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Health Financing and Delivery in Vietnam
standards, although one pair of surveys suggests that in the specific area of pneumonia treatment, Vietnam’s quality of care deteriorated in the 1990s. Data confirm that costs in the hospital sector are rising rapidly, and that the bulk of the annual increase cannot be explained by increases in throughput. The increasingly costly style of care seems likely to be caused by providers having an incentive to deliver tests and drugs whose prices are either not regulated or are regulated, but at a rate that is generous by the standards of the 1995 schedule. The chapter then goes on to explain the intricacies of Decrees 10 and 43. It looks at the factors explaining why it was adopted in some parts of the country and in some types of facilities more quickly than in others, and at its impact on hospitals’ financial performance. It concludes that the changes have indeed encouraged hospitals to earn more user fee income, but that they have also raised costs, especially administrative costs. Nothing, regrettably, can be said with existing data about their impacts on the quality of care.
Institutional Background and Policy Makers’ Concerns The Public Sector As discussed above, during the late 1980s and early to mid-1990s, the first Doi Moi decade, central government spending on hospitals was drastically reduced, limiting further expansion and resulting in falling per-capita hospital bed availability. Provinces became a major financing source for hospitals, drawing on fee and insurance revenues. Meanwhile, the thinking of the time, for example, as stated in the World Bank’s Growing Healthy sector study (World Bank 2001), found that Vietnam had invested too much public money in the hospital sector and was overly reliant on hospitals for treatment, with inpatient admission rates above those for Malaysia and Thailand, but with benefits accruing disproportionately to upper-income strata. Also, many indications pointed to inefficiency in providing services, as well as quality standards that were well below acceptable levels. The government responded to this syndrome of hospital overuse and bypassing commune health centers by enhancing support for preventive and primary care services. Directive No. 06-CT/TW of the