Adequate funding for healthcare requires inventive solutions

Adequate funding for healthcare requires inventive solutions

Vietnam's healthcare industry is poised for significant reforms, thanks to a strong political commitment and a growing economy. The country's health financing system, which has evolved over the past three decades to include social health insurance, out-of-pocket contributions, and government subsidies, plays a crucial role in protecting people from catastrophic health expenditures and improving access to essential services.

Attila Molnar, the vice chairman of the European Standards Medicines Sector Committee at the European Chamber of Commerce in Vietnam, is a key figure in these efforts. One of the strategies for improving healthcare in Vietnam is the promotion of generic drugs and biosimilars. The aim is to provide free medical examination and treatment services for all citizens in Vietnam.

A core approach to achieving this goal is through the Vietnam Health Care Fund for the Poor (HCFP), which uses government revenues to finance health care for the poor and disadvantaged groups. This initiative has significantly increased service utilization and reduced catastrophic health spending risks among these populations. However, improvements are needed in better targeting to increase equity and efficiency. Strengthening such targeting mechanisms ensures resources are directed to those most in need, reducing inefficiencies from broad subsidies.

Recent legislative reforms in Vietnam also promote greater transparency, autonomy, and accountability for financial management in public enterprises, including health entities. By empowering boards and managers to make investment and operational decisions within clear accountability frameworks, the system can reduce unnecessary administrative burdens and allocate resources more efficiently.

Tax reforms aligned with international standards also play a role in enhancing health financing efficiency by broadening the tax base from emerging sectors and supporting priorities like scientific research and innovation.

To implement these strategies effectively, Vietnam can:

1. Enhance targeting and eligibility verification in health financing schemes like the HCFP to ensure benefits reach the intended poor and vulnerable groups, minimizing leakages.
2. Increase autonomy of health financial institutions and state-owned enterprises responsible for health funding, enabling more flexible and timely decision-making under transparent oversight.
3. Continue modernizing the tax system to diversify and stabilize governmental revenue sources allocated to health, while ensuring alignment with international best practices.
4. Monitor continuously the impact of health financing schemes and adopt data-driven adjustments to policies that improve both equity and cost-effectiveness.

Investment in primary care infrastructure is critical to reduce the burden on hospitals and facilitate early intervention. Guidance on drug registration, incentives for technology transfer initiatives, and intensive healthcare professional training are also advocated for to bring affordable quality medicines to Vietnamese people.

Learning from countries like Thailand and South Korea can provide insights for shaping the next phase of reform in Vietnam's healthcare system. Coordination among stakeholders, including the government, insurers, providers, development partners, and civil society, is essential to achieve a fairer and more sustainable health system. Out-of-pocket spending remains relatively high in Vietnam, placing financial pressure on households and limiting access to necessary services. The Vietnamese government provides subsidies for health insurance premiums for various groups, including the near-poor, vulnerable groups, human trafficking victims, and other eligible groups.

Moving to compulsory health insurance can help reduce fragmentation and ensure cross-financing. Increasing fiscal space for health spending, through earmarked revenues and more efficient use of public spending, is necessary to improve the efficiency of health financing in Vietnam. Mandatory enrolment, especially for workers in the informal sector, can help create large, risk-sharing funds and reduce inequalities.

Today, over 90% of the population in Vietnam has health insurance coverage. These strategies, if implemented effectively, can help Vietnam achieve its goal of providing universal health coverage and improving the health and well-being of its citizens.

1. To further enhance the healthcare system in Vietnam, the country could focus on the development of science and technology by investing in research and innovation, particularly in the field of health-and-wellness.
2. As Vietnam strives to provide free medical examination and treatment services for all citizens, it's crucial to strengthen the science-based approach in the production and distribution of generic drugs and biosimilars, ensuring the best possible health standards for its people.

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