Exempting the poor: The experience of Thailand

Sec. Sci. Med. Vol. 33, No. II, pp. 1241-1252, 1991 0277-9536/91 $3.00 + 0.00

Printed in Great Britain. All rights reserved Copyright 0 1991 Pcrgamon Press plc

EXEMPTING THE POOR: THE EXPERIENCE OF THAILAND

ANNE MILLS

Health Policy Unit, Department of Public Health and Policy, London School of Hygiene and Tropical Medicine, Keppel Street, London WCI. U.K. and Department of Social Science and Administration,

London School of Economics and Political Science, Houghton Street, London WC2, U.K.

Abstract-Fee exemption schemes are widely recommended but little analyzed. This paper analyses the operation of the Free Medical Care Project in Thailand, which enables those classified as poor to receive free treatment at government facilities. The paper concentrates in particular on the size and geographical distribution of the group eligible for free care, and on the extent to which the geographical distribution of the budget matches the geographical distribution of the poor. By analysing published data available at national level, information is produced on numbers of people eligible for free care, on the numbers who receive free care, and on the geographical distribution of the free medical care budget. Comments are also made on how the project appears to be operating at health facility level.

The paper goes on to consider whether the equity erects of the project could be improved by reorganizing the project, and what impact reorganization might have on the costs of the project.

Key words-health service fees, equity, Thailand

1. lNTRODUCTlON

The present climate of opinion in many international and bilateral aid agencies favours the imposition of fees for health care [l]. Widespread concern that such a policy is inequitable is countered by proposals that fees should be accompanied by exemp- tions for those unable to pay. Yet little is known about how exemption schemes do or might work, particularly when implemented by governments as opposed to non-government agencies [2). In 1980, the author undertook an analysis of a scheme in Thailand that financed the provision of free care at fee-paying facilities for those classified as poor. While there have been changes in financing patterns in Thailand since that date (most notably the introduction of the health card scheme), the Thai experience is of interest as one of the few attempts to evaluate an exemption mechanism. It provides useful lessons on the design and management of exemption schemes. It also illustrates how data from socio-economic surveys can be of use in health policy analysis.

2. BACKGROUND

The Free Medical Care Project was introduced as part of the Government’s proposals for helping the poorer sections of the population. It formed part of the Fourth Five Year Plan, 1977-8 1, though the first budget allocation was made in 1976.

The objectives of the Project were to:

(a) create equity in receiving medical care among the people;

(b) improve the health status of the poor especially in rural areas;

(c) pave the way for National Health Insurance for the poor;

(d) create positive attitudes in the poor regarding health services [3].

The project has three components, free medical care, mobile health units, and radio communications, the first being by far the largest as indicated by the budget allocations for F.Y. 1979 [4].

This paper is concerned with the first component. The budget is distributed to all government health units (run by the Ministry of Public Health (MOPH), State University Bureau, Ministry of Defence, Ministry of the Interior, Ministry of Agriculture and Cooperatives, Bangkok Metropolitan Authority, and other municipalities) and is used to cover the cost of providing health care to people who would otherwise have to pay fees. At health centre level, the budget provides free drugs; in hospitals it finances drugs, diagnostic tests, examinations, operations, deliveries, etc. [5].

When the project was first introduced, eligibility cards were to be issued in Bangkok to those who were classed as poor. This practice was later dropped, and the hospital director, or person in charge of the health centre, was given the responsibil- ity of deciding who qualified for free care on the basis of various criteria which defined poverty.

The regulations current in 1980 stated that the following were eligible for free care:

(a) single people with an income of less than 81,500 a month;

(b) married couples whose total income was less than B2,OOO a month;

(c) their children under 20, and over 20 if they were mentally or physically disabled.

In addition, they advised that particular emphasis should be placed on providing free care to children

1241

1242 ANNE MILLS

Table I. Numbers of DIYX’ oeo~le bv communitv tvoe 1975/6

Community type No. of poor

% Poor of Community poor community as % of population total poor

Greater Bangkok I ,445,052 26 4.9 Municipal areas 930,964 34 3.2 Sanitarv districts 2.459.667 57 8.4 Villages Kingdom

24:556;546 80 83.5 297392,229 68 100.0

Source: Report of the Socio-Economic Survey, 1975-76, Whole Kingdom, NSO. ‘Defined as households with income of less than BY2000 a month.

under five whose parents were poor, and to the over 60 age group.

The size of the target groups for free care was estimated to be as follows: [3]

Hlfi l!sLl l.9.zii m Urban 1.182,300 1,217,800 I ,254,4(H) 1,292,100 Rural 6,000,OOO 6,180,OOO 6.365.400 6.556.360 l&l 7.182.300 7,397,800 7,619,800 7.848.460

3. THE TARGET POPULATION FOR FREE IMEDICAL CARE

Since the above estimates were made, the Socio- Economic Survey 1975/6 [6] has made available much better information on the distribution of incomes in Thailand, which has made it possible to calculate more precisely the target population for free medical care. The precise way in which the results of the Socio-Economic Survey have been analysed make it impossible to calculate directly the numbers meeting the income criteria. However, it is possible to derive the numbers from tables showing the percentage of households, by type of community and region, below a variety of per capita income levels. The criterion of B2,OOO per family can be converted to an equivalent per capita income by application of the area specific average household size data. This per capita income (which ranges between E334 and IX418 a month depending on the area) then enables the proportion of households falling below it to be calculated.

The main drawback of this method is that it neglects the different criteria for single people, namely 81,500 a month. This is inevitable, since information was not available separately on the range of incomes earned by single people. It is unlikely to affect the results significantly, since single households make up only 3.7% of total households in Thailand, the majority of households having between 2 and 7 members. Moreover, 53% of the population are estimated to be under the age of 20 [4], thus indicating that a household with a married couple and children

under 20 is likely to be by far the most common family structure.

Tables 1 and 2 show the result of applying this methodology to the figures of the Socio-Economic Survey. Table 1 shows the distribution of poor people by community type (municipal area, sanitary district, and village) and Table 2, by Region. It is evident that urban areas had much higher incomes, on average, than rural areas, and that the Northeastern Region had both the highest percentage of its population classified as poor, and much the highest total number of poor. Overall, 68% of Thailand’s population, and 80% of its village population, can be classed as poor in 1975-6 on the basis of the free medical care criterion.

The Socio-Economic Survey also classified Regions and community types by per capita consumption expenditures, as a measure of the quantities and qualities of goods households were able to obtain. The figures indicate clearly the poverty of the North- east. The survey reports that:

Per capita consumption expenditure of village households was 50% of that reported by households living in municipal areas, and the lowest level of consumption among village households was found in the Northeast. The Northeast village population reported the highest size of household (6.0 persons) the highest proportion engaged in agriculture (76.8%) the highest number of earners per household, mostly unpaid family workers (3.2 earners) the highest rate of home ownership (96.4%) the lowest levels of available facilities (electricity 5.8%; piped water 0.4% installed toilet 19%; ownership of radios 66.3%). About 35% of the Northeast village population was under 11 years of age, the highest rate among all regions. Of those 11 years of age or older, 76.6% of all females and 86.2% of all males were active in the labour force, on the average, throughout the survey year. Considering the low level of household income in the Northeast (IJ15,636.-per year) this would indicate an extremely low return on labour [6, p.261.

Table 3, taken from the Socio-Economic Survey, shows the relative welfare position of different com- munities when ranked by per capita consumption expenditures.

Table 2. Numbers of poor’ people by region 197516

% Poor of Regional poor No. of regional as % of

Region poor population total Poor

Northern 7.099.545 77 24.2 Northeastern I1,889,747 78 40.5 Central 5.3 16,527 67 18.1 South 3,641,358 69 12.4 Greater Bangkok - 1,445,052 26 4.9 Kingdom 29,392,229 68 100.0

Source: Report of the Socio-Economic Survey, 1975-76, Whole Kingdom, NSO. *Defined as households with income of less than 82000 a month.

Exempting the poor: the experience of Thailand 1243

Table 3. Per capita monthly consumption expenditures by region and community type, 1976

PC. consumption Relative welfare Region/community expenditures position

type per month (Bangkok core = 100)

Bangkok core 617 100 North metropolitan area 615 loo Central metropolitan area 609 99 Bangkok suburbs 577 94

Bangkok metropolis 573 South metropolitan area 548 : Northeast metropolitan arca 533 86 Central sanitary districts 493 80 South sanitary districts 424 69 Bangkok fringe 415 67 Northeast Sanitary Districts 394 64 Central villages 393 64 North sanitary districts 356 58 South villages 311 56 North villages 272 44 Northeast villages 235 38

The World Bank, in its publication on the distribution of benefits from development in Thailand [7l defined the poverty line as 8150 per month per person in rural areas, and B200 per month per person in urban areas, in 1975/6 prices. This can be taken as indicating those who live in absolute poverty. Apply- ing this criterion to the income data of the Socio- Economic Survey provides the figures of the numbers of poor set out in Table 4. This criterion classifies 25% of the population as living in absolute poverty, over 50% of whom live in the Northeast. --

Table 5 compares these two different definitions of poverty, and contrasts the geographical distribution of the poor with the geographical distribution of the total population. The stricter concept of poverty shows up more clearly the poorer parts of the country. Thus while the Northeast and the North on the one hand, and the Centre and the South on the other, have similar proportions of their population

Table 4. The incidence and distribution of absolute povertf by region and location, l975/6

Local poor Numbers of % Poor of local as % of

Region poor population total poor

Northmr Urban 56,198 I3 0.6 Rural 5.420,917 38 50.5 Total 5.477.1 I5 37 51.1 North Urban 112,395 I3 1.0 Rural 2,299,783 20 21.4 Total 2,412,178 27 22.4 CtWM Urban Rural I. Total I Sourh Urban Rural I Total I Bangkok Kingdom Urban

86.458 IO ,037,496 I2 ,123,954 I2

56,198 I3 ,236,349 26 9292,547 25 427,967 9

739,216 10

0.8 9.7

10.5

0.5 II.5 12.0 4.0

6.9 Rural 9,994,545 28 93.1 Total 10.733.761 25 100.0

Source: Thailand. Towards a Development Strategy of Full Par&i- pation. The World Bank, September 1978. Figuns based on results of the Socio-Economic Survey, 197516.

‘Defined as per capita income of less than XI50 a month in rural areas, and II200 a month in urban areas, at l975/6 prices.

classified as poor using the B2,OOO criteria, they have very different proportions of their populations in absolute poverty.

This data applies to 1975/6 and was the most recent available in 1980. The criterion of B2,OOO per household had remained unchanged since 1976. Between 1976 and January 1980, the consumer price index for the whole Kingdom increased by 40% [8]. Both wages, and income from the sale of crops, were likely by 1980 to be considerably higher in money terms. Thus allowing only for inflation, fewer people would fall below the B2,OOO line in 1980 (though they may have been no better off). In addition it is likely that incomes had increased in real terms [7]. Given the difficulties of projecting the number of people likely to meet the Free Medical Care income criteria in 1980, the rest of this paper uses two definitions of poverty, B2,OOO per household, and the definition of absolute poverty of B150/month/person in rural areas and B2OO/month/person in urban areas. These two levels may be taken to define the maximum and minimum numbers of poor.

4. GEOGRAPHICAL DISTRIBUTION OF THE FREE MEDICAL CARE BUDGET

Given the numbers and distribution of the poor set out in the previous section, how do the budget allocations match this? The main problem in under- taking this analysis lies in allocating the total expenditure of the Free Medical Care project to changwats. This is straightforward for the budget of the Under- Secretary of the MOPH, which is divided between Provincial Hospitals, District Hospitals, and Provin- cial Health Offices (for health centres and midwifery centres). The allocations to the Department of Health, State University Bureau, Bangkok Municipal Authority and other Municipalities can also be identified with changwats. However, some of the other allocations cannot be so identified, either because one budget covers several institutions in different provinces, or because the institution has a national, rather than local role. These allocations, comprising 18% of the budget, have therefore been excluded from the analysis.

A variety of indicators can be used to compare allocations by changwat. Moreover, the allocation

1244 ANNE MILLS

Table 5. Comparison of two alternative definitions of poverty and the regional distribution of poverty 197516

% Poor in Regional poor as regional population % of total poor

<BzM)o < I50 (Rural) <B2ooO < I50 (Rural) % of

hou:iold < 200 (Urban)

Region per capita hou:;old c 200 (Urban) total

per capita population

North 77 27 24 22 21 Northeast 78 37 41 SI 34 Ccntre 67 12 I8 II 22 South 69 25 12 I2 I2 Bangkok 26 9 5 4 II Kingdom 68 25 100 100 IOil

Source: Report of the Socio-Economic Survey, 1975-76, Whole Kingdom, NSO. Thailand. Towards a Development Strategy of Full Participation. The World Bank, September 1978.

can be broken down by type of facility, namely provincial hospital, district hospital, health centre/ midwifery centre. The indicators selected for analysis were total allocation per capita by changwat, allocation per capita of the population defined as poor, provincial hospital allocation per capita, and allocation per health centre/midwifery centre.

Appendix 1 provides these figures, and for each changwat, also lists the average per capita gross provincial product, as a rough indicator of the standard of living of the local people. These figures show that these various indicators varied widely by province. This is true not only when allocations are related to population, but also, for instance, for the figures on allocations per health -cegtre.

These figures are summarized by Region in Tables 6 and 7. Table 6 shows that if Regions are ranked by per capita allocation of the Free Medical Care Budget, Bangkok had the highest allocation, fol- lowed, in order, by the Southern, Central, Northern and finally the Northeastern Regions. If these allocations are divided amongst the total number of poor in each Region, defined either according to MOPH criteria or as those in absolute poverty, the effect is to change the positions of the Southern and Central Regions, and to make far more pro- nounced the disparities in allocations between the Regions. In effect, those Regions which had the greatest numbers of poor people received relatively less of the Free Medical Care Budget, especially the Northeast.

Table 6. Distribution of free medical care budget’ in relation to numbers of noor

Allocation P.C. of regional

Allocation P.C. of poor population

Criteria of MOPH absolute

Region population criteriab povertf

(Baht) (Baht) (Baht) North 6.6 8.6 25.4 Northeastern 4.7 6.2 13.4 Central 7.1 13.3 63.0 South 7.2 11.1 31.2 Bangkok 8.4 28.2 95.2 Kingdom 6.3 9.7 26.7

Source: Budget of the Free Medical Care Project 1980. MOPH and Tables 2 and 4.

‘Excluding allocations to army, airforce. navy, police and national specialist hospitals. Budget figures are for FY 1980.

bDefined as households with income of less than X2000 a month. ‘Defined as those with income of less than BI50/capita/month in

rural areas and BZOO/capita/month in urban areas.

The correlation between high incomes and high allocations is shown graphically in Fig. 1. Provinces have been ranked by average per capita income, and the average per capita free medical care allocation for each group of provinces calculated.

The same disparities are evident when the total allocation is broken down by type of facility (Table 7). In terms of the allocation per capita to the total changwat population for provincial hospital care, the Northeast was much worse off than the other Regions, even without making allowances for its greater poverty. Health centre allocations were rather more equitable, though the Northeast again received the lowest allocation per health centre.

There are a number of reasons which might explain this finding, related to the criteria for allocating the budget between changwats. The allocations were based on the number of poor people seen by each health unit in the previous time period. Two main factors are likely to affect this utilization: the numbers of poor attending the health units, which will depend on physical accessibility, popularity of the health unit, availability of alternative sources of care, etc.; and the strictness with which the hospital director or health centre staff apply the criteria for determining who is poor. These points are investigated further in the next section.

5. THE TAKE-UP OF FREE MEDICAL CARE SERVICES

While it is not the prime intention of this paper to investigate the take-up of free medical care between changwats, some analysis is necessary to illuminate the issues raised above. Appendix 2, summarized in Table 8, analyses three aspects of utilization: the number of people who received free care per 1000 population; the percentage of total inpatient cases who received free care; and the population per health unit, as a very crude measure of the physical accessibility of services.

The take up of free medical care varied enormously between changwats though a regional pattern does emerge. An interesting feature of Table 8 is that in 1978, the Northeast had the greatest take up of free medical care, in relation to population, and the Northern region the lowest, This is unexpected, since the latter was allocated in 1980 a budget larger in per capita terms than the former. This might be explained by the utilization statistics, which include both inpatient and outpatient statistics, if inpatients, for whom


Table 7. Distribution of free medical care budgeta by regionb

Reaions

Provincial hospital

allocationC PC.

Allocation per health/ midwifery

centre

Total allocation

P.C.

P.C. gross provincial product (1976)

Northern 4.2 6246 6.6 5530 Northeastern 2.5 5439 4.7 3220 Central 4.6 6407 7.1 13,450 Southern 4.5 6101 7.2 7230 Bangkok - - 8.4 19,150 Kinadom 3.74 6015 6.3 7520

Source: Report of the Free Medical Care Project; Population Statistics from Planning Division, MOPH; Gross Provincial Product figures from NESDB National Accounts Division and World Bank Mission estimates.

‘Includes all allocations which can be clearly identified with changwats. bFinancial data for FY 1980; population and health facility data for 1978. cIncludes allocations to Khon Kaen and Chiang Mai Universities. dExcluding Bangkok.

a higher allocation was allowed, made up a greater proportion of total free users in the North. The disaggregation of the statistics suggests that the North treated a lower proportion of free inpatients than the Northeast, although this might still represent a greater absolute number. In general, the figures suggest that different provinces applied very different criteria to determine who should get free treatment, and there seems to be no clear correlation between the extent of poverty in each Region and the proportion of inpatients treated free.

A comparison of utilization rates for free care and average population per health unit (see Appxndix 2) suggests that in some provinces physical accessibility to free care might also have been a major problem, preventing greater take up.

Table 9 looks at the total number of patients receiving free care in each Region and compares it

with the likely total number of poor, both according to MOPH criterion and the criterion of absolute poverty. These figures provide only a broad indi- cation of the extent to which the poor have received free treatment, since the patient numbers will include multiple attendances by some individuals. However, it is apparent that on the basis of the MOPH criterion of poverty, the Central Region and Bangkok could potentially provide relatively more free treatment to their poor than could the other Regions, with the Northern Region potentially providing the smallest proportion. A similar conclusion applies when coverage of those in absolute poverty is considered, though with the stricter definition of poverty, it now appears that the North, Northeastern and Southern Regions could not even provide one free treatment to all those in absolute poverty, while the Central Region and Bangkok could give free treatments in excess of the

Yearly p.c. income

<4,000 0

17 provinces

I

10

p.c. income

.OOO-6,000 B

14 provinces

I

-20

p.c. income

6,000-0,000 B

23 provinces

i 30

Cumulative population (in millions)

Fig. 1. Per capita allocation of free medical care budget in provinces ranked by per capita income bracket.

1246 ANNE MILLS

Table 8. Utilization of health facilities by patients defined as poor by region, 1978

Patients’ receiving % of free care inpatient? Population per 1000 receiving per health

Region population free care unit’

Northern 167 2.5 7660 Northeastern 260 39 8894 Central 213 37 6253 South 193 33 5392 Bangkok II3 - - Kingdom 206 356 7225d

Source: Report of the Free Medical Care Project, MOPH; Popu- lation figures from Planning Division, MOPH; Health Facility Statistics from Planning Division, MOPH; inpatient statistics from Health Statistics Division, MOPH.

‘Includes both inpatient and outpatient care. Probably includes some double counting of individuals.

bAt provincial and district hospitals. ‘Includes provincial and district hospitals, university hospitals,

Regional MCH centres, health centres and midwifery centres. dExcluding Bangkok.

numbers in absolute poverty. Needless to say, these statistics do not necessarily indicate that the poorest people actually received free care, though it is likely that of those attending the health facilities, those who appeared comparatively worse off did get free treatment.

These statistics emphasize the point made above, namely that the take up of free medical care in the Northern Region was relatively loG, although this does not appear to have been clearly reflected in budget allocations. The Northeast Region was in the reverse position, in that the take up was higher, but the per capita allocation lower. More patients were treated, with less money.

6. DISCUSSION

The above analyses suggest that while the Free Medical Care Project was making free care available to considerable numbers of people, the budget allocations favoured the better-off Regions, not being concentrated in those Regions which had the greatest number of the very poor, and that eligibility for free care varied over the Kingdom. The problem is essentially one of devising a budget allocation system and

care delivery system that will reach those in poverty. Two issues in particular stand out: the criteria for allocating the budget; and the mechanism for deciding who merits free care.

Devising criteria for resource allocation in the held of health services is a classic problem. The solution adopted in Thailand, to allocate funds on the basis of workload (in this case measured by numbers of poor treated) is one adopted in many other countries. It ensures that the health facilities have the funds to treat the numbers of patients that they see. However, it does not tackle the problem of patients who do not present themselves at health units, or who do attend, but do not wish to declare themselves to be poor. In some cases it may be expensive or time-consuming to travel to a health facility in parts of the country where coverage is low; in other cases people may perceive a stigma to be attached to labelling themselves as poor.

The problem is compounded by the method adopted for deciding who should be classed as poor which involves separating and distinguishing those who cannot pay from those who can. Since this decision was left to local staff to make at the time of treatment, it is unlikely that any detailed investi- gation of income was made and likely that the decision was essentially based on the subjective judge- ment of the director of the health unit. While it is not suggested that directors did not take their task of judging who should receive free care seriously, the utilization statistics imply that different criteria were being applied in different parts of the country. This is to be expected: directors do not have the time or capacity to do a detailed assessment of the income of patients and must therefore rely on indicators such as physical appearance, dress, etc. This will involve an implicit comparison with others who attend that health unit. Yet patients who appear relatively poor in a province in the Central Region are likely to have higher incomes than those who appear to be relatively poor in a province in the Northeast. Thus those who appear to be relatively poor, in the context of each province, will get free care, although a standard criteria will not be applied throughout the whole country.

A further question is raised by the linking of numbers of poor treated with budget allocations.

Table 9. Relationships between numbers of poor and numbers of patients receiving free medical care by region

Ratio between patients receiving

free care and Patients No. of poor (1976) numbex of poor receiving free care MOPH Absolute MOPH Absolute

Region (1978) Criteria’ povertyb Criteria poverty

North 1.561,073 7.099.545 2,412,178 0.22 0.65 Northeastern 4,020,757 I I,8899741 5,477, I 15 0.34 0.73 Central 2,111,242 5.3 16,527 I, 123,954 0.40 1.88 South 1,077.497 3,641,358 1,292,547 0.30 0.83 Bangkok 55 1,483 I .445,052 421,967 0.38 1.29 Kingdom 9.322.052 29,392,229 10.733.761 0.32 0.87

Source: Report of the Free Medical Care Project, MOPH; Report of the Socio-Economic Survey 1975-76, Whole Kingdom, NSO; Thailand. Towards a Development Strategy of Full Partici- pation, The World Bank, 1978.

‘Defined as households with income of less than B2OOO/month. bDefined as income of less than Bl50jmonthjperson in rural areas and SZOO/month/person in urban

areas.


Directors may have perceived it to be in their financial interests to adopt a generous rule on who should receive free care. On the other hand, by so doing they would have lost the fees that would otherwise be paid. It is therefore not obvious where the balance of advantage lay.

At health centre/midwifery centre level, it is likely to have been far more difficult to operate this system for determining eligibility for free medical care, and the nurse in charge may not have been able to restrict free care to only those who needed it. Are there ways of getting round these problems, and ensuring that those in greatest poverty receive free care? Various possibilities are investigated in the next section.

7. POLICY OPTIONS

Options for change fall into two main categories: marginally amending the existing project; and radi- cally changing some of its features.

7.1. Marginal change

The introduction of cards. At the time of this analysis, the MOPH had already taken a policy decision to re-introduce cards which would have to be shown to obtain free care. This decision was implemented in 198 1. Cards are handed out by village headman and Kannans of the Ministry of the Interior, and entitle the holder to care for-3 years.

It is important to ensure that a card system does not become administratively complex and expensive to organize and maintain. Other countries which use cards have experienced the following problems:

(a) Security. Cards are valuable, in that they can save their holders considerable expenditure. Their production and issue needs to be carefully controlled. Means also need to be found to minimize the possi- bility of cards being borrowed by those not eligible for free care. A photograph is ideal but unrealistic in the circumstances of many developing countries.

(b) Period of validity. Cards are usually valid for a specific period of time. The shorter the period, the more frequently will cards have to be renewed, and the more costly will be the administration of the programme. The longer the period, the more likely it will be that the financial circumstances of those holding cards will have changed.

(c) Definition of dependents. Exemption schemes are normally applied to the income earner(s) and his/her dependents. Who are entitled to be termed ‘dependents’ needs to be established. Children are always included; some countries also include parents of the income-earners, and unmarried sisters.

(d) Issue of cards. Since the great majority of those eligible for cards live in rural areas, a decentralized system for issuing cards is required.

Income criteria. The income criteria of 81,500 for single people and B2,OOO for couples and their children is inequitable: since most couples will have children under 20, a stricter rule is in theory being applied to families than to single people. It is particularly desirable not to discriminate against families with children. A criterion could therefore be devised which is sensitive to the size of the family. This could, for instance, take the form of an income allowance

per month of x baht for each adult, plus x/2 or x/4 baht for each child.

The level at which income criteria are set is important. This paper has calculated that when the criterion of IJl,OOO and B2,OOO was set in 1976, about 68% of the population became eligible for free care. This is an excessive number if the programme is aimed at helping the poorest. Indeed, if it is considered that two thirds of the population should receive free care, then attention should be focused on whether the financing of the whole health system should be changed. The cost of administering and managing the payment of fees is excessive if only a small proportion of patients pay them. In general, it is desirable that the income criteria adopted should define those in absolute poverty.

The question might be asked whether it is possible to establish a criterion which is not dependent on calculating household income. Unfortunately, it is difficult to find a criterion that correlates closely with standard of living. For instance, while ownership of land is a potential criterion, in practice it would appear from the Socio-Economic Survey that in villages, there is no significant difference between the income of those who own land, those who rent it, and those who are farm workers.

Any income criteria must relate to a particular time period, which is usually a month or a year. Where incomes may fluctuate widely over the year, estimat- ing eligibility on the basis of the previous year’s income would be preferable to taking a monthly income.

Geographical equity. Any measures to improve the operation of the Free Medical Care Project must recognize that poverty is not equally distributed throughout the Kingdom, but is concentrated in the northeast and north. The distribution of resources for free medical care must necessarily be concentrated in those regions.

However, establishing a system of free medical care does not necessarily ensure that the poor attend health units, particularly if travel to the health units is difficult and expensive. The outreach activities of hospitals and health centres are therefore important, especially in those changwats where accessibility seems to be a major problem. This would help both to reach those (likely to be the poorest) who live far from static units, and would make more efficient use of static units, especially health centres.

7.2. Major change

The Free Medical Care Project essentially accepts the existing health system and existing financing arrangements, while attempting to minimize their inequitable effects through special provision for the lowest income groups. The policy is one of selectivity, namely of concentrating government assistance on the poorest.

The major drawback of this type of approach occurs if the poor are unwilling to draw attention to their state by opting for special assistance or, altema- tively, do not value care that is given free. This may mean that large numbers who qualify for special assistance do not request it.

The extent to which this happens in Thailand could not be determined in this study. If stigmatiza-

1248 ANNE MILLS

tion is a significant problem, the alternative approach would be to adapt the principle of universality, that is to make assistance available to all without special application, the cost being covered by general taxation. Such a principle, applied to health services in Thailand, implies a radical change from a health system financed to a large extent by patients’ fees, to one where payment is divorced from treatment.

Such a change is not necessarily desirable for a country such as Thailand. A more moderate change, however, would be possible, namely to make particular parts of the health service, or particular types of care, free of charge. In Thailand, Family Planning and Immunization Services are already largely free. In some countries, infectious diseases and some chronic diseases are also treated free, the former to encourage take up of treatment, and the latter because the cost of treatment for chronic diseases can put a considerable strain on family finances.

One option which has already been tried out in one province in Thailand is to make all health centre treatment free. The statistics presented in Section 3 of this paper show that 80% of the village population were defined as poor by the MOPH criterion, and 28% were in absolute povery. Moreover, of those defined as poor, 84% lived in rural areas, or 93% in the case of those in absolute poverty. It is thus evident that most of those attending health centres must be eligible for free treatment. _-

The experiment referred to above was tried out in Khon Kaen Province, where the Free Medical Care budget allocated to the Provincial Health Office was used to finance the total supply of drugs for health centres. The health centres in this changwat therefore no longer sold drugs.

No specific evaluation of this experiment has been done, but two issues are of particular importance: the impact of free care on demand for care; and the magnitude of the loss of income from giving drugs free.

A frequently expressed fear is that free care encour- ages high demand, which is expensive to meet. The impression of local staff was that utilization had increased in response to the removal of fees. This increase, however, appeared not to have overbur- dened the health centres. At one unit visited, attend- antes for treatment averaged IO-15 a day, a by no means excessive workload, though possibly greater than many health centres in other changwats.

A small survey in another (richer) province indicated that few health centres sold all the drugs obtained from the regular budget. The income of the health centres in the whole province was on average 80% from the government, 14% donations and 6% drug sales. It can thus be concluded that the income from sales formed a very small part of total health centre income, and that a substantial proportion of health centre drugs were anyway being handed out free. Providing completely free care would thus not have major financial implications.

In the current international climate, it is controver- sial to consider whether a country already charging fees should remove them. The potential advantages and disadvantages of making health centre treatment free can be summarized as follows:

Advantages

-encourage greater utilization, especially by the poor;

-greater utilization would lead to a more efficient use of health centres;

-remove the problems of accounting for income received, and free health workers for other tasks;

-administrative simplicity; -standardize financial practices across the King

dom.

Disadvantages

--cost of supplementing existing budgets to make up for loss Of income;

--cost of health centre care is not necessarily the major barrier to utilization;

-free care may not be perceived as good care by patients;

-free health centre care may lead to demands for more free hospital care.

The resolution of these issues is not easy. However, if it is considered likely that making health centre care free will lead to greater utilization by the poor, then free care might be justified in the Northeast, where the extent of povery is clearly greatest.

8. CONCLUDING REMARKS

This paper has addressed some of the problems of implementing a national scheme of fee exemp- tions, by analysing the experience of Thailand. It highlights the difficulties involved in laying down criteria for exemption, deciding who should apply them, and compensating health units for lost fee revenue.

Recent reports suggest that the problems of ensuring the right people get free treatment have not been solved by the introduction of a card. A review refers to ‘mismanagement and abuse in the distribution of free medical cards’, and quotes evidence that many poor do not receive cards, and that only 60% of free card-holders are poor, and 17% wealthy [91.

There is clearly an urgent need for more investi- gation of the feasibility and operation of nation- wide exemption schemes in low income countries before fee systems are put in place, in order to ensure that those already badly off are not made worse off.

REFERENCES

The World Bank, Financing Health Services in Develop - ing Countries: An Agenda for Reform. World Bank, Washington DC, 1987. Gilson L. Government Health Care Charges: Is Equity being Abandoned? EPC Publication No. IS, London School of Hygiene and Tropical Medicine, 1988. Chadchai Tansiriratanakul Evaluation of Financing of Health Services for Low Income Population Project, Essay presented to the Faculty of the Colum- bia University School of Public Health in partial ful- filment of the Requirements for the Degree of MPH, 1978. Health Planning Division, MOPH, Base Year Data and Background Information. Thailand, June 1980.

5.

6.

7.


Ministry of Public Health, Report of the Free Medical 8. Department of Business Economics, Ministry of Com- Care Project, Annex No. 2. (In Thai.) merce, Consumer Price Index for Whole Kingdom, National Statistical Office, Report of the Socio-Econ- quoted in Bank of Thailand. Monthly Bull. May 1980. omit Survey 1975/76, Whole Kingdom, 1979. 9. Deutsche Gesellschaft fur Technische Zusammenarbeit, The World Bank Thailand. Towardr u Deue~opment GmbH (GTZ), The Health Care Progrumme in Thai- Strategy of Full Participation, September 1978. land. GTZ, Munich and Bangkok, 1988.

APPENDIX 1

Distribution of Free Medical Care Budget’ by Changwaf,b 1980

Region and

changwat

Provincial Allocation Total Per capita hospital per health/ allocation gross

allocationc midwifery per provincial per capita centre capita product (1976)

North (Baht) 5.5 ’ 2.6 6.7 5.9 5.3 5.5 2.2 4.3 3.1 6.7 2.5 3.1 2.5 6.7, 1.3

Chiang Mai Chiang Rai Nan Payao Phrae Mai Hong Son Lamphun Lampang Sukhothai Uttaradit Khamphaeng Phet Nakhon Sawan Phichit Phitsanulok Phetchabun Uthai Thani Tak Regional average Northeast Nakhon Phanom Nong Khai Loei Sakhon Nakhon Udon Thani Kalasin Khon Kaen Chaiyaphun Nakhon Ratchasima Maha Sarakham Roi Et Buri Ram Yasothon Si Sa Ket Surin Ubon Ratchatani Regional average Centre Chai Nat Nakhon Pathom Nonthaburi Pathum Thani Nakhon Si Ayutthaya Sing Buri Samut Songkhram Samut Sakhon Suphan Buri Samut Prakan Ang Thong Chantha Buri Chachoengsao Chonburi Trat Nakhon Nayok

5.5 7.1 4.2

3.8 2.3 2.4 2.0 2.0 1.4 4.0 2.7 3.0 1.8 1.9 2.3 2.0 1.3 1.8

:::

3.7 2.8 2.2 2.3 1.6

10.9 4.1 3.1 2.4 1.8 3.6

15.4 2.5 5.2

11.4 9.1

(Baht) (Baht) 6211 8.5 6667 4.8 5970 9.6 6122 6.9 5128 7.7 6098 12.6 6250 4.0 4878 5.9 6481 5.5 7692 8.8 5833 3.9 6061 5.6

10,638 5.0 6667 9.4 4861 3.4 6977 8.8 6250 9.4 6246 6.6

4891 6.7 7692 5.1 5797 5.9 6897 4.6 7143 3.9 6000 3.2 6667 6.7 6494 5.2 6993 5.3 5618 4.2 5882 3.8 6250 4.3 5833 4.0 4959 3.2 2174 3.2 5854 5.8 5439 4.7

5660 5.2 6522 5.8 5660 4.4 5769 4.4 5714 4.8 7179 13.3 5405 6.2 7143 5.9 6757 4.6 6757 3.8 6154 7.3 7273 18.4 6522 5.0 7059 8.3 7500 16.9 6757 12.5

(Baht) 6780 3290 3890 N/A 5190 5870 4710 6160 6380 5930 5170 6510 5190

5790 6840

4390 3520 3860 3980 2880 3550 3430 4050 2650 2300 3030 N/A 1940 2620 3580 3220

6190 6490

11,200 9230 6650

4960 8700 6980

49,830 6170 7320 6770

. 16,580 9860 6960

[continued overleaf

1250

Appendix I-continued]

ANNE MILLS

Region and

changwat

Provincial Allocation Total Per capita hospital per health/ allocation gross

allocationC midwifery per provincial per capita centre capita product (1976)

Prajin Buri Rayong Lop Buri Saraburi Kanchanaburi Prachuap Kiri Khan Phetchaburi Ratchaburi Regional average South Krabi Chumphon Trang Nakhon Si Thammarat Phangna Phatthalung Phuket Ranong Songkla Surat Thani Satun Narathiwat Pattani Yala Regional average Bangkok _- Kingdom

4.2 5747 4.3 6818 4.3 4688 7.6 6173 4.7 9091 2.3 6667 6.4 6338 6.9 6522 4.6 6407

3.6 4.1 2.9 2.0 8.4 3.8 7.9

6410 7843 6173 6040 6122 5714

17,647 5769 4762 5825 6661 6579 5263 5769 6101

10.7 4.9 5.7 5.1 7.8 3.1 8.7 4.5 - -

3.7d 6015

5.6

Z:Z 4.5 9.0 9.8 7.1

5.7 7.7 5.5 4.2

12.1 5.9

12.6 15.8 6.8 9.4 7.3

10.0 5.1

13.5 7.2 8.4 6.3

5720 9540 8560

12,500 8120

18,110 6790 7240

13,450

7700 7260 7860 4690

11,020 4690

41,840 21,530

8130 6040 7480 4710 3900 7520 7230

19,150 7520

Sources: Report of the Free Medical Care Project; Population Statistics from Planning Division, Ministry of Public Health; Gross Provincial Product Figures from NESDB National Accounts Division and World Bank Mission estimates.

‘Includes all allocations which can be clearly identified with changwats. bFinancial data for FY 1980; Population and Health facility statistics for the year 1978. CIncludes allocations to Khon Kaen and Chiang Mai Universities. dExcluding Bangkok.

APPENDIX 2 Utilization of Health Facilities by Patients Defined as Poor by Changwat

and Region, 1978

Changwat

North Chiang Mai Chiang Rai Nan Payao Phrae Mae Hong Son 393 75 2825 Lamphun 260 22 6724 Lampang 159 33 7250 Sukhotai 196 58 8547 Uttaradit 170 8 7418

Patients” receiving free care per 1000

population

204 86

422 83

118

% of I.P.b Population receiving per health free care unitC

12 6549 40 16,678 40 5201 13 8569 67 5256

Kamphaengphet 130 52 8281 Nakhon Sawan 154 19 9030 Phichit 74 31 10,565 Phitsanulok - 201 14 8425 Phetchabun 63 18 9543 Uthai Thani 289 68 5132

[continued


Appendix Z-continued]

Changwat

Patients’ receiving free care per 1000

population

% of I.P.b Population receiving per health free care unitC

Tak Regional average North east Nakhon Phanom Nong Khai Loei Sakhon Nakhon Udon Thani Kalasin Khon Kaen Chaiyaphum Nakhon Ratchasima Maha Sarakham Roi Et Buri Ram Yasothon Si Sa Ket Surin Ubon Ratchatani Regional average Cenrre Chai Nat Nakhon Pathom Nonthaburi Pathum Thani Nakhon Si Ayudhaya Sing Buri Samut Songkhram Samut Sakhon Suphan Buri Samut Prakan Ang Thong Chantha Buri Chachoengsao Chon Buri Trad Nakhon Nayok Prajin Buri Rayong Lop Buri Saraburi Kanchanaburi Prachuap Kit-i Khan Phetchaburi Ratchaburi Regional average South Krabi Chumphon Trang Nakhon Si Thammarat Phangna Phatthalung Phuket Ranong Songkla Surat Thani Satun Narathiwat Pattani

282 N/A 5126 167 25 7660

523 48 7374 332 19 8914 201 56 5627 409 N/A 8102 284 14 14,745 186 40 6939 412 74 8995 92 34 9846 95 26 11,948

289 53 7654 270 39 8144 148 45 12,185 235 41 6838 290 42 8180 226 26 9910 284 42 7004 260 39 8894

197 156 215 98

280 389 201 159 170 86

267 268 102 310 711 211 240 164 148 178 299 105 290 241 213

52 50 43 15 30 33 4 4

94 18 13 36 20

N:2A 29 64 20 20 30 24 16 38 31 37

5919 7158 6240 5521 4112 4686 4861 6698 8467

11,909 3598 5180 6423 7658 2925 4945 6471 7205 9108 5265 8136

10,675 4823 6085 6253

79 83 4908 219 26 5685 110 37 4818 131 11 7570 311 6 3127 283 26 5313 120 8 6685 466 74 2824 123 8 6090 170 13 5128 136 59 4937 351 73 5182 245 27 4365

[continued overleaf

1252 ANNE MILLS

Appendix Z-conrinued]

Chanawat

Patients’ receiving free care per 1000

oooulation

% of 1.P.b Population receiving per health free care unit’

Yala 372 25 4469 Regional average 193 33 5392 Kingdom 217 356 722Sd

Sources: Report of the Free Medical Care Project, 1976-79, MOPH; Population Figures from Planning Division, MOPH; Health Facility Statistics from Planning Division, MOPH; Inpatient statistics from Health Information Division, MOPH.

‘Includes both inpatient and outpatient care. Probably includes some double counting of individuals.

bAt provincial and district hospitals. CIncludes provincial and district hospitals, university hospitals, Regional

MCH Centres, health centres and midwifery centres.

Documents

Exempting the poor: The experience of Thailand