Study Of India And Thailand Economics Essay INTRODUCTION Promoting and protecting health is essential to human welfare and sustained economic and social development. This was recognized more than 30 years ago by the Alma-Ata Declaration signatories, who noted that Health for All would contribute both to a better quality of life and also to global peace and security (WHO report 2010). Universal Coverage As cited by WHO report 2010 recognizing this, Member States of the World Health Organization (WHO) committed in 2005 to develop their health financing systems so that all people have access to services and do not suffer financial hardship paying for them (WHO 2005). This goal was defined as universal coverage, sometimes called universal health coverage. In striving for this goal, governments face three fundamental questions: 1. How is such a health system to be financed? 2. How can they protect people from the financial consequences of ill-health and paying for health services? 3. How can they encourage the optimum use of available resources? This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order The World Health Assembly resolution 58.33 from 2005 says everyone should be able to access health services and not be subject to financial hardship in doing so. On both counts, the world is still a long way from universal coverage (WHO report 2010). In some countries, up to 11% of the population suffers severe financial hardship each year, and up to 5% is forced into poverty. Globally, about 150 million people suffer financial catastrophe annually while 100 million are pushed below the poverty line. The other financial penalty imposed on the ill (and often their carers) is lost income. In most countries, relatives can provide some form of financial support, however small, to family members during periods of illness. More formal financial transfers to protect those too ill to work are less common. Only one in five people in the world has broad-based social security protection that also includes cover for lost wages in the event of illness, and more than half the world’s population lacks any type of formal social protection, according to the International Labour Organization (ILO). Only 5–10% of people are covered in sub-Saharan Africa and southern Asia, while in middle-income countries, coverage rates range from 20% to 60% (WHO report 2010).Many low- and middle-income countries have shown over the past decade that moving closer to universal coverage is not the prerogative of high-income countries. For example, Brazil, Chile, China, Mexico, Rwanda and Thailand have recently made great strides in addressing all three problems described above (WHO report 2010). Health and Economic Growth Economic growth is commonly used as an indicator of a nation’s economic performance, and the level of GDP per capita is a key component of the Human Development Index of the United Nations Development Program, a popular indicator of national well-being (Duraisamy, Mahal 2005). Recent empirical work has sought to assess the association between human capital and aggregate economic performance and found that, given labour and capital, improvement in health status and education of the population lead to a higher output (Barro and Sala-i-Martin 2004). The role of health in influencing economic outcomes has been well understood at the micro level. Healthier workers are likely to be able to work longer, be generally more productive than their relatively less healthy counterparts, and consequently able to secure higher earnings than the latter, all else being the same; illness and disease shorten the working lives of people, thereby reducing their lifetime earnings. Better health also has a positive effect on the learning abilities of children, and leads to better educational outcomes (school completion rates, higher mean years of schooling, achievements) and increases the efficiency of human capital formation by individuals and households (Strauss and Thomas 1998; Schultz 1999). However, more recent research has also established a strong causal association running from health to aggregate economic performance. Thus Bloom, Canning and Sevilla (2004) report evidence from more than a dozen cross-country studies and all these studies, with a single exception, show that health has a positive and statistically significant effect on the rate of growth of GDP per capita. Health care financing Health financing is by a number of sources: (i) the tax-based public sector that comprises local, State and Central Governments, in addition to numerous autonomous public sector bodies; (ii) the private sector including the not-for-profit sector, organizing and financing, directly or through insurance, the health care of their employees and target populations; (iii) households through out-of-pocket expenditures, including user fees paid in public facilities; (iv) other insurance-social and community- based; and (v) external financing (through grants and loans) (Rao, Selvaraju, Nagpal, Sakthivel 2005). Health care financing in India and Thailand Health care financing in India As per WHO- 1) 65% of the Indian population lacks regular access to essential medicines. 2) The expenditure on health is the second most common cause for rural indebtedness. 3) Expenditure on health is responsible for 3% shift from APL to BPL every year. 4) Over 23% of the sick don’t seek treatment because they are not having enough money to spend . 5) Expenditure on drug constitute about 50-80% of the health care cost. 6) Over 40% of hospitalized patients have to borrow money or sell their assets to get them treated. 7) A study by World Bank shows that as a result of single hospitalization 24% of people fall below poverty line in India. This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order Results from the National Health Account shows that the estimated health expenditure in India for the year 2001-02 was approximately Rs 108,732 crore, accounting for 4.8% of the GDP at current market price while health expenditure as a percentage of the GDP measured at factor cost works out to 5.2%. Out of this, Central, State and local Governments together spend one-fourth of the total health expenditure. The share of other central ministries, which include railways, defense, posts and telegraphs, other civil ministries, etc. is estimated to be about 2.42% of total health spending in the country. The estimate is based on direct spending by the ministries as well as reimbursements provided to its employees. Local governments’ resources for health are through transfers from State Governments and their own resources. An estimated 2.2 % of total health spending comes from the local government. (Rao, Selvaraju, Nagpal, Sakthivel 2005). Source: Rao, Selvaraju, Nagpal, Sakthivel 2005. The three most important features of the Indian health care system are: i. Low levels of public spending: Between 1996-97 and 2005-06, total government spending on health was stagnant at about 1 percent of GDP, and the public expenditure elasticity with respect to GDP was at 0.94, lower than the average for low-income countries for the same period (Tandon and Cashin, 2010). Despite efforts to increase public spending after 2005-06 including the adoption of NRHM, the expenditure increased only marginally to 1.2 percent of GDP in 2009-2010. ii. A resulting poor quality of preventative care and poor health status of the population. iii. The inadequate level of public health provision has forced the population to seek private health providers resulting in high OOP spending. OOP spending in India is over four times higher than the public spending on health care (Rao, Chowdhary 2012). Household Out-of-Pocket Expenditure on Health in India India is one among the developing countries where households spend a disproportionate share of their consumption expenditure on health care, with the Government’s contribution being minimal. Household consumer expenditure data of various rounds of the National Sample Survey Organization (NSSO) suggest that households spend about 5%-6% of their total consumption expenditure on health and nearly 11% of all non-food consumption expenditure. Since 1995-96, household expenditure on health has been growing at the current rate of approximately 14% overall. In 1995-96, households in India spent an estimated Rs 33,253 crore at nominal prices which is then estimated to have increased to Rs 72,759 crore in 2001-02. With an overall growth rate of 14%, household spending is likely to be close to Rs 100,000 crore in nominal terms during 2003-04. Except the category of childbirth/delivery, all other categories registered a current growth rate in double digits. The growth in inpatient expenditure has been highest, in the range of 16%-18% during 1995-96 to 2003-04. In per capita terms, household expenditure measured in nominal prices has almost tripled from Rs 364 in 1995-96 to Rs 905 in 2003-04, while real per capita household expenditure is expected to only marginally increase from Rs 265 to Rs 347, respectively (Rao, Selvaraju, Nagpal, Sakthivel 2005). It is disquieting to note that nearly 70% of the total health expenditure in India comes from households, while around 25% is financed by the Central, State and local Governments. Public spending on Health It is believed that an important factor contributing to India‘s poor health status is its low level of public spending on health, which is one of the lowest in the world. In 2007, according to WHO‘s World Health Statistics, India ranked 184 among 191 countries in terms of public expenditure on health as a percent of GDP. In per capita terms, India ranked 164 in the same sample of 191 countries, spending just about $29 (PPP). This level of per capita public expenditure on health was around a third of Sri Lanka‘s, less than 30 percent of China‘s, and 14 percent of Thailand‘s (WHO, 2010). What is more, public spending on health as a percent of GDP in India has stagnated in the past two decades, from 1990–91 to 2009–10, varying from 0.9 to 1.2 percent of GDP. While public spending on health care is low, the OOP expenditure by households has been large. In 2007, total expenditure on health in India (public and private) was about 4.1 percent of GDP, which was higher than the level in Thailand. In 2007, private spending in India constituted nearly 74 percent of the total spending on health. Nearly 90 percent of this private expenditure in India was in the form of OOP expenditure on health by households (WHO, 2010), a share that is one of the highest in Asia (Van Doorslaer and others, 2007). The high OOP expenditure has put an increasing financial burden on the poorer sections of the population. Data from the National Sample Survey Organization (NSSO) in India indicate that between 1986-87 and 2004, the share of ailments not treated due to financial reasons has increased from around 15 percent to 28 percent in the rural areas. Part of this increased financial burden arises from the fact that the share of visits to private health facilities has increased in recent years. According to the NSSO data, the share of outpatient visits to public facilities has dropped from 25 to 20 percent and for inpatient visits from 60 to 40 percent (Selvaraj and Karan, 2009, cited in Shahrawat and Rao, 2011). Notably, outpatient treatments account for nearly three fourths of OOP expenditure by households; a large part of this could be reduced through adequate provision of primary and secondary care (NSSO, 2007) (Rao, Chowdhary 2012). This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order The per capita total health spending was estimated to be around US$23 during 1997-2000 (World Bank 2003). As compared to the levels of spending by countries such as Sri Lanka (US$31) and Thailand (US$71), the spending in India is substantially low. A breakdown of health expenditure reveals that expenditure by the public sector in these countries is twice that of India. Substantially higher levels of health outcomes in these countries as compared to India clearly indicate that there is a strong case to markedly increase public sector spending on health, as stated in the National Health Policy 2002 and the National Common Minimum Programme (CMP) 2004(Rao, Selvaraju, Nagpal, Sakthivel 2005). Public expenditure Total expenditure as percent of GDP per Capita (PPP int $) as percent of GDP per Capita (PPP int $) India 1.1 29 4.1 109 Thailand 2.7 209 3.7 280 Source: World Health Statistics, 2010, WHO. Public and Private Expenditure on Health in Selected Countries, 2007 Source: World Health Statistics, 2010, WHO Trends in public spending on health in India Public spending on health in India gradually accelerated from 0.22% in 1950-51 to 1.05% during the mid-1980s, and stagnated at around 0.9% of the GDP during the later years (ie. spending by only Central and State health departments), Of this, recurring expenditures such as salaries and wages, drugs, consumables, etc. account for more than 90% and is on the rise in recent years. In terms of per capita expenditure, it increased significantly from less than Re 1 in 1950-51 to about Rs 215 in 2003-04. However, in real terms, for 2003-2004 this is around Rs 120. Health Expenditure by the Central Government:- The Union Ministry of Health and Family Welfare consist of three departments. The department-wise break-up of the Health Ministry’s budget suggests that over one-third of the budget is spent by the Department of Health, while roughly two-thirds goes to the Department of Family Welfare. The Indian Systems of Medicine and Homeopathy (ISM&H) (AYUSH) Department receives a paltry 2%-3% of the total budget of the Ministry. CGHS-a mandatory social health insurance scheme for the Central Government Employees:-Six per cent of the combined budget of the department or 18% of the budget of the Department of Health was spent on 44 lakh beneficiaries or 0.5% of the country’s population under the Central Government Health Scheme (CGHS). Low priority for preventive health care:-An important public health function that governments are expected to perform is expanding access to public goods by focusing on preventive and promotive education. Under the NHP, the amount spent on preventive care aimed at prevention and behaviour change during the financial year is an estimated 21% of this a large amount was for vaccines under the universal immunization programme (UIP). In terms of use of mass media and interpersonal communication, the expenditure under this head in the National Programmes is a mere 2% of the overall budget. Centrally sponsored schemes-National Health Programmes (1991-2003):- Of the total combined central budget 70% is spent on National Health Programmes related to the disease control programmes and family welfare. Health expenditure by State Governments:-At the State level, public heath is also financed through general tax and non-tax revenue resources as the cost recovery from the services delivered has been negligible, at less than 2% (Selvaraju 2001). As a result, resource allocation to this sector is influenced by the general fiscal situation of the respective State Governments. Evidence from other countries also suggests that whenever there is a fiscal consolidation and stress, social sectors like health and education are targeted for pruning expenditures and reducing budget allocations (Tanzi and Schuknecht 2000). Structure of health sector spending:-Analyses of the structure of spending on health by State Governments shows that spending on salaries and wages account for more than 70% of health budgets. Of the remaining budget, nearly 12% is allocated for drugs, medicines, supplies and consumables; purchase of machinery and equipment account for 8%, and nearly 5% is allocated for maintenance of equipment, buildings, electricity, rent, taxes, etc. The remaining 5% is spent on other routine expenditures. (Rao, Selvaraju, Nagpal, Sakthivel 2005). Recent Reforms for Increasing Allocation to Health Care National Rural Health Mission (NRHM) Low public expenditure allocation and its skewed interstate distribution were the major reasons for the central government‘s launching in 2005 of a major program, the National Rural Health Mission (NRHM). NRHM is a comprehensive program initiated to improve access to effective health care for the poor residing in rural areas. The program covers the entire country but has a greater focus on 18 lagging states. It is being implemented since 2005 and spending on health care is expected to increase to 2-3 percent of GDP (from about 1 percent of GDP in 2005). This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order The important components of NRHM include the initiation of an Accredited Social Health Activist program — a voluntary female community health program aimed at improving immunization rates, institutionalized deliveries, reproductive health care, and nutrition. NHRM also mandates improvements in health infrastructure, human resources for health, and availability of drugs. Rashtriya Swasthya Bima Yojana (RSBY) Another important reform initiative was the introduction of an insurance scheme, not by the Health Ministry, but by the Union Labor Ministry. In an attempt to provide financial protection against high OOP expenditure, in 2007 the Government of India introduced Rashtriya Swasthya Bima Yojana (RSBY), a health insurance scheme. The scheme provides insurance coverage for selected hospitalization expenses and daycare procedures to people below the poverty line. Under this scheme every poor (below the poverty line) family can access free hospitalization care and daycare procedures up to Rs 30,000 per annum in selected private and public health facilities. A maximum of five members of a family can be covered under the scheme on a floater basis. A transportation allowance of Rs 1,000 (with a maximum of Rs 100 per visit) is also extended to these families under the scheme. (Rao, Chowdhary 2012). Health Insurance in India: The penetration of health insurance in India has been low. It is estimated that only about 3% to 5% of Indians are covered under any form of health insurance. The size of the commercial insurance is barely 1% of the total health spending in the country. The Indian health insurance scenario is a mix of mandatory social health insurance (SHI), voluntary private health insurance and community- based health insurance (CBHI). Social Health Insurance:-Universal coverage has two dimensions: health care coverage (adequate health care) and population coverage (health care for all) and, coupled with the societal values that underpin it, leaves essentially two financing options—general taxation and SHI. The SHI is based on income-determined contributions from mandatory membership of, in principal, the entire population with the government subsidizing the financially vulnerable sections. While the SHI is an effective risk-pooling mechanism that allocates services according to need and distributes the financial burden according to the ability to pay (thereby ensuring equity in access), such schemes are difficult and expensive to implement where a majority of the workforce is unemployed or employed in the informal sector. In India, its large rural and informal sector accounting for 90% of the population, lack of cohesion and solidarity, and poor institutional capacity to organize them etc. will be constricting factors for the up scaling of the SHI in the near or medium term. The experience with collecting income tax predicts problems in assessing incomes and collecting premiums from small, unregistered firms, unorganized industries and the rural sector. The consumer redressal mechanism may also not function effectively because of the large illiterate population. The SHI is therefore likely to be restricted to the employed population and largely in urban areas, where collection of premium is easier and administrative costs minimal. The existing mandatory health insurance schemes in India— the Employees’ State Insurance Scheme (ESIS) and the Central Government Health Scheme (CGHS)—were first started as pilot projects in 1948 and 1954, respectively in the context of achieving universal coverage via the SHI. Employees’ State Insurance Scheme (ESIS) The scheme applies to power-using factories employing 10 persons or more, and non-power and other specified establishments employing 20 persons or more. Central Government Health Scheme (CGHS) Established in 1954, the CGHS covers employees and retirees of the Central Government, and certain autonomous, semiautonomous and semi-government organizations. Of the total expenditure, about a third is spent on wages and salaries of the CGHS staff Private Health Insurance There are, at present, 12 general insurance companies and 25 TPAs. The total number of insurance holders is reported to be 112 lakh with almost 90% enrolled with the four public sector insurance companies. These four companies collected a premium of Rs 1128.64 crore under Mediclaim. Of the 102 lakh enrolled by these four companies (excluding GIC, Employment Guarantee Corporation, AICL), which are permitted to market health insurance products, Mediclaim alone accounts for 97 lakh persons, the rest being enrolled under other insurance schemes such as Jan Arogya, etc. During 2003–2004, the claim ratio was about 96.34%. Five features that characterize the health insurance system in India emerge: 1. By and large, the system offers traditional indemnity, all known diseases or health conditions are excluded and therefore such policies typically have a large number of exclusions. This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order 2. It is a fee-for-service-based payment system. Such a system of payment is advantageous for the provider since he bears no risk for the prices he can charge for services rendered by him. Combined with the asymmetry in information, such a system usually entails increased costs. 3. Policies provide a ceiling of the assured sum. Such a system, and that too within a fee-for-service payment system, results in shortchanging the insured as he gets less value for money, as the provider and the insurer have no obligations to provide quality care and/or over provide/over charge services so long as the amounts are within the assured amount of the insurance policy. 4. The system is based on risk-rated premiums. This again puts the risk on the insured as the premium is fixed in accordance with the health status and age. Under such a system, women in the reproductive age group, the old, the poor and the ill get to pay higher amounts and are discriminated against. 5. The system is voluntary, making it difficult to form viable risk pools for keeping premiums low. Universal Health Insurance Scheme (UHIS) For providing financial risk protection to the poor, the Government announced a UHIS in 2003. The scheme was redesigned in May 2004 with higher subsidy and restricting eligibility to BPL families only. The subsidy was increased to Rs 200, Rs 300 and Rs 400 to individuals, families of five and seven, respectively. In the last two years of its implementation the coverage has been around 10,000 BPL families in the first year and 34,000 in the second year till 31 January 2005. The reasons for failing to attract the rural poor are many. 1) The public sector companies who were required to implement this scheme find it to be potentially loss-making and do not invest in propagating it, resulting in very low levels of awareness, reflected in the low enrollment and very poor claim ratios. 2) A major problem has been the identification of the eligible families. 3) The procedures are cumbersome and difficult for the poor. 4) In most places there is a deficit in the supply or availability of service providers, particularly because government hospitals are not eligible. Community-Based Health Insurance Community financing (CF) as a method of raising finance at the community level was initiated by UNICEF under its Bamako Initiative for Africa in 1987. In community financing, the community is in control of the principal functions of collection and utilization, the membership of the scheme is voluntary and there is willingness to prepay the contributions (Hsiao 2001). Currently, there are about 22 voluntary CBHI programmes in India, initiated and administered by NGOs. Of these about 10 are active. In many schemes, the community is also involved in various activities such as creating awareness, collecting premiums, processing claims and reimbursements, and the management of the scheme (deciding the benefit package, the premiums, etc). The membership of these CHIs scheme varies from 1000 to more than 20 lakh. Most of the schemes operate in rural areas and cover people from the informal sector. Enrolment is usually facilitated by membership of the organizations, e.g. micro finance groups, cooperatives, trade unions, etc. The annual premium ranges from Rs 20 to Rs 120 per individual. The unit of enrolment is an individual and the membership is voluntary in most of the schemes. All the schemes offer hospitalization; this ranges from the classical Mediclaim product to a very comprehensive cover including all conditions and no exclusions. Many NGOs have been successful in negotiating an appropriate insurance package for their members. Most providers are either NGOs or private for-profit organization. The utilization rates range from 6 to more than 240 per 1000 persons insured. The latter obviously indicates extreme adverse selection (Rao 2005) Issues of Concern:- 1)Financing of National Programmes-not as per need:-Analysis showed that in a number of instances budget allocations are not need-based and in consonance with the extent of the disease burden. For example, UP and MP together accounted for 37% of the total caseload under child morbidity but received only 24% of the total budget for RCH. 2)Gross underfunding of National Health Programmes: A mismatch between policy and practice:-Policy governing the National Health Programmes is that services being provided under them are free for all. Theoretically, therefore, regardless of income class, all citizens of the country are eligible for availing of services free of cost under the NHP that cover vector-borne diseases, TB, leprosy, Family Welfare, cataract blindness and HIV/AIDS. Our calculations show that such a policy would need a minimum of Rs 12,000 crore against which the total amount that is spent by the Centre and States on these programmes is about Rs 5000 crs. The suboptimal functioning of the delivery system due to gross underfunding explains the huge out-of-pocket expenditures being incurred by individual households in seeking services ‘guaranteed’ to them under the NHP. This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order 3) Weak absorption capacity in the Government:-Even while there is mounting evidence to justify a quantum jump in public budgets for health, the Central Ministry routinely surrenders budgets allocated to it. Under World Bank projects also, there have been frequent expressions of concern at the slow pace of expenditure and poor drawals. What is the reason for this apparent disconnect between a shortage of funds and an inability to spend? The reasons for the slow pace of expenditure are both systemic and institutional as well as poor designing and sequencing of expenditure items. Lack of stability in budgetary processes:-State Governments normally pass the budget between April and June every year. Several times during bad fiscal situation, budget authorizations are released but instructions are issued informally to treasury officers not to release money, disrupting ongoing activities and processes, such as finalizing a contract for procurement of drugs or equipment. The department does not only lose the ‘unutilized’ funds at the end of the fiscal year but these are also shown as ‘surrender of funds’ and the next year’s allocations accordingly pegged onto the funds ‘actually spent’. Secondly, expenditure items are also fixed and no discretion is given at any level to reallocate available funds for meeting a need or an emergency. Thirdly, utilization of funds also does not take place as the first instalment could be inadequate for any meaningful activity necessitating the release of subsequent instalments. Finally, in the month of December, the expenditure levels are reviewed and revised estimates for the department fixed. At times of acute fiscal stress, budget cuts are arbitrarily imposed across the department. Dysfunctional system of financing:-The budget process so developed over decades has resulted in fragmentation of the health sector budget into more than 4000 small heads. The funds allocated under those numerous budget heads are non-transferable and are surrendered to the State’s general pool of funds if they remain unutilized at the end of the fiscal year. This is strictly followed to ensure that the funds budgeted for specific activities at the beginning of the year should be spent on those activities to fulfil the intended objective. The system, from the perspective of achieving health system goals, is archaic and needs to be changed. Complex design:-Funds also do not get spent if the design of the scheme or intervention is very complex and process-oriented. Participatory systems that involve all stakeholders do provide, in the long run, greater sustainability to the programme. However, such approaches are time-intensive as different constituents of stakeholders have different and varied ideas, expectations and needs. Harmonizing them takes time, as community responses are not always uniform. Therefore, when any activity has to be implemented within a strict time-frame, then such processes get short-circuited and data are fudged or money not spent. Weak financial capability:-At almost every level-central, State or district, administrative directorates or hospital units-the staff dedicated for financial oversight functions are few and their capacity weak. In most cases, the staff consists of one or two officers and a few clerks. None is trained on either financial management or on health needs. Several times their knowledge of financial rules is superficial. Weak systems give room for discretion and scope for fraud and, more importantly, for delays due largely to raising meaningless and frivolous queries. This therefore calls for greater professionalism of the finance set-up and sharing of responsibility, making them equally responsible for poor expenditure. Changing their mindset from account-keeping to being facilitators for achieving certain goals should be the key for the future. (Rao, Selvaraju, Nagpal, Sakthivel 2005). Health Care Financing in Thailand The Thai health care system has been financed by a mixture of health financing sources, namely general taxes, social insurance contributions, private insurance premiums and direct out-of-pocket payments. Health expenditure is income elastic; during the 1997 Asian economic crisis, health spending reduced both by the government and households. The introduction of the universal coverage (UC) policy fully implemented by 2002 significantly increased public share of total health spending, while household out-of-pocket payments significantly reduced. This is because the UC scheme is financed by general tax with a huge coverage of more than 75% of total population. After achieving universal coverage in 2002, there have been three major public insurance schemes providing health insurance coverage for the entire population: This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order • The Civil Servant Medical Benefit Scheme (CSMBS) which covers around 5.2 million, as of early 2010, government employees and their dependants (parents, spouse and children) as well as pensioners; • The Social Health Insurance (SHI) scheme which covers approximately 9.5 million employees, as of early 2010, in the formal sector from non-work related health care expenditures; • The UC scheme which covers the rest of the population and replaces all previous government subsidized health insurance schemes, namely the Voluntary Health Card (VHC), the Low Income Card (LIC) scheme for the poor, the disabled, the elderly, and children aged less than 12 years and include all the uninsured into this scheme. Total health expenditure (THE), as percent of Gross Domestic Product (GDP), has not been much changed in 1994 to 2008. The ratio of THE to GDP ranged from 3.1 percent in 1994 to 3.8 percent in 1997 prior to Asian financial crisis. The ratio decreased in the subsequent years to be 3.0 percent in 2001 as health expenditure grew less than the overall economy. However, after the UC scheme, the ratios increased again and reached 3.4 percent in 2002 and increased to 3.7 and 4.2 percent in 2007 and 2008, respectively (Tangcharoensathien, Total health expenditure and selected indicators on health spending, 1994-2007, current prices Source: NHA Working Group 2009 Sources of Financing Thailand:-There are five main funds of finance: general government health expenditures (GGHE), social health insurance (SHI), private health insurance, out-of-pocket (OOP) and the rest of world (ROW). In 1994, the share of health care spending by GGHE was less than the private spending (private health insurance and OOP). However, the proportion of GGHE gradually increased and overtook the private spending, and became the dominant financing source after the 1997 Asian economic crisis and the emergence of the UC scheme in 2002. SHI was not a major contributor in health expenditure. SHI accounts for 2.9% of THE in 1994 and gradually increased to about 7% in 2007. Household OOP had a lion share in 1994, 44.5% of THE, until the 1997 Asian economic crisis and then slowly and steadily dropped to 19.2% in 2007. Funding size from the rest of the world is negligible (Tangcharoensathien, Percent distribution of five sources of finance, 1994-2007 (Source: NHA Working Group 2009) Characteristics of three public insurance schemes, 2002 Source: Report on equity impact of universal coverage by consortium for research on equitable health system Structure of the Health Insurance System Thailand’s health insurance system is the product of reforms that have played out over the last thirty years. The Medical Welfare Scheme (MWS), started in 1975, was the first program to provide health care to the poor. Since then, a variety of insurance programs have been established, and some of those programs have been incorporated into the UC scheme. Currently, Thai citizens have access to health insurance through one of three programs: the Civil Service Medical Benefit Scheme (CSMBS), the Social Security Scheme (SSS), and the UC scheme. CSMB: The CSMBS was established in 1980 to provide health care to government employees, their dependents (children, spouses, and parents), and government retirees. CSMBS provides comprehensive medical benefits, including coverage for inpatient and outpatient services, emergency treatment, and pharmaceuticals. Health care providers are paid on a fee-for-service basis, which has led to rapid increases in program spending. In response to rising program costs, the Ministry of Finance imposed cost containment measures, including limiting some benefits and initiating a shift from full payment for hospital charges to prospective payment using diagnosis-related groups (DRGs). The program is fully financed through general tax revenue with no premium payments from the beneficiaries. Beneficiaries are liable for copayments for the room and board charges associated with inpatient care in private hospitals, but not for care in public facilities. SSS: The SSS scheme, established in 1990, is a compulsory insurance program for employees of private businesses. Dependents and retirees are not covered by SSS and are typically enrolled in the UC scheme. SSS provides a comprehensive benefit package for non-work-related illnesses, and a separate workers compensation scheme covers work-related illnesses and injuries. Coverage is provided through a network of public and private hospitals that are contracted to provide inpatient and outpatient services. Beneficiaries select a hospital contractor of his or her choice, and the SSS pays a fixed capitation rate of 1,505 baht per enrollee (about $37.62). Unlike the fee-for-service arrangement of CSMBS, capitation provides strong incentives to control the cost of care. Additional payments are made for certain high-cost services and to account for the additional health care needs of patients with chronic conditions. However, expenses for certain extremely costly treatments (including renal replacement therapy for patients with end-stage renal disease and organ transplantation) are capped. The SSS scheme is financed equally by employers, employees, and the government, each of which contribute 1.5 percent of taxable wages (for a total contribution of 4.5 percent). Only the first 15,000 baht ($375) per month is subject to this tax, and that amount is not indexed for inflation. Beneficiaries are liable for copayments for some services. This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order UC: The UC scheme is the residual insurer in Thailand, available to anyone who is not eligible for CSMBS or SSS. Benefits are similar to the SSS scheme, with certain high cost treatments excluded from coverage. Beneficiaries register with a primary care provider, which acts as a gatekeeper to secondary and tertiary care. If beneficiaries go outside the health provider network in which they are registered, they must pay the full cost of that care out of pocket. Capitation payments cover outpatient services, disease prevention, and health promotion. Inpatient services are paid prospectively using DRGs. In addition, there is a global budget that limits total inpatient spending. The UC scheme is fully funded through general tax revenue with no premium payments from the beneficiaries. Some beneficiaries were initially required to pay 30 baht ($0.75) per visit, but recently that requirement was dropped. Consequently, health services are now free of charge to everyone enrolled in UC. Because of gaps in insurance benefits in the public programs, some people also purchase private insurance to supplement their coverage. In addition, substantial sums are paid out-of-pocket for health services. Some people do not participate in one of the public insurance schemes, perhaps because they live in remote areas and have limited access to public health providers, and must pay for care themselves. Also, some health services may be difficult to obtain within the insurance schemes but are available with direct payment. Pharmaceuticals, for example, that may be in limited supply through hospital pharmacies (which do not charge the patient) might be obtained through private pharmacies that are not covered by UC. Some people are willing to pay the cost of pharmaceuticals purchased in private pharmacies rather than going through physicians and hospitals for their medications. In addition, traditional medicine is typically paid out of- pocket rather than through insurance (Antos 2007). Source: “Financing Universal Healthcare in Thailand”, International Labor Organization (ILO) report, 2004. Available online at Source: International Health Policy Program (IHPP), Ministry of Public Health, Thailand, 2007. Available online at Future challenges Despite success on coverage extension to the whole population in 2002 and equitable outcome of the reforms; following main challenges were identified for which policy attention required. Managing Cost Drivers:-Despite positive cost containment outcomes for SHI and UC schemes due to strategic purchasing; three cost drivers challenge the long term financial sustainability as the majority of financing comes from general tax revenue. Demographic transition: the proportion of the elderly (more than 60 years) has increased from 5.4% in 1960 to 11.8% in 2010. Service utilization rate among elderly is 2.3 times that of general population. With an increased proportion of elderly, there has been thus a substantial increase in demand for health services. Epidemiological transition: The 2004 Burden of Diseases confirms the 1999 BOD studies that non-communicable diseases contribute to Disable Adjust Life Year (DALY) loss more than communicable, nutritional, childhood and maternal diseases and injuries (The Thai Working Group on Burden of Disease and Injuries, 2007). Proportion of DALY attributed to non-communicable diseases to overall DALY also increased from 58.9% in 1999 to 65.7% in 2004. It is not possible to halt demographic transitions; however maintaining a healthy ageing population through effective primary and secondary prevention of chronic NCD for the middle age groups can minimize the future demand for such expensive services. Despite the cost-ineffectiveness of renal replacement therapy for UC members who have end-stage renal diseases; inequity across insurance schemes, catastrophic health spending and impoverishment to households prompted the government to adopt dialysis into the benefit package of the UC scheme in 2008. Once adopted, it is not possible to withdraw from the benefit package except in the future where co-payments may be introduced. Managing Benefit Package:-Even rich governments cannot afford to keep abreast with and adopt all of advance health technologies. There is a need for institutional capacity to generate evidence on effectiveness, cost effectiveness and long term budget impact of new health technologies to guide decisions on benefit package. Two major decision platforms worth mentioning, first the National Subcommittee on Essential Drug (ED) List which reports its work to the National Committee on Drug Systems Development chaired by the Prime Minister is responsible to review and update which medicines are listed in the national ED list. The ED is referred to by all three insurance schemes as drug benefit package, requires evidence on cost effective comparison to be included or excluded from the List. Second, the Sub-committee on Benefit Package which reports to the National Health Security Board chaired by Minister of Health is responsible to review and update, including and excluding health interventions into the benefit package. This essay is an example of a student’s work Disclaimer This essay has been submitted to us by a student in order to help you with your studies. This is not an example of the work written by our professional essay writers. Essay Writing Service Dissertation Writing Service Who wrote this essay Place an Order Managing health systems:-There is a need to actively manage health systems in response to demographic and epidemiological transitions. In the context of adequate and equitable distribution of health infrastructure, there is no significant need for new infrastructure except maintenance for effective operations. The current health systems performance has been hampered by limited human resource in comparison to other middle income countries, using the human resources for health to population ratio. The human resource shortage problem is aggravated by the inequitable distribution across geographical regions, though the gap gradually reduced. There is also limited financial and systems investment as well as lack of effective interventions in keeping the pre-elderly population group stay healthy in order to move toward healthy elderly. Long term care and the effective referral to and from acute hospital care and community based care to accommodate increasing frail elderly who need health and social support require clear policy and significant investment. Intersectoral actions between health and social welfare departments are yet to be strengthened (Tangcharoensathien, CONCLUSION Health sector in India suffers from gross inadequacy of public finance and therefore an immediate and significant scaling- up of resources is an imperative. The undue burden on households for spending on health cannot be wished away. Further, it is also clear that there is an urgent need to restructure the budgeting system to make it more functional, amenable to review of resource use to take corrective measures in time and be flexible enough to have the capacity to respond to an emergency or local need. Rules and procedures for actual release of funds, appointment of persons, labour laws, procurement systems all need a thorough review. Greater decentralization of funds, aligned with functional needs and responsibilities, is necessary. However, any decentralization and financial delegation needs to be carefully calibrated and sequenced. In other words, decentralization can only be done after developing the requisite financial capability and laying down rules and procedures for accounting systems. Unless such restructuring takes place, greater absorption of funds will continue be difficult. The present system of financing and payment systems raise several important concerns on the suitability of the structure to meet current day problems and future challenges. The large size of out of pocket expenditures provides an opportunity to pool these resources and facilitate spreading risk from households to government and employers on a shared basis which will be a more equitable financial arrangement. The dimension of equity is of particular concern as the inelasticities of demand for acute care, are resulting in over 33 lakh persons being pushed below poverty line, every year. In short the social benefits of instituting social insurance as a financial instrument to replace user fees, outweighs the possible risks of moral hazard and increased costs, typical outcomes of prepaid insurance. How to minimize these two market failures are of concern and need to be addressed by developing a well thought out strategy taking international evidence into account so we build on existing knowledge and learn from others’ experiences. It is argued that it is not advisable for governments to intervene in health insurance markets in a piecemeal manner—insurance for pensioners by the Department of Personnel; for weavers by the Department of Textiles, for fishermen by the Department of Agriculture, for farmers by the Department of Cooperatives, poor women by the Department of Rural Development etc., as such attempts fragment risk pools. In other words, resorting to insurance as a financing instrument must be an act of a deliberate strategy that addresses the market failures in order to ensure that inequities do not widen and the poor are not marginalized— two typical outcomes of private, fragmented insurance systems. In conclusion it is reiterated that given the fiscal constraints for government to provide universal access to free health care, insurance can be an important means of mobilizing resources, providing risk protection and achieving improved health outcomes. The critical need is to experiment with the wide range of financing instruments available in different scenarios and have adequate flexibility in the design features, the structures and processes, institutional mechanisms and regulatory frameworks, so that a viable balance can be achieved for minimizing market distortions so that the outcomes do not make the cure worse than the disease (Enthoven 1983, 1993). Unregulated markets are inefficient and inequitable, requiring governments to intervene to ensure no segmentation in the system (Bloom, 2001). For this, the burden of building partnerships and managing change is on the government, which in turn needs to base its strategy on sound research. After UC was successfully achieved by 2002, the whole population is covered by one of the three public insurance scheme, as well as voluntary private health insurance. The financing healthcare is dominated by general tax revenue, which is one of the most progressive sources of funding. The level of THE, as percent of GDP, is modest; this is within the fiscal capacity of the country to afford in long term, see long term projection of total health expenditure by 2020. One of the strengths of healthcare financing is strategic purchasing, with the application of capitation contracting model as major mode of provider payment for SHI and UC Schemes. Compared to fee for service reimbursement model, capitation contracting model has better prospect of long term cost containment. Benefit package provided by the three public insurance schemes is generous and comprehensive, almost all health service including high cost care are included; though a few items of negative exclusion list are excluded such as cosmetic surgery. Comprehensive coverage where services are provided free of charge results in extremely low prevalence of catastrophic health spending and impoverishment; the poor resided in rural areas had better access and use of health services from the district health provider network which serves as a “close to client service” results in pro-poor public budget subsidies. The administrative costs of the UC and SHI schemes are very low as NHSO relies on annual budget approval through the Budget Act processes, and SSO collects revenue from mandatory monthly wire transfer from the employers. The purchasing functions when apply the capitation contract model, the administrative cost is much less where there is no need to review and approve claims as is the case of CSMBS fee for service reimbursement model. Benefit package was harmonized across three public insurance schemes facilitate movement of members from one to another scheme, provider payment is better harmonized between SHI and UC scheme, while CSMBS is still outstanding when it applies fee for service direct disbursement for OP services, although CSMBS applies DRG systems for hospitalization similar to that of the UC Scheme.