And so the government has decided to act on the hospitals this time around.
What’s the event?
On January 9, 2019 Minister of Commerce, Mr Sontirat Sontijirawong, is due to propose adding medical products, medical supplies, and medical services to the Department of Internal Trade’s (DIT) list of products subject to price controls. In fact, many medical products are already on the DIT’s price control list.
Why are they doing this?
I’m actually of the viewpoint that it is a positive, medical inflation is ridiculously high in Thailand, and most of the world for that matter, see the table below. Service quality is ok, doctors are ok though medicine pushers more than anything else, quality of the tools used are old 2nd tier charged at tier 1 prices (private hospitals) and the fact remains I still abhor the fact that so many doctors are this wealthy in Thailand and that my insurance costs continue to increase every few years. So I think its a positive for the general population that prices are capped to an extent.
Does it matter to hospitals?
Yes, medical product revenues are estimated to be ~30% of total Healthcare revenue according to several analyst reports.
Has this happened before?
Half-half, there has been debate over the regulation of medical prices since 2015, and in May 2015 the public debate over whether private hospitals should be regulated more tightly led to drops for the 4 main hospital stocks (BH, BDMS, BCH, CHG) but as no decision was made they all recovered sharply,
Can the government institutions implement this?
Ah, I doubt it frankly, private hospitals officially are regulated by the Ministry of Public Health under the Health Facility Act. And therefore the Commerce Ministry does not appear to have any authority to regulate medical service charges or physician fees. And so how will this be 1) brought as a law 2) enforced 3) by which agency?
So what’s the damage?
Only THB 60 bn in market cap lost in a few days.
So what? Should I buy it?!
I don’t know you, nor what you want, so don’t ask me these types of questions.