Thai Hospitals Face Cash Squeeze as Funding Gaps Meet Stricter Financial Rules

Hospital accounts cannot close the funding gap

Thailand's hospital funding dispute has two stark sets of numbers: remaining maintenance funds fell from 60.078 billion baht in 2023 to 46.499 billion baht in the second quarter of fiscal 2025, while the University Hospital Network put inpatient treatment costs at about 13,000 baht against reimbursement of 8,350 baht. Stricter accounting can expose those pressures, but it cannot by itself pay the difference.

That is the central warning from Anukool Thaithanand, former president of the Association of Regional and General Hospitals. He said six Public Health Ministry directives could make hospital finances more transparent without resolving a liquidity crisis rooted in universal healthcare payments that do not match actual costs.

The distinction matters for patients. Liquidity means having enough money available to pay bills when they fall due. A hospital can record income it expects to receive and still lack the cash needed to buy medicines, pay suppliers or replace equipment. Anukool warned that hospitals with little cash remaining could postpone equipment replacement or cut expensive but necessary medicines.

The dispute is also about accountability. Ministry inspections have identified missing accounting entries, unrecorded debts and spending outside approved plans. Hospital representatives argue that those problems must be investigated without treating every shortage as evidence of poor management. Several mechanisms can operate together: inadequate payment rates, delayed reimbursements, rejected claims and spending decisions that exceed a hospital's means.

The chronology requires care. The financial figures and reimbursement dispute described here largely concern 2025. The reports on the six directives date their signing to October 9, 2569 in the Thai Buddhist calendar, equivalent to October 9, 2026, with a clarification on October 11, 2026. They should not be read as actions preceding the 2025 figures.

What the six directives require

The instructions signed by Public Health Permanent Secretary Dr Somruek Jungsaman address both the accuracy of accounts and the control of spending. They were directed to health regions 1 through 12, provincial public health chiefs and regional and general hospital directors, with oversight requirements also covering community hospitals.

• Record treatment receivables accurately and promptly across all coverage arrangements, and pursue outstanding compensation from funds and other debtors.
• Recognize trade payables immediately when goods are inspected and accepted, following public procurement requirements.
• Record every category of revenue under public sector accounting standards and check collection procedures.
• Keep spending within applicable rules, approved plans and the hospital's financial capacity.
• Prepare annual maintenance fund income and expenditure plans, monitor implementation and report results to management monthly.
• Require hospital managers to comply with fiscal discipline laws and related regulations, with provincial and regional supervision.

Receivables are amounts owed to a hospital, including treatment payments it has yet to collect. Payables are amounts the hospital owes suppliers. Leaving either out can distort the financial picture: missing receivables hide expected income, while missing payables make the hospital appear to have more money available than it really does.

The instructions prohibit using supplies or allowing contractors to start work before approval to enter the financial commitment. They also warn against construction or renovation outside approved plans that compromises payment for medicines and medical supplies.

The legal framework cited includes the State Fiscal and Financial Discipline Act of 2018 and the Public Procurement and Supplies Administration Act of 2017. Neglect that causes liquidity shortages or accumulated liabilities could prompt legal action. Managers could also be removed from their duties if their continued service threatens patient care.

Accounting failures do not always mean concealment

The ministry's concern follows a prolonged audit problem. The directive says the State Audit Office has declined to express an opinion on the Office of the Permanent Secretary's financial statements since fiscal 2020 because supporting information was incomplete, inaccurate or inconsistent with public sector accounting standards.

A refusal to express an audit opinion means the auditor lacks a sufficient basis to judge the statements. It is not, by itself, a finding that every accounting error represents corruption. Internal inspections nevertheless found outdated records, failure to recognize creditors and debtors, and substantial procurement outside plans, particularly construction and renovation.

In the clarification dated October 11, 2026, Somruek said annual spending plans, known as Plan fin, require approval from provincial public health offices and ministry inspectors. He also described problems recording buildings, equipment and other assets, and acknowledged that some community hospitals lack dedicated accounting personnel. He said he believed most errors were not deliberate corruption.

Somruek cited a previous Maha Sarakham case as an example of the risks associated with intentionally omitting creditors. His legal team was still assembling the laws and regulations applicable when wrongdoing is found. A complaint concerning budget management at Photharam Hospital in Ratchaburi was also subject to ministry examination, but no conclusion on that complaint was given.

Anukool drew a separate distinction between deliberate concealment and delays arising during urgent care. A hospital might need specially sized surgical equipment before a supplier completes delivery paperwork, he said. Such circumstances require examination rather than an automatic assumption of dishonesty. Intentionally hiding liabilities to make accounts look stronger, however, should be investigated and punished.

Reserves fell while treatment volumes rose

On April 22, 2025, Deputy Permanent Secretary Dr Montien Kanasawat described declining maintenance funds alongside growing demand for treatment. The funds remaining after financial commitments fell from 60,078 million baht in 2023 to 46,498.9 million baht in fiscal 2025's second quarter, covering January through March.

Those endpoints represent a fall of 13,579.1 million baht, or about 22.6%. The same account described the decline as 9.5%, a percentage that does not match the stated amounts. Without another comparison period or an explanation, both figures cannot describe the same calculation.

Inpatient treatment episodes increased from 6,927,714 in 2021 to 7,886,477 in 2024, a rise of 13.84%. The ministry described average annual growth as 4.42%. The total adjusted relative weight, a measure reflecting the resources required for different inpatient cases, increased from 7,835,757 to 9,757,937, or 24.53%. That indicates growth in the measured treatment workload beyond the increase in admissions alone.

Outpatient visits rose from 149,430,077 in 2023 to 158,260,335 in 2024. The account gave the increase as 5.58%, although calculating growth against the 2023 total produces about 5.91%. The difference does not change the direction of the trend, but it reinforces the need for consistent financial and activity reporting.

Montien also put earnings before interest, taxes, depreciation and amortization, known as EBITDA, at 20,009 million baht, down about 9% from the preceding month. This accounting measure is not the same as cash available to pay bills. Four hospitals were classified at financial crisis level 7, the most severe category described.

How reimbursement falls short of hospital costs

The University Hospital Network's estimate of 13,000 baht per inpatient treatment compared with NHSO reimbursement of 8,350 baht implies a gap of 4,650 baht. On those figures, reimbursement covers about 64.2% of the estimated cost, leaving roughly 35.8% uncovered. The estimate does not establish the cost or payment for every hospital admission, but it illustrates why accurate accounts alone may not restore financial stability.

Individual hospitals have described more immediate payment pressures. In an account published on November 5, 2025, Surat Thani Hospital reported a retroactive deduction of 52 million baht and a latest transfer of just 161.33 baht. It put monthly expenses for medicines, supplies, laboratory work and other needs at 170 million baht.

Buddhachinaraj Hospital in Phitsanulok was reported to have received 15 million baht against a bill of 238 million baht. That payment equals about 6.3% of the bill. The account does not establish how much of the balance was rejected permanently, disputed or awaiting payment, so the entire difference cannot automatically be treated as a final loss.

Senator Dr Veerapun Suvannamai, deputy chair of the Senate public health committee, blamed retroactive deductions, delays and revisions to compensation rates. He warned that many state hospitals could exhaust their reserves within three years if reimbursement problems continued. That was a warning, not a confirmed timetable for hospital closures.

Adjusted relative weights assign different values to treatments according to their expected resource needs. They help distinguish a complex operation from a less demanding admission. Changing the rate paid against those weights can change hospital revenue even after treatment has taken place, complicating spending plans and supplier payments.

Why national reserves do not settle the dispute

The government presented a more reassuring assessment in June 2025. Public Health Minister Somsak Thepsutin said hospitals had about 46 billion baht in reserves after liabilities and rejected claims that the gold card scheme was facing a financial crisis.

Somsak said 13 hospitals registered with the scheme had negative reserves and that teams would investigate their circumstances. That figure cannot be substituted for the four hospitals at crisis level 7 reported in April. The dates and classifications differ, and negative reserves and a specific financial risk category are not necessarily equivalent.

NHSO board member Dr Wichai Khovakheawat also cited 46 billion baht in net reserves, while acknowledging that gold card reimbursement rates were typically lower than those under other public healthcare programmes. The national total therefore supports the government's argument that resources had not been exhausted across the network, but it does not establish that each hospital could meet its own bills.

There are also different counts of service use. Somsak said about 220 million of 304 million outpatient visits by scheme subscribers in fiscal 2024 were reimbursed by the NHSO. The November 2025 account cited NHSO records showing about 176 million outpatient visits and nearly 7 million inpatient admissions by September 30, the end of the fiscal year then discussed.

These totals concern different reporting periods and potentially different counting boundaries. Neither can be directly combined with the ministry hospital activity series. Somsak also pointed out that hospitals receive income from the Social Security Fund, civil servant benefits and payments from patients. Evaluating a hospital's finances therefore requires examining all income and obligations, not just one coverage scheme.

Protecting access without exhausting providers

The Universal Coverage Scheme serves roughly 47 million people. The November 2025 account put its annual allocation at 264 billion baht, including about 65 billion baht for hospital staff wages. Wages therefore represented approximately 24.6% of that allocation. The headline budget was not solely a pool for reimbursing treatment expenses.

The scheme's protection for households remains central to the debate. Reported figures show the number of people driven into medical bankruptcy falling from 663,000 in 2002 to 357,600 in 2023, a reduction of 305,400, or about 46.1%. Hospitals under the Public Health Ministry, meanwhile, were reported to have used up to 18.79 billion baht of reserves to support care under the scheme.

Dr Pawinee Eamchan, director of Saraburi Hospital and president of the Thailand Regional and General Hospital Society, said doctors were seeking reform rather than abolition:

"Nobody wants to abolish the scheme. It's just that we need to discuss the problems related to its implementation," she said.

Pawinee called for consultation before new policies are introduced so that funding, staffing and practical capacity are considered. Critics of the expansion allowing beneficiaries to seek treatment more widely with their national identity cards said it had added pressure to secondary and tertiary hospitals. They also warned that broader access does not mean every treatment a doctor prescribes qualifies for reimbursement.

Those concerns connect access policy to payment design. A benefit can protect patients from direct charges while leaving providers responsible for costs that the reimbursement rules do not cover. Anukool's warning is that continued financial pressure may eventually affect the services patients can actually receive.

Claims technology and payment reform address different problems

The ministry's April 2025 response had four parts: urgent liquidity management and longer term planning, more efficient claims, better use of resources and procurement, and tighter financial discipline. Units considered at high risk were to be monitored every two weeks.

A planned Financial Data Hub function, called FDH Smart Pre-audit Claim, would use artificial intelligence to check documents before submission against fund requirements. The ministry estimated that incomplete or incorrect claims cost service units 12% to 18% of revenue annually and projected that the system could reduce those losses by up to 60%.

If both estimates held, the recoverable amount would correspond to roughly 7.2% to 10.8% of revenue. That is an illustration of the ministry's projections, not a measured result. A document checking system can reduce avoidable claim errors, but it does not automatically increase the amount paid for a correctly documented treatment.

Dr Surapong Suebwonglee, who helped design the original scheme while serving as deputy health minister in 2001, proposed using technology for a broader purpose: making compensation reflect costs more accurately. He described how present tools differ from those available at the scheme's launch:

"When we launched the scheme more than two decades ago, we didn't have the technology that is now available. If the latest technology is applied, the compensation can better reflect real costs while reducing errors," he said.

In June 2025, NHSO secretary general Dr Jadet announced plans for PwC, EY, Deloitte and KPMG to review budget allocation, with a report expected within three months. He also announced a committee chaired by Finance Minister Pichai Chunhavajira to assess reimbursement rates across public healthcare funds. The accounts here do not establish whether the review was completed or what changes the committee adopted.

The timeline and decisions still unresolved

The debate developed through separate financial disclosures, proposed reforms and later accounting instructions. Keeping those stages apart avoids treating promises as completed measures or older hospital counts as current findings.

• Fiscal 2020 onward: the directive says the State Audit Office declined to express an opinion on the permanent secretary office's financial statements.
• April 22, 2025: Montien disclosed falling maintenance funds, four hospitals at crisis level 7 and planned claims technology.
• June 2025: Somsak cited 46 billion baht in net reserves and 13 hospitals with negative reserves; Jadet announced an allocation review expected within three months.
• November 5, 2025: reports detailed the Surat Thani and Buddhachinaraj payment disputes and calls to reform reimbursement.
• October 9 and 11, 2026: reports date the six directives and Somruek's subsequent clarification to these days.

Several questions remain unresolved: the final settlement of the individual payment disputes, results of the promised allocation review, actual savings from claims technology and the legal findings in hospital management investigations. No confirmed future hearing, vote or implementation deadline is given.

Anukool also warned that more complete accounts could reveal additional hospitals in the most severe financial crisis category. A rise in recorded distress could therefore reflect newly recognized debts as well as worsening finances. The central test is whether reform produces both reliable accounts and payments that sustain necessary care, rather than treating one as a substitute for the other.

Key Points

• Six ministry directives require accurate accounts, spending controls and monthly monitoring of hospital maintenance fund plans.
• Anukool Thaithanand says transparency alone cannot fix reimbursement that falls below treatment costs.
• Reported maintenance fund balances fell from 60.078 billion baht to 46.499 billion baht, about 22.6% based on the stated amounts.
• The University Hospital Network estimated inpatient costs at 13,000 baht against reimbursement of 8,350 baht.
• Four hospitals at crisis level 7 in April 2025 and 13 with negative reserves in June are different measures.
• Claims technology may reduce documentation losses, while payment rate reform addresses the cost gap.
• The scheme covers roughly 47 million people, and hospital representatives are calling for reform rather than abolition.