How have poorer Vietnamese households responded to changes in the health sector following economic reform? How are they coping with the higher costs? Research in Quang Ninh province by the UK Institute of Development Studies and the Hanoi Institute of Health Strategy and Policy shows that the ‘willingness’ of the poor to pay for healthcare does not mean that they are ‘able’ to pay.

The Vietnamese Ministry of Health introduced major reforms to the health sector in 1989. They brought in fees for services and drugs in the public system, while preventative services and treatment under national programmes remain free. They legalised private medical practice and the retail sale of drugs, which have become widespread. What impact have these changes had at the household level?

Looking at 1 167 episodes of illness among nearly 3 000 people in four rural communities, the researchers found that:

• Home remedies were by far the cheapest healthcare option, followed by drug purchases, commune public consultations, private consultations and public hospital treatment.
• Two thirds of average healthcare spending by poor households was on relatively cheap but frequent acts of local ambulatory care.
• Poor households delayed and minimised healthcare seeking, especially of expensive hospital services. But as illnesses became more serious, poor households had less leeway to choose cheaper options.
• A hospital admission can be a catastrophic economic event for a household. The poor may do without inpatient treatment because of the expense.
• The poor had fewer healthcare consultations and spent less on health care then the non-poor. Nevertheless, for households reporting illness, the average proportion of income devoted to health care was 21.9 per cent for the poor compared with 8.2 per cent for the non-poor.
• Poor households’ expenditure on health decreased by nearly half in the lean season compared with the plentiful season.
• To meet healthcare costs, many poor households incurred debt, sold assets, reduced essential consumption or withdrew children from school, threatening their future livelihood.

This research shows that user fees are unlikely to raise much finance without deterring necessary healthcare use by the poor. The researchers advise that, in the short term, the poor need exemption from public sector user fees in both primary and hospital care. But exemption systems are difficult to administer and fraught with problems, including identifying the eligible poor. The government’s health strategy for the years 2001-2010 recognises the need for both fee exemptions and the gradual replacement of direct charges by health insurance. At the moment, social assistance and fee exemptions are not well targeted at those most in need. There is no clear exemption policy for the cost of commune health services, which is an important source of care for the poor.

The researchers calculate that providing poor households with essential drugs free of charge at commune health stations would add some 15 per cent to the public subsidy. This could be financed from poverty alleviation funds, commune revenue or the provincial health budget. In the longer run, they recommend that the government budget and prepayment schemes for rural areas should replace direct user charges in healthcare finance.

All countries undergoing transition from a socialist to market economy have had similar healthcare experiences. The researchers conclude that such countries should preserve the public health services built up under the planned economy. Market reforms that stimulate growth in the economy appear inappropriate for reform of social sectors.

Source(s):
‘Economic transition should come with a health warning: the case of Vietnam’, Journal of Epidemiology and Community Health 56 (7): 497-505, by M. Segall, G. Tipping, H. Lucas, T.V. Dung et al., 2002

Funded by: European Commission; UK Department for International Development

id21 Research Highlight: 29 October 2003

Further Information:
Malcolm Segall
Institute of Development Studies
University of Sussex
Brighton BN1 9RE

Tel: +44 (0)1273 678450
Fax: +44 (0)1273 621202
Contact the contributor: m.segall@ids.ac.uk

Institute of Development Studies (IDS), UK

Other related links:
'User-friendly healthcare? Public health services in Vietnam after economic reform' >

'Health costs – economic reform places burden on Vietnamese poor' >

'Softening the blow – does health insurance reduce costs for Vietnam’s poor?' >

'Any volunteers? Extending voluntary health insurance in Vietnam' >

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