Public hospitals in Vietnam are moving toward the self-financing model in an effort to cut government health expenditure, but some officials fear there can be drawbacks to the movement, as patients may have to bear the financial burden.

Around 160, or 7.6 percent, of all public hospitals in Vietnam are now fully self-sustained financially, which helped lower yearly government spending on healthcare by some VND9 trillion (US$388.5 million) in 2018 compared to three years earlier, said Nguyen Nam Lien, director of the finance and planning department under Vietnam’s Ministry of Health.

Nearly 1,400 more hospitals are now capable of self-supporting 80-90 percent of their operational costs, according to the same source.

Vietnam is among countries with the highest government health expenditure in Asia, spending around six percent of its gross domestic product (GDP) each year on healthcare, according to Le Dinh Thang, chief state auditor of Vietnam.

Vietnam’s GDP in 2018 was estimated at $240.5 billion, according to government data.

“This is an unreasonable spending level,” Thang said.

More than 25,000 redundant employees at 23 hospitals under the health ministry’s management have been cut off from the public payroll as these medical institutions have been under pressure to cover their own costs.

The initiative has also driven the hospitals to push forward with the application of advanced medical techniques such as organ transplantation and early cancer screening to remain competitive professionally.

Some hospitals have taken the opportunity to improve their service by hiring pianists to entertain patients or redecorating rooms with paintings and photos to create a cozy atmosphere, said Pham Van Tac, head of the human resource department under the Ministry of Health.

Self-financing hospitals also enjoy freedom to invest on their equipment and facilities, which encourages the application of modern technology to medical checkups and treatment.

Drawbacks

Despite a growing number of public hospitals going financially self-sustained, the Ministry of Health has yet to release an official guideline and regulations on the do’s and don’ts for those institutions adapting this model.

This has raised officials’ concerns over hospitals abusing their autonomy to charge patients more than they should, Thang said.

Vietnam’s state-run national health insurance program has even threatened to cancel its payments to some hospitals out of concerns about insurance fraud.

Without the health ministry’s regulations, hospitals might buy medical equipment for much more than its original costs, placing a financial burden on patients – who indirectly pay for the equipment with their medical fees.

“This is an issue that requires close monitoring from the health ministry,” Thang said.

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