An assessment of the implementation of the Health Care Funds for the Poor policy in rural Vietnam

Abstract

User fees at public health care facilities and out-of-pocket payments for health care services are major health financing problems in Vietnam. In 2002, the Government launched the Health Care Funds for the Poor (HCFP) policy which offered free public health care services to help the poor access public health services and reduce their health care expenditure (HCE). This paper is an assessment of the implementation of the HCFP in a rural district of Vietnam. The impacts of HCFP on household HCE as a percentage of total expenditure and health care utilization were assessed by a double-difference propensity score matching method using panel data of 10,711 households in 2001, 2003, 2005 and 2007. The results showed that the HCFP significantly reduced the HCE as a percentage of total expenditure and increased the use of the local public health care among the poor. However, the impacts of HCFP on the use of the higher levels of public health care and the use of go-to-pharmacies were not significant. In conclusion, this assessment indicates that the HCFP has met its objectives by reducing HCE for the poor and increasing their use of the local public health care services. However, further efforts are needed to help them access higher levels of public health care. Pharmacists should be better regulated and incorporated with primary health care to improve efficiency of the system.

Introduction

The “medical poverty trap” resulting from catastrophic health expenditure has been observed in many developing countries where out-of-pocket payments are common in health care financing. Vietnam is no exception [1], [2]. According to the World Health Report 2005, the Vietnamese budget for public health care, including the central, provincial and communal budgets, was USD 7 per capita per year in 2002 (about 1.5% of GDP) [3], [4]. Out-of-pocket payments accounted for 87.6% of private expenditure on health, which amounts to USD 16 per capita per year in 2002. The out-of-pocket payments include formal and informal user fees for public services, payments for professional private services, self-medication and pharmaceuticals. The introduction of formal user fees has generated additional income for the public health sector (USD 0.40 per capita per year in 2001 equal to 7%) [5]. Fees are therefore likely to place a financial burden on some poor and near-poor households. The impact of this can be seen in the change in the utilization of many public health facilities over time. The poor use high quality public health facilities less and access poorer quality health services. The opposite is true for those with the ability to pay for the services. For example, 36% of public hospital users belonged to the richest quintile, compared to just 8% from the poorest quintile. Additionally, 20% of commune health station users were from the poorest quintile, compared to 7% from the richest quintile [4]. This indicates that transferring part of the burden of financing directly to the population through user charges for services could undermine equitable access to health care. This could potentially lead to poverty because of the catastrophic proportion of household expenditure being spent on health care, which, in some cases or due to permanent disability, is followed by decreased income as a result of the inaccessibility of treatments. A recent cross-sectional participatory poverty assessment in Vietnam [6] identified the economic shock of ill health as the most common cause of household poverty. Around 3 million people are driven into poverty each year as a result of meeting catastrophic health care payments—a 4% rise in the poverty headcount from 1993 and 3.4% rise from 1998 [7].

To overcome the major barrier to accessing public hospitals that user fees pose to the uninsured, and especially to facilitate access for the uninsured poor, in 2002 the Prime Minister of Vietnam issued Decision 139, which established the Health Care Funds for the Poor (HCFP) policy in each province [8], [9], [10]. These funds allocate VND 70,000 (USD 4.7) per beneficiary per year. Seventy-five percent of this fund is covered by the central budget and the rest covered by other sources, such as individual and community contributions. Provinces can allocate HCFP resources to the direct reimbursement of health care costs, or to the purchase of health insurance cards. The beneficiaries include poor households and all households belonging to the 135 areas (the poor and difficult areas classified by Decision 135) [11]. The process of selection of beneficiaries involves identification of those eligible at the village, hamlet, and commune level. Lists of eligible households are consolidated and sent to the provincial level for final selection. By 2003, there were 11 million HCFP beneficiaries (∼14% of Vietnamese population), representing 84% of the target population [12]. Out of this group, one-third had been granted health insurance cards and two-thirds had been entitled to direct reimbursements of health care costs.

There are two recent studies evaluating some aspects of the HCFP using data from the Vietnam Household Living Standard Surveys (VHLSS) [13], [14]. Wagstaff [13] used the 2004 VHLSS and did a cross-sectional study. The impact of HCFP was estimated by comparing the out-of-pocket payments and health care utilizations between those covered by the reform and comparable individuals not covered, by means of a single-difference propensity score matching. Axelson et al. [14] used 2002 and 2004 VHLSS and did both cross-sectional and panel analyses using both single- and double-difference propensity score matching methods.

Wagstaff found a mixed result. The positive consequence was that the reform increased the utilization of health care and reduced the risk of catastrophic out-of-pocket spending. On the other hand, the average out-of-pocket spending did not change. Further, the utilization impact was more pronounced for inpatient care than outpatient care, and the impact was larger among the better off. The main message in Axelson et al.’s study was that the reform achieved its objectives of increased public health care utilization and reduction of the out-of-pocket spending in the target population.

Both the studies focused on a short-term impact of HCFP and neither included the health care expenditure (HCE) as a percentage of total expenditure, which could make more sense than the absolute amount of HCE for an over-time comparison, especially in a developing economy with high inflation such as Vietnam.

To fill these gaps we assessed the long term impacts of the HCFP by using panel data in 2001, 2003, 2005 and 2007. We used HCE as a percentage of total expenditure instead of an absolute amount of HCE to measure impacts of HCFP on the out-of-pocket payments.

Considering both the objectives of the HCFP and the results known so far, we hypothesize and expect the following consequences:

• The HCE as a percentage of total expenditure has decreased among the poor.

• The numbers of use of public health care have increased among the poor.

• The numbers of use of private health care have decreased among the poor.