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Paper delivered by:
Pakdee Pothisiri PhD*, Viroj Tangcharoensathien MD, PhD**, Jongkol Lertiendumrong MD, DHS, Vijj Kasemsup MD**, Piya Hanvoravongchai MD**
at the 12th World AIDS Conference, Geneva, Switzerland, June, 1998
* Permanent Secretary Office, Ministry of Public Health, Thailand.
**Health Systems Research Institute, Thailand
Acknowledgement:The authors wish to sincerely thank staffs and director of MOPH AIDS Division and Provincial Chief Medical Officers we visits.
Recent economic crisis triggered by the devaluation since July 1997 placed a severe constraint on public financing including public health and HIV/AIDS programmes (Table 1). GDP growth in 1998 is estimated at minus 5.5% and an inflation of 10.5%. As a result, the government budget was 18.5% scaled down from 982 billion Baht which was approved in the 1998 Budget Bill, to 800 billion Baht. The Ministry of Public Health (MOPH) budget was cut, from 70.145 to 59.92 billion Baht, a 14.58% reduction from the Budget Bill (Table 2). Education and health ministries had less cut than the national average, resulting in higher total budget share, 18.6% and 7.5% respectively. Top five ministries facing highest cuts were, Science, Technology and Environment (34.0%), Transport (33.6%), Industry (25.7%), Interior (25.7%) and Defense (23.0%). Ministry of Finance revenue assessment found serious cash flow problem. The Budget Bureau increases budget allocation to five allotments instead of previously three to accommodate cash deficits.
In this paper, we first introduce the conceptual framework of inter-related consequences of economic crisis on HIV/AIDS prevention and control. Based on document research and in-depth interviews with officials at national and provincial levels, we elaborate how Thai Government deals with AIDS epidemic during the economic hardship. How programme managers at national and provincial levels responded to budget cut and how this would likely to have an impact on programme effectiveness were elaborated.
It should be noted here that government revenue crisis leads to several administration interventions and dynamic policy adjustments. Budget amendments were made many times in association to government revenue collection and in agreements according to the letter of intents made with the International Monetary Fund.
The conceptual framework depicts several inter-related consequences of economic crisis. As a result of public resource constraints, AIDS programme budget on preventive activities and medical service was hampered. Reduction of budget to non-AIDS Programme which is quite a substantial source of financing AIDS services further limits AIDS programme activities, e.g. supplies for universal precaution, allowance for field works. Increase cost of production of services, (especially imported drugs, either finished product or raw material) and medical supplies due to foreign exchange rate further retards programme activities.
Limited access to drugs and treatment of AIDS cases shortened the life span among AIDS cases. Household reduction of disposal income due to salary cut or job may reduce the risk of infection due to reduction of demand for commercial sex services. In contrast, it may lead to more prostitution among primary or secondary school leavers who could not find jobs, among economic distressed and especially jobless women. Experience of deaths due to AIDS among immediate kin and neighbors could be a strong influence on significant sexual behavior changes. Preventive activities either by government or employer may or may not influence behavior changes. Finally, programme effectiveness in terms of HIV prevalence is a result from various determinants, e.g. government and non-government interventions and sexual behavior changes.
The MOPH budget reduced from 66.544 in 1997 to 59.92 billion Baht in 1998, a 10% reduction. Communicable Disease Control (CDC) Department budget increased by 1.8%; and Food and Drug Administration by 13.7%, while budget in all other departments were reduced, notably Permanent Secretary Office, 11.5% (Table 3). This is a result of capital investment suspension. It should be noted that during the last trimester of fiscal year 1997 (July-September 1997), there was a de facto reduction of MOPH programme budget due to Ministry of Finance (MOF) lack of cash and inability to disburse, but figures is not available during this analysis.
Table 4 compares MOPH AIDS budget with MOPH non-AIDS budget, AIDS budget during the period of 1997-98 got more cut (24.7% reduction) than non-AIDS budget (5.5% reduction). However, trend was reversed for the period of 1998-99, AIDS budget are more or less preserved (0.6% reduction) when non-AIDS budget was cut more (8.9% reduction).
In table 5, the 1998 national HIV/AIDS programme budget was cut by 25.4% in nominal term but when adjusted by the inflation rate of 10.5%, there is a real term reduction of 33% compared to 1997. Four out of five programmes budgets in table 5 were cut. Only budget for social and psychosocial service was increased by 20%. Note that health and medical services took the major share of 71% of total national programme budget; research and local wisdom development took the least share.
Budget allocation by the five programmes in 1998 crisis showed some reorientation. Programme budget on co-ordination, empowerment and health promotion and medical services were cut, ranging from 27% to 34%; programme budget on research and local wisdom development had the least cut (1.9% reduction). There was 20% budget increase for Social and psychosocial services. The 1998 budget distribution among the five programmes was reoriented compared to 1997. There was an increase proportion of social services and research at the expenses of a decreasing proportion for the top three programmes. However, the top three programmes in 1998 remained the same as 1997. Increase budget to social and psychosocial supports is not significant in monetary terms (17 million Baht increase). Although there is a reorientation of programme budget in terms of budget proportion among the five programme, but there is no significant reorientation in monetary terms as health promotion and medical services took the major share of total national AIDS budget.
AIDS programme was intersectorally responsible by all ministries. Not unexpectedly, MOPH took the major share of 74.2% of total 1998 national programme budget, despite the fact that it faced 24.8% budget reduction from 1997 (Table 6). Budget under Ministry of University Affairs was cut by 22.3%. Only Ministry of Labour and Social Welfare, who is mainly responsible for the social and psychosocial services to the affected population got an increase of 18.9%, in association to this programme budget increase as shown in Table 5. Detailed analysis found that AIDS budget proportion within CDC Department reduced from 21% in 1997 to 14% in 1998. This demonstrated lower priority of AIDS compared to other disease control programmes.
Again, 1998 budget allocation by responsible ministries showed no significant reorientation compared to 1997. Although labor ministry who is responsible for social supports to affected population, got increasing budget but still small in monetary term (17 million Baht increase). The proportion of budget allocation among ministries remains status quo. Budget ranking in 1998 were similar to those in 1997.
The MOPH AIDS budget analysis found that the Permanent Secretary Office (PS Office) and CDC Department took the major share of the national AIDS budget, i.e. 67.8% in 1997 and 64.4% in 1998 (Table 7). This prompts us to further investigate programme budget under the PS Office and CDC Department in greater detail. Table 7 demonstrated detail breakdown of PS Office and CDC Department budget by five programmes comparing 1997 and 1998. We found that health promotion and medical services took the major share within PS Office. This programme was reduced by 50.7% (especially due to reduction in hospital construction projects). The overall budget under PS Office was reduced 50.4%. Comparing 1997-98, the overall budget under CDC Department wsa reduced by 31.5%, mainly due to cut in programme co-ordination (59.5% reduction) and medical services (28.4% reduction). The Empowerment of individual and community increased from 22.3 to 44.0 million Baht, a 97.3% increase. This demonstrates budget reorientation towards cut on infrastructure, co-ordination and medical service whereby increase budget on empowerment and research. However, 1998 budget reorientation is not significant in monetary term.
Budget analysis by programme activities provides more understanding on how Thai government and National AIDS committee dealt with the crisis. We selected some nine major activities under the MOPH Permanent Secretary Office, CDC Department and Health Department for further in-depth analysis as shown in Table 8, sorted by 1997 budget size. These nine activities significantly consumed 42.9% and 50.4% of total national AIDS programme budget in 1997 and 1998 respectively.
The top three activities are the use of antiretroviral drugs (ARV), opportunistic infection (OI) drugs and donor blood screening. Only two out of nine major activities gained their budget in 1998; namely, breast milk replacement (34.6% gain) and blood donor screening (11.8% gain). Other seven activities sacrificed, notably vertical transmission reduced from 25 to 5.9 million Baht, a 76.4% reduction. Budget was proposed for the prevention of 2,500 cases in 1997 and 1998. We estimated 18,000 infections among pregnancies annually. Resource could accommodate 14% of potential demand for vertical transmission interruption. Due to limited budget and good preventive outcome, the Thai Red Cross Society campaigns for domestic donations for prevention of vertical transmission.
Budget for universal precaution reduced from 94.6 to 26.5 million Baht, a 72% reduction. ARV was selectively provided in centers who are able to provide a comprehensive approach of psycho-social and medical services to infected population. This took the highest amount of resource in both years, and 5.8% reduction in 1998. Budget on drugs for opportunistic infection reduced from 188 to 166 million Baht, a 11.7% reduction . Budget on condom was reduced by 5%. The total number of condom distributed was reduced from 60 to 50.2, 11.2 and 10.1 million pieces during the period of 1995-1998. Budget subsidy to NGO stayed at the same figure of 90 million Baht.
Budget on OI drugs in 1998, 166 million Baht, could not purchased the same amount of goods as in 1997. Our survey of four common OI drug cost inflation (1998 compared to 1997) at Ramathibodi Teaching Hospital in Bangkok found a wide range of 3% to 20% cost increase, average 10%. Survey data at Phayao Provincial Hospital showed a wider range of 11% to 50% cost increase, average 31% (Table 9).
Using the estimated cost of OI treatment (excluding the use of ARV) for AIDS of 800-1,500 USD (average 1,150 USD) per person per annum, and the total number of 60,000 AIDS cases in December 1997 and one third required OI treatment, there is a potential need of 920 million Baht (calculated at 40 Baht per 1 USD) for OI treatment. In 1998, only 166 million Baht budget is available. Resource could meet 18% of potential demand.
In summary, the 1998 national AIDS programme budget was cut by 25% in nominal and 33% in real term. MOPH took the major share of national HIV/AIDS programme budget. The MOPH PS Office and CDC Department shared the highest proportion of national AIDS budget. There is a reorientation of 1998 budget in response to crisis focusing more on social and psychosocial services, and cut more on infrastructure, programme co-ordination and medical services. However, reorientation is not significant in monetary term. Health promotion and medical service got the highest proportion in PS Office and CDC Department Budget. The first three programme activities consuming highest budget are mostly medical intervention; namely, the use of ARV, opportunistic infection drugs and donor blood screening. Despite highest budget allocation, these medical interventions could not effectively match potential demand for curative services. In addition, cost inflation of OI drugs and other imported medical goods further aggravated the problems of limited resources in 1998.
Field visits and interviews to provincial chief medical officers and hospital staff (in Chiangmai, Chiangrai and Phayao provinces in the upper Northern Region) revealed interesting information. Programme budget cut has significant impact on field operation but level of negative impact depends on the leadership and management skill by the chief medical officer and the team.
Major policy choices adopted by these provinces were the allocation of limited budget to more cost-effective programme activities, such as the empowerment of individual and community, inter-sectoral activities, co-ordination with NGOs, and other non-medical interventions. The trade off is the reduction of resource for the treatment and care of AIDS cases. However, evidence is inadequate to assert the cost effectiveness of these non-medical interventions.
However, by the third quarter of FY1998, due to MOF cash flow deficit, budget in some programmes did not arrive at the provinces. This significantly interrupts programme operations. The late arrival of allotment of budget earmarked for free medical care for the poor, which were significant source supporting AIDS programme operation also hampered the field works.
Budget allocation to hospital is inadequate compared to demand for care in the previous year. For example, Phayao provincial hospital got an allocation of 3.2 million Baht for OI drugs in 1997, but consumption of the four OI drugs was 6.9 million Baht. The deficit was absorbed through hospital non-budgetary revenue and other budget lines, especially free care for the low income scheme. However, evidence showed reducing income from the non-budgetary sources due to lower purchasing power among customers who paid out of pocket. In 1998, non-budgetary revenue may not be able to absorb deficit from OI treatments.
Due to cash flow deficit, the Comptroller-General’s Department could not timely disburse budget to hospitals. Table 8 shows cost increase of OI drugs. Other drug price increased by 15-20% (non-proprietary drugs) and 20-30% (proprietary drugs). Demand for AIDS care and cost inflation of OI drugs synergistically squeezed the hospital limited resources resulting in stringent access to OI drugs.
The hospital responses on the treatment of opportunistic infections are:
There is inadequate evidence of higher mortality or shorten life span of AIDS cases as a result of this practice, but it is plausible that cases could die early due to inadequate treatment of OIs. The response increases the gap of inequity when only affordable or insurance covered patients could access OI drugs and vice versa. It also provoke ethical dilemma among professionals.
INH prophylactic programme for tuberculosis and cotrimoxazole for Pneumocystis carinii pneumonia prevention among HIV infections were practiced. Anti-retroviral (ARV) drugs were spared only for vertical transmission prevention, not for general HIV positive cases. ARV are given in centers where comprehensive approach is guaranteed.
As spelled out clearly in the national AIDS control and prevention plan (1997-2001), the AIDS programme budget in not a sole financing source for HIV/AIDS control, but rather a catalytic budget to mobilize and re-orientate the use of resource from both public and private sectors, families and community at large. The 1998 crisis forced all concerned ministries to amend budget within the ceiling designated by the Budget Bureau. AIDS budget was sacrificed by all other ministries. This proved that ideology of AIDS strategic budget is quite a long way to go.
As demonstrated in budget analysis, economic crisis in 1998 has strong negative consequences on government programme budget and activities. As the nature of heterosexual infection, we claim that behavior changes is one of the most crucial determinants for a sustainable AIDS control in Thailand. However, evidence is inadequate at the moment to demonstrate the causal relationship between national AIDS programme activities and major determinants (e.g. death experience among kin and neighbor) and sexual behavior changes among Thai. If programme activities showed causal relationship, programme contraction does have negative impact on AIDS control. If other determinants which is not directly affected by economic crisis showed causal relationship, crisis may have not much impact on AIDS control. Recent commercial sex premise survey in January 1998 showed slight upwards number of sex premises, from 7,208 in 1997 to 8,016 in 1998. Number of prostitutes does not increase, 63,526 in 1997 and 63,941 in 1998. However, survey also reveal fewer customers served, down from four clients per day in 1997 to three every two days in 1998. This reflects reduction in demand for commercial sex services. However, this does not demonstrate casual sexual encounters.
The significant reduction in the number of condom distribution especially in 1997 and 1998 creates a great concern that when prostitutes have no condoms available, there is a significant increase in the risk of spreading infections. The belief that either prostitutes or their clients may purchase condoms is unlikely as retail price was 11-15 Baht per piece in 1998. Condom retail price accounts for 14% of the prostitute income per client served (calculated on low cost service of 200 Baht and 60% deduction by premise owner). Moreover, when compare to MOPH bulk purchasing of 1.48 Baht per piece in 1998, it is cheaper to distribute via public channel, even when adjust for distribution cost of 1.5 Baht per piece. The proposition that prostitutes will purchase condom must be proved via in-depth studies, but counter-argument is that the stake is too high; and re-allocation within AIDS control programmes, for example squeezing budget from less cost effective OI drugs and ARV to more cost effective condom is feasible.
Given the nature of national AIDS programme budget is oriented towards medical intervention for quite some years, evidence from several behavior surveys demonstrated changes in sexual promiscuity among men. We would argue that programme contraction in 1998 on medical intervention may have little impact on HIV heterosexual infections. Our argument should be validated by subsequent sentinel surveys in June 1998, 1999 and 2000 and subsequent sexual behavior surveys. However, programme shrinkage especially on OI drugs may shorten life span of AIDS. When resource is scarce, policy makers must allocate to the most cost- effective interventions. The question is what is the cost effectiveness of each programme activities. Budget reorientation is extremely difficult unless guided by cost effectiveness evidence.
Assessment of the impact of economic crisis on AIDS prevention and control programme is not straight forwards. We found significant programme reduction in 1998, especially on medical interventions (ARV, OI drugs and donor blood screening). Programme reduction especially on condom distribution may have negative consequence on primary prevention of heterosexual infection. There was an re-orientation of 1998 budget but not significant in monetary term in response to economic crisis, as its emphasis is on medical services which is less cost effective and could not meet potential demand. This posed further questions on equal access to OI treatment and ARV.
We argue that programme sustainability and outcome (in terms of HIV infection) depends largely on sexual behavior changes. Changes in sexual practices may be relate to programme activities and economic crisis, but to what extent is yet to be further explored. Further evidence from sentinel surveys in June 1998 and subsequent sexual behavior surveys is required to prove this hypothesis.
Budget reorientation towards cost effective programme activities, e.g. condom distribution, blood donor screening, vertical transmission, STD treatments are strongly recommended. However, policy makers should strike a balance and taking into account constraint by the political pressure and pressing demand for ARV among infected cases and OI among AIDS.
TABLES
Table 1 Key economic indicators.
Indicators
1996p
1997e
1998e
1999e
2001e
2000e
GDP growth(%)
5.5
-0.4
-5.5
1.8
3.4
3.7
GDP/capita
Baht
76,650
79,274
82,941
90,340
98,654
106,550
US Dollar
3,027
2,525
1,843
2,258
2,504
2,697
CPI(%)
5.9
5.6
10.5
6.0
5.0
4.0
Source: National Economic and Social Development Board, March 1998.
Table 2 The FY1998 budget revision in response to economic crisis, a 182 billion Baht reduction.
Ministry
1998 Budget Bill approval
% total
Budget revision
%total
Adjustment
% adjust
Central Fund
82,051,605,400
8.36
76,589,967,747
9.57
-5,461,637,653
-6.66
Prime Minister Office*
7,993,717,000
0.81
6,588,348,300
0.82
-1,405,368,700
-17.58
Mo Defense
105,238,348,000
10.72
80,998,594,000
10.13
-24,239,754,000
-23.03
Mo Finance*
44,797,897,900
4.56
42,752,981,000
5.34
-2,044,916,900
-4,56
Mo Foreign Affair*
4,131,846,000
0.42
3,503,160,300
0.44
-628,685,700
-15.22
Mo Agriculture
80,864,696,300
8.23
62,580,531,400
7.82
-18,284,164,900
-22.61
Mo Communication
102,108,099,500
10.40
67,786,410,000
8.47
-34,321,689,500
-33.61
Mo Commerce*
4,364,583,300
0.44
3,746,802,600
0.47
-617,780,700
-14.15
Mo Interior
178,540,267,700
18.18
132,710,229,353
16.59
-45,830,038,347
-25.67
Mo Labour & Soc Welfare*
11,155,173,000
1.14
9,437,204,500
1.18
-1,717,968,500
-15.4
Mo Justice*
5,962,532,400
0.61
5,269,090,400
0.66
-693,442,000
-11.63
Mo science & Tech
16,595,700,900
1.69
10,945,590,300
1.37
-5,650,110,600
-34.05
Mo Education*
166,308,911,800
16.94
148,577,152,500
18.57
-17,731,759,300
-10.66
Mo Public Health*
70,145,500,000
7.14
59,920,895,000
7.49
-10,224,605,000
-14.58
Mo Industry
5,461,664,200
0.56
4,057,343,000
0.51
-1,404,321,200
-25.71
Mo University Affair*
39,337,350,800
4.01
32,900,884,800
4.11
-6,436,466,000
-16.36
Other organizations*
5,035,514,700
0.51
4,686,293,600
0.59
-349,221,100
-6.93
State Enterprises*
29,660,591,100
3.02
26,932,521,200
3.37
-2,728,069,900
-9.2
Revolving Fund*
22,246,000,000
2.26
20,016,000,000
2.50
-2,230,000,000
-10.02
Total
982,000,000,000
100
800,000,000,000
100
-182,000,000,000
-18.53
Source: Budget Bureau Office
Note: The 1996, 1997 budget were 843.2 and 984 billion Baht respectively.
* Ministries whose budget cut less than the national average.
Table 3 MOPH budget allocation by departments: 1996-98, million Baht
1996
1997
1998
97-98% changes
- Office of Permanent Secretary
41,240.5
51,107.0
45,245.4
-11.5
Dept of Health 5,129.3
5,380.8
4,799.2
-10.8
Dept of CDC 3,577.1
3,646.7
3,713.5
+1.8
Dept of Med Service 3,058.7
3,519.0
3,307.4
-6.0
Dept of Mental Health 1,425.8
1,514.9
1,438.1
-5.1
Dept of Med Science
518.0
893.2
877.0
-1.8
Food and Drug administration 286.8
422.5
480.2
+13.7
Health Systems Research institute 0
60.3
60.0
-0.5
Total
55,236.2
66,544.3
59,920.9
-10.0
Source: MOPH Health Policy and Plan Bureau.
Table 4 MOPH AIDS and non-AIDS budget, 1992-1999
Fiscal year
MOPH AIDS budget
% change
MOPH non-AIDS budget
% change
1992
447.5
na
24,193
na
1993
904.5
102.1
31,994
32.2
1994
1,000.1
10.6
38,319
19.8
1995
1,245.5
24.5
43,858
14.5
1996
1,418.5
13.9
53,782
22.6
1997
1,459.9
2.9
65,084
21.0
1998
1,099.0
-24.7
61,526
-5.5
1999
1,092.6
-0.6
56,052
-8.9
Note 1999 is budget request figure as of June 1998.
Table 5 National HIV/AIDS programme budget by five major programme activities, 1997-98
1997
mil Baht
%
1998
mil Baht
%
1997-98
- Health promotion and medical services
1,438.60
72.4
1,052.80
71.1
-26.8
Co-ordination 213.8
10.8
141.6
9.6
-33.8
Empowerment of individual and community 202
10.2
138.3
9.3
-31.5
Social and psychosocial services 85.2
4.3
102.2
6.9
+20.0
Research and local wisdom development 47.6
2.4
46.7
3.2
-1.9
Total 1,987.10
100.0
1,481.50
100.0
-25.4
Source: MOPH CDC Department.
Table 6 National HIV/AIDS programme budget by ministries, 1997-98
1997
mil Baht
%
1998
mil Baht
%
1997-98
% change
Ministry of
- Public Health
1,461.20
73.5
1,099.00
74.2
-24.8
University Affair 233
11.7
181
12.2
-22.3
Labor and Social Welfare 90.9
4.6
108.1
7.3
+18.9
Other ministries 202
10.2
93.4
6.3
-53.8
Total
1,987.10
100.0
1,481.50
100.0
-25.4
Source: MOPH CDC Department.
Table 7 Programme budget compare MOPH Permanent Secretary Office and CDC department, 1997-98, million Baht.
Five programme budget
1997
PS Office
1998
% change
1997
CDC Dept
1998
% change
- Health promotion and medical services
701.4
345.8
-50.7
545.8
393.9
-27.8
- Health promotion and prevention
0
0
0
3.0
5.3
76.7
- Medical services
320.2
272.1
-15.0
540.3
386.9
-28.4
- Medical service supporting
0
0
0
0
0
0
- Counseling
0
0
0
2.5
1.7
-32.0
- Hospital ward construction projects
381.2
73.7
-80.7
0
0
0
- Programme Co-ordination
0
0
0
213.8
86.6
-59.5
Empowerment of individual and community 6.3
5.3
-15.9
22.3
44
97.3
Social and psychosocial services 0
0
0
0
0
0
Research and local wisdom development 0
0
0
0.6
11.4
1800.0
All five programmes
707.7
351.1
-50.4
782.5
535.8
-31.5
% of total national AIDS programme budget
32.2%
25.5%
na
35.6%
38.9%
na
Source: MOPH CDC Department
Table 8 Analysis of 9 major programme activities: PS Office, DOH and CDC, 1997-98
Nine major programme activities
1997
%
1998
%
97-98% change
- Use of ARV
260
30.5
245
32.8
-5.8
Opportunistic infection drugs 188
22.0
166
22.3
-11.7
Donor Blood screening 126.2
14.8
141.1
18.9
+11.8
Universal precaution 94.6
11.1
26.5
3.6
-72.0
NGO subsidy 90
10.6
90
12.1
+0.0
Breast milk replacement 26.9
3.2
36.2
4.9
+34.6
Laboratory tests 20
2.3
14.3
1.9
-28.5
Condom distribution 22
2.6
21
2.8
-5.0
ARV vertical transmission 25
2.9
5.9
0.8
-76.4
Total nine main activities (million Baht)
852.7
100.0
746
100.0
-12.5
% of national AIDS programme budget
42.9%
50.4%
na
Source: MOPH CDC Department.
Table 9 Drug price survey for opportunistic infection drugs, Phayao and Ramathibodi, 1998
Phayao Provincial Hospital
Ramathibodi Hospital
Selected Drugs
1997 price
1998 price
% change
1997 price
1998 price
% change
Amphotericin B 50mg vial
300
413
37%
300
308
2.7%
Fluconazole 200 mg 50 cap
10,914
12,122
11%
10,368
11,515
11%
Itraconazole 100 mg 100 cap
3,000
3,839
27%
2,850
3,410
20%
Ketoconazole 200 mg 250 tab
1,000
1,500
50%
1,062
1,100
3.5%
Average
31%
10%
Source: Phayao provincial and Ramathibodi Hospital 1998.
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