Increased payments to hospitals reduced infant mortality in Thailand

21 June 2013

When healthcare reform in Thailand increased payments to public hospitals for indigent care, more poor people sought medical treatment and infant mortality was reduced a new study by the Consortium on Financial Systems and Poverty shows.

The study, The Great Equalizer: Health Care Access and Infant Mortality in Thailand, funded in part by the National Institutes of Health, found that reducing out-of-pocket costs of medical care had less of an impact than providing more money to hospitals. The study, forthcoming in the Journal Applied Economics, also suggests that health reforms should make reimbursements to healthcare providers a primary concern for any effective health reforms.

"When the Thai government provided hospitals with more resources to care for the poor, more of the poor sought and received treatment," said Nathaniel Hendren, a Post-Doctoral Fellow at the National Bureau of Economic Research, who was one of the researchers, along with Jonathan Gruber and Robert M. Townsend, both professors of economics at the Massachusetts Institute of Technology (MIT). "This increase in patient care and public confidence had a direct impact on infant mortality, which suggests reimbursement incentives to health care providers is an important factor in improving health outcomes and access to medical care in developing countries."

Thailand's health care reform occurred in 2001. Called the "30 Baht Program", it was one of the largest and most ambitious health reforms ever undertaken in a developing country. The aim of the program was to reduce long-standing geographical disparities in public healthcare. The program both increased by fourfold the amount hospitals were paid to care for the poor — from 250 Baht (about $6) per enrollee per year to 1,200 Baht (about $35) — and reduced the copays for non-welfare residents to 30 baht — essentially 75 cents. In effect, the reforms made access to healthcare in public facilities independent of a person's financial situation and equalized health care access for rich and poor.

The new healthcare reform led to a moderate increase in the use of health care among those who previously were uninsured. But the greatest impact was among those who were previously covered by Thailand's Medical Welfare program, particularly mothers and infants.

Before the 30 Baht Program, poor provinces had higher infant mortality rates, but after the program was implemented, infant mortality rates in rich and poor provinces were nearly identical. The study provides evidence that the new health reform reduced infant mortality by as much as 30 percent in poor provinces.

"Indeed, the sharp equalization in infant mortality observed between 2000 and 2002 is consistent with the fact that the most common causes of infant mortality in the world are from treatable diseases, such as dehydration associated with diarrhoea, pneumonia and infection," the study's authors write.

The researchers used data from Thailand's Health and Welfare Survey, a national cross section of all 76 Thai provinces, as well as data from the provincial-level vital statistics registry. The Thai National Statistics Office was instrumental in providing the authors access to the data sources.


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