Thailand is a health leader in South-east Asia. Not only is it strong on the domestic side, with more than 99% of the population receiving free health care, but it is also a highly competitive destination for medical tourism. Heavy investment continues in the sector. Hospital groups are raising funds and expanding, mergers are being undertaken and the sector is venturing overseas. Health care is growing and seen as a source of significant opportunity and growth.

Yet a number of challenges remain. Universal health care is under considerable strain and in need of additional funding, most likely through the creation of a co-payment system. The limited benefits of the programme have also been brought into question, while an ageing population and the higher costs of medicine are starting to take a toll on the overall system. To a great degree, these trends are much like those seen in the rest of the world, and like many other developing countries Thailand is beginning to question the cost of prescription medicines. The greater costs are also the result of an interplay between the private hospital system, which gets higher rates because of demand from international patients, and the public hospital system, which is struggling for funds.


The first hospital in Thailand, Siriraj, was founded in 1888 by King Chulalongkorn. A medical school at the hospital was started two years later. Before 1932, very little was done in terms of health-care beyond public health and preventing communicable diseases. After the end of the absolute monarchy in 1932, and with the rise of democracy, medical services were expanded but progress was slow. It was not until 1956 that every province had its own hospital. By 1993, everyone in the country was within an hour walk of a medical facility.

Before 1974, very limited public health care existed. The government offered a fee exemption for the poor but not much else. In 1975, a formal programme was created for the poor, while the 1977 Constitution recognised health care as an entitlement for all Thais and guaranteed equal access. True universal health care, which covered a wider range of the population and offered a full complement of services, was introduced in 2003 as the Universal Coverage (UC) scheme. The programme brought people who were neither civil servants nor in the private sector into a stable and comprehensive programme.

Under the UC, 18m of the uninsured and 28m who were covered under relatively weak schemes received significant state coverage. The programme was expanded in 2008 to include more expensive treatments that were not previously covered, and in 2007 the BT30 ($0.90) co-payment was ended and treatment was free. A full 99.5% of Thailand’s population is now covered by the UC scheme.

Thailand has significant medical infrastructure, with a total of 17,013 health care facilities as of October 2015. Of these, 56% are sub-district health promotion units, 28% are private clinics and 7% are primary care units. A total of 780, or 5%, are district hospitals; 1%, or 88, are provincial hospitals; and another 1% or 116 are “other” public hospitals. In total, the country has 336 private hospitals. An estimated 70% of all facilities are public.

Healthy Society

Overall, Thailand is a healthy society. The introduction of universal health care has been to a great degree responsible for the drop in mortality rates, while public health efforts and vaccination campaigns have greatly reduced the prevalence of disease. Life expectancy in 2013 was 74.24, up from 54.7 years in 1964. The current rate is slightly lower than the life expectancy in Malaysia and Vietnam (and significantly under Singapore’s), but higher than in Indonesia (68.7) and the Philippines (68.13). In terms of hospital beds per person, Thailand ranks well. It has 21 per 1000 people versus the ASEAN Economic Community average of 10. Vietnam has 20, Singapore 20, Malaysia 19, Indonesia 9, Cambodia 7, Myanmar 6 and Philippines 5. Only Brunei has more hospital beds, at 28, while Thailand is already near the global average of 26.

Non-communicable diseases (NCDs) remain a problem in the country, with the rate of smoking for men at 46%. According to Bangkok Hospital, 73% of deaths in Thailand are caused by NCDs, compared with 63% globally. Recent statistics also suggest that Thais do not exercise enough, that they do, on average, maintain a healthy diet and that the population is the second most obese in ASEAN, after Indonesia. Thailand’s HIV rate has dropped dramatically, from a high of 2.3% in 1997 to 1.1% in 2014, but it is still higher than its ASEAN neighbours.

The country has a high rate of tuberculosis and still has cases of malaria, though mainly in remote and mountainous areas. An increase in dengue fever cases is expected in 2016. It is the world’s fastest spreading tropical disease, now in 128 countries worldwide versus nine before 1970. The number of cases in 2016 in Thailand will be about the same as in the last major outbreak, in 1987. In 2015, the country had 140,000 cases. That will rise to 170,000 in 2016. A vaccine, Dengvaxia, is available, but it is not 100% effective and cannot stop the disease from spreading.


Thailand is ageing faster than the rest of the world, according to the Thailand Development Research Institute (TDRI). Its ratio of senior citizens to total population was 11% in 2005. By 2014, that number had increased to 14%. The world overall was 11% senior citizens in 2005 and 12% in 2014. It is estimated that the old will account for 25% of Thai society by 2025. An ageing population will create many business opportunities, in segments such as food provision, medical equipment development and sales, health services, and nursery and home-care services, according to the TDRI. The government is looking for ways to handle this demographic issue. It is, for example, working to keep people productive for a longer period of time, to 65 or 70, with research suggesting that people who work longer enjoy a higher quality of life. It is also developing community centres and training volunteers to take care of the elderly.


Though it succeeded in greatly expanding coverage, the UC is facing significant problems in terms of funding. The system guarantees a wide range of services to 49m Thais, and it does manage to cover these people while staying under the OECD recommendation of spending 5% of GDP on health care, but there are strains on both the state budget and the state hospitals. The UC scheme was successful in its early years in part because the country experienced rapid economic growth and stability.

Three separate state-run schemes operate in the country are: the UC, general social security and the Civil Servant Medical Benefit scheme (CSMB). According to the local press, the lower funding committed to the UC scheme results in a lower quality of service than with the CSMB. Some proponents – mostly civil society groups – are calling for a harmonisation of the three systems. They argue that a lining up of systems is required by the National Health Act. The government, however, says that there will be no changes in 2016. Despite problems with the various programmes, Prime Minister Prayuth Chan-ocha has said that the UC will not be ended. And despite the problems in the system, the UC is starting to become a model for other developing nations. Despite debates about its potential shortcomings, the UC is generally seen to provide quality basic coverage at a low cost as a percentage of GDP. It could ultimately become a template for other developing countries.

The situation at public hospitals is mixed, and the problems they face are to a great extent the result of a lack of resources and a heavy use of services by the public. Many feature long lines and waiting times, a noisy and stressful environment and overworked professionals. Thailand has only four doctors per 10,000 people, and the risk of potential errors can be high, as doctors in some public wards sometimes see 100 patients a day, according to The Nation.

As a result of bottlenecks in the system, many patients will only see a health care provider a few times a year. The distribution of resources is also uneven, with the CSMB programme receiving four times as much funding per as the public programme.

Potential Reforms

A wide range of reforms have been discussed in many quarters. A new tax has been suggested, specifically a rise in value-added tax, but it is being opposed. The introduction of co-payments has been much discussed as a way to close the funding gap, but many officials and experts are warning against the implementation of these measures. For example, a former public health minister, Mongkol Na Songkhla, has said that payments at the time of medical service delivery would unnecessarily burden the poor and further exacerbate economic disparities. He added that the poor should not be hit with an added expense when they are most vulnerable.

The TDRI says that charging a co-payment would make more funds available for inpatient services, which are currently lacking in resources. Three types of specific co-payments have been suggested by the TDRI: for prescription drugs, as an insurance premium and for doctor visits. It was also suggested that a fee be collected for patients visiting a doctor for treatment of very minor ailments, such as a common cold, in order to discourage such visits and encourage people to better manage their own health. The government says a co-payment plan of some sort is inevitable in the medium term and that the only remaining question is whether it should be done in the form of a premium or at the time when treatment is sought.


While Thailand has its share of sunset industries, it has a number of sectors identified as fast-growing: health care and telecommunications in particular are seen as driving the economy in the future. Deloitte estimates that the health care spending in Thailand will reach $18.7bn in 2018, growing by 8% between 2014 and 2018. The consultancy says that total spending was $12.8bn in 2013. Health care spending as a percentage of GDP has been on the rise. In 1995, it was 3.5%. It dipped to 3.3% by 2001 and then rose to 4% by 2009. By 2013, it had grown to 4.6%, higher than in Malaysia (4.0%), Indonesia (3.1%), Myanmar (1.8%) and the Philippines (4.4%) and on par with Singapore. Cambodia is higher (7.5%) as is Vietnam (6.0%). The medical equipment market is growing quickly as well, having risen in value from BT25.92bn ($780.2m) in 2010 to BT38bn ($1.1bn) in 2015. Nearly 80% of this medical equipment is imported.

The government’s share of sector spending is the second highest in the region, at 77%, yet private sector spending is on the rise. In 2008, the Thai government spent BT8.2bn ($246.8m) on health care while the private sector spent BT2.6bn ($78.3m). By 2015, the government was spending BT12.5bn ($376.3m) for health care, while the private sector spent BT4bn ($120.4m). Private hospitals have benefited from government efforts to provide universal health care. Local hospitals report having experienced sharp increases in patient numbers, and this has led patients with the financial means to seek treatment at privately run establishments.

Private Growth

Thailand has a strong private health care sector, with eight exchange-listed hospital groups: Aikchol Hospital, Bangkok Dusit Medical Services, Krungdhon Hospital, Krungdhon Hospital, Mahachai Hospital, Ramkhanhaeng Hospital, Samitivej Hospital and Vibhavadi Hospital. Many of these groups are actively investing in the growth of the sector. Emerging players such Thonburi Hospital Group, which has two hospitals in Thailand as well as facilities in China, plans to sell shares in an initial public offering in 2016 and the hopes to raise BT8bn ($240.8m). Vibhavadi Medical Centre is planning a substantial expansion, investing BT40-50bn ($1.2-1.5bn) over 2014-18, to double in size to 2000 beds and adding eight hospitals by 2017, both through new building and acquisition. In 2014, the company purchased Leam Chabang Hospital and renamed it Vibha Ram Hospital; it is hoping to build out the Vibha Ram brand by opening facilities near industrial areas. Bangkok Dusit Medical is spending BT4bn ($120.4m) at its Bangkok Hospital. Two new buildings will be added in 2016 and another four planned for 2017.

The government is encouraging private hospitals to make a greater investment in research and development so the country can maintain its position as a leading medical tourism destination and develop into a medical centre for the ASEAN region. While the doctors in the country are some of the best in the region, rated just slightly lower than the medical professionals in Japan, hospitals widely suffer from underfunding. Private hospitals in the country generate profits estimated to be as high as BT700bn ($21.1bn) annually, of which approximately BT100bn ($3bn) comes from foreign visitors seeking treatments.


Thai health care providers are targeting growth overseas. Thonburi Hospital says that the Thai market is too crowded with competitors and that it sees greater opportunity elsewhere. It plans to open an outlet in Myanmar, having signed an memorandum of understanding in 2014 with Aung Shwe Thee International. In July 2014, Myanmar’s Ministry of Health said that foreign companies could be allowed to form joint ventures with local hospitals.

Bangkok Hospital Group is seeking to expand from 42 to 50 hospitals and has its sights set on developing throughout ASEAN. It currently has two hospitals in Cambodia and offices in Myanmar and Vietnam. Bumrungrad International Hospital plans to open a branch in Myanmar, with an investment of $1.13m. The facility will be a clinic that will also offer diagnostic services. Bumrungrad owns 80% of the joint venture and Yangon International Medical Services will own the rest.


In Thailand, health tourism has been on the rise in recent years. It is estimated that 2.81m people came to Thailand in 2015 for medical treatment, up more than 10% from 2014. These tourists spent $3bn in the country in 2015, up 15%. Thai health care remains competitive in terms of both quality and price. It is cheaper than Singapore, but more expensive than Malaysia or the Philippines, and has a total of 53 medical outlets that are Joint Commission International (JCI) certified – more JCI accredited hospitals than any other country in ASEAN – providing international best practice assurance to medical tourists.

The government is looking for ways to support the development of medical tourism by having more local hospitals upgraded to meet international standards and to find ways of offering medical care to foreign tourists who become sick while travelling. It is also relaxing some visa rules, allowing for an extension of stays to 90 days (from 30) to people from Kuwait, Bahrain, Oman, Qatar, Saudi Arabia and the UAE.

Cost Complaints

Despite the fact that Thai medical services tend to be less expensive than in Japan, Hong Kong and Western countries, complaints about the costs have been reported, with some customers refusing to pay their bills. The prime minister is concerned that cases of overcharging could hurt Thailand as a destination for medical tourists, and has called for a review. He has said that median prices should be instituted for use at private hospitals, and that these prices should be set with reference to international standards. The law allows private hospitals to charge more than the state hospitals, but the prime minister has stated publicly that if the ratio were more than seven or eight times the price, it would be a problem and the government would need to consider action.


The government is currently considering a Drugs Bill, which would require companies to reveal information about their pricing structure when seeking to have medicines approved in the country. While generics and unbranded drugs would be exempt, companies would have to disclose their marketing and production costs on newly patented medicines. Some state and private actors object to these provisions, as they would require private companies to disclose commercially sensitive information.

There are also specific calls from the private sector for the industry to bring itself more clearly in line with international and ASEAN standards. “Joining the Pharmaceutical Inspection Co-operation Scheme would be largely beneficial to Thailand and would open up export markets. To date, Singapore, Malaysia and Indonesia have joined the scheme with the Philippines set to follow suit,” Virapatna Thakolsri, managing director of Biopharm Chemicals, told OBG.

Those objecting to full transparency are calling for a panel to set median costs and examine standards. Included in the calculations would be the following: production costs, profits, price comparisons with other developing countries, price comparisons with similar drugs, and agreements between pharmaceutical companies and hospitals.


Thailand’s health sector is doing well in places, but is starting to feel the pressures of success. Health tourism is beginning to have an impact on the domestic market, both in terms of pricing and expectations, and necessary policy reforms are under way.