“More Health for Money” in Vietnam: Does Operational Cost or Running Cost of Health Institutions Help Budgeting for More Services and Improve the Health of the population?

Abstract

This paper examines the correlation between cost of health facilities and population at provincial level in Vietnam. A major cause of the services quality and cost problems in health care today is that payment systems encourage volume-driven health care rather than value-driven health care. Under the current Vietnam health care payment systems, physicians, hospitals and other health care providers have strong financial incentives to contain cost, deliver more services to more people but are often financially penalized for providing better services and improving health. Research has shown that more services and higher spending do not result in better outcomes; indeed, they often produce exactly the opposite result. In order to fix the right price and use the right payment system, governments often look at producing costing studies,  such as the cost of running a facility type, cost of services, cost of program and others. All kinds of costing can be adapted based on either the population size, number of patients or complexity of services delivered. This study linked cost (expenditures?) with population and assessed the impact of cost of service delivery, on the practice patterns of providers and its productivities in primary health care mainly at the provincial levels in Vietnam. The results support the notion that costing studies can only be regarded as a start point in considering wider issues of financing health care services and its management. Five provinces have been chosen for piloting their facilities at a primary care level. One of the findings shows that the reported activity levels in the public provider network are low when compared to other countries and international standards. This could reflect both inefficiencies and insufficiencies in the financial management structure of the facilities. Both cases will need to be rectified. If efforts do not lead to acceptable levels of service quantity and quality by population size, the cost of any expended resources would be high. A rectified costing system per capita that links population to providers’ payment at provincial level would provide a better future financing model -  for achieving Universal Health Coverage in Vietnam. Some risk adjustment and reward for health service productivity might be an added value and a viable alternative to current practices.