This is a study, studies about costs and benefits of aprogramme for implementing the contracting out of primarymedical care to private clinics and the impacts of thecontracting out interms of provision, utilization andefficiency improvement. Nopparat Rajathanee Hospital andit's networks were sekected to be the representative ofpublic hospitals and their networks in Thailand. The contracting out health care services is a newhealth services delivery system in Thailand, as in mostdeveloping countries, and it is believed that it can improvehealth services efficiency, by using public financing andprivate provision. The study showed that the programme can achieve (1)allocative efficiency by making a contribution to preventionof some severe illnesses and to early recover

(2) ficalefficiency as net monetary benefit is 12,594,925.75 baht andthe benefit-cost ratio is 1.66

(3) technical efficiencysince contracted private clinics can provide the healthservices with treatment charges for out-patient per visitand drug prescription cost per visit cheaper than thehospital provision. Other important outcomes of the studyare (4) awareness of the high incremental administrativecost

(5) equity of access of insured workers to healthservices which are more readily available and (6) theservice utilization rate increase of 50%. Regarding administrative efficiency, although theadministrators are given authority and freedom to mange thesocial security budget by themselves, they have very lowrewards so that the brain drain from public to privatesector may trend to be encouraged. As for improvement ofservices provision,it can not be concluded from this studywhether this has happened or not, because withing one yearof the health care provision, it might not have any effecton the overall society, it needs a more longitudinal studywhich uses appropriate indicators. The contracting out primary medical care to privateclinics is possible to implement for other main-contractors.But it needs more studies in detail, because the success ofcontracting out depends on many criteria, i.e. the number ofmain contractors, sub-contractors, competition among themand details of fiscal policy of each hospital, capacity ofmain-contractor to control sub-contractors.