By 2011, 97 percent of the poor in Vietnam had been enrolled in Social Health Insurance (SHI).
High rates of enrolment into SHI have not translated into effective coverage for the poor,
however. The fragmentation of funding across different groups has serious negative implications
for risk pooling and equity. The poor are subsidizing the rich, and poorer provinces are
subsidizing richer provinces. Out-of-pocket (OOP) payments are high and persistent, resulting in
limited financial protection for the poor. Meanwhile, government subsidies for health are not
sufficiently reaching the poor. Hospital subsidies, in particular, tend to favor the rich,
exacerbating existing inequalities.
This case study is aimed at providing a descriptive assessment of the key features of Vietnam’s
SHI, focusing on the impediments to integrating the poor into universal coverage. The trajectory
of SHI in Vietnam is similar to that of many other countries in the East Asia and Pacific region.
The poor were covered under a separate Health Care Fund for the Poor to begin with. The 2009
Law on Health Insurance merged all of the different programs into one. Health insurance
premiums for the poor were fully subsidized by the government and enrolment became
mandatory, resulting in almost complete enrolment of the poor by 2011. Vietnam has combined
elements of contributory social health insurance with substantial levels of tax financing to
provide coverage for the poor and informal sector.
In principle, Vietnam now has a single-payer insurance system, with a single pool and unified
benefits package. In practice, the capitation-based resource allocation mechanism for primary
care has exacerbated already high levels of fragmentation of revenues and risk pools. Capitation
rates are determined on the basis of historic and province- and group-specific utilization rates.
Poorer groups and provinces tend to face greater barriers to access, have lower utilization rates
and, consequently, lower capitation rates. Because the poor tend to have lower capitation rates,
health facilities are more likely to underprovide to this group, perpetuating the cycle of lower
utilization and capitation rates.
This fragmentation of risk pools combined with high OOP payments, and weak cost containment
more generally have been detrimental to equity in access and financial protection for the poor.
The increase in enrolment rates has not been accompanied by any significant reduction in rates
of catastrophic spending or OOP-related impoverishment among the poor. Fee-for-service
payment, hospital autonomy, and resource allocation and payment methods have created strong
incentives for providers to oversupply services, making it difficult to contain costs and stem the
growth of OOP payments. The wide prevalence of balance billing, although not permitted, and of
informal payments, further contributes to this.
Public hospital subsidies fail to reach the poor because a disproportionately large share is
allocated to secondary and tertiary hospitals that the poor have limited access to. The expansion
of insurance coverage and increased use of public hospitals by the poor has led to a slight
improvement in the distribution of public subsidies. Nevertheless, the fact that the distribution of
nonhospital services—largely commune health stations—is pro-poor, while that of hospital
services is pro-rich, suggests that the poor have limited access to hospital services. The poor face
significant financial barriers in accessing hospital services because of the high OOP costs.