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Informatics for Health Policy and Systems Research:!

Lessons Learned from a Study of Healthcare Financing!

Cross-subsidization in Thai Public Hospitals

Borwornsom Leerapan, MD PhD!
JITMM2014 & FBPZ8!
Bangkok, Thailand!
December 2, 2014

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Special thanks to:
Pha1a Kirdruang, Ph.D.
Thaworn Sakulpanich, M.D.
Patchanee Thamwanna
Utoomporn Wongsin
NutniAma Changprajuck
Health Insurance System Research Oce (HISRO) &
Health System Research InsAtute (HSRI)

PresentaAon Outline
1. Introducing Health Policy & Systems Research (HPSR)
Purposes of HPSR

Overview of HPSR methodology & Data for HPSR

2. Example: Study of Cross-subsidizaAon of Health Services in

Thai Public Hospitals
Study objec?ves, methods, results

3. Discussion: InformaAon Systems for DeterminaAon

Implica?ons for policy and prac?ces

Informa?cs needed for future HPSR

What exactly is HPSR?

Pix source: online.wsj.com

New Health Research Mapping?

Source: Hoffman et al. (2012).

New Health Research Mapping?

Dierent kinds of
knowledge needed

Source: Hoffman et al. (2012).

The Systems
The WHO Six Building Blocks of health (services) systems

Source: WHO )2012); de Savigny & Adam (2009); Scheerens and Bosker (1997); Pix source: humanrevod.wordpress.com

Dierent Levels of Health Systems

Source: Gilson, editor (2012). Health Policy and Systems Research: A Methodology Reader.
Health Systems & Health Policy
Terrain of Health Policy and Systems Research

Source: Gilson, editor (2012). Health Policy and Systems Research: A Methodology Reader.
What Is & What Is Not HPSR?

Research on health systems

Research for Health systems

Source: Gilson, editor (2012). Health Policy and Systems Research: A Methodology Reader.
Research Strategies in HPSR

Source: Gilson, editor (2012). Health Policy and Systems Research: A Methodology Reader.
Research Strategies in HPSR

Source: Gilson, editor (2012). Health Policy and Systems Research: A Methodology Reader.
Example of HPSR: Study of Healthcare
Cross-subsidizaAon in Thai Public Hospitals

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Financing of Thai Healthcare System
CSMBS SSS UCS Motor Vehicle Private Health
Victim Insurance
Feature State/Employer Compulsory State welfare Compulsory Voluntary health
welfare heath insurance heath insurance insurance
with state for vehicle
subsidies owners
Targeted groups Civil servants, Employees in Thai citizens Victims of General public
of beneficiaries state enterprise private sector and without the vehicle accidents
employees and temporary coverage of
dependents employees in CSMBS & SSS
public sector
Source of Govt. budget Tri-party Govt. budget Vehicle owners Household
financing (Employee,
employer and
govt. budget)
Method of Fee-for-service Capitation and Capitation and Fee-for-service Fee-for-service
payment to Fee-for-service Fee-for-service
health facilities
Major problems Rapidly and Covering while Inadequate Redundant Redundant
constantly rising being employed budget eligibility and eligibility and
costs only slow slow
disbursement disbursement
Source: Adapted from Wibulpolprasert et al. (2011). Thailand Health Profile 2008-2010.
Financing of Thai Healthcare Systems
Payment Mechanisms:
Salary, Fee-for-Service,
Providers in
Global Budget,
Public & Private Sector
Capitation, DRGs, etc.

Taxes Payers CGD

Hospitals Ambulatory
Employer-based Facilities
private health
Office (SSS)

Individual &
private health Commercial
insurance Insurance
(Voluntary) Companies
Medical Generalists
Motor vehicles owners Specialists & PCPs
(Mandatory by the Motor
Vehicle Victim Protection Law) Patients paying out-of-pocket
of the out-patient expenditure during the second period showed an upward trend and
had very rapid growth in the last two years, 2006 and 2007 (graph 2.5).

With respect to expenditure per patient, this study can merely consider the average in-

Study RaAonale
patient expenditure, because of data limitations. According to data from the electronic
payment system, the average in-patient expenditure in 2003-2006 increased over time as
shown in graph 2.6.

Graph 2.4: CSMBS expenditure during the fiscal years 1996-2007

CSMBS Expenditure in the fiscal years 1996-2007 Common assump?ons

46,481 of what causes
increasing healthcare
35,000 30,833
Million Baht

20,476 22,686 21,896
16,440 17,058 19,181 16,943
13,587 15,502 15,253

9,877 10,574 9,048

10,050 11,058 10,967
11,350 13,905
Overuse of NED drug?
8,761 15,649
4,826 5,625 5,866 6,206 7,007 8,123
9,509 11,335 12,138 12,437 15,109
Overuse of brand-named
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 drugs?
Out-patient In-patient Total
Limited EBM prac?ces?
Source: The Comptroller Generals Department and the Government Fiscal Corrup?on in healthcare
Management Information System (GFMIS) sector?
Note: 1 Euro = 49.4450 Baht, as of January 8, 2008

Cross-subsidiza,on can be a missing piece!

Figure source: Benjaporn (2007) 14
Study RaAonale
Do hospitals use payments of a type of health services to
subsidize/support nancing of other services?
If so, how?, at which level?, at what degree?

Figure source: www.be2hand.com; www.imdb.com
Literature Review

Concepts of cross-subsidiza?on or cost-shi^ing from

developed countries such as the U.S. (Morrisey 1994, Cutler 1998,
Dranove 1988, Feldman et al. 1998, Frakt 2010 & 2011).

Such theorec?cal concepts might not be applicable in

Thailands healthcare systems, especially that Thai public
hospitals do not have the ability to set prices by themselves.

There was no empirical study of cross-subsidiza?on in the

contexts of Thai healthcare systems.

Study ObjecAves
1. To explore mo?va?ons and exis?ng prac?ces of the
administrators of Thai public hospitals that poten?ally can
lead to cross-subsidiza?on (to use payments of a type of
health services to support nancing of other services).
2. To develop mental models of the administrators of Thai
public hospitals regarding organiza?onal responses to
healthcare nancing policies.
3. To demonstrate an empirical evidence related to cross-
subsidiza?on at the hospital level, including the cost
dierence and the dierence of excess of revenues over
expenses among health schemes.

Methodology: Research Design
No empirical study of cross-subsidiza?on in the
contexts of Thai healthcare system.
Concepts from developed countries such as the U.S.
might not be applicable in Thailand.

Mixed-methods research, with the concurrent

embedded research design (Creswell et al., 2004).
Qualita,ve study: the mental models.
Quan,ta,ve study: an empirical evidence related to
cross-subsidiza,on at the hospital level. 20
Methodology: Mixed Methods
Mixed-methods research with concurrent embedded design,
which quan?ta?ve data analysis is used to compliment as the
qualita?ve data analysis.

Source: Creswell (2009). Research design: Qualitative, quantitative, and mixed methods approaches. 3rrd ed.
Methodology: Source of Data
Data was based on three selected public hospitals:
Two medical centers with 1,000 and 1,134 beds
One teaching hospital with 1,378 beds.
Hospitals were purposefully selected, based on the
accessibility to the hospital administrators and the
availability of the datasets of unit cost, claims, and

Methodology: Data
QualitaAve data:
Semi-structure interviews and focus-group interviews.
30 key informants who are responsible for the administra?on
of the three hospitals.
Verba?m was transcribed and analyzed using ATLAS.? 7.

QuanAtaAve data:
Secondary data of inpa?ent care, collected at the pa?ent level,
from the two medical centers.
Unit-cost, charge, reimbursement, pa?ents health scheme,
DRG codes, and basic demographic characteris?cs.
Analysis was conducted using Stata 12. 23
Research Findings

Pix source: online.wsj.com

QualitaAve Analysis
Construc?vist grounded theory (Chamaz, 2005; 2006)
Coding process (Strauss & Corbin 1990)

QualitaAve Findings

13 sub-themes, categorized into 4 emerging themes.

Sub-themes Themes
Varied understanding of cross-subsidiza?on, Dierent understanding of
Unclear nancing for non-healthcare missions ajtudes towards
cross-subsidiza?on concepts
Inadequate reimbursement, Non-performing Obstacles facing management
loan, Unequal nego?a?on power due to policies of the payers
Conic?ng roles between quality & equity- Obstacles facing management
focus and eciency-focus, Limited informa?on due to organiza?onal
to manage prices and cost limita?ons
To be missions-driven organiza?on, To focus Organiza?onal responses to
more on eciency than revenues, To do public policies of the payers
funds raising, To control the volume of certain
groups of pa?ents when feasible, To advocate
changes of the payers policies
QuanAtaAve Analysis
Analyze the cost dierences across health schemes
By using descrip?ve sta?s?cs and a regression analysis.
Compare the dierences among charge, cost,
reimbursement, par?cularly reimbursement-cost and
reimbursement-to-cost ra?o:
Across health schemes
Across MDC groups
Across Age groups
Inves?gate possibili?es for cross-subsidiza?on
By examining the rela?onship between (charge-cost)OOP and
QuanAtaAve Findings #1:
Cost Dierences across Health Schemes
Total Cost Across Health Schemes
The average costs per

visit vary across health

schemes, where CSMBS
pa?ents have the highest

mean of totalcost

A^er controlling for

age, gender, disease, LOS,

the regression analysis

conrms that the pa?ents
health scheme has a
signicant impact on the


unit cost of health

Source: Center hospital #1 services. 28
QuanAtaAve Findings #2:
Prot or Loss across Health Schemes
Total Charge, Total Cost, and Reimbursement
(by Health Scheme)

CSMBS pa?ents are

the only group whose

reimbursement is
greater than cost,

while reimbursement is
lower than costs for UC

Total charge is set to


be greater than the
mean of totalcharge mean of totalcost
mean of reimbursement cost for all health
Source: Center hospital #1 29
QuanAtaAve Findings #2:
Prot or Loss across Health Schemes

Charge-Cost vs. Reimbursement-Cost


is the highest for CSMBS,


but is nega?ve for other


Charge-Cost are
posi?ve for all groups,

but is very small for OOP


OOP pa?ents may


not be the protable

group as suspected.
mean of charge_cost_diff mean of reimb_cost_diff

Source: Center hospital #1 30

QuanAtaAve Findings #2:
Prot or Loss across Health Schemes
Dierence between Reimbursement and Cost
(by Health Scheme)
Assume that charge

equals reimbursement for

foreign, OOP, and others
mean of reimb_cost_diff

Reimbursement (or
charge) is much lower than
the cost for UC and foreign

Insucient reimbursement
Hospitals burden to take

csmbs sss uc foreign cash Others care of pa?ents without

health rights (e.g. foreign pts)
Source: Center hospital #2 31
QuanAtaAve Findings #2:
Prot or Loss across Health Schemes
Dierence between Reimbursement and Cost
(by DRG-MDC)
MDC 5 = Diseases & disorders of the circulatory system
mean of reimb_cost_diff


MDC 22 = Burns

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 28

Source: Center hospital #1

The hospital receives reimbursement more than the cost for only 5 MDC groups.
Some major diagnos?c categories create a large decit for the hospital.
QuanAtaAve Findings #2:
Prot or Loss across Health Schemes
Dierence between Reimbursement and Cost
(by Health Scheme and Age group)

is generally posi?ve for

CSMBS, and the
dierence is large for

elder pa?ents.
This dierence is

nega?ves for almost all

age groups for UC

<20 21-30 31-40 41-50 51-60 61-70 71+ pa?ents.

mean of reimb_cost_diff_CS mean of reimb_cost_diff_SS
mean of reimb_cost_diff_UC mean of reimb_cost_diff_cash

Source: Center hospital #1 33

QuanAtaAve Findings #3:
Evidence for Cross-SubsidizaAon?
RelaAonship between Charge-Cost for OOP and
Reimbursement-Cost for UCS
100000 150000 200000

If there is cost-shi^ing
between UC and OOP
pa?ents, we expect to see
(mean) charge_cost_diff_cash

a nega?ve rela?onship

and (charge-cost)OOP.

No clear evidence of

ac?ve cross-subsidiza?on.
-300000 -200000 -100000 0 100000 200000
(mean) reimb_cost_diff_UC

Source: Center hospital #1 34

QuanAtaAve Findings #4:
LimitaAons of Available Data

Reimbursement-to-Cost RaAo
The reimbursement-

to-cost ra?o is extremely

high for CSMBS, possibly
mean of reimb_cost_ratio

because of the outliers.

26 observa?ons have

ra?o greater than 2000!!

csmbs sss uc foreign cash Others

Source: Center hospital #2 35

QuanAtaAve Findings #4:
LimitaAons of Available Data

Reimbursement-to-Cost RaAo aeer DeleAng Outliers

A^er dele?ng the

outliers, the
mean of reimb_cost_ratio

ra?os are s?ll rela?vely

high for CSMBS and SSS.

This could be due to

missing informa?on in
terms of recording the

cost data.

csmbs sss uc foreign cash Others

Source: Center hospital #2 36

Summary of Findings
No direct evidence suggests that hospitals cost-shi^ by
increasing prices charged to out-of-pocket payment pa?ents
to compensate for the loss.
Yet, three parerns of decision-making of hospital
administrators related to cross-subsidiza?on were found.
Therefore, nancing policies of health schemes also impact
other pa?ents groups within the hospitals.

Mental Models of Hospital Administrators

ImplicaAons for Policy and PracAce
To policymakers:
Demonstrates an empirical evidence of
that current healthcare nancing of
hospitals s?ll inappropriate/inadequate.
Suggests that payments from par?cular
payers could be used as a buer for
hospitals, poten?ally leading to passive
cross-subsidiza?on and inequity issues
of healthcare access.
Suggests how to harmonize health
funds in a more ecient and equitable
InformaAon Systems for DeterminaAon:
The Case of Policies for Healthcare Financing

Pix source: online.wsj.com

Lessons Learned
HPSR is an emerging mul?disciplinary eld of study
that aims to help decision-making of health
policymakers and healthcare administrators.
HPSR is a study for health system development.
HPSR is not a study on health systems or specic health
interven?onal programs.
HPSR usually requires dierent kinds of data than typical
clinical/epidemiological/cost-eec?veness studies.

Lessons Learned
HPSR methodology depends on research ques?ons.
Some HPSR use primary data collec?on.
Some HPSR use secondary data collec?on.
Some HPSR do require a u?liza?on of administra?ve data
of healthcare organiza?ons. (e.g. study for strengthening
healthcare nancing policy).
Lessons Learned #3
Data needed for future research on healthcare
Micro-data (e.g. data at DRG level) are not suitable in determining
cross-subsidiza?on across health schemes.
Varia?on across pa?ents within the same DRG.
Hospitals unlikely make nancial decisions at the micro-level.
Aggregate data at the hospital level are more suitable to study cross-
Results are highly sensi?ve to the data accuracy.
Data from dierent sources (e.g. reimbursement and cost) may be
inconsistent, and could result in misleading results.
Cross-sec?onal data used in this study limits the ability to inves?gate
the dynamic of changes in reimbursement and cost over ?me.

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Q & A

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