INTERNATIONALJOURNALOF HEALTH PLANNING ANDMANAGEMENT, VOL. 8,137-152 (1993)

HEALTH INSURANCE AND PRIVATE PROVIDERS: A STUDY OF THE CIVIL

SERVANTS’ MEDICAL BENEFIT SCHEME IN BANGKOK, THAILAND

SARA BENNETT’ AND VIROJ TANGCHAROENSATHIEN’

‘Health Economics and Financing Programme, London School of Hygiene and Tropical Medicine, Keppel Street, London WClE 7HT, England; 2Health Planning Division, Ministry of Public Health,

Dheves. Bangkok, Thailand

SUMMARY

Compulsory health insurance schemes have received attention recently as a means of creating a reliable extra-budgetary source of health care funding. Yet, the full impli- cations of such schemes in a developing country context are unclear; in particular, the impact on and relationship with private sector providers has infrequently been explored. This study examines patterns of public and private sector utilization under the Civil Servants’ Medical Benefit Scheme (CSMBS) in Bangkok, Thailand. The CSMBS currently provides limited reimbursement for private inpatient care, but recent proposals suggest increasing benefit levels for care sought in the private sector. The study shows that despite high level of cost recovery in the public sector, charges were much lower than those in the private sector. Different patterns of diagnosis in the two sectors were found with private hospitals tending to treat a less complex case mix. Within the private sector, there was a limited tendency to specialize in certain types of care. It is concluded that under the current payment mechanism of fee-for-service reimbursement, measures to enhance access to private sector care should be approached with caution. In the long run, the scheme should merge with the recently established social security scheme.

KEY WORDS: Private sector; Health insurance; Payment mechanism; Thailand

INTRODUCTION

For many people in developing countries the main barrier to use of private health care providers is financial. This is reflected in the steep income gradients often associated with private sector utilization (e.g. Mulou et a/., 1991; Pannuru- nothai, 1992; Bennett et al., 1994). Health insurance andmedical benefit schemes which cover the cost of private sector care may significantly increase the number of people who are able to seek care from private providers. Often, national health insurance schemes in developing countries cover the better off (Kutzin and Barnum, 1992; McGreevey, 1990; Vogel, 1990). Such formal sector employees naturally demand privileged access to the private sector in return for their contributions. Health insurance may, therefore, increase the income

CCC 07494753193f020 137-1 6 0 1993 by John Wiley & Sons, Ltd.

138 S . BENNETT AND V. TANGCHAROENSATHIEN

sources available to the private sector and ultimately act as a catalyst for private sector growth.

A number of intermediary factors are likely to influence the final outcome. In particular, the type of payment mechanism adopted and the rules governing the scheme can be critical. For example, in the Philippines, although providers were paid according to an agreed fee-for-service schedule, they were allowed to charge patients a top-up amount. This resulted in a rapid increase in the level of patient co-payment until by 1982 only 15-18 per cent of the total fee was reimbursed. Thus, under this payment mechanism, although the scheme limited its own liability, it failed to increase the security of its clients and it increased provider revenues (Ron et al., 1990). In Brazil the payment mecha- nism has been adapted a number of times in order to influence provider incen- tives (McGreevey, 1988). For example, the extremely high rate of Caesarian sections led the social security organization to make the reimbursement fee payable to doctors the same for both vaginal and Caesarian section deliveries (Barros et al., 1986). The scheme is now moving towards a Diagnostic Related Group (DRG)-based payment system.

In Thailand the private health care sector, particularly in Bangkok, is already substantial, with an estimated 110 private hospitals and over 2000 private clinics in the capital alone. A Social Security Act (SSA), including a substantial health insurance component, was passed in 1990 and implemented in 1991. This scheme has adopted a capitation-based payment mechanism in order to contain costs and prevent over-provision of services. Other public sector insurance and medi- cal benefit schemes continue to operate on a fee-for-service basis. All the schemes are indirect in that they rely upon existing government and private health care providers rather than having their own service outlets.

This article, firstly, presents the objectives of the study and then provides background information about how the (CSMBS) currently operates and press- ing policy issues concerning the direction of the scheme. Methodology and results are then presented, including a comparison of charges and case-mix in public and private sectors. Evidence concerning market distortions such as cream skimming and anti-competitive practices is reviewed. Finally, the implications of the results for the CSMBS and broader government policy on health insurance and the role of private sector providers are discussed.

THE STUDY

Objectives

The purpose of the study was two-fold:

- to inform decision makers about the current patterns of health care utiliza- tion under the CSMBS and thus feed into policy formulation on the future of the scheme and its relationship with other insurance schemes in Thailand; and,

CIVIL SERVANTS' HEALTH INSURANCE IN BANGKOK 139

- to contribute to a wider review of the publidprivate mix for health in Bang- kok, in particular to enhance understanding of differences in behaviour between and within the public and private sectors.

Scope andgrowth of the scheme

The CSMBS covers the cost of health care for civil servants who are currently in employment and their dependants (spouse, parents and up to three children) and civil service pensioners and their dependants. The scheme is one of a number of fringe benefits provided for civil servants including mortgage relief and child support. In 1990 there were 1.83 million current civil servants covered by the scheme and 0.17 million pensioners. If a conservative estimate of 2.5 dependants per covered person is made, then this implies that the total number of people covered under the scheme is 7 million people or nearly 13 per cent of the Thai population.

I 1400 E

w "7

2 400 6ool

YI

C c

P b

Figure 1. Growth in expenditure under the CSMBS (1976 constant prices).

Growth of real expenditure under the scheme has been rapid (Figure 1). Payment under the scheme increased more than three-fold between 1981 and 1990. Growth in expenditure has been particularly marked amongst the pen- sioner group: although starting from a low base, real expenditure has grown by an average of 21 per cent per annum. It is likely that this expenditure will continue to rise as longevity increases and more complex technologies become available. The growth of expenditure under the scheme is marked in contrast to other government expenditures; in 198 1 the CSMBS constituted 0.8 per cent of the total government budget, by 1990 it amounted to 1.5 per

140 S. BENNETT AND V. TANGCHAROENSATHIEN

cent. In 1981, payments under the CSMBS made up 8.4 per cent of all fringe benefits received by civil servants, by 1990 this had risen to 17.5 per cent. Significant growth in expenditure under the scheme contrasts with the limited growth in the number of state employees: since 1980 a ceiling of 2 per cent growth per annum in the public sector establishment has been strictly enforced.

Although outpatients make up the largest number of cases under the scheme, inpatient cases consume more resources. In 1990 just over 60 per cent of total payment for current employees was for inpatient cases.

Operations and rules governing the scheme

The scheme operates differently for public and private sector claims. Public sector claims are fully reimbursed direct to the hospital which provided the care. Private sector expenses are first paid out-of-pocket by the patient and then reclaimed. Civil servants and their dependants cannot seek reimbursement for outpatient care sought in the private sector.

All inpatient claims from public hospitals in Bangkok are sent directly by the hospital to the Central Comptroller’s office in the Ministry of Finance. A standard invoice has been devised and this is submitted for each patient. This record includes the following variables:

- diagnosis - length of stay - pensionerlnon-pensioner - department of civil servant - personal claim or claim for dependant - relationship of dependant to claimant - eight items of charge such as room and board, investigations, drugs and

blood products.

The Central Comptroller’s Department reimburses the hospital directly. Summary data on total reimbursement is produced, but not more detailed information on patterns of utilization or charges.

Bills from private hospitals for inpatient care are first paid out-of-pocket by the patient; the civil servant is then reimbursed by the Ministry of Finance. Reimbursement of private sector medical bills is governed by a complex web of regulations. Certain fee items such as ‘room and board’ have fixed maximum rates of reimbursement set by the Ministry of Finance. For other categories of fees half of the actual fee is paid, but not more than B3,000 (US $120) for the first 30 days. After 30 days, half of the actual cost is paid but not more than BlOO per day. In 1991 just over 20 per cent of the reimbursements made for inpatient care for current employees were for care sought in the private sector.

As civil servants must first pay out-of-pocket for private care it is probable that the charges made to civil servants are representative of the charges generally imposed on private sector clients. In contrast, public sector facilities claim

CIVIL SERVANTS’ HEALTH INSURANCE IN BANGKOK 141

reimbursement directly and normally make the maximum charge allowable under government regulations in order to generate as much revenue as possible from the scheme. This is used to cross-subsidize indigent patients. An approxi- mate estimate indicates that about 87 per cent of the full cost of care for civil servants (including overheads and capital costs) is recovered through fees (Mongkolsmai et al., 1992).

Proposed modijications to the scheme

The rapid growth in expenditures under the CSMBS, pressure from employees for better benefits, and the establishment of the new SSA have raised a number of questions about the future direction of the scheme.

The Government announced in 1992 an increase in the ceiling for room and board paid under the scheme in to B600 per day. The rate was previously increased in 1989 from B150 to B300. These increases are a sign of the pressure that the Government is under to provide better benefits under the scheme. At the end of April 1992, the debate concerning the role of the private sector under the CSMBS was further opened up when the Ministry of Finance orga- nized an inter-ministerial meeting to discuss wide-ranging reforms, proposed by the Civil Servants’ Commission, which would enable greater private sector involvement in the scheme. Under the new proposals the ceilings on reimburse- ments for private sector care would be raised, enabling civil servants to be reimbursed for a much larger percentage of the cost of care.

Methodology

7357 records, or just under 10 per cent of the civil servants’ inpatient cases in Bangkok in the fiscal year 1990191 (1 October - 30 September), were sampled, using a random-stratified sampling technique. Approximately half of the sample were drawn from public sector hospitals and the other half from private. The sample from the public sector purposely took a rather larger proportion of pensioner claims than that represented in the population as a whole in order to investigate more closely the costs of care for the elderly. Such claims are likely to be more expensive than those made by current civil servants; therefore, much of the analysis here excludes the pensioner part of the sample in order to make public and private sector care directly comparable.

During data collection, key fields on the records were transcribed onto a data sheet by data collectors. As there is no standard claim format for care received in the private sector, a set of fee categories had to be agreed upon.

Although the standard claim form specifically requests diagnostic infor- mation, in the past this has never been analysed and there is little compulsion for the hospital to complete this field accurately. Many of the diagnoses given are lay diagnoses and could not be coded very accurately. However, most cases could be specified to three international classification of diseases (ICD) digits. Nonetheless, the inaccuracy of the diagnosis and the lack of any data

142 S. BENNETT AND V. TANGCHAROENSATHIEN

on procedures preclude the possibility of using more sophisticated groupings such as DRGs, patient management categories or disease staging. The diagnos- tic categories referred to here are simply the 17 broad disease classifications identified in ICD 9.

RESULTS

Projle ofsample

Table 1 shows the mix of employee (him or herself) and relatives seeking care under the scheme. Employees themselves account for only 25-30 per cent of cases amongst claims made by current employees. The largest share of cases is made up of parents. It is also apparent that of all the groups of relations, parents were the most likely to use private sector care. Utilization patterns were found to vary little with sex.

Table 1. Profile of sample: percentage claims made by current and retired employees

Current employees Retired employees Public Private Public Private

Hidherself Parent Spouse Child Number

29.6 24.1 69.4 51.8 35.5 50.2 6.3 28.8 17.7 8.1 20.6 16.5 17.2 17.6 3.6 2.9 2460 3425 1322 139

Table 2. Public sector charges (Baht) and lengths of stay

Current employees* Retired employeesf Mean SD Median Mean SD Median

Charge per case 9981 17,798 5308 16,298 33,881 8970

Length of stay 13.14 18.35 7 18.99 30.66 10.5 Charge per day 866 1103 583 1079 1179 779

~~~ ~

* N = 2460; TN = 1322.

Fees charged and charges reimbursed

Table 2 summarizes the mean, standard deviation and median charges found in the public sector sample and the pattern of length of stay. Considerable variation in charge is evident for all categories, reflecting the diversity of diag-

CIVIL SERVANTS’ HEALTH INSURANCE IN BANGKOK

Table 3. Private sector charges (Baht) and lengths of stay

143

~~

Current employees Retired employees Mean SD Median Mean SD Median

Chargepercase 12,128 21,808 6118 25,039 104,068 9867 Reimbursement 4019 4036 3227 5498 6669 4200

Charge per day 3194 3582 2280 4400 5666 2689 per case

Length of stay 4.31 6 2 6.49 10.27 3

noses and types of hospital included in the sample. A sizeable difference in charge is also noticeable between current and retired employees: the mean charge for retired employees is over 60 per cent more expensive than that for the current employee group. The average length of stay for claims for retired employees is over 5 days longer than for current employees. These differentials were expected, but they clearly show the burden that an ageing population will place upon health care services.

The average length of stay within the group is surprisingly high. On average, stays in government provincial hospitals are 4.9 days. A recent small-scale study by Mongkolsmai et a f . (1992) estimated the average length of stay for civil servants in provincial hospitals to be about 11 days. By international standards the observed lengths of stay are very long. Mongkolsmai et al.’s study also suggests that government officials paid a mean of B477.93 per day at a provincial hospital; considerably more was paid in Bangkok.

Charges made by private sector hospitals under the CSMBS are higher than those made by public hospitals (see Tables 2 and 3). For current employees, the average charge per case is about 22 per cent higher in the private than in the public sector, and for retired employees the charge per case is about 50 per cent higher. The very short lengths of stay in private sector hospitals mean that charges on a per day basis are much higher than in public facilities.

Private sector reimbursement rates averaged about 50 per cent of charge for current employees and approximately 44 per cent of charge for retired employees, indicating a signfbcant level of co-payment for private sector care. For some of the most expensive cases, reimbursement rates dropped to 5-10 per cent.

The three principal components of total charge were drugs (29 per cent of total), room and board (22 per cent) and doctor’s fee (14 per cent). Investigations made up 10-13 per cent of expenditure: surprisingly little was spent on special investigations such as computed tomography and magnetic resonance imaging.

Hospitalization by diagnostic group

Figure 2 shows claims by diagnostic category for public and private sector facilities. For the public sector, the leading causes of hospitalization in the group as a whole were: (i) neoplasms (16.9 per cent), (ii) disorders of the nervous

144 S. BENNETT AND V. TANGCHAROENSATHIEN

system (16.1 per cent), (iii) conditions of pregnancy, childbirth and the puerper- ium (10.7 per cent).

hlwy h Pdranlng

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PERCENTAGE OF CASES

PUBLIC HOSPITALS PRIVATE HDSPTALS ___ -51 Figure 2 . Hospitalization of current employees (diagnostic category).

The disease pattern amongst claims for care received at private sector hospi- tals was rather different. In this group, the leading cause of hospitalization was infectious and parasitic diseases (16.7 per cent), followed by diseases of the respiratory system (14.9 per cent) and those of the circulatory system (12.0 per cent).

In order to explore the issue of specialization further, the mean fee charged by diagnostic category was calculated. As shown in Figure 3, there was some degree of consensus in the ranking of different diagnostic categories by price. For example: group 2, neoplasms, was the most expensive group in both public and private samples. Group 14, congenital anomalies, was also relatively expen- sive to treat in both sectors. At the other end of the scale, group 1, infectious and parasitic diseases, group 15, conditions originating in the perinatal period, and group 16, symptoms, signs and ill-defined conditions, appeared to be the cheapest groupings in both public and private sectors.

Referring to Figure 2 again, it is clear that cases in the public sector are much more likely to come from the more expensive groups. For current employees, neoplasms constitute 16.5 per cent of hospitalizations in the public sector and only 4.2 per cent in the private sector. Correspondingly, private sector services were concentrated on the cheaper groupings: notably infectious and parasitic diseases, which accounted for 16.7 per cent of current employee cases (compared to only 5.3 per cent in the public sector); and, ill-defined

CIVIL SERVANTS’ HEALTH INSURANCE IN BANGKOK

A M

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I I I 5000 10000 1 SO00 20000 21

PIJBUC SECWK CHARGE

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KEY TO GROUPS

Group 1 - Infectious 6 parasitic Group 2 - Neoplasrs Group 3 - Endocrine, Nutrition and Hetabolisn Group 5 - Hental Disorders Group 6 - Nervous system Group 7 - Circulatory system Gronp 8 - Respiratory system Group 9 - DIgestive system

Group 4 - Blood

Group 10 - Genito-urinary system Group 11 - Pregnancy and Childbirth Group 12 - Skin and Subcutaneous tissue Group 13 - Husculoskeletal system Group I4 - Congenital hbnoralies Group 15 - Conditions orginating in Perinatal period Group 16 - I11 defined syrptoms Group 17 - Injury and poisoning

Figure 3. Charges in public and private sectors by diagnostic group.

symptoms, which accounted for 8 per cent of current employee cases (compared to 4.3 per cent in the public sector). The one exception to this rule was maternity care: women showed a clear preference for seeking maternity care in the public sector, although charges in both sectors tended to be low.

Cornpa r ing prices by diagnosis

Diagnoses which were common to both public and private facilities were selected, including: diarrhoea, cataract, normal delivery, diabetes (with no com- plications), pneumonia, hypertension and heart disease. Table 4 shows the mean

146 S. BENNETT AND V. TANGCHAROENSATHIEN

charge, standard deviation and median charge per case for both public and private sectors on each of the selected diagnoses. Cataract, normal delivery and heart disease appear cheaper in public hospitals, but for other diagnoses the difference is not clear. Using t-tests to compare the means within public and private sectors it became clear that only for cataract and normal delivery were public sector hospitals unequivocally cheaper than private sector ones.

Table 4. Public and private sector charges for specific diagnoses (Baht).

Public Private Diagnosis Mean SD Median N Mean SD Median N

Diarrhoea 3500 3687 2294 50 4303 5236 2797 260 Cataract 8722 4542 6798 215 25,297 14,558 22,082 86 Normaldelivery 2510 1496 2077 238 14,965 10,442 12,160 89 Diabetes-no 15,047 22,838 9335 66 13,720 15,151 7357 81

Pneumonia 16,232 29,999 4764 63 14,504 21,854 7776 95 Hypertension 9900 12,201 4360 41 7081 7712 4310 148 Heart disease 10,957 16,881 5792 115 29,150 88,018 7135 65

complications

Despite being able to compare prices of fairly specific diagnoses there still appear to be large standard deviations in charge for all diagnoses, except catar- act and normal deliveries. For these two diagnoses the procedures used are likely to vary little. For the other diagnoses severity may vary considerably and consequently treatments may also differ. It is possible that public hospitals take the more severe cases. Data on severity were not available, but differences in length of stay by diagnosis were investigated as a proxy for severity. Table 5 presents mean length of stay (and standard deviation) for each of the different diagnoses. T-tests show that the difference between the public and private sec- tors is significant at the 1 per cent level for each of these, with the exception of normal deliveries, where the differences are not even significant at the 5 per cent level.

Unfortunately, length of stay is not a perfect proxy for severity. Variation

Table 5. Comparing length of stay by diagnosis.

Diagnosis Public Private Ratio public:

Mean Sd Mean SD private

Diarrhoea 6.42 6.11 2.23 2.65 2.88 Cataract 7.56 6.01 3.36 3.37 2.25 Normal delivery 4.75 2.82 5.46 2.98 0.87 Diabetes 19.71 20.93 5.75 5.65 3.43 Pneumonia 17.78 26.75 5.16 4.68 3.44 Hypertension 17.44 20.03 5.21 7.22 3.35 Heart disease 14.93 17.39 4.82 6.96 3.10

CIVIL SERVANTS’ HEALTH INSURANCE IN BANGKOK 147

in length of stay may also be due to factors such as greater availability of beds in public hospitals, different medical practice in public and private facili- ties, or cheaper care in public hospitals (making it financially viable for people to stay longer). There is probably some truth to the last of these reasons at least. However, for normal deliveries in which there can be very little variation in severity (if severity is the appropriate term to use), the difference in length of stay is not significant. For cataracts, another category where severity is likely to vary little, there is a difference in length of stay between public and private sectors, but the differential is less than for other diagnoses. These data suggest that severity is at least one of the factors influencing length of stay.

Private hospital market share under the CSMBS

Table 6 shows the private hospitals most commonly utilized under the CSMBS in Bangkok. For the sample as a whole, Thonburi Hospital was most popular with an 8.5 per cent share of the market, this was followed by Mayo Hospital (7.5 per cent of cases), Phyathai I (6.3 per cent of cases) and Phyathai I1 (5.9 per cent of cases). Table 6 also shows the hospitals most commonly used within three different diagnostic groups from ICD 9, that is group 1, infectious and parasitic diseases, group 16, symptoms, signs and ill-defined conditions, and group 2, neoplasms. These three groups were selected for further analysis, as groups 1 and 16 are relatively inexpensive and group 2 is an expensive category (see Figure 3).

Table 6 suggests that the same or a similar set of hospitals feature in the popularity rankings for each of the different diagnostic groups: Thonburi, Mayo, Phyathai I and Phyathai I1 are used frequently for virtually all the groupings identified. However, hospitals’ relative popularity does vary between diagnostic groups; in particular, between the cheaper groupings (1) and (16) and the more expensive neoplasms category (group 2) . It is interesting that three out of four of the facilities commonly used for neoplasms (Bamroongrad, Bangkok and Samitivej) are quoted on the stock exchange. One would expect such facilities to have both more profit-oriented management and better access to capital for expensive items of equipment; this access to capital may allow such facilities to provide adequate care for some of the more complex cases which other private hospitals cannot treat.

Beneath Table 6, concentration ratios are calculated. The ten-firm concen- tration ratio reflects the share of the private sector market held by the largest ten hospitals; similarly, the three-firm concentration ratio reflects the share of the market held by the largest three hospitals. In general, the concentration ratio measures the degree to which the market is concentrated in the hands of a few providers. The more concentrated a market is, the less competitive it is likely to be. The data suggest that the private health care market in Bangkok is not particularly concentrated by international standards. (The Hirschman- Herfindahl index was 400 for private sector health care. US anti-trust authorities only begin to start investigations into an industry when the Herfindahl index exceeds 1800.) Yet this result should be interpreted cautiously: for many con-

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CIVIL SERVANTS’ HEALTH INSURANCE IN BANGKOK 149

ditions patients will not travel across Bangkok for care; thus, there are likely to be sub-markets within the city where concentration is higher. Furthermore, the market for particular types of services, especially complex treatments required for care of cancer patients, appears more concentrated than the market as a whole.

DISCUSSION

In many Western European countries where private sector providers constitute a relatively small proportion of total health care providers, there is a consider- able degree of specialization in terms of the services which private providers offer (Culyer et al., 1990). Private providers tend to focus their attention on the more profitable services which are commonly acute, elective care. For exam- ple, private hospitals in the UK are frequently used for operations such as hip replacements where there are long waiting lists in the public sector. Chronic conditions such as bronchitis or liver cirrhosis are much more likely to seek public services.

In Bangkok, the sheer size of the private sector means that it is not able to specialize as narrowly as private sector facilities in the UK might. However, it is apparent from these data that private hospitals are concerned primarily with treating patients in probably less serious, and definitely less expensive diagnostic categories, and for a specific diagnosis they tend to treat the less severe cases.

Why does this specialization or market segmentation occur? Firstly, levels of co-payment under the CSMBS are high. If patients are faced by complex or severe illnesses then they are more likely to seek public sector care as it will be less expensive for a potentially costly episode of care. Secondly, it is possible that patients ultimately have greater faith in public hospitals, despite the various inconveniences, such as less comfortable facilities, in using them. For example, it is common belief that private hospitals rely heavily upon rela- tively unskilled personnel to provide services to patients, drawing upon part- time doctors for professional skills. Thirdly, there is a positive disincentive to use public facilities for minor complaints; the long waiting times will deter people from seeking care. Unfortunately, the available data do not reveal whether or not private providers play a conscious role in promoting this segmen- tation. It would be possible for private hospitals to refer on more complicated cases; or, alternatively, provide inadequate treatment, thus ensuring that the patient refers him or herself to a public facility.

There also appears to be a limited degree of specialization by individual hospitals within the private sector. Some hospitals such as Phyathai I, Phyathai I1 and Bamroongraj tend to attract a more complex case-load, which is perhaps more similar in profile to that of the University teaching hospitals in the public sector. How this specialization is achieved, whether through concerted efforts by hospitals themselves or simply as a product of their location, remains unknown.

I50 S. BENNETT AND V. TANGCHAROENSATHIEN

POLICY IMPLICATIONS

The results of the study pose some thorny problems in terms of reforming the CSMBS. There are arguments in favour of recent proposals to lift the reimbursement ceilings for care received in the private sector. Reimbursement rates for private sector care are relatively low and it is likely that high co- payment is one of the factors behind the heavy reliance on public facilities for treatment of more serious cases.

However, increasing reimbursement ceilings will clearly increase expenditure under the scheme, which has been expanding extremely rapidly. As the level of Ministry of Health subsidy to patients covered by the CSMBS is relatively low (i.e. there is high cost-recovery from insured patients in government hospi- tals), raising ceilings will not only increase expenditure under the scheme but will also raise government expenditure as a whole. Further, it is not clear whether patients in the private sector get good value for money. Differences in the quality of care may account for observed differences in charges between public and private sectors: but, at the moment, evidence on quality and cost of care is not available.

In the long run, there is a clear need to converge the CSMBS and the SSA. The capitation payment used by the social security scheme has the advantage of containing cost whilst simultaneously providing access to private providers. As insured persons have the opportunity to register with a different provider each year, the SSA has the added advantage of promoting competition between providers. Changing the payment mechanism used under the CSMBS may there- fore promote improvements in the quality of care at government hospitals, particularly in terms of easily observable factors such as politeness of staff, waiting time and quality of food. Furthermore, if patients are registered with one provider, be it public or private, then all consultation should take place with this provider. Thus, a capitation-based payment mechanism may help prevent segmentation of the health care market and allow true competition between hospitals. Merging the SSA and the CSMBS would also lower adminis- trative costs, freeing more resources for patient care.

Unfortunately, merging the CSMBS and the SSA is unlikely to be easy and can only be seen as a long-run option. The SSA provides benefit solely to the employee him or herself, whereas the study indicates that only 25-30 per cent of claims made under the CSMBS are for the employee, the remaining claims are for relatives. Civil servants will be unwilling to lose such benefits unless children and the elderly are covered by an adequate welfare net. Cur- rently, both children and the elderly receive free basic care at all government hospitals but not at private ones.

What can be done in the short term? As a first step, some of the questions left unanswered by this study may need to be addressed. In particular, it would help both the Ministry of Health and insurance scheme administrators to have a clearer perception of quality of care and costs in the private sector, so that value for money may be assessed. Up until now the Ministry of Finance has played a relatively inactive role in monitoring care received under the scheme.

CIVIL SERVANTS’ HEALTH INSURANCE IN BANGKOK 151

Improved information systems and a wary eye on charges and treatment pat- terns for different diagnoses would help the fund administrators to gain better benefits for insured persons. Policies to increase the reimbursement ceilings for private sector care should be approached with caution; and, if it does prove necessary to improve benefits then such increments should apply only to civil servants themselves, thus bringing the CSMBS into line with all the other medi- cal benefit and insurance schemes.

Understandable excitement over the 1990 SSA in Thailand has detracted attention from other public, health insurance schemes. Yet, in terms both of the number of people covered and the amount paid out in benefits, the CSMBS is by far the largest of the schemes. Civil servants in Thailand are an articulate and powerful group, which government finds difficult to ignore. It is particularly important, therefore, that when considering reform of the CSMBS the likely influence of change on the aspirations of groups covered by other medical benefit and insurance schemes is fully taken into account. The coordination, and possibly integration, of public insurance schemes in Thailand has important implications for the future equity and efficiency of health financing, and the government’s ability to structure the incentives which both public and private providers face.

ACKNOWLEDGEMENTS

The fieldwork for this research was supported by grants from the WHO, (South East Asia Regional Office) and the National Epidemiology Board of Thailand. S.B. works on the Health Economics and Financing Programme which is funded by a grant from the Overseas Development Administration, UK. Deep-felt thanks go to Anne Mills and Sanguan Nittarayamphong for their comments on previous drafts and to all members of the Health Planning Division in Bangkok for their hard work and enthusiasm.

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