Strategic purchasing and health system efficiency: a comparison of two financing schemes in Thailand

Walaiporn Patcharanarumol , Warisa Panichkriangkrai , Angkana Sommanuttaweechai , Kara Hanson , Yaowaluk Wanwong , Viroj Tangcharoensathien , 2018
International Health Policy Program

Strategic purchasing is an essential health financing function. This paper, published in PLoS One, compares the strategic purchasing practices of Thailand’s two tax-financed health insurance schemes - the Universal Coverage Scheme (UCS) and the Civil Servant Medical Benefit Scheme (CSMBS). It identifies factors contributing to successful universal health coverage outcomes by analysing the relationships between the purchaser and government, providers and members.

Key findings:

  • Purchasing for the CSBMS is passive. Fee for service payment for outpatient care has resulted in rapid cost escalation and overspending of the annual budget.
  • The National Health Security Office (NHSO), which manages purchasing for UCS, undertakes a range of strategic purchasing actions, including applying closed ended provider payment, promoting primary healthcare’s gate keeping functions, exercising collective purchasing power and engaging views of members in decision making process.
  • This difference in purchasing arrangements between the two schemes resulted in expenditure per CSMBS member being 4 times higher than UCS in 2014.

The paper concludes that strategic purchasing can improve health system efficiency as a whole through multiple approaches, e.g. by using primary care as gatekeepers to promote appropriate use by level of care and use of a closed-ended budget with proper mix of provider payment methods.

The governance of the purchaser organization, the design of the purchasing arrangements including incentives and use of information, and the institutional capacities to implement purchasing functions, are essential for effective strategic purchasing.

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Journal publication | Financing