Lessons from Thailand

These frequently asked questions about health promotion foundations help SA to learn from the Thai experience

Why is a health promotion foundation needed?
The main reason to establish a health promotion foundation is to address the need for securing sustainable funding for health promotion programmes, including alcohol and tobacco control. This budget line is lower in the priority agenda and is under-resourced under the national budget. Setting up a health promotion foundation is the most cost-effective strategy for government to secure long-term funds for supporting health promotion and tobacco control activities. Previously, there was also no budget line or agency responsible for prevention and control of other non-communicable disease risk factors such as alcohol control, traffic accident control and promoting physical activity. Many countries have reaped enormous benefits from the establishment of a health promotion foundation. These include Australia, Switzerland, Austria and Singapore.

Why doesn’t the ministry of health request a bigger budget and conduct health promotion activities?
It is not always possible or feasible to request additional funds to support health promotion through the conventional budgeting system because of systemic issues such as complexity and bureaucracy. The current small health promotion budget varies annually and is subject to policy changes with each new government. In the case of Thailand, the budget for the health promotion fund that has been proposed is only about 1 to 2% of the national health budget.

Isn’t a surcharge tax or levy against financial discipline and traditional practice?
An additional or surcharge tax can be viewed as a new mechanism, and in the case of Thailand it is not against any financial regulation. It was a “financial discipline” or “traditional practice” in Thailand not to have a surcharge or dedicated tax before the Thailand Health Promotion Act was enacted in 2001. A similar situation exists in SA.

What added value does a health promotion foundation bring?
a) Health promotion programmes require collaborative partnership from both government andnon-governmental sectors and promote inter-sectoral action and inter-organisational partnerships at all levels, including community engagement in planning and decision-making.
b) The existing funding system is focused primarily on health care services, with much less emphasis on health promotion programmes.
c) A health promotion fund will be used to support implementation of governmental health-related policies and priorities in the country. The only difference is that the source of funding is derived from a surcharge tax on tobacco and alcohol products, collected directly from tobacco and alcohol producers and transferred directly to the health promotion fund.
d) The health promotion fund is managed differently from government agencies, but is audited by designated government agencies and Parliament.

Won’t a special levy on alcohol and tobacco set a precedent for more requests?
The argument that imposing a surcharge will set a precedent and may disrupt the country’s financial discipline has not been the experience of Australia, which implemented a sin tax for health promotion. Although this was in place for many years, there was no other request by any other sector for a similar surcharge. It is Parliament ‘s decision to enact other similar laws if it sees fit.

What is the alternative to a health promotion foundation?
The real question is what other mechanism is there to ensure that health promotion is incorporated into the health system? Either we retain the existing
financial procedure — which neglects health promotion — and face the consequences of a growing healthcare burden, or we impose a surcharge tax on the alcohol and tobacco industries, with the opportunity to gain additional government revenue to fund health promotion. The tax can be used to support short and long-term health promotion and alcohol and tobacco control programmes, resulting in the health and well-being of the public improving over time, while the concurrent health care expenditures decline.

Why do we need new funds? Many existing funds do not work well. How can anyone guarantee that it is going to work in SA?
This argument is based on the premise that there are various types of funds which are generally small but with the same objective of generating funds for its cause. Some of these funds are set up within the government departments, while others are created for service or charity purposes. Most of these funds are set up by executive order or decree and lack oversight by the public or other auditing agency. They also fail to secure long-term funding to support their activities and there are other issues concerning transparency in the use and administration of many of the existing funds.

How will good governance be ensured?
The health promotion foundation’s objectives and governance requirements should be clearly stipulated in the legislation, specifically:
a) Objectives of this foundation
b) Financial controls
c) Transparency and accountability procedures
d) Funding Sources

How does the Thai foundation link to the National Health Insurance Scheme?
While the Thai government was proposing a bill on universal health care (insurance) coverage for all Thais, the health group simultaneously advocated for the health promotion bill to government and Parliament, arguing that setting up a health promotion fund is necessary to deal with the escalating health care costs that the universal coverage scheme has to shoulder

What was the position of the Thai ministry of finance on a dedicated tax?
The ministry of finance opposed a dedicated tax because it is against the ministry’s traditional practice. The health group then proposed changing from a “dedicated tax” (asking for 2% of all tobacco and alcohol taxes collected by the excise department) to a “surcharge tax” instead. This would require the tobacco and alcohol industries to pay an additional 2% of excise taxes to the ministry of finance and to divert this revenue into the health promotion foundation. Such an approach would enable the ministry of finance to collect the full amount of excise taxes paid and, at the same time, the extra 2% surcharge tax is channeled to the health promotion fund. In addition, effective health promotion would save the government money by limiting tobacco and alcohol use, which would decrease the disease burden and health care expenditure. It would also provide desirable and sustainable funding for a broad range of health promoting initiatives that could clearly continue to bring immediate and major benefits. The Thai ministry of finance agreed to this new proposal and has since been collecting the 2% extra taxes for the Thai Health Promotion Fund.

What was the response of the general public to a health ¬promotion foundation?
In Thailand, a public poll revealed that the general public strongly supported the government’s proposal to set up a health promotion foundation funded by additional tobacco and alcohol taxes that focuses on main health promotion areas including tobacco and alcohol control, road safety, exercise and nutrition. The poll also showed that civil society and non-governmental organisations fully supported tobacco control and other health promotion initiatives.

* This article is modified from content in Southeast Asia Tobacco Control Alliance’s (SEATCA), “Lessons Learnt in Establishing a Health Promotion Fund”, September 2011 and can be accessed on their website www.seatca.org