Buffet Syndrome | Co-payment and Health Insurance Systems

This morning, I wanted to write something serious after not writing a long-form piece in a while.

Last month, there was an announcement regarding Co-Payment in health insurance claims. I must admit—I’m a big fan of Co-Payment. This perspective has been ingrained in me since I was a newly graduated doctor. I have always felt that a system without co-payment would be unsustainable because a crucial factor in any system is aligning incentives; everyone should have some skin in the game.

Why is Co-payment Important?

I believe that designing the right incentives is key to making a healthcare system sustainable. If a system allows for 100% reimbursement with no cost-sharing by the patient, it often leads to what is called the Buffet Syndrome.

Imagine the difference between eating at a buffet versus ordering a single dish. Which scenario makes us consume more and waste more food? The healthcare system works similarly. If we perceive healthcare as "free" or "100% reimbursed," we may overuse services unnecessarily—seeking additional treatments, extending hospital stays, or requesting extra medications that are not actually needed.

Skin in the Game: Why Cost-sharing Matters

Co-payment, or cost-sharing, helps create a sense of skin in the game—meaning patients feel personally invested in their healthcare consumption. The requirement to pay, even a small amount per service, makes people more mindful about whether a medical visit or treatment is genuinely necessary. This leads to overall lower healthcare costs and prevents overutilization of services.

This issue is largely about perception. In reality, we all already pay for healthcare—whether through taxes or insurance premiums. However, because these payments are made in advance and are detached from the actual moment of care, we feel like healthcare is "free." Co-payment brings the payment closer to the point of care, making the cost of healthcare more tangible and real.

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Learning from Other Countries

Many countries with robust healthcare systems utilize Co-payment as a key mechanism, such as:

- Singapore: Co-payment has been in place for a long time. The government mandates health insurance, and individuals must co-pay 20% of treatment costs, resulting in an overall healthcare expenditure reduction of 15-30%.

- Switzerland: A compulsory system requires everyone to purchase private health insurance from certified providers. Patients must pay a deductible before insurance coverage kicks in. Even after reaching the deductible, they continue co-paying a set percentage of treatment costs, with an upper limit to prevent excessive charges. This system promotes cost awareness and rational healthcare usage.

- Japan: Uses a tiered Co-payment system based on age and income. Higher-income individuals contribute a larger percentage than lower-income groups, maintaining balance in public health budgets while capping out-of-pocket expenses to avoid excessive financial burdens.

On the other hand, countries without Co-payment, such as the UK’s NHS (National Health Service), struggle with ballooning budgets and long waiting times for treatment. Many citizens choose to pay for private healthcare instead of waiting in queues. If you ask British friends about their healthcare system, they will likely have similar complaints.

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What About Thailand?

Thailand’s public healthcare expenditure continues to rise:

- 2023: 310.8 billion THB

- 2024: 319.6 billion THB

- 2025: 341.2 billion THB

This trend is driven in part by Thailand’s transition into a super-aged society, with over 13 million elderly individuals (as of 2023) and an annual increase of 18% (2020 data). This places a growing financial strain on the healthcare system.

If we do nothing, we risk facing the same financial crises as other countries that provide unrestricted free healthcare.

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Challenges of Co-payment

Despite its theoretical benefits, implementing Co-payment comes with challenges:

1. High Administrative Costs → Universal Coverage is Simpler

For those with financial constraints, even a minimal Co-payment might be unaffordable. This raises the need for tiered cost-sharing based on financial ability, similar to Japan’s model.

However, determining who should pay more or less involves high administrative costs. Public health experts have pointed out that the cost of segmenting the population based on financial ability might exceed the savings from Co-payment itself. In such cases, universal coverage may be more efficient.

That said, advancing technology may gradually reduce these costs, making a balanced, fair system possible. But personally, I maintain that indefinitely providing free healthcare is unsustainable.

2. System Hacking → Bypassing Co-payment Rules

In some countries with strict Co-payment policies, people find ways to game the system. For example, instead of going to a hospital where Co-payment applies, they visit the ER (Emergency Room), which often provides free services. Spain has encountered this issue frequently.

This creates additional complications that policymakers must address.

I actually wanted to list three points here, but… I can’t think of a third one at the moment. Haha (not very cool, I know). ??

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Zooming Out

There is no perfect system. The best we can do is design a system that fits our country’s unique context. Every policy comes with trade-offs—we just need to choose which ones we’re willing to make.

Ultimately, the most cost-effective healthcare solution is prevention and health promotion. It might sound boring (eat well, sleep well, exercise, manage stress), but any country or individual that prioritizes prevention will always have the lowest healthcare costs. Because health is the first wealth.

Wishing everyone Health at Home! (Wait, what? ??)