State hospitals face THB60 billion drug debt as health ministry speeds up budget relief

The pharmaceutical industry group under the Federation of Thai Industries has called on the government to settle overdue medicine payments that have remained outstanding for as long as 10 months, with the total estimated at around THB60 billion, to ease private-sector cash flow at a time when manufacturers need funds to pre-order raw materials amid the fighting in the Middle East.

Although the Ministry of Public Health has instructed hospitals with arrears older than 10 months to pay at least four months first, the key question remains whether hospitals have enough money to do so, and why medicine debts have been allowed to remain unpaid for far longer than three to six months.

Public Health Minister Pattana Promphat said on Thursday (March 19) at the Food and Drug Administration that he and the permanent secretary of the Ministry of Public Health had accelerated efforts to secure budget support from the National Health Security Office, adding that one tranche of funding had already been sent to hospitals last month and that further allocations were now under consideration.

He said the permanent secretary had instructed hospitals to strike a careful balance between repaying debts and ensuring continuity of patient care.

Pattana said the current situation was abnormal and required especially careful management, adding that the ministry also understood the difficulties faced by private operators and had not ignored them, while insisting that patient treatment must not be disrupted.

About concerns from hospitals that being required to repay four months of debt while still carrying another six months of arrears might be unmanageable because NHSO funding was insufficient, Pattana said there had been no one-size-fits-all order requiring every hospital to comply in the same way.

He said the broader picture must also take hospital operators and suppliers into account, and that if a hospital had large arrears but was in a position to manage its finances to some extent, it should make partial repayments, provided this did not undermine liquidity for patient care.

He added that the permanent secretary’s policy was for large hospitals to help support medium-sized and small hospitals in their areas, with all levels working together as Team Thailand and as one.

Pattana also said the National Health Security Board meeting on April 1, 2026, might include a discussion of the issue.

Dr Pawinee Eamchan, director of Saraburi Hospital and president of the Thailand Regional and General Hospital Society, said the Ministry of Public Health and the National Health Security Office had already allocated outpatient, inpatient and health promotion and disease prevention funds in full, in the hope that hospitals would use the money to repay outstanding debts, but she said this was only a temporary solution.

The main annual fund, she said, was the inpatient fund, and it still did not reflect real costs, meaning that hospitals continued to face liquidity problems.

She said hospitals did try to manage their debts and to repay as much as possible when they fell into debt, but the long-running mismatch between budget allocations and real costs remained the root problem.

Pawinee said the lack of liquidity and persistent losses at hospitals had been building up for a long time and had affected medicine bills, medical supplies and staff compensation because service payments, particularly for inpatients, did not reflect actual costs.

She said previous studies had put the real cost at THB13,000 per relative weight, while in reality, inpatient budgets had been less than THB8,000, with average payments at around THB7,000, creating an accumulated problem that had led to unpaid medicine bills, unpaid compensation and worsening liquidity.

She said that in 2026, the permanent secretary had discussed the matter with the NHSO until the board resolved to guarantee an inpatient budget of THB8,350 per AdjRW (Adjusted Relative Weight), including salaries, but once salaries were separated, hospitals would actually receive only THB3,505, which already meant a loss.

She said the target was to raise the rate to THB10,000 per AdjRW, which would leave a little over THB5,000 after salaries were deducted.

While still below real costs, this would at least improve hospital liquidity compared with the current situation.

In a Facebook post on the management of the national health security fund, Pawinee said that administrators of Thailand’s main health fund should give priority to protecting all stakeholders in the health system so that the system could remain efficient and sustainable.

In reality, however, she said the fund management system still faced major challenges, particularly as many public hospitals were suffering from financial liquidity problems while fund executives were receiving awards for outstanding management, making transparent and fair scrutiny necessary.

She said the latest figures showed that 51% of public hospitals were facing liquidity problems, with 463 out of 901 hospitals holding negative maintenance fund balances and 57 in the highest level of crisis, with cumulative losses estimated at more than THB17.143 billion by January 2026.

She also said workers were exhausted, the brain drain crisis was intensifying, and 1,200 doctors were resigning each year.

The sharp rise in resignations had pushed Thailand’s doctor-to-population ratio below international standards and had compounded longstanding problems, including unpaid medicine bills, unpaid staff compensation and liquidity shortages.

If nothing was done, she warned, the problem would not end with liquidity shortages but would become outright bankruptcy for public hospitals.

Pawinee further said the situation might be an illusion of budget growth: although the NHSO claimed the 2026 budget had increased by 13%, or more than THB7.929 billion, the reality was that hospitals were still not being paid at full cost because funds had to be split into other categories, especially innovation budgets, blanket clawbacks and wage deductions.

The public knew only that the NHSO increased the budget each year, she said, but the money never reached hospitals in full.

She questioned whether this could really be considered appropriate management.

Pawinee said it was now time to rescue the public health system through four immediate measures.

First, wage deductions should be abolished.

She said deductions from the universal healthcare budget had risen every year, from 39% in 2019 to as high as 59% in 2026, reducing the Basic Payment budget left for purchasing medicines and treating patients.

Second, hospitals should be paid according to real costs.

She said this had been a longstanding problem because funding had been diverted to other benefit categories without proper prioritisation.

In the 2026 upward budget adjustment, the NHSO approved only a 3.5% increase in inpatient funding while allocating large sums to disease-specific and innovation funds that still had disbursement issues and did not help solve the overcrowding crisis, until the Thailand Regional and General Hospital Society raised objections and changes were eventually accepted.

Third, blanket clawbacks should be stopped.

She said the NHSO had refused payment for treatment costs that had actually been incurred, despite repeated objections from the Ministry of Public Health over incomplete medical records, and had used statistical extrapolation to reclaim funds in an unfair manner, damaging the morale of an already short-staffed workforce.

Fourth, the balance of power on the NHSO board should be adjusted because frontline workers had no voting power, and service providers held only two of the 30 seats.