The social security scheme in Thailand: what lessons can be drawn?

The Social Security Scheme was launched in 1990, covering formal sector pri vate employees for non-work related sickness, maternity and invalidity incl uding cash benefits and funeral grants. The scheme is financed by tripartit e contributions from government, employers and employees, each of 1.5% of p ayroll (total of 4.5%). The scheme decided to pay health care providers, wh ether public or private, on a flat rate capitation basis to cover both ambu latory and inpatient care. Registration of the insured with a contractor ho spital was a necessary consequence of the chosen capitation payment system. The aim of this paper is to review the operation of the scheme, and to exp lore the implications of capitation payment and registration for utilisatio n levels and provider behaviour. A key weakness of the scheme's design is s uggested to be the initial decision to give employers not employees the res ponsibility for choosing the registered hospitals. This was done for admini strative reasons, but it contributed to low levels of use of the contractor hospitals. In addition, low levels of use were also probably the result of the potential for cream skimming, cost shifting from inpatient to ambulato ry care and under-provision of patient care, though since monitoring mechan isms by the Social Security Office were weak, these effects are difficult t o detect conclusively. Mechanisms to improve utilisation levels were gradua lly introduced, such as employee choice of registered hospitals and the for mation pf sub-contractor networks to improve access to care. A beneficial e ffect of the capitation payment system was that the Social Security Fund ge nerated substantial reserves and expenditures on sickness benefits were wel l stabilised. The paper ends by recommending that future policy amendments should be guided by research and empirical findings and that tougher monito ring and enforcement of quality of care standards are required. (C) 1999 El sevier Science Ltd. All rights reserved.