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A Promotional Privilege Framework for Medical Hub Revised to Strengthen Health Systems

NHCO / Story of the Month  / A Promotional Privilege Framework for Medical Hub Revised to Strengthen Health Systems

The new Promotional Privilege Framework for the Health Industry jointly done by the Board of Investment of Thailand and the National Health Commission Office is completed awaiting for public hearing. The Promotional Privilege Framework shifts from supporting medical hub policy to strengthening Thai health systems.

The Thai public health circle was shocked late last year when the Office of the Board of Investment (BOI) announced the criteria for its promotional privileges for the health industry, in particular for the investment projects that would develop Thailand into a medical hub.

It offered tax reductions and privileges for hospitals with investment projects but would in fact promote medical brain drain. The move is opposedby many organizations, health networks and academics because it will affect medical services for people in the country and contradict the Statute on the National Health System of 2009 with respect to health services and quality control.

Fear that the move could aggravate medical brain drain prompted the then Prime Minister Abhisit Vejjajiva in his capacity as Chair of the National Health Commission to suspend the plan of the BOI and order the BOI and the National Health Commission Office of Thailand (NHCO) to form a Joint Working Group to review the framework and details of all promotional privileges for the health industry in order to prevent potential negative impacts. BOI Secretary-General, Atchaka Sibunruang, and Advisor to the NHCO, Dr Narongsakdi Aungkasavapala, headed the working group. After over four months of work, the working group proposed a “Promotional Privilege Framework for the Health Industry” to the National Health Commission. There will be public hearings to gather opinions from all concerned parties before the implementation of the framework which is intended to guarantee the health interest of all people in the country.

Dr Amphon Jindawatthana, Secretary-General of the National Health Commission, says the Promotional Privilege Framework for the Health Industry is different from the previous promotional privilege framework of the BOI that envisioned Thailand as the medical hub that would treat foreign patients. The reviewed framework is the result of brainstorming of the working group and invited academics from the Ministry of Public Health, and aims to strengthen the Thai health system. It specifies four categories of promotional privileges for health services and products: 1) promotional privileges for private hospitals;2) promotional privileges for the medicine industry;3) promotional privileges for the development of medical equipment in Thailand; and 4) promotional privileges for businesses catering to the elderly.

“With the new Promotional Privilege Framework for the Health Industry, the NHCO and the BOI agree that large-scaled private hospitals that use complicated medical equipment should not enjoy additional promotional privileges and tax exemption because that would worsen the problem of unequal access to services,” Dr Amphon said. The profit-oriented exploitation of health resources will increase people’s unequal access to medical treatment. Besides, Clause 51 of the Statute on National Health System of 2009 stipulates that the government should neither support nor offer a tax or investment privilege to health services that all parties define as profit-oriented businesses.

The NHCO Secretary-General also said that those hospitals that are implementing the medical hub policy already perform well. Therefore, the government should leave it at that and should not accelerate it; otherwise, the gap will be widened. This draft new framework of promotional privileges instead aims to support primary health care facilities because they serve the majority of people in the country. Primary health care facilities including clinics, sub-district hospitals and community-based hospitals treat up to 80% of all outpatients and most of these facilities are governmental organizations. If the private sector would invest more in such facilities, it would make the best use of its resources:it would relieve not only the shortage of health personnel in the government sector but also the congestion in large hospitals.

The new framework requires the parties that seek promotional privileges to enter the universal health coverage system and the social security system within three years after applying for promotional privileges and to remain in the universal health coverage system and the social security system as long as they are entitled to corporate income tax exemption. The NHCO Secretary-General declined to comment on how many operators will be interested in the investment under the new framework. We will have to wait and see.

There is a concern that the support for the private sector to invest in primary health care facilities and treat patients in the health insurance systems may affect budgets of the systems because the existing facilities that treat such patients may have to share their allocated budgets with private facilities. The NHCO Secretary-General is not concerned. He noted that if private health facilities perform well, they will relieve some of the burdens of public hospitals. That would enable large-scaled public hospitals to dedicate more resources to treating patients with complicated illnesses. Besides, the support will only go to facilities with up to 30 beds each. Public hospitals of this size rarely attract patients, who instead prefer to go to large hospitals. This will stimulate public hospitals to adjust their services and explore new models of health services.

In addition to promotions for private hospitals, there will be support for the local pharmaceutical or medicine industry by enhancing local operators’ potential to research and develop medicines. The value of medicine trade in Thailand is soaring from 34 billion baht in 2000 to 107 billion baht in 2007. The dominance of imported medicines is increasing in the market. Their value exceeded that of locally made medicines in 2003. Therefore, the support is called for. Support for investments in and development of medical equipment in the country is also essential to ensure access to necessary and safe medical equipment for everyone in Thailand.

Promotional privileges for businesses related to the well-being of the elderly are important for the growing aging society in Thailand. According to a census in 2007 by the National Statistical Office, there are as many as 7 million elderly in Thailand and they account for 11% of the total population. Their number will double in 20 years. According to the National Plan for Senior Persons (2002-2006), one-fifth or 19% of old Thai people were unattended and only 29% of them received support from their communities. Homes for the elderly accommodated only 253,000 senior people or 3% of the elderly in the country. Without any preparation, the elderly will have a troubled life.

Dr Amphon further clarified that the draft promotional privilege framework is completed and the BOI will now welcome feedback from stakeholders in order to make it publicly acceptable. He admitted that there may be opposition to the draft such as from private hospitals that benefit more from privileges under the previous draft. However, he is not concerned and views this as a democratic process in which all parties can have their say in order to come to a conclusion that is in the public’s best interest.

The current draft promotional privilege framework is an example of a process of developing a government policy in which concerned parties have their say in order to prevent negative impacts. In this partnership, the BOI as an investment-promoting agency has demonstrated it can prioritize the public interest. This draft is different from the previous one for not supporting the medical hub policy and emphasizing promotional privileges to strengthen the medical and public health systems of the country. The draft has yet to undergo public hearings.

Duangkamol Sajirawatanakul, 3rd  July, 2011 edition of Krungthepturakij newspaper

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