Thailand is quickly becoming a frontrunner for the title of Asia’s medical hub. Boasting state-of-the-art facilities and technologies, internationally certified medical services, expert medical professionals, and a wide range of high-standard international hospitals. Despite these high standards, Thailand’s healthcare costs remain less expensive compared to Japan, Hong Kong and Western countries.
Thailand continues to be a highly competitive market for medical tourism, which drives heavy investment in the sector. This means the 99% of Thais covered by social security can benefit from free healthcare at public facilities. The problem is, these facilities don't often offer the quality of care many expats and HNW individuals will demand, causing them to opt for international insurance plans in order to benefit from higher levels of coverage and better access to private hospitals than social security options.
Thailand’s IPMI fell to 7.8%, exactly the same figure as the Philippines, thus continuing the assumption that insurers have grouped these countries together for premium increases. The year-on-year Consumer Price Inflation of 0.22% (as of June 2016) fell more sharply than the CPI average in top expat destinations.
The constant drivers discussed in the Inflation Drivers section of this report continue to have an impact on IPMI, however the following are considered to be specific drivers for Thailand:
- Grouping with other “low cost” Asian markets - The IPMI inflation shrink seen in Thailand has been identical to the figures for the Philippines this year, and near enough to Indonesia’s 7.6%. With the IPMI rates for China, Hong Kong and Singapore all noticeably moving the opposite direction, the figures for the rest of Southeast Asia continue to indicate that, as mentioned in previous reports, these countries are likely grouped as a “low cost” region of Asia and have had premium increases applied as a group.
- Cost complaints and government regulations - Despite Thailand already having medical services less expensive than in Japan, Hong Kong, and Western countries, the government has received complaints about healthcare prices and reports of customers refusing to pay bills. The government has also considered a Drugs Bill that would require pharma companies to reveal information about their pricing structure when seeking approval for medicines in Thailand. These public and government attitudes could be a driving factor in insurers’ decision-making around premiums.
- ASEAN AEC developments - The developments of the Association of Southeast Asian Nations will bring further economic challenges to Thailand as cheaper production, outsourcing and labour rates can be found in its neighbours such as Laos, Cambodia, and Vietnam. A weakening economy may see the government struggle to deliver on its infrastructure projects, including in the healthcare sector. This could mean higher demand with lower supply which would inevitably increase healthcare costs.
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