raise

the prices of services. Consequently, only wealthy Thai patients will be able to afford medical

services from private facilities. Coupled with the implementation of the universal coverage of

health care, most Thai patients will rely on public facilities. However, equity of access might be

disturbed since the number of health professionals is limited and unevenly distributed

throughout the country. The magnitude of the problem is more significant than one would

perceive. In the private sector, resources needed for providing services to one foreign patient

may be equivalent to what is needed for 4-5 Thai patients (25). High competition among private

hospitals themselves to attract foreign patients such as establishing of specialised centres

imposes these hospitals to provide high financial incentive to specialists in the public sectors to

work for them. Therefore the ratio of health personnel to population may worsen (23). In the

dental sector, Kanchanachitra et al (2004) (8) has estimated that, in Phuket, around 5 percent of

tourists would come to use the local dental services. The annual income figure of foreigners

visiting the province stood at 1,453,426 Baht which indicates that there would be more than

72,000 foreign patients alone. The maximum capacity of the dental service in Phuket was for,

however, 60,840 patients.

3.1.4.2 Implications of Mode 2 trade in health services on health workforce

• Opportunities

In Thailand, the increase in demand from the influx of foreign patients would lead to more

employment for health care personnel and higher earnings in the private sector as well as an

increase of medical expertise in the highly demanding areas of services. The increase in plastic

surgeons and ophthalmologists, for instance, implies that Thailand has the capacity to offer

services well in those areas. It could thus generate more foreign exchange earnings as well as

more job opportunities in linkage industries such as tourism with food, insurance and hotel

industries.

• Risks

The increased demand from the influx of foreign patients and the attractive financial incentive to

supply those demands within the private sector could lead to an exacerbation of health

personnel shortages. It was estimated that, in 2005, Thailand still need 1,134 - 1,315 more

doctors to meet the country’s health needs and it would take many years to fulfil this shortage.

However, this problem would be particularly severe in the public sector and rural areas due to

17

the internal brain drain phenomenon as health workers are tempted to move the private sector

where they can earn more. By one estimate, if there were 100,000 more patients seeking medical

treatment in Thailand, it could lead to an internal brain drain of between 240 to 700 doctors (26).

From the study of Wibulpolprasert et al (2002) (9), several scenarios were predicted depending

on the extent of health system reform and the success of trade in health services (Table 7). The

high growth of the health service sector (i.e. scenario 1 and 3 where the sector is highly

successful) and the poor level of reform (i.e. scenario 3 and 4 where the problem of shortage of

health personnel in the rural area and the public sector persist) would lead to the worst problem

in term of the number and the maldistribution of the health workforce.

Table 7 Scenarios of international trade in health services and human resource development

The success of health

system reform

The success of International trade in health services

High Low

High 1 2

Low 3 4

Note: Wibulpolprasert et al. (2002)

The proportion of medical doctors working full-time in the private sector since 1998 is around

20 percent [Figure 3]. In Thailand it is legal for health personnel in the public sector to work in

private health facilities after hours. Medical specialists are in high demand in the private sectors.

Employment of these specialists is mostly on a part-time basis as most of them are registered as

full-time staff in the public sector. In 2006, 12,736 medical doctors throughout the country

worked part-time after hours at the private sector, while 1,313 dentists and 7,708 nurses did,

accounted for 60.5, 31.4 and 7.3 percent of medical doctors, dentists and nurses in the public

health sector, respectively.

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Figure 3 Proportion of medical doctors working full-time in the private sector

Source: Bureau of Policy and Strategy, Ministry of Public Health 2007

The study by Kanchanachitra et al (2004) (8) has shown that there was a direct link between the

growth of the private health service sector and the number of doctors leaving the public sector.

The rate of newly graduated doctors leaving the public sector had continuously gone up during

1994-1997 while the private sector enjoyed substantial growth from the period of economy

prosperity. This figure went down during the economic crisis between 1997-1999 but started to

climb again and reached the rate of 59.9% in 2002 and was the highest in 2005 at 84.5% as

shown in Table 2 above (10).

The private sector also provides 8-11 times higher financial incentive to attract health personnel

from the public sector [Table 8]. Although the Ministry of Public Health has increased financial

incentives for medical doctors working in the public sector, the amount is still less than what

they would get from the private sector, especially for specialists.

After the launch of universal health coverage (UC), there have been more health needs for health

personnel in rural areas because the increase in utilisation rate of health centres and community

hospitals. As a result, those rural areas would continue to suffer the most if the problem of

internal brain-drain is not sufficiently addressed. In 2005, the doctor : population ratio in the

1998 1999 2000 2001 2002 2003 2004 2005 2006

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poorest North-eastern region was 1:7,015, almost ten times of the proportion in the capital city

of Bangkok, 1:867.

With the mentioned health workforce problem, the government has implemented both demand

and supply side interventions including financial and non-financial incentives to increase

retention of health personnel in the public sector (6).

Table 8 Comparison of monthly salary in public and private health facilities

Cadre MOPH State enterprise Private

(Non-profit)

Private

(profit)

Medical doctor 8180 - 27980 15090 – 62080 100,000* 50,000 – 300,000

Dentist 8260 – 19840 17990 – 52990 80,000* 27,000 - 150,000

Pharmacist 7197 – 17083 7640 – 49910 18000 – 55000 18399 – 31229

Nurses 5255 – 19680 7640 – 21620 9000 – 20000 14281 – 27720

Medical

technician

6680 – 19005 7640 – 35960 5300 – 25000 14281 – 29381

Radiologist 7880 – 17880 4880 – 35960 5000 – 20000 10417 – 29160

Admin 5200 – 15540 6810 – 46950 5500 – 25000 5326 – 20963

Others 4200 – 14040 4880 - 21620 5000 – 15000 5310 – 27000

Note: These

range covers salary

and other benefits

Note: * average

salary

Source: Pannarunothai S. et al 1999. (27)

3.2 Quality control

3.2.1 Quality control for medical services and facilities in Thailand

For public facilities, the government has invested a large amount of budget to establish good

facilities nationwide since the early 1980s. They are well maintained and new investments

continue. For private facilities, the Medical Facility Act 1999 requires the licensed private

20

hospitals to meet certain standards on the premises and the number of health professionals.

However, these are minimal standards.

In 1998, the Institute of Hospital Quality Improvement and Accreditation was established as an

agency to provide accreditation to hospitals that meet all the required standards. In 2007, 227

hospitals received this accreditation (28). Of which, 200 were public hospitals while 27 were

private hospitals. Although it is not mandatory to receive accreditation but those that are

accredited will have better social acceptance.

A report in the McKinsey Quarterly (29) on mapping the market for medical travel reveals that

40 percent of medical travelers would see the world’s most advanced technologies and 32

percent would seek better-quality care than they could find in their home countries. Comparing

with other countries, health facilities in Thailand have high competitive advantages which are

one of the main factors influencing the influx of foreign patients [Table 9].

Table 9 Competitive Advantage of health facilities in Asian countries providing health care

services to foreign patients

Competitive Advantage Thai Singapore India Malaysia Hong Kong

Service & Hospitality ***** ** * * **

Hi-technological Hardware ** **** ** * **

HR Quality **** **** ** ** ***

International Accredited Hospital ** ** - * *

Pre-emptive Move ** *** * * *

Synergy/Strategic Partner * ** * * *

Accessibility/Market Channel ** *** * ** **

Reasonable Cost **** * **** *** *

Source: modified from Private Hospital Association and Business Council of Thailand, 2004 (22)

3.2.2 Implications of Mode 2 trade in health services on quality of services

• Opportunities

Trade liberalisation increases competition which in turn reduces costs within the market. Health

services trade offers countries the opportunity to enhance their health systems through trading

21

health technology in areas where countries have comparative advantages. Developing countries

might improve their infrastructure; upgrade medical knowledge and technological capacity in

order to attract foreign patients.

The influx of foreigners would lead to an increase demand for high quality services which in turn

lead to a more efficient and high quality health service providers, although the improvement

would occur mainly in the private sector (8, 23, 24).

From the opinion survey carried out by Searsiriwattana et al (2006) (24), the general opinion of

the private sector, who agreed with the liberalisation, said that the opportunity to learn from

developed countries, i.e. USA, was immense and the technological advance gained from such

country would benefit the quality of service. The liberalisation of health services through this

FTA would certainly open up any barrier which was impeding the transfer of knowledge.

• Risks

From the opinion survey on Thai-US FTA by Searsiriwattana et al (2006) (24), the professional

bodies and the public health government agencies (both central and local), who the majority

disagreed with liberalisation, stated that they did not want the ‘commercialisation’ of health

services as it would demean the cause and purpose of health care (which has been portrayed as

noble by the Thai community). This could lead to a drop in the ethical standard of health care

personnel, and in turn, the quality of care. They were also concerned about the two-tier service

which would stress too much on giving care to the richer foreigner.

The two-tier system can lead to an overall increase in price for the lower tier if resources are

inappropriately allocated (8, 24, 30). At the same time, it could lead to a drop in quality for the

lower tier (30).

3.3 Overall implications

• Opportunities

One of the main advantages is income generation. The increase in revenues from foreign patients

can provide financial benefits from economies of scale that would help to improve the health

service sector as a whole (23, 31). Thailand has more than one million foreign patients each year

which attracts around USD615 million annually (32). The Department of Export Promotion

estimated an income of USD1,028 million and USD1,170 million would be gained from foreign

22

patients in 2006 and 2007, respectively. It is estimated that 850,000 cases of dental care could

bring in THB19.6 billion in 2004 which could rise to THB39.8 billion in 2008 (8), and the revenue

from foreign consumption of spa, Thai massage and health tourism could be as high as THB17

billion in 2008 (24).

Table 10 Estimate of revenues from different products and services (million baht)

Types of business 2004 2005 2006 2007 2008 Total

Curative 19,635 23,100 27,433 32,898 39,833 142,899

Health promotion 4,996 6,754 9,185 12,492 16,989 50,416

Health products 1,500 2,000 3,000 4,000 7,000 17,500

Total 26,131 31,854 39,618 49,390 63,822 210,815

Note: adapted from Kanchanachitra et al, (2004)

The most common areas of health care service requested by foreigners are acute care, physical

checkups, dentistry, long-term care, and health promotion. These are very promising areas for

foreign exchange earnings if Thailand makes the commitment to international trade in health

services.

In an FTA context, there is a potential for cooperation with other nations in order to allow

exchange of knowledge and reduce trade barrier, e.g. cooperation on Hospital Accreditation

between Thai and India (24).

• Risks

Other several impacts are likely to happen. For example, an influx of foreign patients could lead

to the danger of importing infectious disease such as HIV/AIDS, and in a bilateral FTA context, it

is possible that the other country may set certain conditions which may be detrimental to the

Thai health system, and the extent of patent protection to apply to diagnostic, curative and

surgical techniques which would prevent Thailand from gaining access to new knowledge that

could benefit the Thai health system.

4 Discussion and Recommendations

Mode 2 trade in health services in Thailand has occurred and was initiated by the private sector

itself. It has occurred outside the multilateral and regional trade agreements. Thailand is

23

recognised as a leading exporter of medical services to foreign patients due to its high capacity

and good marketing strategies.

Although the increase in demand of health services among foreign patients generates income for

the country, negative implications also occur and take part in elevating existing problems in the

Thai health systems such as inequitable distribution of health workforce and widening of the

two-tiered health services. However, the implications have not been systematically measured

and monitored.

The review for this paper found that the main methods used for analysing the implications of

Mode 2 trade in health services in Thailand are mainly by review of existing literature, modelling,

surveys, focus group discussion, and direct communication with experts in trade in health

services, communication with service providers and interview with service providers.

In order to take benefit from the increasing demand of health services from foreign patients,

there have been several recommendations, for example, the Thai government should find a

measure to collect a reasonable medical service tax from foreign patients who seek medical

services in Thailand (7). Although this tax revenue could be used as compensation for the public

sector in providing medical service to Thai patients and providing quality training of health

personnel, collecting tax from patients might reduce their interest to seek medical services in

Thailand.

The policy coherence and collaboration among health and non-health sectors should be

established. The private sector should collaborate with the public sector (such as the Ministry of

Public Health) in surveillance and monitoring implications of Mode 2 trade in health services on

the health systems and taking part in addressing and preventing negative implications.

As the magnitude of impacts from Mode 2 international trade in health services is still not clear

and has not been systematically measure, good systems or methods for measuring the impacts

should be developed. In addition, Thailand could learn from experience of other countries that

promote Mode 2 trade in health services on how impacts on the health systems are prevented,

measured and addressed.

24

Acknowledgement

The author would like to acknowledge and thank the World Health Organization (Department of

Ethics, Trade, Human Right and Health Law) for providing support to this study. Mr. Jiraboon

Tosanguan (International Health Policy Programme, Thailand) is thanked for his assistance with

information gathering and part of literature review for the earlier draft, and a big thank goes to

Ms. Pen Suwannarat (International Health Policy Programme, Thailand) for her assistance with

editing. The author thanks the Director of the Service Business Division, Department of Export

Promotion, Ministry of Commerce, for providing information on the number of foreign patients

and how the data were collected. All other sources of information are acknowledged with thanks.

Finally, special thanks go to Dr. Viroj Tangcharoensathien, Director of International Health Policy

Programme Thailand, and Dr. Suwit Wibulpolprasert from Ministry of Public Health Thailand for

supporting this work.

25

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28

Appendix 1

Number of Foreign Patient Report Form

Name of Hospital _______________________________________________________

Name of Informant _____________________________ Position________________

Phone_____________________________ Fax ___________________________

Please report the number of foreign patients using services in the hospital during January –

December 2007 by country

Country Number of foreign patients Remark

North America

- USA

- Canada

Europe

- UK

- Germany

- France

- Sweden

- Other (please specify)

East Europe

- Russia


East Asia

- Japan

- China

- South Korea

29


- Taiwan


Oceania

- Australia

- New Zealand


Middle East

- United Arab Emirate

- Oman

- Kuwait

- Bahrain

- Qatar

- Yemen


South Asia

- Bangladesh

- India

- Pakistan

- Sri Lanka

- Maldives


ASEAN

- Cambodia

- Myanmar

- Vietnam

- Indonesia

30


- Philippines


Other country (Please specify)

Total

Note: Please sum up the number of foreign patients who revisit

Proportion of foreign patients who reside in Thailand ________%

Proportion of foreign patients who do not reside in Thailand ______________%

Number of foreign patients using services in 2006 ______________

Number of foreign patients using services in 2007 _____________

Change from 2006 � increase _________% � Decrease_________%

Estimated change of foreign patients who will utilize services in 2008

� Increase _________% � Decrease_________%

Please answer the following questions

1. Factors that discourage foreign patients to utilize health services at the hospital

(Please � � )

� Exchange rate � Political situation � Unstable Thai economy

� Language skill of health personnel

31

� Other (Please specify)

_______________________________________________________________________________________________________________

___________________________________________________________________________________________________

2. Which months do foreign patients visit the hospital the most?

(Please rank 1- 4 in � 4 = the most, 1= the least)

� January - March � April - June

� July - September � October - December

Which factor is most likely encouraging foreign patients to use services during the months

ranked 4th above? ______________________________________________________________________

______________________________________________________________________

Service Business Promotion Section 2, Bureau of Service Business Promotion,

Department of Export Promotion

Implications on ph from mode 2 c pachanee -6-oct2009

Health & Medicine

health facilities

health workforce

quality of services

medical services

healthcare services

trade inhealth services

health care systems24

world health organizationand