Implications on Public Health from Mode 2 Trade in Health Services: Empirical Evidence. [A Case of Thailand]

Transcription

1 Implications on Public Health from Mode 2 Trade in Health Services: Empirical Evidence [A Case of Thailand] By Cha-aim Pachanee Ministry of Public Health, Thailand This paper is supported by the World Health Organization and presented at the Workshop on the movement of patients across international borders - emerging challenges and opportunities for health care systems February 2009, Kobe, Japan

2 Contents 1. Introduction Framework of analysis The Thai health systems and their implications from Mode 2 international trade in health services Supply and Demand for Health Services Health facilities Health workforce Demand and Access to healthcare services Implications of Mode 2 trade in health services on access to services Quality control Quality control for medical services and facilities in Thailand Implications of Mode 2 trade in health services on quality of services Overall implications Discussion and Recommendations Acknowledgement References

3 List of Tables Table 1 Health facilities in the public sector, Table 2 Number and proportion of doctor loss in relation to newly graduated doctors, Table 3 Healthcare seeking behaviours of Thai population during Table 4 Projected demand for medical doctors by Thai patients Table 5 Number of foreign patients entering Thailand by country, Table 6 Demand for medical doctors by foreign patients Table 7 Scenarios of international trade in health services and human resource development Table 8 Comparison of monthly salary in public and private health facilities Table 9 Competitive Advantage of health facilities in Asian countries providing health care... services to foreign patients Table 10 Estimate of revenues from different products and services (million baht) List of Figures Figure 1 Model of trade in health services in Thailand, including related regulatory framework... 6 Figure 2 Geographical distribution of population : doctor, population : dentist, population :... pharmacist, population : nurse ratios, in Figure 3 Proportion of medical doctors working full-time in the private sector

4 1. Introduction Nowadays, we witness a large number of patients from the developed world obtaining medical services in world class hospitals in some developing countries and extending the visit with an impressive holiday. Comparing the costs of selected services between countries, the cost for heart bypass graft surgery in Thailand is three times less than what it would cost in the United States, or one cosmetic surgery in India is one tenth of the cost in the United States without long wait-listing (1). With this, we can clearly see one of the factors driving such an extensive medical tourism phenomenon - world class service at reasonably lower costs (2). In addition, good quality services with warm hospitality and availability of alternative treatment area, the number of foreign patients rapidly increases. Smith et al (2009)(1) estimated that there were around 4 million foreign patients every year. Thailand attracted the highest number of patients in Asia with a figure of more than 1 million each year since 2004 (1, 3, 4). The worldwide market for medical tourism is about USD20 40 billion, with predictions topping USD100 billion by Thailand, the present leading health services exporter in Asia, has the market at USD615 million (1). In Thailand, the business of private hospitals was on the rise during the period of economic boom in mid the 1990 s. The promotion of medical services to foreign patients started aggressively during the economic crisis in 1997 when facilities in big private hospitals were not fully utilized by Thai patients. These hospitals then shifted their target customers to foreigners and conducted extensive marketing campaigns. Since late the 1990 s, the growth in demand for medical services in Thailand among foreign patients, expansion of service specialties, and expansion of service facilities along with marketing campaigns rapidly increased. From the economic point of view, influx of foreign patients generates income, as indicated with the amounts mentioned above. However, negative impacts particularly on the health system also occur in parallel. Although some constraint situations on the health system have been in existence outside international trade in health services, the growth of international trade does take part in aggravating the situation. Implications of Mode 2 international trade in health services in Thailand have been studied sporadically and mostly focussed on a few specific issues or were included in studies on implications of international trade liberalisation. For instances, Mongkolporn et al 2005 (5) studied the demand and supply of medical services for foreign patients, focusing on Japanese patients, and implications on the health system and health workforce in Thailand, Pachanee and 4

5 Wibulpolprasert 2006 (6) projected the additional demand for medical doctors for foreign patients in Thailand, Na Ranong et al 2008 (7) studied implication of the Thailand medical hub policy, Kanchanachitra et al (8) studied implications on health from free trade policy, and Wibulpolprasert et al (9) studied implication of liberalisation of trade in services on the health workforce in Thailand. This paper presents a case of Thailand on the implications of Mode 2 international trade in health services on the health systems. As mentioned above, Thailand is a leading exporter of health services with the highest number of foreign patients in Asia, and possible implications arise. With the promotion of the medical hub policy supported by the government, export of health services will expand. 2. Framework of analysis The analysis was carried out by literature review and direct communication with related organisations and informants. It covers implications in terms of opportunity and risk for access, price and quality of health services, and the health workforce Mode 2 of trade in health services does not occur just in isolation. Instead it also stimulates, as well as is influenced by, other modes of services particularly Mode 3 and Mode 4. The characteristics of trade in health services in Thailand can be modeled as in Figure 2. The study analyses supply, demand and access for health services by Thai and non-thai, how these are affected in order to answer the following research questions: o What have been the implications on the access to health services? o What have been the implications on the prices of health services? o What have been the implications on health workforce? o What have been the implications on the quality of health services? 5

6 Figure 1 Model of trade in health services in Thailand, including related regulatory framework Foreign patients Worker Health Prof. s Mode 1 Mode 2 Mode 4 Foreign Investors Mode 3 Border Immigration Act Foreign Business Act Local Investors Labour Act (Work Permit) Health Prof. Act Premise Control Acts Service / payment Border Practice OOP / Private insurance Private health services SSS/ UC/ CSMBS Local Patients Health Facilities Drug Act Insurance Act Local Admin. Transfer of Capital Mode 3 (Internal) Brain drain (External) Foreign Mode 4 providers Public health services Mode 1,2 Border Note: OOP = Out of pocket SSS = Social Security Scheme UC = Universal Coverage CSMBS = Civil Servant Medical Benefit Scheme 6

7 3. The Thai health systems and their implications from Mode 2 international trade in health services Thailand, like many other countries, has a pluralistic health system. Ministry of Public Health is the main national health agency and owns the majority of health resources and facilities, while private health facilities are operated under supervision of the Medical Registration Division, Department of Health Service Support of Ministry of Public Health. Existing public health facilities provide good coverage throughout the country at all levels of care primary, secondary and tertiary levels. Medical services costs are paid through one of the health insurance schemes Supply and Demand for Health Services Health facilities Table 1 provides information on a number of public health facilities in the countries in These facilities are available throughout the country with full coverage. Health centres are operated by health workers who are trained to provide primary care services to people of communities covered by that health centre. Table 1 Health facilities in the public sector, 2007 Administrative Level Health Facility No. Coverage Medical school hospitals 5 Bangkok Metropolis General hospitals 26 Specialized hospitals/institutions 14 Public health centres/branches Regional level and Medical school hospitals 6 Branches Regional hospitals 25 Specialized hospitals / 77 All districts Provincial level General hospitals (under MoPH) % (75 provinces) Military hospitals under the Ministry of Defense 59 Hospital under the Royal Thai Police districts and Community hospitals (Mar, 2007) % 81 minor districts Branch hospital 1 1 Important health insurance schemes in Thailand are 1) Universal coverage of health insurance [UC], 2) Civil servant medical scheme [CSMBS], and 3) Social security scheme [SSS] 7

8 Administrative Level Health Facility No. Coverage Municipal health centres (Oct, 2003) 214 7,255 sub-districts Health centres (2006) 9, % Community health posts ,435 villages Community PHC centres (2003) - Rural 66, % - Urban 3,108 Source: Thailand Health Profile (10) In the private sector, the number of private hospitals expanded rapidly from around 10 percent of total beds in the entire health system in 1985 to 23 percent in 1997, largely influenced by the rapid double-digit economic growth in the early 1990 s. After the 1997 economic crisis, a number of private hospitals were closed and many of them reduced their capacity. It was during this time when a number of big private hospitals started aggressive marketing to attract more foreign patients who have higher affordability for medical costs. The proportion of private hospital beds was reduced to 21 percent in In 2006, there were 344 private hospitals providing a total of 35,806 beds, of which 43 percent were in Bangkok. Besides, there were 16,547 private clinics (without inpatient bed) throughout the country (10) Health workforce Inequitable distribution and insufficient number of health workforce remains a major problem in the Thai health systems (11, 12). In 2006, there were 21,051 medical doctors, 4,187 dentists, 7,940 pharmacists, 101,143 registered nurses and 12,882 technical nurses in the country (10). Out of 21,052 doctors, or 20.5 percent (4,309 doctors) are in the private sector; however this does not cover those who work part-time after hours in the private sector while registered in the public sector. On average, the number of doctors per hospital in the private sector is higher than the number in public hospitals, while bed occupation in the private hospitals is lower. There is uneven distribution of the health personnel: population ratio between geographic regions. In 2005, the doctor : population ratio in Bangkok was 1 : 867, eight times better than the ratio in the Northeast (1: 7015) (10). Figure 1 illustrates population covered by each doctor, dentist, pharmacist and nurse in

9 Figure 2 Geographical distribution of population : doctor, population : dentist, population : pharmacist, population : nurse ratios, in 2004 Source: Thailand Health Profile (10) Loss of medical doctors due to resignation is also an alarming problem of the public health sector (13). Part of the loss is due to shifting to the private system especially major private hospitals in 9

10 urban area as a result of expanding exportation of health services to foreign patients (11). In 2005, a net loss of 667 doctors through resignation occurred, accounting for 56 percent newlygraduated doctors [Table 2]. This creates an insufficient number of medical doctors in some areas, particularly in the rural areas where the population are relied on medical services at public facilities. Table 2 Number and proportion of doctor loss in relation to newly graduated doctors, Year New graduates Increased Reappointed Number of doctors Total Decreased (resignation) Civil servants State employees Total Net loss (No) Net loss (%) , , , , , Source: Thailand health profile (page 273) Demand and Access to healthcare services Demand and access by Thai patients According to health and welfare surveys conducted by the National Statistical Office since 1991 to date, Thai people increasingly depend on health facility-based services. The proportion of using facility-based health services increased from 40.2 percent in 1970 to 78.5 percent in 2005 as shown in Table 3 (14-21). The proportion of self-medication and traditional healing reduced steadily. 10

11 Table 3 Healthcare seeking behaviours of Thai population during Health care seeking behaviours Not seeking health care Traditional healing Self-medication Health Centre (public) Public Hospital Private Clinic / Hospital Sources: National Statistical Office. Reports of health and welfare survey, 1991, 1996, 2001, 2003, 2004, 2005, 2006, 2007 The demand for health services and health personnel in Thailand is expanding, contributed by the universal coverage of health insurance which has been implemented since 2001 of which more than 70 percent of the population are registered with the public facilities to utilise health services (6). Besides, the economic recovery enabled people to obtain private medical services and services not covered by the insurance. In 2003, two years after implementing the universal coverage policy and a time of rapid economic recovery, outpatient visits increased to 3.62 visits/capita/year (17). In addition, increases in specific health problems and diseases such as chronic diseases and diseases in elderly people also increased demand for specific types of medical services (5). A projection on demand of medical doctors by Thai patients shows that 1,815-2,083 additional doctors are required for 2009 and an increase to 1,891-2,175 doctors in

12 Table 4 Projected demand for medical doctors by Thai patients Year Visits / capita / year Outpatients (OP) Inpatients (IP) Population (million) Total visits (OP equiv.) that require MD (million) Number of additional medical doctors Required Total In private sector (1) (1) (1) (1) (1) (1) ,443-2,795 1,002-1, (2) (2) ,134-1, (2) (2) ,596-1, (2) (2) ,815-2, (2) (2) ,639-1, (2) (2) ,830-2, (2) (2) ,891-2, (1) Data from Health and Welfare Survey by National Statistical Office (2) Projecting rate of future increase in Outpatient (OP) and In-patient (IP) visits by using average rate in the previous three biennial periods giving equal weight to each period. Conditions for projection: 1. Population growth rate = 1 percent / year (National Statistical Office 2004) percent of OP and 100 percent IP require medical doctor services (Wibulpolprasert 2002) 3. One IP visit equivalent to the work load of OP visits (Wibulpolprasert 2002) 4. One medical doctor services 18,000-20,000 OP equivalent visits / year (Wibulpolprasert 2002) percent of patients visit private hospitals/clinics Demand and access by foreign patients Together with high comparative advantages of good hospitality, quality of human resources, and the lower cost with good quality of services (22), business of these private hospitals has been successful. This is clearly seen by the number of more than 1 million foreign patients in Thailand since 2004 with 20 percent increase between 2004 and 2007 (3, 4) as shown in Table 5. 12

13 Table 5 Number of foreign patients entering Thailand by country, Country / Region Japan 118, , , , , ,389 USA 49,253 58,402 85, , , ,248 UK 36,778 41,599 74,856 95, , ,286 Taiwan /China 26,898 27,438 46,624 57,051 57,279 24,392 Germany 19,057 18,923 37,055 40,180 42,798 41,313 ASEAN NA NA 36,708 93,516 74,178 68,420 India 20,310 23,752 35,528 NA NA 36,645 Middle East NA 20,004 34,704 71,051 98, ,215 Bangladesh 14,547 23,803 34,051 NA NA 32,313 France 16,102 17,679 25,582 32,409 36,175 37,251 Australia 14,265 16,479 24,228 35,092 40,161 42,668 Scandinavia NA NA 19,851 20,990 22,921 NA South Korea 14,419 14,877 19,588 31,303 26,571 26,259 Canada NA NA 12,909 18,144 18,177 22,907 Eastern Europe NA NA 8,634 6,728 6,120 NA Others 220, , , , , ,503 Total 550, , ,532 1,103,095 1,249,984 1,373,087 Source: Department of Export Promotion, Ministry of Commerce, Thailand. Note: 1. 1,373,807 patients were reported for However, only the figure by hospitals is available, the figure by countries therefore does not appear in the table. 2. NA = Not applicable The data were collected annually by the Bureau of Service Business Promotion, Department of Export Promotion, Ministry of Commerce 2. The Bureau sent out a letter with questionnaire [see Annex 1 for questionnaire] to request private hospitals to provide the number of foreign patients disaggregated by nationality. However, only hospitals where the Bureau anticipated receiving foreign patients would receive such questionnaire. These included hospitals in major cities and tourist detinations of Bangkok, Chiangmai, Chonburi, Phuket, Chiangrai, Songkhla, Trad, Mookdaharn, Prachuabkirikhan, Khonkhaen, Udonthani and Surat Thani. Forty-nine hospitals provided the data in 2006, and the same hospitals with an additional one (total of 50 hospitals) provided data in Of this, three hospitals (Siriraj, Maharaj Nakorn Chiangmai, and 2 The information was obtained from personal communication [two telephone conversations] with the Director of Bureau of Service Business Promotion, Department of Export Promotion, Ministry of Commerce. 13

14 Srinakarin Khonkaen) are public hospitals with more than 1,000 beds (3,000 beds for Siriraj Hospital). The figures in Table 4 also included foreign patients who revisited. It is estimated that one patient might have 3-4 visits each year. Since the data covered only about 50 private hospitals, it is very likely that the actual figures might be higher if taking into account number of foreign patients in big public hospitals as well as other private hospitals. In addition, each hospital has different patient registration systems; the figures reported by these hospitals could be either the number of individual or re-visited patients. However, the Bureau of Service Business Promotion has revealed that they have asked the hospitals to report the number of individuals from 2008 (collected by the Bureau in 2009) onward. Foreign patients in this context cover expatriates (60 percent), foreign visitors with medical purpose (30 percent), and foreign tourists who become ill while travelling (10 percent) (5). With increases in the number of foreign patients, the projection by Pachanee and Wibulpolprasert (2006)(6) found that in 2009 the percentage of additional medical doctors required by foreign patients will be 6-8 percent of total doctors in the health system or percent of the private system. In 2015, the requirement will increase to 9-12 percent of the health system or percent of the private system. However, Na Ranong et al 2008 (7) argued that this estimation might be low. The figures could be five times higher. Table 6 Demand for medical doctors by foreign patients Year Foreign patient visits (million) Outpatients (OP) Inpatients (IP) Total visits (OPD equiv.) require MD (million) Additional medical doctors required by foreign patients Total % of those required in the private sector % of those required by the whole system (1) (1) (1) (2) (2) (3) (3) (4) (4) (1) Figure from the survey by Ministry of Commerce plus 30 percent of the under-surveyed. 14

15 (2) Estimation with the assumption of increase at the rate of percent per year (3) Estimation with the assumption of increase at the rate of percent per year (4) Estimation with the assumption of increase at the rate of percent per year Conditions for projection: 1. IP visit is equal to 5 percent of OP visits and 20 times of OP workload 2. Every patient requires a medical doctor 3. One medical doctor provides services to 10,000 12,000 OPD visits / year (Wibulpolprasert 2002) Implications of Mode 2 trade in health services on access to services Implications on access to medical services involve equity of access, price and health workforce. This section analyses opportunities and risks of access (including prices) and health workforce separately Implications on access and price of services Opportunities Mode 2 trade in health services helps increase revenue from a high number of foreign patients with higher prices of medical services. Using the revenue to reinvest in the health system to promote its reform, particularly in the area of human resource management for health, can create better access to health services (23). Na Ranong et al 2008 (7) noted that increasing demand for medical services could raise prices of services, hence an increase in revenue. However, this could as well create a barrier of access to services among Thai patients who cannot afford high prices. The same authors conducted a survey on price changes of caesarean section, appendicitis operation, hernia operation, gall bladder operation and knee joint replacement operation four hospitals that provide medical services to foreign patients and found that the prices increased every year [the survey covered a period of ). Some hospital charged foreign patients higher prices and the author noted that this would be a good measure to prevent increasing prices for the case of Thai patients and encourage more access to services. Besides, with the increased demand, service providers also increase supplies of service specialties that can, at the same time, benefit Thai patients. Risks The creation of two-tier system with the better quality services reserved for foreign clients with a higher ability to pay could lead to a decrease in quality and an increase in price for the poor if the lower tier is not properly subsidised (8, 23, 24). 15

16 As mentioned above, increasing demand for medical services from foreign patients could raise the prices of services. Consequently, only wealthy Thai patients will be able to afford medical services from private facilities. Coupled with the implementation of the universal coverage of health care, most Thai patients will rely on public facilities. However, equity of access might be disturbed since the number of health professionals is limited and unevenly distributed throughout the country. The magnitude of the problem is more significant than one would perceive. In the private sector, resources needed for providing services to one foreign patient may be equivalent to what is needed for 4-5 Thai patients (25). High competition among private hospitals themselves to attract foreign patients such as establishing of specialised centres imposes these hospitals to provide high financial incentive to specialists in the public sectors to work for them. Therefore the ratio of health personnel to population may worsen (23). In the dental sector, Kanchanachitra et al (2004)(8) has estimated that, in Phuket, around 5 percent of tourists would come to use the local dental services. The annual income figure of foreigners visiting the province stood at 1,453,426 Baht which indicates that there would be more than 72,000 foreign patients alone. The maximum capacity of the dental service in Phuket was for, however, 60,840 patients Implications of Mode 2 trade in health services on health workforce Opportunities In Thailand, the increase in demand from the influx of foreign patients would lead to more employment for health care personnel and higher earnings in the private sector as well as an increase of medical expertise in the highly demanding areas of services. The increase in plastic surgeons and ophthalmologists, for instance, implies that Thailand has the capacity to offer services well in those areas. It could thus generate more foreign exchange earnings as well as more job opportunities in linkage industries such as tourism with food, insurance and hotel industries. Risks The increased demand from the influx of foreign patients and the attractive financial incentive to supply those demands within the private sector could lead to an exacerbation of health personnel shortages. It was estimated that, in 2005, Thailand still need 1,134-1,315 more doctors to meet the country s health needs and it would take many years to fulfil this shortage. However, this problem would be particularly severe in the public sector and rural areas due to 16

17 the internal brain drain phenomenon as health workers are tempted to move the private sector where they can earn more. By one estimate, if there were 100,000 more patients seeking medical treatment in Thailand, it could lead to an internal brain drain of between 240 to 700 doctors (26). From the study of Wibulpolprasert et al (2002)(9), several scenarios were predicted depending on the extent of health system reform and the success of trade in health services (Table 7). The high growth of the health service sector (i.e. scenario 1 and 3 where the sector is highly successful) and the poor level of reform (i.e. scenario 3 and 4 where the problem of shortage of health personnel in the rural area and the public sector persist) would lead to the worst problem in term of the number and the maldistribution of the health workforce. Table 7 Scenarios of international trade in health services and human resource development The success of health system reform The success of International trade in health services High High 1 2 Low 3 4 Note: Wibulpolprasert et al. (2002) Low The proportion of medical doctors working full-time in the private sector since 1998 is around 20 percent [Figure 3]. In Thailand it is legal for health personnel in the public sector to work in private health facilities after hours. Medical specialists are in high demand in the private sectors. Employment of these specialists is mostly on a part-time basis as most of them are registered as full-time staff in the public sector. In 2006, 12,736 medical doctors throughout the country worked part-time after hours at the private sector, while 1,313 dentists and 7,708 nurses did, accounted for 60.5, 31.4 and 7.3 percent of medical doctors, dentists and nurses in the public health sector, respectively. 17

18 Figure 3 Proportion of medical doctors working full-time in the private sector Source: Bureau of Policy and Strategy, Ministry of Public Health 2007 The study by Kanchanachitra et al (2004)(8) has shown that there was a direct link between the growth of the private health service sector and the number of doctors leaving the public sector. The rate of newly graduated doctors leaving the public sector had continuously gone up during while the private sector enjoyed substantial growth from the period of economy prosperity. This figure went down during the economic crisis between but started to climb again and reached the rate of 59.9% in 2002 and was the highest in 2005 at 84.5% as shown in Table 2 above (10). The private sector also provides 8-11 times higher financial incentive to attract health personnel from the public sector [Table 8]. Although the Ministry of Public Health has increased financial incentives for medical doctors working in the public sector, the amount is still less than what they would get from the private sector, especially for specialists. After the launch of universal health coverage (UC), there have been more health needs for health personnel in rural areas because the increase in utilisation rate of health centres and community hospitals. As a result, those rural areas would continue to suffer the most if the problem of internal brain-drain is not sufficiently addressed. In 2005, the doctor : population ratio in the 18

19 poorest North-eastern region was 1:7,015, almost ten times of the proportion in the capital city of Bangkok, 1:867. With the mentioned health workforce problem, the government has implemented both demand and supply side interventions including financial and non-financial incentives to increase retention of health personnel in the public sector (6). Table 8 Comparison of monthly salary in public and private health facilities Cadre MOPH State enterprise Private (Non-profit) Private (profit) Medical doctor ,000* 50, ,000 Dentist ,000* 27, ,000 Pharmacist Nurses Medical technician Radiologist Admin Others Note: These range covers salary and other benefits Note: * average salary Source: Pannarunothai S. et al (27) 3.2 Quality control Quality control for medical services and facilities in Thailand For public facilities, the government has invested a large amount of budget to establish good facilities nationwide since the early 1980s. They are well maintained and new investments continue. For private facilities, the Medical Facility Act 1999 requires the licensed private 19

20 hospitals to meet certain standards on the premises and the number of health professionals. However, these are minimal standards. In 1998, the Institute of Hospital Quality Improvement and Accreditation was established as an agency to provide accreditation to hospitals that meet all the required standards. In 2007, 227 hospitals received this accreditation (28). Of which, 200 were public hospitals while 27 were private hospitals. Although it is not mandatory to receive accreditation but those that are accredited will have better social acceptance. A report in the McKinsey Quarterly (29) on mapping the market for medical travel reveals that 40 percent of medical travelers would see the world s most advanced technologies and 32 percent would seek better-quality care than they could find in their home countries. Comparing with other countries, health facilities in Thailand have high competitive advantages which are one of the main factors influencing the influx of foreign patients [Table 9]. Table 9 Competitive Advantage of health facilities in Asian countries providing health care services to foreign patients Competitive Advantage Thai Singapore India Malaysia Hong Kong Service & Hospitality ***** ** * * ** Hi-technological Hardware ** **** ** * ** HR Quality **** **** ** ** *** International Accredited Hospital ** ** - * * Pre-emptive Move ** *** * * * Synergy/Strategic Partner * ** * * * Accessibility/Market Channel ** *** * ** ** Reasonable Cost **** * **** *** * Source: modified from Private Hospital Association and Business Council of Thailand, 2004 (22) Implications of Mode 2 trade in health services on quality of services Opportunities Trade liberalisation increases competition which in turn reduces costs within the market. Health services trade offers countries the opportunity to enhance their health systems through trading 20

21 health technology in areas where countries have comparative advantages. Developing countries might improve their infrastructure; upgrade medical knowledge and technological capacity in order to attract foreign patients. The influx of foreigners would lead to an increase demand for high quality services which in turn lead to a more efficient and high quality health service providers, although the improvement would occur mainly in the private sector (8, 23, 24). From the opinion survey carried out by Searsiriwattana et al (2006)(24), the general opinion of the private sector, who agreed with the liberalisation, said that the opportunity to learn from developed countries, i.e. USA, was immense and the technological advance gained from such country would benefit the quality of service. The liberalisation of health services through this FTA would certainly open up any barrier which was impeding the transfer of knowledge. Risks From the opinion survey on Thai-US FTA by Searsiriwattana et al (2006)(24), the professional bodies and the public health government agencies (both central and local), who the majority disagreed with liberalisation, stated that they did not want the commercialisation of health services as it would demean the cause and purpose of health care (which has been portrayed as noble by the Thai community). This could lead to a drop in the ethical standard of health care personnel, and in turn, the quality of care. They were also concerned about the two-tier service which would stress too much on giving care to the richer foreigner. The two-tier system can lead to an overall increase in price for the lower tier if resources are inappropriately allocated (8, 24, 30). At the same time, it could lead to a drop in quality for the lower tier (30). 3.3 Overall implications Opportunities One of the main advantages is income generation. The increase in revenues from foreign patients can provide financial benefits from economies of scale that would help to improve the health service sector as a whole (23, 31). Thailand has more than one million foreign patients each year which attracts around USD615 million annually (32). The Department of Export Promotion estimated an income of USD1,028 million and USD1,170 million would be gained from foreign 21

22 patients in 2006 and 2007, respectively. It is estimated that 850,000 cases of dental care could bring in THB19.6 billion in 2004 which could rise to THB39.8 billion in 2008 (8), and the revenue from foreign consumption of spa, Thai massage and health tourism could be as high as THB17 billion in 2008 (24). Table 10 Estimate of revenues from different products and services (million baht) Types of business Total Curative 19,635 23,100 27,433 32,898 39, ,899 Health promotion 4,996 6,754 9,185 12,492 16,989 50,416 Health products 1,500 2,000 3,000 4,000 7,000 17,500 Total 26,131 31,854 39,618 49,390 63, ,815 Note: adapted from Kanchanachitra et al, (2004) The most common areas of health care service requested by foreigners are acute care, physical checkups, dentistry, long-term care, and health promotion. These are very promising areas for foreign exchange earnings if Thailand makes the commitment to international trade in health services. In an FTA context, there is a potential for cooperation with other nations in order to allow exchange of knowledge and reduce trade barrier, e.g. cooperation on Hospital Accreditation between Thai and India (24). Risks Other several impacts are likely to happen. For example, an influx of foreign patients could lead to the danger of importing infectious disease such as HIV/AIDS, and in a bilateral FTA context, it is possible that the other country may set certain conditions which may be detrimental to the Thai health system, and the extent of patent protection to apply to diagnostic, curative and surgical techniques which would prevent Thailand from gaining access to new knowledge that could benefit the Thai health system. 4 Discussion and Recommendations Mode 2 trade in health services in Thailand has occurred and was initiated by the private sector itself. It has occurred outside the multilateral and regional trade agreements. Thailand is 22

23 recognised as a leading exporter of medical services to foreign patients due to its high capacity and good marketing strategies. Although the increase in demand of health services among foreign patients generates income for the country, negative implications also occur and take part in elevating existing problems in the Thai health systems such as inequitable distribution of health workforce and widening of the two-tiered health services. However, the implications have not been systematically measured and monitored. The review for this paper found that the main methods used for analysing the implications of Mode 2 trade in health services in Thailand are mainly by review of existing literature, modelling, surveys, focus group discussion, and direct communication with experts in trade in health services, communication with service providers and interview with service providers. In order to take benefit from the increasing demand of health services from foreign patients, there have been several recommendations, for example, the Thai government should find a measure to collect a reasonable medical service tax from foreign patients who seek medical services in Thailand (7). Although this tax revenue could be used as compensation for the public sector in providing medical service to Thai patients and providing quality training of health personnel, collecting tax from patients might reduce their interest to seek medical services in Thailand. The policy coherence and collaboration among health and non-health sectors should be established. The private sector should collaborate with the public sector (such as the Ministry of Public Health) in surveillance and monitoring implications of Mode 2 trade in health services on the health systems and taking part in addressing and preventing negative implications. As the magnitude of impacts from Mode 2 international trade in health services is still not clear and has not been systematically measure, good systems or methods for measuring the impacts should be developed. In addition, Thailand could learn from experience of other countries that promote Mode 2 trade in health services on how impacts on the health systems are prevented, measured and addressed. 23

24 Acknowledgement The author would like to acknowledge and thank the World Health Organization (Department of Ethics, Trade, Human Right and Health Law) for providing support to this study. Mr. Jiraboon Tosanguan (International Health Policy Programme, Thailand) is thanked for his assistance with information gathering and part of literature review for the earlier draft, and a big thank goes to Ms. Pen Suwannarat (International Health Policy Programme, Thailand) for her assistance with editing. The author thanks the Director of the Service Business Division, Department of Export Promotion, Ministry of Commerce, for providing information on the number of foreign patients and how the data were collected. All other sources of information are acknowledged with thanks. Finally, special thanks go to Dr. Viroj Tangcharoensathien, Director of International Health Policy Programme Thailand, and Dr. Suwit Wibulpolprasert from Ministry of Public Health Thailand for supporting this work. 24

25 References 1. Smith R, chanda R, Tangcharoensathien V. Trade in health-related services. Lancet. 2009;73(9663): Bookman M. Medical tourism in developing countries. New York: Palgrave MacMillan; Department of Export Promotion MoC. Number of foreign patients entering Thailand by country, Nonthaburi: Ministry of Commerce; Department of Export Promotion. Number of foreign patients entering Thailand by country, data. Nonthaburi, Thailand: Ministry of Commerce; Mongkolporn V, Akleephan C, Kanchanachitra C, Tangcharoensathien V. Demand and supply of medical services for foreign patients: Study of impacts on the health system and human resources for health in Thailand. Research report. Bangkok: International Health Policy Programme, Ministry of Public Health; Pachanee C, Wibulpolprasert S. Incoherent policies on Universal Coverage of Health Insurance and Promotion of International Trade in Health Services in Thailand. Health Policy and Plan. 2006: Na Ranong A, Na Ranong V, Jindarak S. Thailand as the medical hub development strategies, a research report submitted to the National Economic and Social Council. Research report. Bangkok: National Institute of Development Administration; 2008 August Kanchanachitra C, Supakankunti S, Petrakart P, Limpananont J, Sethsirote B. Implications on health from free trade policy. National Health Assembly. Bangkok, Thailand; Wibulpolprasert S, Hempisut P, Pitayarangsarit S. Implications of liberalization of trade in services on the development of human resources in health. Nonthaburi, Thailand: Ministry of Public Health; Wibulpolprasert S. Thailand Health Profile Nonthaburi, Thailand: Ministry of Public Health; Wibulpolprasert S, Pachanee C. Addressing the internal brain drain of medical doctors in Thailand: The story and lesson learned. Global Social Policy. 2008;8(1): Kanchanachitra C, Wibulpolprasert S, Thammarangsi T, editors. Gender and physician mobility in Thailand. Boston: Global Equity Initiative Harvard University; Wibulpolprasert S, editor. Thailand Health Profile Nonthaburi, Thailand: Bureau of Policy and Strategy, Ministry of Public Health; National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office;

26 15. National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office; National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office; National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office; National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office; National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office; National Statistical Office. Report of Health and Welfare Survey Bangkok: National Statistical Office; National Statistical Office. Report of the Health and Welfare Survey Bangkok: National Statistical Office; Private Hospital Association and Business Council of Thailand. Competitive Advantage of private health facilities in Southeast Asia. Bangkok: Private Hospital Association and Business Council of Thailand,; Janjaroen W, Supakankunti S. International trade in health services in the mellennium: the case of Thailand In: Vieira C, editor. Trade in health services: Global, regional and country perspective. Washington DC: WHO PAHO; Searsiriwattana S, Kanacharoen I, Ratana-amorn P, Singhakaew S, Gungwarnlert R, Unnakitti S, et al. The impact of medical services from free trade agreement between Thailand and the United States of America. Bangkok: The Secretariat of the Senate; Wibulpolprasert S, Pachanee C, Pitayarangsarit S, Hempisut P. International service trade and its implications for human resources for health: a case study of Thailand. Human Resources for Health June Arunanondchai J, Fink C. Trade in Health Services in the ASEAN Region, World Bank Working Paper No Pannarunothai S, Tharathep C, Thamthataree J, Leesmidt V. Management of public and private hospitals: a financial and business opportunities for the autonomous hospitals. Nonthaburi, Thailand: Health Systems Research Institute; Institute of Hospital Quality Improvement and Accreditation. List of accredited hospitals [cited; Available from: Ehrbeck T, Guevara C, Mango PD. Mapping the market for medical travel. The McKinsey Quarterly May Janjaroen W. Preliminary study on implication of liberalisation trade in health services on Thai society and health system. Bangkok: College of Public Health, Chulalongkorn University;

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28 Appendix 1 Number of Foreign Patient Report Form Name of Hospital Name of Informant Position Phone Fax Please report the number of foreign patients using services in the hospital during January December 2007 by country Country Number of foreign patients Remark North America - USA - Canada Europe - UK - Germany - France - Sweden - Other (please specify) East Europe - Russia - Other (please specify) East Asia - Japan - China - South Korea 28

29 Country Number of foreign patients Remark - Taiwan - Other (please specify) Oceania - Australia - New Zealand - Other (please specify) Middle East - United Arab Emirate - Oman - Kuwait - Bahrain - Qatar - Yemen - Other (please specify) South Asia - Bangladesh - India - Pakistan - Sri Lanka - Maldives - Other (please specify) ASEAN - Cambodia - Myanmar - Vietnam - Indonesia 29

30 - Philippines Country Number of foreign patients Remark - Other (please specify) Other country (Please specify) Total Note: Please sum up the number of foreign patients who revisit Proportion of foreign patients who reside in Thailand % Proportion of foreign patients who do not reside in Thailand % Number of foreign patients using services in 2006 Number of foreign patients using services in 2007 Change from 2006 increase % Decrease % Estimated change of foreign patients who will utilize services in 2008 Increase % Decrease % Please answer the following questions 1. Factors that discourage foreign patients to utilize health services at the hospital (Please ) Exchange rate Political situation Unstable Thai economy Language skill of health personnel 30

31 Other (Please specify) 2. Which months do foreign patients visit the hospital the most? (Please rank 1-4 in 4 = the most, 1= the least) January - March July - September April - June October - December Which factor is most likely encouraging foreign patients to use services during the months ranked 4 th above? Service Business Promotion Section 2, Bureau of Service Business Promotion, Department of Export Promotion 31