1 MINISTRY OF MINISTRY OF HEALTH HEALTH PLANNING AND PLANNING AND FINANCING FINANCING DEPARTMENT DEPARTMENT Report on STUDY ON CURRENT SITUATION ASSESSMENT AND RECOMMENDED SOLUTION TO STRENGTHENING PUBLIC PRIVATE PARTNERSHIP IN VIETNAM HEALTH SECTOR

Ha Noi, 12/2010 Ha Noi, 12/2010 i

TABLE OF CONTENTS I. BACKGROUND...... 1 II. OBJECTIVES...... 3 2.1. General objectives...... 3 2.2. Specific objectives...... 3 III. STUDY SUBJECT, SITE AND METHODOLOGY...... 3 3.1. Study subject...... 3 3.2. Study site and scope...... 3 3.3. Study methodology...... 5 3.3.1. Study design...... 5 3.3.2. Desk study...... 5 3.3.3. Expert workshop...... 5 3.3.4. Field study...... 5 3.3.5. Study contents...... 7 3.3.6. Duration of the study...... 8 3.3.7. Data analysis...... 8 IV. FINDINGS...... 9 4.1. Overview of international literature on public private partnership...... 9 4.1.1. Definition of PPP...... 9 4.1.2. PPP theory in health...... 10 4.1.3. Policy instrument in promoting PPP...... 11 4.1.4. Selected public-private partnership models in the world and lessons learnt for Vietnam.12 4.2. Analysis of policy documents related to PPP in health care in Vietnam...... 19 4.2.1. PPP in health through legistive documents on ‘social mobilization’ in health care...... 19 4.2.2. Policies to widen the participation of the private health sector in the health system...... 20 4.2.3. Various forms of public-private partnership in health care and legislation on the autonomy of public health services...... 22 4.3. PPP models/approaches in health care in Vietnam...... 23 4.3.1. PPP in delivery of medical services...... 23 4.3.2. PPP in preventive medicine...... 47 4.2. PPP potentials in health sector...... 51 V. DISCUSSION...... 55 5.1. The models of public private partnership in Vietnam...... 59 5.2. PPP potentials in Vietnam...... 60 5.3. Limitations of the study...... 62 VI. CONCLUSION AND RECOMMENDATIONS:...... 63 6.1. Conclusion:...... 63 6.2. Recommendations:...... 63 REFERRENCENT ……...... 65 ANEX……………………………………………………………………………………… 67 ii

LIST OF TABLE

Table 1. Difference in outpatient visits and inpatient sessions in 2006* from 2009 in the hospitals...... 24 Table 2. Difference in selected hospital operational measurements between 2009 and 2006* ...... 25 Table 3. Revenue of public hospitals by year, 2006-2009...... 25 Table 4. Private hospitals and patient beds by region...... 29 Table 5. Number and distribution of private health providers in reviewed areas, 2009...... 29 Table 6. Bed distribution and occupancy at reviewed hospitals, 2009...... 30 Table 7. Health insurance cards registered at public and private health providers, 2009...... 33 Table 8. Distribution of health insurance cards registered at public and private health providers by province/city, 2009...... 34 Table 9. Number and composition of HI-based medical services provided by the private sector, 2009...... 35 Table 10. Total HI-based revenue by year at private hospitals...... 36 Table 11. Comparison of average inpatient and outpatient costs for HI-based medical services by province/city, 2009...... 37 iii

LIST OF FIGURES

Figure 1 : Study site...... 4 Figure 2. PPP theory in health...... 10 Figure 3. Composition of hospital income, 2006...... 26 Figure 4. Composition of hospital income, 2009...... 26 Figure 5. Distribution of patients in private hospitals, 2009...... 31 Figure 6. Distribution of inpatients and outpatients, 2009...... 32 Figure 7. Proportions in the income of private hospitals/clinics, 2009...... 37 1

I. BACKGROUND Vietnam health system has shifted from a purely public to a public-private mix one since private health practice was officialy recognized in 1989 and then legalized after the enforcement of the Ordinance on Private Pharmaceutical and Medical practice in 1993. Since then the private sector has rapidly developed, become an important component of the national health system and played an important role in health care for people especially in outpatient care (providing more than 60% of outpatient services)[6]1. The existence and popularity of private sector has been nationwide in recognition with more than 65,000 private health facilities counted by the year 2009. Of which there is about 30,000 medical private facilities with running 93 hospitals[1] 2. In 2003, Standing Committee of Vietnam National Assembly promulgated the New Ordinance on Private Pharmaceutical and Medical practice replacing the 1993 Ordinance in order to better adjust new development of private sector. In addition, the development of private sector has been pushing up since Vietnam officially became a member of World Trade Organization. In the Resolution No 46-NQ/TW dated 23/2/2005 of Politbureau on " Protection, caring and promotion of people health in the new period" has confirmed that "The legalized pharmaceutical and medical private facilities are components of health system. The government facilitate procedures for investment, taxation, land etc... to encourage development of these facilities". With this opportunity it is promising that the private sector would play crucial role in enhancing the service provision capacity of Vietnam health care system to better meet the greater and greater demand of people, and in promoting its competition with public sector to increase people's accessibility to health care services. In the world, public private partnership (PPP) has been developted widely both developed and developing countries in different sectors such as construction, transportation, education, health… with different models that are appropriate with various contexts of each country. International literature provided quite comprehensive analysis on strength and benefit of a good PPP such as: i) Improving provision of health services; ii) Increase in cost-effectiveness of investment; iii) More resources for public infrastructure investment; iv) Reduce risks for government side since these risks 1 Điều tra Y tế Quốc gia, Việt Nam 2001-2002 2 Báo cáo của Cục Quản lý Khám chữa bệnh tại Hội nghị giao ban bệnh viện tư nhân toàn quốc năm 2009, TP Huế 9/2009 2 has been shifted to private partner for better risk management; v) Improving government budget; vi) Better use of capital fund and infrastructure. In Vietnam, although the issue of PPP has been addressed quite early in policy document but it still lacks of factors in terms of legislation, theoretical and practical evidences to establish effective PPP to meet objectives of people's healthcare. While there are fairly clear and comprehensive legal frame for health service in public and private sector separately it lacks of specific legal document regulating public-private partnership in healthcare sector. In annual health sector report, information and data on private health sector usually very limited. Private health practices are often managed separately from public health ones. The recent approval of the Law on examination and treatment which provide a common rules for management of both public and private sector in the area of providing curative care has been a significant progress in governance of health services. Up to now there has been several studies on private health sector, however most of them focused on describing its current status but not providing analysis its relationship with public health sector, especially PPP models. The previous assessment on the private sector using data from National Health Survey in 2002 mainly focused on the actual situation description of private sector in terms of scope, types, running mode, service quality and price in general. The recent study on situation, role and potential of private health sector carried out by Health Policy Unit, Ministry of Health provided the information on the patient's satisfactory towards private facilities. Responding to that fact, this study is conducted to meet the need for assessing the current situation of private health services in relation with public health sector, exploring patterns of PPP in the area of provision of curative care, providing recommendations in order to strengthen PPP in healthcare care area. 3

II. OBJECTIVES

II.1. General objectives To promote role and potentiality of private health sector so that it can well collaborate with public health sector to resolve health problems aiming at equity, efficiency and development .

II.2. Specific objectives 1) To explore pattern/model of PPP in the area of health sector and lessons learnt from international perspective 2) To review and analyze legal document related to private health services and PPP in the area of health sector 3) To explore patterns/models of PPP in the area of health sector and to analyze strength and weakness of each pattern in terms of equity and efficiency 4) To analyze potentiality and conditions to establish good PPP in the area of curative care and preventive care 5) To propose solutions to strengthen PPP in healthcare

III. STUDY SUBJECT, SITE AND METHODOLOGY

III.1. Study subject The study focuses on the following subjects: - Representatives from health administration at central and province levels - Representatives of Social Security at central and province levels - Representatives of private health facilities . - Representatives of public health facilities - People in community

III.2. Study site and scope This study will focuses on role and partnership between public and private partners in areas of curative and preventive care. The study will consist of desk study and field study:

- Collect and analyze available data on private health services in the whole country from 2006-present; - Field work was carried out in Thai Binh, Hanoi, Hue and Ho Chi Minh city. Selection of these provinces/cities based on the following reasons: (1) in these 4 4

provinces/cities private health services develop most strongly in the nationwide; (2) these provinces are selected from different areas of the country including the North, the Central and the South. - The aim of the field study is to supplement and fill the gaps in secondary data analysis, especially about relationship between private health sector and public health sector as well as PPP in the area of health sector. In each province, the study was investigated 1 private general hospitals, 1 public general hospitals (province general hospital), 1 district hospital, 1 private polyclinics and 1 commune health station and 2 private clinics (1 part time clinic and 1 full time clinic). However, in fact, we only investigated in these sites as the Figure 1 because we have met some dificulties in accessing to some part time and full time clinics.

Hà Nội At the city .Saint Paul hospital Ha Noi •Thanh nhàn hospital •Sơn Tây hospital At district level: •Thường Tín hospital Private hospital: •Tràng An hos. •Hồng Ngọc hos.

Huế At province level: Hồ Chí Minh •Traditional Medicine At the city: hospital • Choray hospital At district level: At district level: •Hue Health Care Central • Thuduc hospital Private sector: Private hospital: Hồ Chí Minh •Hoàng Viết Thắng •An Sinh hospital general hospital •Phước An hospital

Figure 1 : Study site 5

III.3. Study methodology III.3.1. Study design A cross-sectional study will be used in this study with combination of quantitative and qualitative methods

III.3.2. Desk study - Literrature review of PPP in health care from international and national perspective - Collect and analyze available data and information on private health services at nationwide from 2005-present. - PPP pattern/model in Vietnam - Conduct a regulatory analysis of legal document related to private health services and PPP in the area of curative and priventive care.

III.3.3. Expert workshop The expert workshop was held on at the central level. There were about 20 persons, representatives of MoH (Medical Service Addministration, Department of Legistration), experts in area of health management, experienced researchers in the area of health system research, representative of Private Practitioner Association were invited to a technical workshop to explore their opinions on PPP models, potential areas for PPP in healthcare, issues related to government management in this area, measures to strenthen PPP in health care. III.3.4. Field study . Data collection form: At province level, 03 forms will be designed to collect figures and information on socio-economic, health system including public and private facilities (number, classification, patient volume) and health insurance.

. Questionnaire for facility survey: In each health facility selected either public or private one, a questionnaire will be used to collect information on professional activities, infrastructure and investment, manpower, health service provided... in the health facilities.

. Indepth interview: will be conducted with the following key informant:

- MOH: Representatives from related Departments such as : Health Planning and Financing Dept, Administration of Curative care, Health Insurance Dept., Administration of Preventive care, Dept. of Science and Training, Dept. of Organization 6

and Personnel…In order to explore their opinions and perception on potentiality and condition for strenthening public-private partnership in health sector - Health Service Bureau : Leader of Health Service Bureau and health officer in charge of management of medical practice including private facilities in order to investigate their assessment on current situation of private health services, management and supervision, models of public-private collaboration in the area of healthcare, strength and weakness of each model. - Provincial Preventive Medicine: To investigate on private participation into preventive activities: what activities, strength and weakness, potentiality to expand their involvement, issues related to government managemen. - Representative of provincial social security: In order to explore his/her perception on role of private health sector on provision of health service to the insured patients? assessment on quality and price of provided services? Suggestions to expand the participation of private health providers in provision of health service to the insured patients - Representative of Provincial Preventive Center: To get information about private involvement in preventive activities: how to be involved, what are strength and weakness, potential participation of private sector in the area of preventive medicine, issues related to governance/management - Representative of private health facilities: To get information about their collaboration with public health facilities in terms of curative care, preventive care, non-health service... To explore their perception on potentiality and condition to establish a good PPP in the area of healthcare and recommendations to strengthen PPP in provision of health services

Representative of public health facilities: To get information about their collaboration with private health facilities. To explore their perception on potentiality and condition to establish a good PPP in the area of healthcare and recommendations to strengthen PPP in provision of health services . Focus Group Disscussion Representative of stakeholders related in the provision of curative care at the provincial level: including representative of Health Service Bureau, Social Security, public hospital, private hospital, private polyclinics, private clinics… The aim of FGD 7 is to get information about role, function and relationship between public and private in provision of curative care well as constraints and difficulties concerning with this issue, potentiality and condition to have good public private partnership. Representative of stakeholders related in the provision of preventive care at the district level: including representative of district preventive center, district health center, district health department, commune health station, polyclinics, private clinic and people at the community. The aim of FGD is to get information about role, function and relationship between public and private in provision of preventive care, IEC activities, rehabilitation... as well as constraints and difficulties concerning with this issue; potentiality and condition to have good public private partnership. People in community: To explore their assessment on role of private health sector in provision of health service in community, their satisfaction with services provided by private and public sector, potentiality to collaborate between public and private sector in the area of curative care .

III.3.5. Study contents Review of international literature on concept and framework to assess PPP in the provision of health services as well as experiences from other countries concerning with this issue. Review of literature on current PPP in Vietnam Regulatory analysis of legal documents related to private health services and PPP in the provision of health services Description of curent patterns of PPP in the area of health sector including: curative care and preventive care. Possible PPPs are as below: - PPP in providing curative health services (delivering services for health insurance patients, referral, technical support...) - PPP in providing preventive health services (vaccination, diagnose new cases of diseases under National Health Program, hygiene and enviroment…) - PPP in the area of manpower (training, labor contract) - PPP in financing health service (joint-venture project on medical equipment) 8

- PPP in the area of health management information (developing soft ware for hospital management, reporting routine health information…) - Contract on providing non-health services (catering, laundry, security…) Analysis of strength and weakness of each pattern in terms of equity and efficiency - Quality of service - Accessibility and utilization of services by groups of living condition in the community - Price of service - Goverment management of service List of potential areas for PPP Conditions for establishing good PPP in health care Recommendations to develop private health services and strengthen public private collaboration in provision of health services

III.3.6. Duration of the study This study was conducted from 5/2010 to 12/2010 III.3.7. Data analysis All data collected using forms from No 1 to No 4 will be analysed by Excel. Transcription of recorded in-depth interview and focus group discussion will be coded and charted following developed themes. 9

IV. FINDINGS

IV.1. Overview of international literature on public private partnership IV.1.1. Definition of PPP While the public-private partnership term has been widely used in various lines of work such as construction, transport and civil engineering, education, health care, the definition remains controversial. There are some definitions as the following below:

The World Health Organization released a general definition in 1999: “PPP is the gathering of different partners for the purposes of public health improvement based on agreed roles and responsibilities of the parties” (WHO, 1999)[28].3 In 2003, a PPP definition was provided by the United Nations Development Program (UNDP) with more details as: “PPP is a partnering and voluntary relation between various parties including public and private players where the parties agree to work together to achieve a mutual goal or fulfill a specific task, to share risks, responsibilities, resources, capacity and interests."[29]4 Another definition was introduced in a world economic forum: “PPP is but a form of contract engagement that requires obligatory compliance, mutual accountability, free will or contractual relationships, sharing of resources, risks and mutual responsibilities in design and management”[24]5 (World Economic Forum 2005). In health care, Jutting defines that a public-private partnership is a relationship established between the public and private sectors, including both not-for-profit and for-profit private actors, where the public and private partners share specific goals, methodology and work to achieve mutual agreements[24]. According to Güntert[19]6, the public-private partnership concept includes: i) removal of financial and legal boundaries between the public and private sectors; ii) creation of a new playground to ensure provision of health services and health sector modernization; iii) utilization of financial and human resources from the private sector; and iv) basing on long-term agreements. In a nut shell, while there may be a number of ways to define public-private partnership, James Warner Bjorkman confines the concept to the following three key components: (1) relative equality between the partners; (2) bilateral commitment to achieve the mutually set targets; and (3) bilateral interest of the involved parties. For

3World Health Organization. 1999. Who Guidelines on Collaboration and Partnership with Commercial Enteprise. Geneva: World Health Organization. 4 Alexander S. Preker and April Harding (2003). Innovations in Health Service: Delivery The Corporatization of Public Hospitals 5 World Economic Forun 2005 6 Güntert, B. J. Public Private Collaboration in the Healthcare Sector: Definitions and Overview 10 these components to be materialized, an agreement should be agreed upon and entered into by the parties (James Warner Bjorkman 2008)[23]7. IV.1.2. PPP theory in health First, to understand what is a public-private partnership, a clear definition of public and private health providers should be provided. + The public system consists of agencies and entities receiving financial resources from the state budget and performing their roles relying on the state coffers. These entities include governmental agencies, line ministries, provincial, district administrative units, civil societies, schools and research entities, and so on, all under the auspices of the government. + The private system consists of entities and individuals not operating directly under the control of the government, including for-profit and not-for-profit entities and individuals. For-profit entities and individuals may be private companies and businesses and not-for-profit entities and individuals may include NGOs, philanthropy and humanitarian organizations. Whether it is for-profit or not-for-profit public or private entities, the common goal is to achieve effectiveness in public health care, fair and efficiency distribution of resources and ensuring provision of quality public health services. To this end, Harding and Peker in 2005 introduced a theoretical diagram of PPP in health care (Figure 2)[20].

Figure 2. PPP theory in health Source: April Harding and Preker, 2005

7 James Warner Bjorkman (2008). PPPs in health care services of less developed countries. IPSA Conference. Concordia, Quebec, Canada 11

The above diagram puts forward three key strategies: i) leveraging existing resources (harnessing) – capitalizing the advantages of the private health sector in local/regional health service provision; ii) developing the private health system (grow) – promoting the private health sector to expand service categories, clientele, locations where they continue to provide services to the health system and programs; and iii) conversion – the transition of public health to private health provision in the hope of improving access, efficiency and quality. IV.1.3. Policy instrument in promoting PPP To expedite the above mentioned three strategies, Harding and Peker also discussed key policy tools to be used for public-private partnership. + Legislative documents: to improve quality and access, clinical technology and skills; distribute resources efficiently; reduce wastes and combat corruption; legislative documents include fee levels, extent and scale of coverage, conditions and quality of health services, business licensing, human resources quality and norms, accreditation, service use. + Signing agreement: This is considered as a common and most effective tool among different PPP instrument. There are two types of agreements: i) Contracting out: the government outsources the private sector provision of health services and the later making use of its entire human and financial resources; ii) Contracting in: the government may hire outside managers to work in state-owned health services to administer and run hospitals or hire private providers for such services as facility sanitation, security, laundry etc. + Social marketing: use of social marketing principles to influence human behaviors for health and social benefits; an interactive relation exists between social marketing and PPP and conversely. Behavior change through social marketing is vital to achieving the set targets. + Social franchising: This is a standard business model designed for the development of a widespread system/network while maintaining the control and quality standards of the franchising entity. The government may sign a service procurement agreement with the private sector (service providers/outlets network or agents). In the hospital system, franchising may mean that the government signs an agreement with a private firm for the management of a public hospital. + Vouchers: the government has expanded demand for priority health services by subsidizing procurement of health services through such instrument as vouchers. Vouchers are provided to target recipients to increase the efficiency of priority health services. 12

IV.1.4. Selected public-private partnership models in the world and lessons learnt for Vietnam International experience in PPP for provision of medical services In recent decades, governments have been facing financial difficulty where health expenditure escalates beyond the ability of the state budget to cover and public-private partnership is considered as a strong policy tool to leverage resources, control costs and improve health services quality. International success stories in PPP speak for themselves about the practical benefits of public-private partnership. However, policy makers need to be careful as to what is the best option to choose and how to tailor the policy framework to the specific conditions of each country to achieve service access equity, quality and increased efficiency[27].8 Public-private partnership takes place in very different contexts in developed and developing countries. In developed countries, while the trend of public services privatization started in the 1980s, the proposal for entire privatization of the health sector was not accepted given the market failure in health care. Instead, various approaches where the roles of service buyers and providers in the public sector are separated and service provision is shifted to the private sector. These approaches are viewed as a way to improve productivity, creativity and responsiveness to health service users. Normally, the public system is considered as having lower efficiency and responsiveness than the private sector[26].9 In developing countries, the private health sector has been increasingly developed and played a major role in health service provision (accounting for 70-80% of total private health expenditure in India, Pakistan and Bangladesh)[24]10. Public health care becomes less effective with poor physical facilities and equipment, unable to meet the health care needs of the public. Leveraging resources from the private sector is instrumental. There have been different PPPs in health care provision in the world, such as: [26]: + Franchising Public authority contracts a private company to manage existing hospital + DBFO (design, build, finance, operate) : Private consortium designs facilities based on public authority’s specified requirements, builds the facility, finances the capital cost and operates their facilities

8 Rob Taylor and Simon Blair, PUBLIC HOSPITALS OPTIONS FOR REFORM THROUGH PUBLIC- PRIVATE PARTNERSHIPS, 2002 9 Martin McKee, Nigel Edwards, & Rifat Atun, Public–private partnerships for hospitals. Bulletin of the World Health Organization, November 2006; 84 (11) 10 Johannes Jütting (1999). Public-private-partnership and social protection in developing countries: the case of the health sector. The extension of social protection. Geneva Switzerland 13

+ BOO (build, own, operate) Public authority purchases services for fixed period (say 30 years) after which ownership remains with private provider + BOOT (build, own, operate, transfer): Public authority purchases services for fixed period after which ownership reverts to public authority fixed period after which ownership reverts to public authority + BOLB (buy, own, lease back): Private contractor builds hospital; facility is leased back and managed by public authority + Alzira model: Private contractor builds and operates hospital, with contract to provide care for a defined population + Private management of public hospita: Private sector manages public hospital under contract with government or public insurance and provides clinical and nonclinical services. May employ all staff. May also be responsible for new capital investment, depending on terms of contract. + Colocation of private wing within or beside public hospital: private sector may provide only accommodation services or clinical services as well, public sector contracts with private wing for sharing joint costs, staff and equipment. + Outsourcing clinical/special/non-clinical support services: Private sector provides: clinical support services such as radiology and laboratory; specialized clinical services (such as lithotripsy) or routine procedures (cataract removal); cleaning, catering, laundry, security, building maintenance) and employs staff for these services. In preventive care, there have been some PPPs model such as: social marketing, social fanchising, vouchers… Public-private partnership generates substantial benefits in public health care, especially in low and middle income countries, including: i) less public health care costs using state budget; ii) more efficient operation of health providers owing to better management; iii) improved and upgraded quality of care thanks to technical transfer. Nevertheless, the combination between two types of entities with different missions (one for profit and the other for social security) poses a great challenge to policy makers and managers of public health. Public-private partnership in addition to enormous benefits, comes with inherent risks, being: i) the concentration of the private sector providers in highly-profitable health services, which may threaten to break the integrity and unity of the health system; ii) despite reduced state budget spending, the entire burden of health care costs and out-of-pocket health expenses may increase from the additional spending to make up for the profit of investors and abuse of health services[4].11

11 Cường, Lê Quang, PPP in health care: benefits and risks, Health Policies Journal, 2010. 14

There may be a large variety of PPP models in the world but choosing what PPP model/approach depends on the specific conditions, context and existing legal framework of a country for the purposes of ensuring provision of health services to the public with the best quality, equity and efficiency. We will discuss below some of the successful stories about PPP in the world. In Australia, the federal and state governments have adopted PPP in more than 50 public hospitals through different models, but mostly in the form of the private health sector and public hospital operating in the same location (private wings) which is the case for 30 hospitals. Typical examples of PPP in Australia include Mildura Hospital which has been quite a PPP success story and received an award for effective operation in 1999. The government chose to sign an agreement with a private contractor for the design and management of an used-to-be, 153-bed public hospital for a period of 15 years. The public hospital was closed down and its entire staff was transferred to the new hospital. The managers of the hospital are required to provide appropriate and completely free-of-charge services to clients. The government provides annual budget to the hospital based on the anticipated number of patients plus support funding for training. Such quality assurance measures as independent quality control, monthly reporting on clinical performance, patient record review, awards and penalties are all stated in the agreement. The hospital achieved impressive results after one year in operation. Fixed costs reduced by 20% compared to the public hospital system and the hospital was able to provide services at lower expenses than the government’s hospitals. In addition, all operational categories achieved their targets as the client base increased by 30% in the first year and the hospital reported making profit[27].12 In Sweden, the autonomous government of Stockholm City leased a 240-bed public hospital to a private partner in 1999 and adopted a variety of hospital reform policies with the purpose of increasing competition, quality and lowering costs. The municipal autonomous government transferred the risk-based costs to the private partner through financial terms clearly indicating fee levels and services. The costs are viewed in perspective with operational standards of the private hospital under competition pressure with other public hospitals. As a result, the hospital reduced 30% of the costs and can now provide treatment to more than 100,000 patients with similar resources[21].13 In the UK, the Private Finance Initiative (PFI) which is in nature a DBFO (design-build-finance-operate) undertaking, is the main approach adopted in investing in major health projects in the last two decades[26].14 In these projects, a private firm (often the contractor) would sign a contract with the government for developing the 12 Rob Taylor and Simon Blair, PUBLIC HOSPITALS OPTIONS FOR REFORM THROUGH PUBLIC- PRIVATE PARTNERSHIPS, 2002 13 Hjertqvist, Johan. 2000. “Swedish Health-Care Reform:From Public Monopolies to Market Services.” Paper pre-sented at conference on the Future of Health Care in Quebec, Montreal Economic Institute, Montreal, Canada,18 October. 15 hospital and providing non-clinical services for usually a period of 15-25 years. For the entire length of this period, every year, the government would set aside a specific amount from the hospital revenue to pay the company which is in turn responsible for maintaining and possibly managing the hospital (depending on the agreement). This model is also applied in Canada, Portugal, Spain, Ireland. In Chile, the government works with philanthropy societies in innovating management of public hospitals and introducing autonomy in service provision. The partnership is established in the form of the government and a private not-for-profit organization contributing capital, sharing management and operational responsibilities. Reviews have indicated improved efficiency in service provision. In the two former Soviet Middle Asian countries of Kazakhstan and Kyrgystan, a nearly similar model as in Chile has been used where the government works with private not-for-profit entities. Initial evaluations reveal multiple positive results whereas limitations of the traditional hospital management approach are mitigated when it is changed to a more open-minded, flexible and need-based system. In Singapore, the public hospital system has been reformed toward the formation of companies. The key purpose of the process is to make hospitals more effective and compete more with the private counterparts while maintaining the commitment of servicing those without the means to access other health resources. In this way, the hospital sector could increase revenue and thus reduce subsidies from the state budget and health insurance. Singapore General Hospital, the largest and most advanced hospital in the country, was chosen for trial and later turned out a fruitful outcome of the privatizing process, followed by extension of the process to other relevant hospitals by the government. Evidence of some negative impacts in the reform process of turning hospitals into companies however exists[13].15 First of which is the increase in overheads by 5-10%. On the other hand, besides technological development, expansion of advanced and high-technology services, many concerns about service abuse also emerged. In Indonesia, hospital autonomy and private wing was introduced, including i) cooperation with international investors from Singapore in purchasing high-tech equipment in September 2002; ii) cooperation with Japan in provision of on-demand patient bed/room services in October 2004. All the above mentioned PPP approaches used Memorandums of Understanding. The hospital developed a balanced revenue growth and productivity strategy. As a result, since autonomy was adopted, the hospital have been doing well in improving quality of care and financial income increased substantially in 2008. The hospital received the “Excellent quality hospital” award from the Indonesian President in 2009[18].16

14 Martin McKee, Nigel Edwards, & Rifat Atun, Public–private partnerships for hospitals. Bulletin of the World Health Organization, November 2006; 84 (11). 15 Alexander S. Preker and April Harding 2003. 16 Gede Patra, Tabana hospital Profile, Building Public Private Partnership in Health System Strenthening 16

In addition, a number of PPP arrangements in the form of non-clinical service provision and sanitation service agreements in Thailand, provision of nutritious meals in Bombay, India also returned good results in the form of less administrative burden, lower fee levels, less wastes and improved service quality. In short, most PPP models in both developed and developing countries have made progress at different levels, including increased clientele, higher revenue, reduced treatment costs and so on. The potential risks however cannot be ruled out as private investors tend to pursue profit and may overlook public health care priorities, without strict government’s control. The conflict of interest between the public and private sectors in a fair and effective relationship has always been a debatable and conflicting topic. Lessons learnt of PPP in preventive care and primary health in developing countries There have been a number of successful examples of PPP in primary health care and preventive health in developing countries. As a general result, contracting non- governmental organizations in providing primary health services or nutrition services seem to be very effective as the impressive changes may achieve the set targets quickly. Most studies have pointed out that service provision contracts between the public and private sectors are positive. For example, contracting the private sector to provide nutrition services in the rural area in Bangladesh returns positive outcomes as malnutrition reduces by 18% compared to 13% in non-intervention groups. The community-based tuberculosis control program in Indian cities also returns very different measurements. Detected and successfully treated tuberculosis rated at 21% and 14%. The cost for a single successful treatment of tuberculosis is $118. PPPs in primary health service provision in Rahim Yar Khan district, Pakistan, supported by NGOs, are evidence of an effective way of improving primary health services in developing countries[16].17 Contracting out for management, provision of medical curative and preventive services in primary health care providers (BHU) were adopted. PRSP divided 104 BHUs into different groups, each group with three BHUs. A doctor is assigned to manage a group, with a pay rise from 12,000 Rs to 30,000 Rs a year, providing that he/she is not allowed to do private work. The doctors are responsible for the operation and discipline in their BHUs. As a result, 100% of the BHUs are running with the service of a doctor and sufficient medical supply. Work discipline in BHUs was also significantly improved as access and service use in BHUs was also increased. Services provided in BHUs were increased three fold in number and outpatient services increased by nearly four times. The RYK model was replicated in 11 other districts, covering 25 million people and recording better performance using the same amount of resources. Shortcomings, however, are found from review: i) lack of PRSP

17 Benjamin Loevinsohn, April Harding. “Buying results? Contracting for health service delivery in developing countries. Lancet 2005; 366:676-81 17 monitoring; ii) lack of quality control for medicines and pharmacists working at private drug stores. PPP in identifying tuberculosis and suspected tuberculosis patients in the community and during transit started from 2005 in Indonesia. Promoting the private health sector in identifying TB suspected cases and recording using the referral notes, transporting the patients to testing facilities, disseminating patient educational materials were done, as well as promoting leaders of private hospitals, private physicians, paramedics and technicians to apply DOTS in treatment, counseling, recording and reporting, reporting TB using the electronic reporting system to the district health office. The highest form of commitment is signing a MoU between the private health provider and district health office, albeit rather limited. In Denparsar, Bali in 2008, 12 out of 15 private hospitals participated in the TB program while only three of them had a MoU with Denparsar health office. There is a lack of incentives for private health services except for free-of-charge supply of medicines under the provisions of the TB program. Every year, the Health office would send a “Thank you” letter to private health providers taking part in the TB program. The drawbacks with the approach include limited participation of the private sector, lack of practical commitments, non-existence of legal instrument regulating the participation of the private sector, thus limited participation. From the experience of PPP in provision of medical services, primary health and preventive care in selected developed and developing countries as discussed above, the following lessons can be drawn. . A political consensus and comprehensive legal framework is needed for PPP. . In PPP, the government’s responsibility increases in the role of mostly administration, setting standards, distribution of resources, ensuring social security, identifying the right health care packages, legal support and corruption control. . The technical and managerial capacity of public entities needs to be strengthened. . An appropriate PPP model needs to be selected before taking to scale. . Budget cut for the public facility is not recommended when it engages in a PPP project. . Simultaneously with promoting the participation of the private sector, the government needs to solidify the public health sector to stay on par with their private counterpart and capitalize on the advantages of the private players in the process. . Maintaining information exchange between the parties is vital to the success of PPPs. 18

. In the public preventive health sector, incentives are needed to draw the participation of the private sector. . The government needs to set rules for the obligatory participation of the private sector in a number of activities/services of the preventive branch which should be part of the qualification for licensing private medical practice. . The government needs to increase state budget spending on preventive health.

IV.2. Analysis of policy documents related to PPP in health care in Vietnam IV.2.1. PPP in health through legistive documents on ‘social mobilization’ in health care The concept of public-private partnership in health care was first known in Vietnam when the government turned its attention to realizing a ‘social mobilizing’ policy in health care to share the burden of health expenditure in 1997 after it released Resolution 90/1997/NQ-CP on the approach and vision of ‘socializing’ education, health care, cultural activities, which allowed the formation of semi-private, private, joint venture or entirely foreign-owned hospitals. Later, this approach was concretized with multiple pieces of legislation including Government Decree 73/1999/NĐ-CP on ‘socializing’ policies in education, health care and cultural life, reflecting extensive incentives of non-public health facilities to pursue non-commercial goals, respecting and treating fairly the products and services provided by non-public health facilities. Typically, PPP in health care started to be legalized. Decree 73/1999/NĐ-CP clearly states that non-public health facilities also have part of the responsibility in accepting and providing services to subsidized service users as public providers. In this period, a form of PPP was specifically defined in the law, allowing development of semi-private service providers by establishing a partnership between public and non-public entities or individuals from any economic sectors in the form of new establishments, entire or partial transition of the public facilities for joint development of infrastructure. In practice, this form of partnership was quite developed and was regulated by the Joint Circular 31/2000/TTLT/BYT-BTC and Circular 16/2000/TT-BYT, regarding formation and financial management for semi- private health providers. Nevertheless, after some time in operation, the approach started to reveal setbacks in management, organization and finance and therefore was no longer encouraged in the government’s Resolution 05/2005/NQ-CP on accelerating ‘socialization’ in education, health care and cultural practices. The key ideas on ‘socialization’ in Resolution 05/2005/NQ-CP are itemized in Decree 53/2006/NĐ-CP, which provides the policies for promoting non-public service providers and Circular 91/2006/TT-BTC, the implementing document for Decree 53. It is made clear in these documents that the government and society hold high regard for and provide fair treatment to the products and services from non-public providers, no 19 differently from that of public providers. Non-public providers are allowed to participate in delivery of public services sponsored by the government, procurement, tenders, projects financed with both domestic and foreign funds that fit the roles and mandates of such providers. Non-public health providers qualified for delivery of medical services as ruled by the relevant health authority may provide the respective medical services to health insurance card holders depending on the unobligatory choice of the card holders. Resolution 18/2008/NQ-QH12 passed by the 3rd session of the 12th term National Assembly on strengthening the implementation of the ‘socialization’ policies to improve public health care, introduced a number of responses to promote use of resources for health, emphasizing that “the government is authorized to make recommendation to the National Assembly and NA Standing Committee for release of laws, ordinances and resolutions to improve the legal framework supporting a health care system that looks to take good care of the health of the entire population and in a comprehensive manner based on public-private partnership where the public sector holds the pivotal role.” Later, the policies of promoting ‘socialization’ in education, vocational training, health care, cultural practices, sports and environment were also clearly stated in Decree 69/2008/NĐ-CP and its implementing legislations. IV.2.2. Policies to widen the participation of the private health sector in the health system The Ordinance on private medical practice issued in 1993 and superseded with the Ordinance on private medical practice No. 07/2003/PL-UBTVQH, dated Feb. 25, 2003, created a really good environment for private health to grow ever more strongly and make its foothold in the health system, while at the same time reiterating the urge of expanding the involvement of private health in the health system of the ruling Party and government. Developing non-public health services is the core idea of the ‘socialization’ policies. From the very first days of the ‘socialization’ policies, incentives to and promotion of non-public health providers have been provided by the government. Policies providing tax breaks for non-public health was clearly reflected in Decree 73/1999/NĐ-CP, where non-public health providers were entitled to tax-free land allocation for development of hospitals and health facilities and a corporate tax rate scheme of 15% for areas of specially difficult socioeconomic conditions, 20% for areas of difficult socioeconomic conditions and 25% for remaining areas. The implication was further made clear in Resolution 46/2005/NQ-TW of the Politburo, stating that the government is to make investment procedures easier; provide incentives in taxation, land utilization and so on to develop the non-public health sector. In support of the guiding approach of the Party and government, a series of related legislative documents were released in relation to corporate tax incentives such as the Enterprise Law ratified in 2005, Decree 53/2006/NĐ-CP regarding promotion of 20 non-public health by applying a corporate tax rate of 10% to non-public health providers throughout their life cycles instead of the 25% rate specified in the Enterprise Law of 2003. This was later followed by Decree 69/2008/NĐ-CP and implementing Circulars addressing allocation of ‘clean’ land, corporate tax incentives, permission for private health facilities to provide medical services to health insurance card holders, among others. In line with Decree 69 and its implementing Circulars and Enterprise Law, non-public health providers are entitled to tax exemption for the first four years of operation and a 50% income tax break for the next nine years. In addition, state administration continues to be strengthened for non-public health providers with implementing documents to Ordinance 07/2003/PL-UBTVQH. Private health providers, apart from complying with the laws on private health, have to adhere to the provisions of the Law on Delivery of Medical Services, Enterprise Law, Trade Law, Investment Law, Decree 108/2006/NĐ-CP, the implementing document of the Investment Law, Bankruptcy Law and so on. Ordinance 07/2003/PL-UBTVQH and other legislative documents including Decree 103/2003/NĐ-CP, Circular 01/2004/TT-BYT, Circular 09/2004/TT-BYT, Circular 07/2007/TT-BYT providing guidelines on private medical practice also address a number of issues related to public-private partnership in delivery of health services such as how government employees are allowed to work at private health facilities, issues like medical training, signing clinical support agreements between state-owned health facilities and private health providers. This includes the requirement that private health providers sign a clinical and technical assistance agreement with a public health facility as a precondition for being granted the license for private medical practice. This alone has caused considerable problems to private health providers in clearing procedures for developing a new hospital. Added to that, with regards to private health providers, especially private hospitals that are without an official classification of clinical grade for private clinics, more problems may arise from this regulation when the private hospital needs to perform certain medical procedures and referrals. The intention of deepening the involvement of the private health sector was again stressed in the Health system development plan for 2010 and vision to 2010 approved by the Prime Minister in Decision 153/2006/QĐ-TTg as the Medical services network plan for 2010 and vision to 2020 set the target of by 2010, achieving a patient bed over 10,000 population ratio of 20.5, including two beds from the private sector and by 2020, a ratio of 25.0, including five private patient beds. However, while lines of expertise and mechanism for public-private partnership may be ready in terms of human resources and technical arrangements, these lack details and comprehensiveness. The creation of the Health Insurance Law in 2008 was a policy advancement in health insurance, which allow both private health providers and public health facilities 21 to share the common task of providing health insurance-based services. Decree 62/2009/NĐ-CP, Circular 09/2009/TT-BYT providing implementation guidelines for the Health Insurance Law and Circular 10/2009/TT-BYT guiding registration for medical services, primary health care and referral for health insurance-based medical services clearly provide the criteria to participate in delivery of health insurance-based services for non-public health providers. These are the very legal framework that allows the involvement of the private health sector in providing health insurance-based services. IV.2.3. Various forms of public-private partnership in health care and legislation on the autonomy of public health services Hospital autonomy is also one of the key components of the government’s ‘socialization’ policy. A few PPP forms have also been created in the finance transition process in income-generating public services. Decree 10/2002/NĐ-CP, dated Jan. 16, 2002, on finance autonomy in income-generating public services was replaced with Decree 43/2006/NĐ – CP, dated Apr. 25, 2006, providing on autonomy and accountability in operation, organization, personnel and finance for public service providers marked a vital change in the finance management system for a wide variety of public services including public health providers. Decree 43 practically widened autonomy for public service providers at various levels. Public service providers now can enter into contracts with non-public providers in implementing the plan assigned by the government and are encouraged to make a shift in their operation into the form of an enterprise or non-public entity of some kind to leverage every capacity they have in doing their jobs as defined by the law. Nevertheless, Conclusion 42/2009/KL-TW put a stop to making hospital shareholding entities and instead encouraged the development of new joint stock, joint venture, private hospitals as a way to counter the tendency of turning public hospitals to private clinics. As a result, the shift of public health facilities to companies was never realized in practice. Different forms of joint ventures and partnerships under Decree 43 and implementing documents are described in fairly good details. The issue is also well discussed in the Prime Minister’s Decision 202/2006/QĐ-TTg which ratifies the rules on management of public assets in public service providers. Circular 15/2007/TT-BYT guides the exercise of autonomy and accountability in using assets in joint ventures, partnerships or contributing shares to procure equipment and facilities for private wing service delivery in public providers. Ways of attracting capital such as calling for capital contribution from the hospital staff to upgrade facilities and equipment, use of equipment in private wing sections in partnership or joint venture with outside companies based on a specific profit sharing ratio, leasing equipment from outside corporate partners and so on have been employed in the hospitals as an effective way to increase revenue. 22

IV.3. PPP models/approaches in health care in Vietnam IV.3.1. PPP in delivery of medical services IV.3.1.1. Leverage of private resources in delivery of health and non-health services in public hospitals Private financial investment through joint ventures or partnerships in terms of facilities and equipment in public health providers Private wing joint ventures/partnerships + Partnership form A commonly used form of PPP is joint ventures or partnerships in procurement of equipment in the system of public hospitals subject to financial autonomy, started since 2002 and flourishing after the Government issued Decree 43/2006/ND-CP, dated May 26, 2006, on granting entire autonomy to public health providers and Circular 15/2007/TT-BYT on ‘socialization’ in health care. Surveys in 10 participating hospitals indicate that the private parties engage in the partnership at public hospitals in one of the following four approaches. Approach 1 : Partnership with private investors (firms, medical equipment trading companies) in the form of installing equipment for use at the hospital based on a capital contribution scheme (the private party contributing capital in equipment; hospitals in facilities, human resources). The profit sharing ratio is defined based on mutual agreement on types of services delivered, years of equipment use etc. (often 30/70 – 30% for the hospital and 70% for the investors, or 25/75, 45/55 etc.) This approach has been used in 8 out of 10 hospitals, namely Thai Binh General Hospital, St. Paul Hospital, Son Tay General hospital, Dong Hung hospital, Hue Traditional medicine hospital, Hue City health center, Thu Duc hospital, Cho Ray hospital. Approach 2 : the private investors may provide the equipment and assume the exclusive right of supplying chemicals and consumables (mostly laboratory equipment, dialysis devices), meaning that the investors providing the equipment and hospitals paying for chemicals and consumables to the companies owning the equipment. This form of partnership can be done through an agreement where the hospital undertakes to consume a certain amount of chemicals and consumables or it may undertake to buy chemicals and consumables from the equipment owner. This is a 2-option approach: i) the hospital is restricted to using chemicals from the equipment owner; and ii) the hospital is not restricted to chemical use. Most of the reviewed hospitals are not in the obligatory chemical consumption group. This approach has been adopted in 7 out of 10 hospitals, including Thanh Nhan hospital, St. Paul hospital, Son Tay general hospital, Thai Binh general hospital, Dong Hung hospital, Thu Duc hospital, and Cho Ray hospital. 23

Approach 3: direct capital contribution by the hospital staff for procurement of equipment used in the hospital with profit sharing based on the capital contribution proportion. This approach is seen in 5 out of 10 hospitals including St. Paul hospital, Thuong Tin hospital, Thai Binh general hospital, Hue Traditional medicine hospital, Thu Duc hospital. Approach 4 : termed lease of equipment (only in Thanh Nhan hospital and Cho ray hospital). Obviously, forms of joint venture and partnership seem sufficiently diverse in studied sites, where approaches 1, 2 and 3 are most common with 8/10 hospitals applying approach 1, 7/10 using approach 2, and 5/10 using approach 3 while only 2/10 hospitals adopt approach 4. The extent of engaging in partnerships also vary in large proportions between the hospitals as some of the hospitals are involved in multiple forms of partnership such as St. Paul, Cho Ray and Thu Duc hospitals which have adopted ¾ approaches; 4 hospitals adopting two approaches and only two hospitals using only one approach, being Thuong Tin hospital and Hue city health center. Thu Duc district hospital, a district level health facility as it is, has adopted multiple forms of partnership (3/4 approaches) compared to other hospitals of the same level (see Annex 1). Extent and scale of partnership + The total leveraged private capital by 2009 accumulates to an impressive level, as in the whole country, public hospitals pooled together about VND3,200 billion to be used in deployment of high-tech services, of which, hospitals directly affiliated to MoH mobilized more than VND500 billion; health providers in HCMC mobilized and received stimulus loans of nearly VND1,000 billion; health providers in Hanoi City mobilized over VND100 billion; and nearly VND50 billion in Quang Ninh, more than VND30 billion in Thai Binh etc. 2 + High-technology equipment increases in number after the partnerships are in place, mostly hi-tech equipment such as CT scanner, MRIs, Phaco, Gamma knife, Pet- CT, among others. Nearly 80% of the private wing equipment are subclinical devices. + Private investment in public hospitals seems only developed in areas where the hospitals have good income potentials (central level hospitals, provincial/municipal hospitals) and populous and better-off areas (HCMC, Hanoi, Thai Binh), but less in hospitals with limited income-generating potentials (district hospitals and specialized hospitals such as Thua Thien Hue Traditional medicine hospital). For example, a private firm came to Hue Traditional medicine hospital in 2007 to start a equipment placement partnership but withdrew after only one year out of poor productivity due to low number of users and slow recovery rate. This hospital now only adopts capital contribution from the employees to invest in the hospital drug 24 store. In Thuong Tin hospital, Ha Tay (now Hanoi), only one biochemical analysis equipment worth over VND200 million was placed since 2009 from financial contribution of the employees. Other district health providers like Hue City health center, Dong Hung hospital all have very limited levels of investment compared to the above mentioned hospitals (see Annex 2). Advantages of joint venture and partnership in terms of equipment and facilities - Clear improvement in access to equipment in diagnosing and treatment in public hospitals As this review is restricted to exploring PPPs, the selection of hospitals has been strictly specific by focusing only on hospitals with a higher level of partnership activities than other hospitals in a specific study area. That is why Cho Ray hospital and Thu Duc hospital are separately studied in relation to hospitals in other provinces as a special trait of HCMC. The reason for this is that HCMC is the first and only city in the country receiving preferential financial support from the HCMC PC to develop a system of hospitals with 100 patient beds or more. Most hospitals are eligible to apply for stimulus loans but some of the hospitals not only use the loans but also engage in partnerships like Cho Ray hospital, while some of them are not eligible for the loan such as Thu Duc hospital. Thu Duc general hospital however is an example of strong PPP in the last few years with certain levels of achievements. . Patient bed use has increased in most of the hospitals (by 10-30%), sometimes overly high such as Thai Binh general hospital and Dong Hung hospital in Thai Binh at over 200%. In Thu Duc hospital, bed occupancy also increased by 5.5 times in 2009 over 2006. In 2005-06, this hospital had only 50 beds providing very limited inpatient services, in addition to mostly outpatient activities while in 2009, it had 150 registered beds which is in fact 158. . Inpatient and outpatient clients increase by the year. Outpatient visits and inpatient sessions increase in most of the hospitals with strong PPP activities. District level and specialized hospitals on the other hand show little increase or even downturn from the previous year. The increase level ranges from 1.1 – 1.3 times. Thu Duc hospital in particular had unusually high increase in 2009 (9.9 times) since while it had only 50 beds in 2005 with 11.8% of occupancy rate, the number increased to 150 with 65.5% occupancy in 2009 (see Table 1).

Table 1. Difference in outpatient visits and inpatient sessions in 2006* from 2009 in the hospitals (episodes) Criteria Cho Provincial Traditional Thu District Ray hospitals medicine Duc hospitals hospital hospital hospital 25

1. Outpatient visits 1.3 0.8 2.9 1.2 2 Inpatient sessions 1.2 1.2 1.1 9.9 1.1 (*) Hospital autonomy under Decree 43 was not applied in 2006. . The total number of tests increases significantly in most hospitals. The total number of biochemical and hematological tests has increased substantially in most of the hospitals, ranging between 1.3 and 1.7 times. Thu Duc hospital in particular reports an impressive growth of 15.9 times, owing to intensive PPP activities in the hospital in 2008, 2009 and the fact that in 2006, it did have the funds needed to procure hematological testing equipment, which explains why there was such an unusual hike in 2009. Similarly, normal X-ray scans in the hospitals also increase by 1.1-1.8 times, except for the 3-fold increase in Thu Duc hospital. MRI imaging increases by 1.9 times in Cho Ray hospital. Ultrasound scans also see a surge in the hospitals, with Thu Duc hospital reporting the peak level of 2.6 times increase, followed by 1,8 times in provincial hospitals and 1.5 times in Cho Ray hospital. Provincial hospitals record the highest increase of endoscopy by 3.9 times. Special surgical procedures increase by 2.2 times in Cho Ray hospital and 1.6 times in district hospitals (see Table 2). Table 2. Difference in selected hospital operational measurements between 2009 and 2006* (episodes) Measurement Cho Ray Provincial Traditional Thu Duc District hospital hospitals medicine hospital ** hospitals hospital Tests (biochemical 1.6 1.7 1.3 15.9 1.3 + hematological) Normal X-ray 1.3 1.1 - 3.0 1.8 scans MRI scans** 1.9 - - - - CT scans 1.5 6.7 - - - Ultrasound scans 1.5 1.8 - 2.6 1.0 Endoscopies 1.4 3.9 - - - Operations*** 1.2 - - - - Surgical procedures 2.2 1.2 0.7 1.6 (*) Hospital autonomy under Decree 43 was not applied in 2006. ** While provincial hospitals did not perform any CT scans in 2006, there were 30,144 CT scans taken in 2009, more than 700 of which taken in Thu Duc hospital in 2009. *** Thu Duc hospital in 2005 did not perform any operation but had 3,432 operations in 2009. Source: Operational statistics on reviewed hospitals. - The total financial income of most of the hospitals sees a strong increase following PPP, ranging between 1.9-2.1 times in 2009 over 2006. Typically, Thu Duc district hospital achieved strong review growth (7.9 times) owing to considerable PPP activities in 2009. Other hospitals like Thanh Nhan hospital, St. Paul hospital, Thai Binh general hospital etc. also gained a 3-fold income increase in 2009 over 2006. Cho 26

Ray hospital, Son Tay township general hospital and district general hospitals scored somewhat lower growth rate at about twice in 2009 whereas Hue Traditional medicine hospital makes almost no revenue growth for the last five years. This again is evidence that hospital income depends in large part on private wing operations, as far as the reviewed hospitals are concerned (see Table 3). Table 3. Revenue of public hospitals by year, 2006-2009 Unit: VND million

Hospital 2006 2007 2008 2009

Cho Ray hos. 665,273 899,348 1,069,760 1,255,981

Provincial hospitals* 46,207 65,411 137,997 154,378

Thua Thien Hue Traditional med. hos. 4,188 5,459 5,640 7,253

Thu Duc district hos. 6,221 10,823 14,707 36,383

District hospitals** 8,840 10,995 16,128 23,240

* This includes the average total revenue of four hospitals – Thanh Nhan, St. Paul, Thai Binh general hospital and Son Tay general hospital. ** Average revenue of three district hospitals: Thuong Tin, Dong Dung – Thai Binh and Hue health center. The composition of hospital income also shows a striking difference if compared to the proportions of revenue items between the hospitals. Figures 3 and 4 indicate that income from health insurance reimbursement and user fees in all the hospitals in question has increased sufficiently in 2009 over 2006, with the exception of Hue Traditional medicine hospital. This helps slowly alleviate the hospitals’ dependence on the state budget. 27

Figure 3. Composition of hospital income, 2006 Figure 4. Composition of hospital income, 2009

- Favorable conditions were created for public hospitals to develop spearhead services and opportunities to accumulate assets in size and value (on-demand wing, cardiovascular specialized wing, oncology, hematological biochemical testing, endoscopy etc.) Barriers, challenges and unexpected effects + The fact that private financial contribution through shareholding, joint venture and partnership, procurement of equipment in public hospitals seems to be unseparated from the direct interest of the hospital employees will likely lead to the risk of health service abuse for quick financial recovery. Excessive income-making methods may include: i) increased indications for hi-tech tests and equipment use, especially in case of the PPP format by capital contribution in any forms and provision of equipment accompanied with monotonous supply of chemicals and consumables used for the equipment where the hospital is confined to the chemical and consumable supplies from the equipment owner, which can easily lead to wastage or equipment abuse since every party’s direct interest is involved; ii) increased inpatient treatment indications for user fee collection; iii) prolonged treatment duration; iv) increase of both inpatient and outpatient costs[12].18 + PPPs in the form of procurement of equipment mostly center around central level hospitals and provincial/municipal hospitals, and less in district or specialized hospitals which have poorer income prospects. Central, provincial/municipal hospitals are often located in more populous and better-off areas which is more attractive to investors in terms of quick cost recovery and high profitability. Services often target high income groups, resulting in increasing inequality. + The increased income from PPP activities has created a gap in qualification, health service quality and personal income between the hospitals from different levels, posing the risk of an increasing shift of human resources from the rural areas to the cities (internal brain drain) and also a more and more severe overload in higher level hospitals (Thai Binh general hospital ofThai Binh is typical examples of heavy overloads with patient bed occupancy regularly in excess of 219%). + Private involvement in public hospitals is on-going in a time when the legislative framework is still in a premature and incomplete stage, with a lack of policy tools to administer, monitor, supervise and audit (hi-tech medical equipment procurement plan in hospitals of various levels, standard therapeutic guidelines as the basis for assessment and management of rational use of tests, equipment as well as drug use in hospitals, evaluation of health service quality etc.)

18 Health Strategy & Policy Institute, Planning & Finance Department, MoH, Review of the implementation of Decree 43/2006/NĐ-CP in public hospitals. 28

+ The capacity, management and administration of leaders of public hospitals remain very limited while PPP in the form of joint venturing, procurement of equipment requires certain levels of qualification from senior managers. The private sector signing agreements for provision of sanitation, laundry, security, nutrition canteens, information technology etc. services (contracting in) as a highly common and effective form of partnership in public hospitals Most of the respondents informed that immediately after hospital autonomy was introduced, the hospitals took no time in signing package agreements with private firms specialized in providing non-clinical services. These deals with private contractors have proved to be much more efficient and professional compared to the previously self-subsisted service provision. Aware of that, most hospitals, both public and private, have had contracts with private companies for the provision of such services as sanitation, laundry, canteen, nutrition diner, security, IT etc. “… As for non-clinical services, we would use the services provided by private suppliers as they are quick, professional and very efficient, take water utility supply for example – we used to pay as much as VND100 million for water a month before but now we use water 24 hours a day for just VND30 million a month …” (Comment of a public hospital leader in Hanoi) On the other hand, some private hospitals would sign an agreement with public counterparts in search for a resolution to problems in relation to environment, waste processing be means of formal contracts or sometimes verbal agreements, all for the ultimate purpose of giving the clients good access whether it is public or private providers. “… We signed a contract with a limited liability company which is also our affiliate and we act as the collecting hub for private providers. Mostly this is done by written contracts but sometimes a verbal agreement is enough. Either way, the most important point is that the clients must be given good access and quality services …” (focused group at a public hospital in Hanoi) 4.1.1.1. Private health sector involved in the health service system Despite strong development, the private health sector receives very limited investment in depth and scale, which is far from enough to meet the potentials. o Coverage of private health sector nationwide Since the Ordinance on Private Health was released in 1993 and amended in 2003, private health providers have increased strongly in number from some 14 hospitals in 2001 the figure increased to 83 by the end of 2008, accounting for 7.5% of 29 the total 1,111 health service providers[3].19 General clinics also see a rapid growth in number with more than 30,000 private general clinics at the end of 2008, and 21,600 private drug stores and pharmaceutical outlets, 450 traditional medicine facilities, over 2,000 herbal products. Private health providers however are not evenly distributed as they mostly concentrate around major provinces and cities where the population density and standard of living is high. A regional survey indicates that there is a flock of hospitals in the South East region with 33 hospitals in total, including 30 in HCMC alone, followed by the Red river delta with 17 hospitals, 12 of which in Hanoi. The remaining hospitals are thinly scattered in the Northern Central, South West, Southern Central and so on. The North West discriminates itself as a region without any hospital. The patient bed capacity of private hospitals is often very small and accounts only for 3.3% of the accumulated number of public and private patient beds nationwide. The number of beds in private hospitals is also small, often ranging between 20-100 beds, or average 65 beds/hospital. Patient beds over 10,000 population is also very low, at 0.1 – 1.79 beds/10,000 population, of which, the South East region has the highest rate of 1.79 beds/10,000 people (see Table 3). Compared to the target set in the MoH plan for 2010, the expected private patient beds ratio of 2 beds/10,000 population and at least 5 beds/10,000 population by 2020 would seem to be a huge challenge[9].20 Public health still plays the dominating role in the health system, with over 90% of hospitals and 96.7% of patient beds. Table 4. Private hospitals and patient beds by region Region Hospitals Patient beds Beds/10,000 population North West 0 0 0 North East 3 97 0,10 Red river delta 17 684 0,37 Northern Central 11 508 0,47 Southern Central 7 492 0,68 Central Highland 2 200 0,40 South East 33 2.608 1,79 South West 10 840 0,47 Private health – country 83(7,5%) 5.429(3,3%) 0,63 Public health - country 1.028 159.558 18,51 Source: MoH, Health Yearbook, 2008.

o The reach of private health in the reviewed provinces Table 5 illustrates more clearly the uneven distribution in both number and proportion of private health providers in the reviewed sites. HCMC and Hanoi are two

19 Medical Services Administration, MoH, Hospital review (1,015 public hospitals and 69 private hospitals, 2009). 20 Decision 153/2006/QĐ-TTg and Decision 30/2008/QĐ-TTg. 30 cities with much more developed private health than Thua Thien Hue and Thai Binh provinces. The total number of private health providers in HCMC is three times higher than in Hanoi, 24.4 times higher than in Thua Thien Hue and 26.6 times higher than in Thai Binh. Most of the private health facilities are however small-scaled service providers, general clinics and traditional medicine practitioners. General hospitals and clinics take up only a very small proportion of private health service providers. Table 5. Number and distribution of private health providers in reviewed areas, 2009 Type of private Thua Hanoi HCMC Thai Binh health provider Thien Hue

General hospitals 9 19 1 2

Specialized hospitals 11 12 2 0

General clinics 226 158 19 11

Specialized clinics 1,482 6,286 237 80

- Business hours 696 - 141 55

- After-hours 786 - 96 25

Traditional medicine 677 1,037 78 120 clinics

Other services 293 714 0 96

Total 2,698 8,226 337 309

Source: Reports of provincial Health Departments, 2009.

Table 6 shows very small number of private hospitals in the reviewed provinces and cities, with a planned patient bed capacity ranging only between 24 and 100 beds, compared to the large tolerance gap of 90-1,400 beds with public hospitals. Bed occupancy in private hospitals is also very low at an average of 60% compared to 155% in public hospitals.

Table 6. Bed distribution and occupancy at reviewed hospitals, 2009 Hospital Planned Actual beds Occupancy beds (%) Public hospitals 501 612 155% St. Paul 520 579 170 Thanh Nhan hos. 480 680 153 31

Son Tay hos. 400 511 128 Thai Binh hos. 500 730 219 Traditional med. hos. 100 145 136 Cho Ray hos. 1.400 1.631 180 Thu Duc hos. 150 158 65,8 Thuong Tin hos 160 190 123 Dong Hung hos. 160 205 230 Hue city health center 90 105 90 Private hospitals 51 50 60% Trang An hos. 60 30 55 Hong Ngoc hos. 24 24 85 Bao Long hos. 50 50 50 Lam Hoa hos. 50 97 100 An Sinh hos. 100 120 72 Source: Reports of reviewed hospitals, 2009.

Private health providers servicing mostly out-of-pocket clients and a very small proportion of health insured patients Figure 5 shows that out-of-pocket patients take up the majority in the composition of clients in private hospitals in the provinces, from 56.6% to 100% while health insured clients account for a very small proportion. Only Lam Hoa hospital in Thai Binh has a fairly higher proportion of health insured clients of the total number of patients (43%), which is also the highest rate among the reviewed hospitals. This is followed by Bao Long hospital and Trang An hospital with 12% and 11% respectively. Hong Ngoc and An Sinh hospitals are those without almost zero registration of health insured clients, since these two hospitals are not yet in the registered list for providers of primary health services and only good to accept referred patients (level 2 health insured clients). 32

100% 90% 80% 70% 56.6 60% 88.8 87.8 50% 100.0 100.0 95.0 40% User fees 30% 20% 43.4 Health Insurance 10% 11.2 12.2 0% - 5.0

Figure 5. Distribution of patients in private hospitals, 2009 Private health providing a very small proportion of medical services compared to the public health sector The review of 1,084 hospitals (including 1,015 public hospitals and 69 private hospitals) in 2008 and 2009 by the Medical Services Administration, MoH, unveils very small proportions of medical services provided by the private health sector as compared to the public sector, at only about 4.3% in 2008 and 4.8% in 2009[3].21 Outpatient services provided by private hospitals account only for 5.3% of the total outpatient delivery, leaving 94.7% of the service delivered by public hospitals. Similarly, inpatient care by the private health sector accounts only for 4.5% of the entire inpatient package, as 95.5% of the service is delivered by public hospitals.22 Private hospitals mostly provide outpatient care and a very small proportion of inpatient services (93.5% outpatient care and 6.5% inpatient care)[3].23 Surveys at six private hospitals in the reviewed areas also return similar results. Inpatients also account for a very small proportion at more or less 10% with the remaining dominating 90% being outpatients. (Figure 6).

21 Medical Services Administration, MoH, Hospital review: 1,098 hospitals (1015 public hospitals and 69 private hospitals), 2009. 22Medical Services Administration, MoH, Hospital review: 1,098 hospitals (1015 public hospitals and 69 private hospitals), 2009. 23 Medical Services Administration, MoH, Hospital review: 1,098 hospitals (1015 public hospitals and 69 private hospitals), 2009. 33

100% 90% 80% 70% 60% 87.8 88.8 50% 97.2 95.0 91.7 97.1 40% Outpatient 30% 20% Inpatient 10% 12.2 11.2 0% 2.8 5.0 8.3 2.9

Figure 6. Distribution of inpatients and outpatients, 2009

Humble involvement of private health in service delivery to the health insured + Extent of involvement PPP in medical care in Vietnam has so far not been explicitly reflected through service delivery for the health insured since Social Security of Vietnam was allowed by law to sign an agreement for provision of health insurance-based medical services with non-public health providers in 2005. Contract engagement between the Social Security and private health facilities has increasingly developed ever since, albeit only accounting for a very small percentage compared to the public health system. By reports of Social Security of Vietnam, by the end of July 2010, there were only 276 non-public health providers having had a contract for delivery of health insurance- based services, or 3.5% of the total 7,918 health service providers having signed a contract nationwide[2[.24 Of which, 65% are private hospitals and only 25% are private general clinics. Some private hospitals only register to provide level 2 health insurance-based services, with a limited number of services such as dialysis, CLS and DVKTC tests (An Sinh hospital, HCMC). Areas having the highest number of private health providers having a health insurance service contract include HCMC (70 providers), Binh Duong (34 providers), Haiphong (24 providers), whereas in as many as 23 other provinces/cities, contracts for delivery of health insurance-based medical services have not been signed with non-public health providers[2].25

24 BHXH VN, Báo cáo quyết toán BHYT, năm 2009 25 BHXH Việt Nam, số liệu báo cáo quyết toán năm 2009 34

Surveys in four provinces/cities return a common result that the number of health insurance cards registered at private health providers in the reviewed provinces/cities remains very few, accounting for just 3.8% of the total health insurance cards from both public and private sectors. The number of registered health insurance cards at private health service providers varies among the areas. HCMC and Thai Binh have stronger participation of private providers in delivery of health insurance-based services than Hue and Hanoi (7.2% and 6.5% respectively versus 0.8% and 0.4% respectively) (Table 7). Table 7. Health insurance cards registered at public and private health providers, 2009 Percentage of HI HI cards at HI cards at cards at private Province/city public private providers/Total HI providers providers cards (%) Hanoi 3,339,242 28,304 0.8 HCMC 3,211,059 230,275 6.7 Hue 734,057 2,787 0.4 Thai Binh 1,036,815 67,119 6.1 Total 8,321,173 328,485 3.8

Source: Reports of provincial/municipal Social Security, 2009. Hanoi: By the end of 2009, a total of 3,367,546 people participated in the health insurance scheme in Hanoi City, achieving a coverage rate of 53%, which is approximately the country coverage rate for health insurance. Most private hospitals in Hanoi (20) have signed an agreement with the Social Security of Hanoi while only some 10% of general clinics have participated in health insurance-based medical care (26/226). General clinics may be many in number but often have small scales, below the requirement of Social Security, whereas qualified general clinics, if any, do not want to sign the contract considering the low reimbursement level from health insurance and complex reimbursement procedures. As a result, despite the strong private health system in Hanoi, which is only behind HCMC, registered health insurance cards remain very few. HCMC: By the end of 2009, there were in total 3,211,059 people registered for health insurance-based medical services in HCMC at public health providers and 230,275 people registered at private health providers for a total of 3,441,334 health insurance participants, achieving a coverage rate of 48%. Most health insurance cards were registered at public clinics (93.3%) and only 6.7% at private providers. HCMC is where private health is most developed in Vietnam. By the end of 2009, there were 70 private health providers participating in delivery of health insurance-based medical services, as most of private hospitals have had a contract with Social Security, except for only four general hospitals of Trieu An, ITO Saigon, STO Phuong Dong and Viet 35

Han hospitals. The percentage of registered health insurance cards in HCMC however remains very low at less than 10% of the total and nearly 94% is covered by public health, albeit the highest rate in the country. In-depth interviews with participants reveal that many private general clinics want to sign the contract but are not qualified, e.g. a general clinic must have six independent wings and sufficient space to be qualified for such a contract. City Social Security senior officials also agreed that the potentials for partnership in this sector are promising and strong development can be expected in the near future. Hue: In 2009, the Social Security of Thua Thien Hue province started to sign health insurance-based medical service agreements with two private hospitals, Hoang Viet Thang general hospital and the Orthopedics and Aesthetic Surgery hospital, and mostly targeting clients with obligatory health insurance plans (92.4%). As the Orthopedics hospital is a specialized hospital, it is not eligible for primary health care reimbursement from the health insurance fund but only for emergency care and referrals related to orthopedics. No general clinics signed an agreement with the provincial Social Security since they were not qualified. Medic Company was the only provider of limited CLS tests and hi-tech services for health insured clients based on an agreement signed with the City health center with the written agreement of the Social Security of Hue city. This is also a form of PPP in delivery of health insurance- based medical services to meet the health care need of the community and relieve the workload for the public sector. Thai Binh: In Thai Binh, only two private hospitals and 4 out of 6 private general clinics signed a health insurance-based medical services agreement. Some other unqualified clinics did not have an agreement or only wanted to subcontract a few specific services. Lam Hoa and Hoang An private hospitals and general clinics have taken one step ahead in advertising information and their services to the health insured with a focus on improving services and attitude to the clients’ satisfaction and attracting health insured clients. As a result, health insurance cards registered at Lam Hoa hospital has kept increasing. Lam Hoa hospital now has in stock about 30,000 HI cards compared to just about 3,000 in 2007. The distribution of health insurance-based client groups at public and private health providers also varies significantly between different areas. Table 8 reveals that the percentage of health insurance cards for obligatory health insurance groups and school children continuously remains the highest in both the public and private sectors in the reviewed sites, a typical example of which is Hoang Viet Thang private hospital in Hue with most of the cards being obligatory HI cards (>90%). In the mean time, HI cards for the poor registered for HI-based medical services at private providers account for a very small proportion in most of the reviewed provinces, at 0.1%-1.7% (Table 8). 36

Table 8. Distribution of health insurance cards registered at public and private health providers by province/city, 2009 Unit: % HI card Hanoi HCMC Hue Thai Binh Public Private Public Private Public Private Public Private categories health health health health health health health health Compulsory 52.7 39.8 51.8 55.7 32.2 92.1 44.5 66,1 HI For the poor 12.6 0.1 9.8 0.6 18.4 - 15.7 1,7 For school 30.1 48.6 26.4 26.0 29.1 - 26.6 16,0 children Voluntary HI 4.6 11.5 12.0 17.7 20.4 7.9 13.2 16,2 Total 100 100 100 100 100 100 100 100 Source: Reports of provincial/municipal Social Security, 2009. Table 9 indicates that the types of services mostly provided by the private health sector is outpatient care, at substantial proportions between 81.2% and 98.5%, whereas inpatient services take up a very small percentage, between 1.5-18.8% of the total HI-based medical care episodes. Table 9. Number and composition of HI-based medical services provided by the private sector, 2009 Measure Hanoi HCMC Hue Thai Binh Total Inpatient episodes 3,497 55,574 368 2,105 61,544 Percentage of 12.3 6.7 18.8 1.5 inpatient care (%) 6.2 Outpatient episodes 24,927 769,233 1,585 137,223 932,968 Percentage of 87.7 93.3 81.2 98.5 93.8 outpatient care (%) Total inpatient & 28,424 824,807 1,953 139,328 994,512 outpatient episodes Total (%) 100 100 100 100 100 Source: Reports of provincial/municipal Social Security, 2009. + HI reimbursement levels In the studied sites, private health providers in general, including private hospitals, are only eligible for the reimbursement grade of a level 3 hospital, or equivalent to a district hospital (by regulations of MoH). Nevertheless, the Social Security may also apply the reimbursement rate for a level 2 hospital for specific equipment-based services if approved by the Health Department. In addition, private health providers are also allowed to collect the difference between its own use fee level and the HI tariff to ensure income and of course at the cost of the client, which adds burden to health insurance participants. 37

In the observed private hospitals, despite the modest number of registered HI cards, revenue from HI has had obvious increase over time, especially in Phuoc An general clinic, An Sinh and Lam Hoa hospitals (Phuoc An clinic achieves relatively fast growth in revenue from HI from VND 3,855 million in 2006 to VND 59,776 million, or a 15.5 times growth in 2009) (Table 10). Table 10. Total HI-based revenue by year at private hospitals Unit: VND1,000

Hospital 2006 2007 2008 2009

An Sinh hos.* 0 0 15,476,000 21,369,000

Lam Hoa hos.* 0 0 1,737,000 8,819,000

Trang An hos. 435,000 582,000 665,000 915,000

Bao Long hos. 31,000 41,000 118,000 249,000

H.V.Thang hos.* 0 0 109,000 294,000

Hong Ngoc hos. 14,000 15,000 20,000 22,000

Phuoc An gen. 3,855,000 12,989,000 24,314,000 59,776,000 clinic

* Hospitals started up and operational in 2007. Source: Reports of private hospitals. Figure 6 indicates a stark difference in the composition of HI-based revenue between the private hospitals, reflecting the magnitude of HI-based medical services delivery in the hospitals. Among the hospitals with a HI-based services agreement, Phuoc An medical center is the one with the largest percentage of income from HI (83%) in the entire financial revenue of the hospital, followed by Lam Hoa, An Sinh and lastly, Hoang Viet Thang general hospital, Thua Thien Hue. 38

Figure 7. Proportions in the income of private hospitals/clinics, 2009 Table 11 shows the average outpatient cost in public hospitals of VND130,796 and that of private hospitals at VND175,329, and the average inpatient costs for public and private hospitals respectively at VND2,082,601 and VND2,695,700. Table 11. Comparison of average inpatient and outpatient costs for HI-based medical services by province/city, 2009 Unit: VND

Average outpatient cost Average inpatient cost Description Public Private Public Private

Hanoi 225,966 258,733 2,814,105 2,411,766

HCMC 162,276 179,178 2,144,504 2,592,861

Hue 53,978 112,583 2,331,667 1,864,793

Thai Binh 80,964 150,821 1,040,130 3,913,382

Province average 130,796 175.329 2.082.601 2.695.700

Typically, HI patients seeking medical care at private providers would have to pay a significant cost difference, beyond the portion of the cost reimbursed by health insurance to the private providers. By estimates of HI officials in HCMC, a HI patient on average would have to pay nearly 40% of the total medical expenses for the services received at private providers. At An Sinh hospital, a HI patient pays an extra amount of about VND200,000 for each renal dialysis episode. Normally, the difference in service fees between the private providers and HI is really big. For 39 example, at Trang An hospital, VND50,000 is the fee level for a consultation episode whereas HI only reimburses VND3,000; or at An Sinh general hospital, the charge for a bed/day ranges between VND100,000 – 1,000,000 against the HI level of VND10,000/day. The cost difference between HI and private health providers and the out-of-pocket balance places a huge burden on the patients and as such, the poor and near poor will have even less opportunities to have access to private health care. This is also a current barrier to the development of health insurance in the private health sector. + Challenges and barriers for the private sector looking to sign a HI-based service agreement Qualitative study results make apparent the challenges and barriers that a private health provider would face when participating in the HI-based service delivery scheme. The top challenges include the lack of a classifying system for private hospitals and the extremely low service fee schedule applied for HI-based services. + Overall legal framework: By law, the standards applicable to a private health provider having a HI-based service agreement mostly depend on the business license or medical practice certificate issued by MoH or the Health Department. Service quality assurance in the private health sector is facing multiple challenges due to deficiency in human resources, standard instrument and benchmarks for measuring quality. While public hospitals have for long been settled with a ranking system, private hospitals are still operating without one. In terms of service fee levels, according to the Ordinance on prices, health service fee levels can be self-determined by the service providers providing that the fees are made public. As a result, the fee level for a same type of service is often higher in a private provider than that in public health facilities with the difference at the cost of the health insured clients. Also, it is required that before signing a service agreement with a private provider, the Social Security has to conduct an audit on workforce, infrastructure, equipment of the entity to make sure that it meets the requirements for a medical service provider defined by the Minister of Health and also to check if the lines of services provided and fee levels are acceptable. Such audit in practice remains cursorily performed and most of the time, the assessment and licensing verdicts of health administrative agencies are used. + From the perspective of Social Security: As informed by representatives of HCMC Health Insurance, most private health providers in HCMC now want to have a HI-based contract and this requires a very strict process of assessment and approval for participation in the scheme, which will increase the workload for the HI review team. “… The audit team will have more work to do as combating service abuse is a tough task, considering how organized it is today. Private health providers tend to resort to excessive indications. As such, very careful assessment must be done before an agreement is signed and experienced auditors are needed for these providers too…” 40

(Comment by a Social Security auditor, HCMC) Many believe that while health insurance auditors have the authority, they do not have enough means to keep tab of private clinics and fight service abuse, indications for unnecessary services or creation of phony patient records. The auditor workforce of Social Security, weak in both number and qualification, is failing to keep up with practice. About 80 staff members of HCMC audit bureau are covering 130 service providers, 3 million cards and more than 800 in-bound referrals from elsewhere. Under such circumstances, Social Security is unlikely to have good control of both public and private health sectors. The information technology systems used are also patchy and inconsistent as each office may use a different management software resulting in different output measurements, while Social Security is the final compiler of data. This explains why there is a lack of comprehensive data on deliver of HI- based medical services and expenses at private health service providers nationwide. + From the perspective of private providers: A few challenges have been shared by private providers with the study team: i) the private health sector is being treated unequally on many aspects as opposed to the public sector; while public hospitals receive investment, subsidies and various privileges from the government, private hospitals are on their own financially and receive almost no support, not to mention the heavier legislative pressure they have to bear since private businesses are subject to Enterprise Law and Labor Code. Thus, mitigation of medical malpractice is a major concern for private health providers; ii) the pressure from price competition among private clinics and with public hospitals is significant, as public hospitals receive financial investment from the government in physical facilities, advanced equipment and are edging closer to meeting the public need; iii) human resources in private providers are in shortage and unstable. The private sector relies mostly on three major sources for staff – retired physicians, new graduate doctors and doctors who are working in public hospitals. The two groups may add to the regular workforce but the third group who can often work on a part-time basis plays a crucial role in maintaining the clinical quality for many private health providers, given the weaknesses of retired physicians from old age, slow update of new information and know-how, and those of the fresh graduates being lack of experience; iv) the HI reimbursement levels remain too low and outdated (under Circulars 14 and 03), not enough for the hospitals to cover the costs. The private hospitals have to ask for the difference of the expenses but find it very hard to explain why the patients have to pay the extra money. It is against their will to collect the extra fees from health insured clients; v) irrational regulations on classification of levels of care set by MoH, on referrals and so on are causing problems for private clinics in delivery of HI-based medical services. + From the perspective of the health insured: Having to pay extra fees when seeking HI-based medical care at private providers not only creates the financial burden for HI card holders but also impairs access to health services when they need 41 them. On the other hand, given the challenges in service quality and cost management in the private health sector, HI card holders seeking services from private providers may encounter more financial and clinical risks than trying to obtain the services from the public sector. Public-private partnership relationship + Public hospitals may have clinical assistance contracts with private hospitals as a mandatory term for non-public hospitals to acquire their private medical practice license. Survey results indicate that most private clinics have been complying strictly with this requirement by choosing a sponsoring public hospital. As private hospitals have not been classified, they are now at no higher level of care than district hospitals. Often, private hospitals would sign a contract with a provincial/municipal general hospital. General clinics fortunately are not subject to this requirement to have their private medical practice license issued. In addition to having a contract to stay legit, private hospitals often invite doctors from public hospitals including general and specialized hospitals to provide counseling, take part in group consultation or perform operations as collaborators or part-time associates. In addition, private hospitals also sign agreements with general hospitals of higher levels of care to receive transfusion support. Private hospitals so far have reported no difficulty in securing blood supply support from public hospitals. “… We have a contract with the Hematology and Blood transfusion Institute and have had no problem so far in getting the supply, even if it is in the middle of the night …” (focused group in a private hospital in Hanoi) “ … Based on the Civil Code and Trade Law, we have contracts with local private providers and give them clinical support. Despite the lack of detailed guidance from the Health Department and MoH, we still provide them support even in high level areas of specialty …” (in-depth interview with a senior office from a public hospital in Hanoi)

Sometimes even without an official agreement, public hospitals would recommend or refer patients to private providers for treatment. For example, Cho Ray hospital has referred patients to An Sinh hospital for dialysis. It is explained by leaders of An Sinh hospital that the referral of patients from Cho Ray hospital to An Sinh hospital has been on-going despite the fact that there is no agreement between the two hospitals and it is based on the agreement of HCMC Health Department and Social Security which allows any health providers under the jurisdiction of the Department capable of renal dialysis to receive referrals when there is overload in public hospitals. 42

Some say however that such agreements are only formality and hold not financial value or benefit sharing commitment between the parties and act like a certificate for completion of legal requirements.

“We have a contract with Bao Long Traditional medicine hospital but it is just a way to help them accomplish the formalities to start up their hospital and there is no other relationship involved …” (focused group at Son Tay general hospital) + Public-private human resources support and training agreement Staff support: Most respondents agree that almost every employee in public health providers is doing part-time jobs of some kind (in their own after-hour clinics or as a part-time employee). There is however no official written agreement between the public and private health sectors and this is done mostly through verbal or private agreements. Private providers still depend much in terms of human resources on public hospitals. “… There is no official contract between public and private hospitals in staff supply but the private sector still relies on the public providers for human resources. This is mostly the case in the cities as almost 80% of doctors in public hospitals are also working in private health providers (275 providers in Hue alone)” (focused group at Thua Thien Hue Health Department) Working part-time jobs or running after-hours clinics are an on-going fact with most hospitals in major provinces/cities though it seems less common in the districts. Most of the cases, there is hardly any kinds of commitment in writing or with the signatures of hospital directors. It is also agreed by hospital management that working two or more jobs is the rightful choice of doctors and health staff and the hospital management has no right to interfere with what they do on their own time. Training support between the public and private sectors: Survey results indicate that most private hospitals and clinics have sent staff for training and specialized updates at provincial/municipal general hospitals or central hospitals when needed. Among the reviewed hospitals, three are capable to provide certified training and in-service training for private hospitals and district public hospitals – Thanh Nhan hospital, Cho Ray hospital (HCMC) and Thai Binh general hospital. “… We have agreements with private medical schools like An Khanh, Thang Long and we have very strict requirements and specific standards. We agree with them that the output of the schools is the input of the hospitals. We also have training deals with other private hospitals…” (focused group at a public hospital in Hanoi) 43

Apart from the above training-capable hospitals, most private hospitals have sent their doctors and nurses for training and specialized training, with certificates granted, in central hospitals including Viet Duc hospital, ENT hospital, Army Institute 103, Hematology and Blood transfusion hospital, Cho Ray hospital, to name a few. These partnerships are all made possible through business agreements between the parties whenever a private hospital has the need for staff training. In addition to signed training deals upon requests, private health providers have also been invited by provincial Health Departments to short-term training courses on topics including orientation of legislations, hospital management, training of specialized treatment plans or technical workshops for capacity building, information updates similar to public providers. These activities are often funded by the state budget or international organizations and NGOs. Training opportunities of this type however are narrowly scaled and infrequent due to financial constraints and the fact that private providers often show little interest or willingness to participate. + Referral support agreement From the private sector to public providers: Qualitative results show that most private hospitals have had a referral agreement with local public hospitals of higher levels of care. These agreements entail no financial benefits to the public sector and are only a formality. The reason for the agreements to be signed is that private hospitals are not yet classified and they may have problems when transferring patients to a higher level. Without an agreement, the patients in principle will have to be referred to the district hospital first, then relayed by the district hospital to the desired level of care, which is very troublesome for the patients. Inconvenient referral arrangements will cost private hospitals clients and thus the agreements with public hospitals. Another reason is that despite having developed to an advanced level as they may be, private clinics are not yet fully-fledged to meet all clients’ needs and there remains high level and complicated specialties or infectious diseases that private clinics cannot handle. In practice, while to sign a referral agreement with higher level hospitals is no difficult, it has been reported from public hospitals that private clinics often retain their clients until they have done the last possible subclinical tests and equipment-based services before referring or would refer only clients with hard to cure illnesses, treatment failure or more severe conditions. The challenges sometimes come from public hospitals which often write off diagnosis or test results or private hospitals or clinics, or even other public hospitals, when receiving referred patients. This is the result of the lack of legislations on sharing information about the patient’s health status and benchmarks for tests, equipment- based services and so on between public and private health providers in diagnosing and treatment. This is causing medical costs to increase and social resources to be wasted. 44

“ … It is unfortunate that private hospitals often requires the clients to go through a large number of tests and would give the patients treatment if they know what the health problem is, otherwise they would refer the patient. To put it casually, if it is no good for income they would pass on the burden to public providers, since we are both the leading line of health care in the city and also the backyard of private hospitals and clinics …” (focused group at public hospitals in Hanoi) “… We don’t mean any difficulty in terms of referral but private hospitals often squeeze off any subclinical service there is before making the referral. Public hospitals dare not use these test results which still have to be paid for by health insurance. As there is not yet a standard system in place for testing, how can we use others’ test results when the errors, if any, will later be blamed on us”. (senior official of a provincial hospital in Thai Binh). From the public sector to private sector: most participants in in-depth interviews and focused groups agree that technically there is only referrals from private providers to public facilities and not conversely. In practice however, this is quite common, especially in major cities like Hanoi and HCMC. The reasons are: i) many doctors and medical staff from the public sector (80% in Hue – as informed by a Health Department official) are working extra jobs in private providers and recommend clients to the private hospitals or clinics where they work or have connections with for financial gains or commissions; ii) as public hospitals are often in a constant state of overload, long waiting, patients prefer to have the choice for doctors and home-based care rather than going to public health services, especially in major cities like Hanoi and HCMC; iii) doctors giving prescriptions and recommending clients to intended drug stores is also a common fact since commission from drug sale contributes a sizable part to the doctors’ income. This is a very sensitive issue and accurate information can hardly be extracted from in-depth interviews and focused groups but rather requires dedicated studies. In a nut shell, despite the existence of official referral agreements between public and private providers, a real and consistent relation does not exist in practice on the basis of benefit and risk sharing between the two sectors and there are multiple gaps to be bridged in relation to classifying levels of care, classifying private hospitals, sharing patient’s information, recognition of diagnosing and testing results, etc. Personal relationship and for personal ends still play a major role in the process. + Private providers signing agreements to provide subclinical testing services In general, signing PPP agreements in provision of subclinical testing and equipment-based services remains few in number. In the four reviewed provinces/cities, Hue is the only place where official PPP exists in this field. Thua Thien Hue allows district health centers/hospitals that lack diagnosing equipment to 45 outsource testing and equipment-based services to private general clinics and Medic Company, not only in the case of health insured clients but also fee-for-service patients. District PCs will review and approve the fee levels through the Health Department. For health insured patients, Hue City health center, Hue City Social Security and Medic Co. will sign a 3-party agreement on provision of subclinical tests and equipment-based services. Medic Co. is responsible to provide subclinical tests and equipment-based services needed using a fee-for-service approach with the fee levels respective of the similar levels of care set by Thua Thien Hue Social Security applied. Costs of medicine, chemicals and consumables are paid for based on the purchased invoice prices of the company from following bids for medicine and consumables supply at the Health Department. The patients have to pay the balance of the costs to the company. To avoid non-transparency in costs and fees, Medic Co. has to attach a list of extra costs that it will collect from the clients to the contract. This is a breakthrough of Hue City Social Security and health sector in creating an opportunity to the patients to have access to early testing and equipment-based services without depending to referrals to a higher level of care, which helps relieve the stress for higher levels hospitals. This type of agreement is not only used for HI-based health care but also out-of-pocket clients at health centers which are often in continuous overload and still rely on outdated old equipment that are slow to be upgraded to meet the health care need of the community. In other provinces/cities, most participants in in-depth interviews and focused groups informed PPP is not yet in existence in provision of interconnected diagnosing and testing services. In practice however, unofficial types of partnership have been present in most provinces/cities, especially in Hanoi, HCMC and Hue City, mostly for the reason of public hospitals being constantly in a state of overload, failing to take care of the patients, leaving the patient to wait long while private clinics or testing centers have more advanced equipment (especially district hospitals/health centers that are in deteriorating physical conditions). Also, most doctors in public hospitals have an after-hours private clinic or work part-time for other private clinics and often recommend or give clients appointments for after-hours tests, or refer patients in more severe illnesses to the public hospital. In HCMC, some public hospitals have referred patients to Medic center though there is no agreement yet between public hospitals and the center. Medic center of Medic Ltd group is flouring business in HCMC and some other major cities in Vietnam and is an annually accredited quality, international standard early diagnosing center. All in all, with regards to signing agreements for diagnosing, subclinical tests and hi-tech services, there has been an official partnership through service agreement between public and private providers in Thua Thien Hue, which is absent in other provinces. Unofficial partnerships (non-contract agreement) have been present in most provinces/cities. Without good governance however, this will be a source for concerns of lack of control on service charges in private providers (which is not the case with 46 public providers since fees are prescribed) and testing service quality provided in the private sector, leading to financial risks for the patients, particularly the poor and those with limited financial resources. + Private hospitals signing service agreements with public hospitals: Morgue service is part of this but it is rare in practice that private hospitals would let the patients die in their premises. Severe patients are often referred to a public provider to rule out any risks. IV.3.1.2. + Monitoring and management: Very little has been done in supervising private medical facilities. Changes in organization, division of departments, centers, hospitals at the sub-national levels have resulted in overlaps in clinical operation causing difficulty to consistent and effective management. Added to that, the entities charged with the responsibility of monitoring are operating without clear roles or the right means, which rendering them poorly effective. On the other hand, the technical capacity as well as management skills of these monitoring agencies remain too weak to catch up with the development of the private health sector. IV.3.2. In preventive medicine IV.3.2.1. Contributions by private health in preventive medicine The qualitative study results show that contributions by private health in preventive medicine remain limited or almost none. According to regulations, private hospitals and clinics must regularly report epidemic stituations to the Provincial Preventive Health Center. However, compliance with the above regulations remains limited due to the absence of legal documents, which clearly stipulate the responsibilities of private health in epidemic prevention as well as lack of sense of responsibilities in epidemic prevention and control. “ Cooperation in epidemic discovering by the private health sector is nearly zero. The sense of private sector in epidemic prevention and control is poor due to limited technical capacities in prevention. On the other hand, there is no legal documents, which stipulate the participation by private sector and the Government has yet established mechanisms to encourage private sector to engage in prevention …” (Comments by leaders of Ha Noi Preventive Medicine Center) At the same time, the preventive medicine activities are less-profitable transactions and private health facilities operate mainly for profits. As a result, they do not want to participate in this area and mainly focus on medical service delivery for profit generation. However, the private health sector show their willingness to work together with the public in epidemic prevention and control upon occurrence. When being asked about the potential of private health sector in this areas, most responsdents share the same comments that private sector has a great potential in 47 prevention because with small scale, private facilities are scattered in living quarters and they are the eyes and ears to early discover epidemies. IV.3.2.2. PPP models in preventive medicine According to the overall study results, PPP in prevention is presently limited. Most interviewees share the same views: Prevention has a social nature and the Government must make more investment and no other should take responsibilities in this area. Therefore, in most study provinces, PPP in this area remain very limited and mainly relies on external aid project from international organizations, NGOs and others. As a reason, most private health facilities are for-profit organizations. Only some are non-profit, namely charity, church, pagoda, religious and private donors who are active spontaneously. Meanwhile, investment in prevention has the essence of long-term with few immediate benefits. The area is less attractive and private investors focus in medical care services delivery for quicker investment return and profit generation. Study results in 4 cities and provinces reveal several PPP preventive models. They are largely in national target programs like TB, HIV/AIDS, STI and reproductive health with support of international organizations or NGOs, charity organizations or churches. Below are some PPP models available in study locations: + Vaccination: The Vaccine Trading Company (AVM Group) has signed contract with the Preventive Medicine Centers and established SAFPRO vaccination office as well as provided counseling in 8 provinces and cities throughout the country, including Ha Noi, Thai Binh, Thai Nguyen, Nghe An, Hai Duong, Lao Cai, Ha Nam and Da Nang. With regard to cooperation mechanism, AVM Group invests in physical infrastructure, equipment and the Preventive Medicine Centers contribute human resources. Each vaccination office needs one physician, one nurse and one receptionist to take care of vaccination and counseling. There are procedures according to ISO in place. Consultants the National Institute of Hygiene and Epidemiology (NIHE) are recruited for evaluation because presently Viet Nam do not has an independent service quality assessment organization. According to AVM leaders, the corporate is now sufferring from losses if taking into account fixed asset depreciation cost. However, the group is willing to bear such losses to expand the market to cover the whole country. The company plans to develop the IT network to store all clients’ information and monitor with the help of AMV-SAFPO software via electronic vaccination logbooks. This is a great idea of AMV Group. + Supply chemicals, insecticide and mosquito spraying: Private companies sign contract with Thai Binh Preventive Medicine Centre to supply chemicals and conduct mosquito and insecticide spraying under the technical guide and monitoring of the centre. Leaders of the centre reveal that they hire private to provide such services due to their offered prices are 4 times lower than that of the government 48

(VND5000/square metre). According to local people, government charges are higher than their affordability so if prices are cheaper they would use more. + TB control: PPP TB control models in study locations: - The model for early discover, examination, couselling and referral to TB treatment facilities as well as DOTs application in Ha Noi, HCMC and Thai Binh Implementation scopes, extents and results: - The model is piloted in HCMC with 2/22 districts and 300,000 population. The target groups included physicians working at clinics and pharmacies. In Ha Noi, pilot is carried out in 2 districts of Tu Liem and Thanh Xuan with 220 private health facilities and 12 private hospitals. In Thai Binh, 250 private practitioners have been trained on early discover, examination and referral. PPPs implementation results in TB control: - In Ha Noi, after 2 years of implementation, the number of detected and referred TB cases increased by 8%. All private health facilities signed commitment to participate in discovering and referring TB patients (85%). However, only 18% of the participating private health facilities detected TB patients. - In Thai Binh, 577 suspect cases have been referred to TB treatment facilities for diagnosis and treatment registration. Of which, 106 patients have TB diagnosis. After 18 months of implementation, TB/HIV early discovering rates increase. The percentage of TB patients detected and referred by private health sector raised from 0.8% in the 3rd quarter of 2007 to 8.15% in the 3rd quarter of 2008[22]26. - In HCMC, the model is regarded a success with 58% of selected pharmacies referring at least 01 TB suspect case. At least 373 TB suspect cases have been referred, 149 cases have test and 10 TB cases have been detected[25]27. + HIV/AIDS control: Tuberculosis PPPs models at studied area  The pilot model of free ART for HIV/AIDS patients in Hanoi.  The model of early test, anddetection of HIV/AIDS patients and referal to Provincial HIV/AIDS Control Center, which was only available in Hue.

26 Hung DV., Ly HM, Lien NT, Expanding TB and TB/HIV Intergrated Services in Thaibinh Province Vietnam

27 Knut LönnrothI, 1; Mukund UplekarI; Vijay K. AroraII; Sanjay JuvekarIII; Nguyen T.N. LanIV; David MwanikiV; Vikram PathaniaVI, Public–private mix for DOTS implementation: what makes it work? Bull World Health Organ vol.82 no.8 Genebra Aug. 2004 49

 The model of counseling, care and support for OI patients and participation in PLHIV care in the community in Hue. Implementation scopes, extents and results:  The pilot model of free ART for HIV/AIDS patients at private clinics has just been carried out since January 2010 at 2 districts in Hanoi sponsored by PATH organisation via Hanoi HIV/AIDS Control Center. This is the first pilot model implemented with signing commitment contract between the municipal PAC and private helath facilities  The model of providing early detecting HIV/AIDS test and detection services: There are 4 private companies in Hue investing testing laboratory to detect HIV positive suspect cases and referal to PAC for confirmation.  Common OI care support and participation in PLHIV care in the community by Tue Tinh Duong Hai Duc Clinic and the Christian Thien Long Charity Clinic with financial support by NAT. The government does not provide financial support and PAC only support via training. These two clinics are invited to have quarterly meetings and and annual review is organized. + The model of private participating in prevention, care and treatment of STDs and HIV/AIDS in Hanoi, HCMC, Can Tho, An Giang and Quang Ninh where HIV prevalence ranks top in the country[10]28. + The model of cooperation with private physicians in home-based care service delivery for AIDS clients in An Giang, Can Tho and Quang Ninh (Physicians in public sector introduce AIDS client to some private general practitioners for home-based services delivery). + The model of cooperation with private pharmacies to distribute subsidized or free condoms and clean syringes and needles for clients in Quang Ninh and participate in data collection on HIV/AIDS patients to report to provincial hospital for managemen[10]t29. + The model of social franchising: sponsored Atlantic Philianthropies (AP) and MSI Vietnam, the social franchising model on reproductive health care/family planning services associated with the trademark of “Sisterhood” in Vietnam has been successfully piloted in 10 Commune Health Centers (CHC) in Da Nang and 28 CHCs in Khanh Hoa. In 2010, the above project was expanded to 3 more provinces of Thua- Thien-Hue, Thai Nguyen and Vinh Long. In Hue, the project will operate in 25 remote communes in 3.5 years. The project aims to improve quality and utilization of reproductive health care services at commune level, especially in remote areas of the province. Franchising participants will be fully trained about social franchising and social marketing with contents: establishing and maintaining relationship with clients, service quality and financial stability. Besides, specialized staffs (physicians,

28 Pathfinder International Vietnam, Assessment report on private health participation in prevention, care and treatment of STDs and HIV/AIDS in Ha Noi, HCMC, Can Tho, An Giang and Quang Ninh, 2007 29 Pathfinder International Vietnam, Assessment report on private health participation in prevention, care and treatment of STDs and HIV/AIDS in Ha Noi, HCMC, Can Tho, An Giang and Quang Ninh, 2007 50 midwives) will be trained to replenish the clinical techniques and medical care quality. When joining the model, CHCs have to meet the service quality and facility standards to show the trademark of “Sisterhood”. Service charging is officially and consistently operated in franchising CHCs. Comprehensive marketing activities including communication with mobile art performance, display, mass media, leaflets or brochures distribution to popularize CHCs have helped to increase community concern to franchised trademark. Marketing activities are designed and combined with cultural events to attract the participation of women and their family as well as potential clients.  Training support: i) The Community Health Development Institute (CHDI) cooperates with Sacombank and some public hospitals like Hung Vuong, Hospital 115, Hospital of the HCMC Medical and Pharmaceutical University to train hundreds of specialized staffs in non-communicable chronic conditions, asthma, COPD, cancers in women, and stroke for some provinces in the Mekong Delta; ii) Cooperation among CHDI, Sacombank and Ben Tre Health Department to train and upgrade equipment in the whole province, from town to district and grassroots level, paying special attention to non-communicable diseases according to WHO recommendation.

Strengths and weakness of PPP models in prevention:

 Strengths: Results show that pilot models have gained certain achievements like mobilization of active participation from private health sector, increase of access for the people as well as TB/HIV/AIDS/STI patients to health facilities, increase the percentage of early detected TB patients (the percentages of TB patients early detected and referred from private health sector increased from 0.8% to 8.15% after one year of implementation in Thai Binh Province, and such figure in Ha Noi is 8%), raise awareness, knowledge and corporate responsibilities of private health facilities when participating in disease prevention programs and primary health care for the people in communities.

IV.3.2.3. Limitation/obstacles: PPP models in health sector remain limited. Currently they are mainly small and spontaneous activities with less sustainability and high dependence on external aid. The main causes are lack of budget, legal document and guidelines as well as appropriate policies to encourage such cooperation IV.4. PPP potentials in health sector

 PPP viewpoint: Most respondents believe that in the current circumstances, the people’s health care needs keep increasing, health care expenditures tend to go up, and the State Budget cannot afford all investment in health, mobilization of private sector is needed. PPP is a policy tool to mobilize additional resources (human 51

resources, infrastructure, management capacities); reduce State Budget spending; reduce risks for the public sector (the Government); improve cost-effectiveness of investment; improve service delivery; improve technical and management capacities; promote technical transfer; create more choices for affordable patients. However, many believe, in prevention, the Government should maintain the leading role and private sector only participate upon request. The Government should have strict control in immunization, supply of vaccines and biological products to protect health for clients, avoiding risks caused by private suppliers, which may neglect management and cause damages to clients.

 PPP potentials in Vietnam

Based on study findings, some PPP possibilities in Vietnam can be recommended as follows:

In medical care:

o The private may construct modern hospitals with full medical equipment at international standard, targeting better-off and affordable clients to limit patients seeking medical services abroad. o The private may invest in hospital construction in the form of BOT (Build- Operate-Transfer): Private health actors invest in infrastructure construction, service delivery and transfer ownership back to the Government o Primary health care (PHC) contract: the Government/Vietnam Social Securities sign contract with private practitioners to provide PHC services for a group of population in the community under the form of family doctor. o Expand the signing of health-insured medical services delivery contracts because the private participation remains very low (less than 4% of total health insurance cards registered for services). This is to reduce the burden and overload of public health facilities. Besides, it is needed to develop commercial and community-based health insurance to increase access for some vulnerable groups in the communities or remote and advantaged areas.

Provision on non-health services:

o The private may supply information technology (IT) system for hospital management at large scale (the recent Prime Ministerial decision permit PPP in e-Health). o The private sign contract on maintenance, repair of medical equipment and infrastructure. 52

o The private sign contract to supply services like hospital sanitation, security, nutritional canteen, laundry, power source management, safe water, etc.

Prevention:

o The private may sign contracts on immunization and supply vaccines but under strict control of the Government/Preventive Medicine Centers of Provinces and Cities o Contract to supply disease prevention services like mosquito chemical spraying, environmental sanitation, etc. o Organize communication campaign to raise awareness of the people in prevention and control of some diseases o Social marketing: the private participate to organize for implementation of social marketing campaigns to distribute commodities financed by international organizations/NGOs like condom, clean syringes and needles o Social franchising: the private participate to deliver services/products according to standard, requirements and receive technical assistance, financial support from Government partners for the benefits of the communities (for example, social franchising in reproductive health care services, mental health, HIV/AIDS, etc.) o Law enforcement: the aim is to improve medical morale for private health actors and create non-economic incentives like recognition and improvement of their fame in the society. There are two obligations mandatory to private health sector, including i) compulsory participation in some services of national target health program like TB, HIV/AIDS, STI, mental health and others, which should be attached with licensing for private medical and pharmaceutical practice, and ii) consolidate conditions when extending business license to encourage private health facilities to improve quality and implement legal obligations.

Conditions for PPP implementation in Vietnam:

In order to promote PPP in health sector, the following conditions are needed.

o The Government should have appropriate tax incentive policies for social services provided by private health and at the same time create conditions to allocate clear land for private health facilities or offer preferential in land use in case of land allocation or land rental fee reduction. o Create favorable conditions of human resources, support for human resources training for private health sector, and provide clear regulations on physicians working at private health facilities both in and outside working hours. 53

o Support private to get credits at appropriate interest rates (HCMC pioneers in supporting private health facilities to borrow demand stimulation capital from the development bank), increase the amount of loan and lending duration. o An independent quality assessment unit should be available to recognize private health facilities with good performance and quality to disseminate and develop commercial names for private health as well as to create motives for private health to improve the quality of medical services. o Provide professional health insurance policies for private health when they participate in delivering high-risk services like contracting infections or claims.

Challenges in PPP implementation in Vietnam:

o Absence of a complete legal framework for PPP in both medical care and prevention o Views/conception of the private partner remain limited in both public and private sectors, leading to difficulties in reaching consensus, partnership between public and private health facilities o Lack of technical human resources in both public and private sectors o Technical and managerial capacities of regulatory authorities are still limited o Information systems and sharing between public and private health facilities remain limited o State investment in health is at low level, especially in prevention 54

V. DISCUSSION The models of public and private partnership in Vietnam.

Analyses of domestic literature reveal that the public and private partnership (PPP) in Vietnam is still a new concept to a subsidy, decentralization and unprofessional public health care of Vietnam. Perhaps what derives from the market failure in health and the existence of foreign factors are asymmetric elements of medical information between service suppliers and users, which lead to the concerns relating to people health[2424]30. Therefore, PPPs in Vietnam develop at a limited level. However, in Vietnam there have been studies about private hospitals or reality assessment, the role and potential of the private medical, public and private partnership in certain provinces and districts, but almost no researches on PPP models[5][8]31, 32 . The research result showed that Vietnam has been carrying out several PPP models in both policy and implementation but at limited level. In examination and treatment field, there are three most common PPP models: i) signing joint venture and private investment contract on medical equipment investment at public hospitals according to the regulations of the decrees, circulars guiding social mobilization and hospital autonomy (Decree 43, Circular 15); ii) f signing the contracts of the health- insured medical services delivery between private health clinics and Social Securities at levels are carried out according to the guiding document of Vietnam Social Securities (VSS); iii) private signing the full package contracts in providing non-health services like cleaning, laundry, nutritional meals, security, etc. In prevention, there are some PPP models in health target programs like reproductive health care, tuberculosis, HIV/AIDS, STI, etc.

 The model of joint venture and partnership in procurement of medical equipment are diversified among public hospitals: As analyzed in the study results, the form of joint venture and partnership in procurement of medical equipment are diversified among hospitals, areas and hospital levels. Three most popular joint venture types at hospitals are: 1) joint venture and partnership model of medical equipment placement and profit sharing. 2) investors self-placing medical equipment and holding monopoly in chemicals and consumables supply. 3) hospital staffs and employees making capital contribution to procure medical equipment. And the model of term medical equipment lending is also applied but with limited quantity (2 of 10 hospitals). However, as a matter of fact, there are still 2 more models namely, i) investors placing medical equipment and supply monopoly chemicals and control the amount of monthly used chemicals and

30 Johannes Jütting (1999). Public-private-partnership and social protection in developing countries: the case of the health sector. The extension of social protection. Geneva Switzerland. 31 Long NH et al, Current situation, role and potentials of private health, Ha Noi 2007 32 Duc HA et al, Current situation, role and potentials of PPP in service delivery by private sector in the Mekong Delta, 2009 55 consumables ii) hospitals borrowing capital from their staffs, employees and monthly paying the interests announced by commercial bank at borrowing time[24]33. The result indicates that, levels and forms of investment are very different among hospitals. The high autonomy level hospitals have diversified joint venture modes to improve medical equipment, new techniques. Other less autonomy hospitals like district hospital have less joint venture with smaller possessions of joint venture. Nevertheless, as a difference identified in in this study, the investment of joint venture with private partnership not only develops at provincial level hospitals - the high autonomy level hospitals but also district level hospitals with high economic conditions like Thu Duc district-HCMCT. Thu Duc hospital is the district level hospital which ha 50 patient beds in 2006, mainly supplied out-patient services with poor facility and medical equipment condition. Since 2007, hospital has transformed according to hospital autonomy mechanism, Decree 43 and hospitals have positively mobilized joint venture’s capital according to above-mentioned forms and gained significant results (revenue increased up to 5.8 times in 2009 compared to 2006 and performance indicators of the hospital increased more sharply than that before). The study result also indicated that joint venture activities at public hospitals brought a lot of positive results, meeting the urgent demand of new medical equipment, especially high-tech equipment to timely respond to the people’s need of health care, while the government cannot provide enough budgets to procure medical equipment. At the same time hospitals also reduce the risk of interest as well as equipment maintenance expenses. However, this research and the review on Government Decree 43 application at public hospitals by the Health Strategy and Policy Institute and Department of Planning and Finance, MOH clearly pointed out the obstacles and unexpected impacts of the joint venture form[24]34. Accordingly, the promotion of joint venture at public hospitals has leadto “public private mix” situation in using human resources as well as physical facilities, medical equipmen resulting in weakening public hospitals, separating referral levels, breaking the unity of medical service delivery system. Without a mechanism to control the indication of high-tech equipment, out-of-pocket payment increase will be the main factor to worsen inequity in access to health care services. Besides, joint venture and partnership in investment to procure medical equipment at public hospitals in the absence of MOH regulations on testing criteria can lead to the abuse of testsat many helath facilities for capital return, creating cost burden for people and the health system.

 Partnership in health-insured medical services delivery remains very modest

33 HSPI, Department of Planning and Finance, MOH, Survey report on implementationof Government Decree 43 at public hospital, 2010. 34 HSPI, Department of Planning and Finance, MOH, Survey report on implementationof Government Decree 43 at public hospital, 2010. 56

Study results revealt that the private health facilities’ paricipation in medical services delivery, in general and health-insured medical services delivery, in particular remains modest, only accounting for a small proportion of health-insured medical services. However, there are no data on total health insurance cards registered for PHC, including types of cards as well as visits for examination and treatment at private health facilities. The proportion of private health sector in medical care services delivery for health insured cannot be accurately estimated. This would also affect the development of plan on expanding health-insured medical services utilization at private health facilities. In general, the ratio of in and out patient medical services delivery under health insurance schem by private sector is very low compared with that of the public. According to the results of inspecting 1,084 hospitals, including 1,015 public and 69 private nationwide, the total in and out patient visits in 2008 and 2009 were 4,637,060 and 5,683,822, accounting for 4.4% and 4.9%, respectively[3]35. However there remains a large number of private general clinics (estimated at about 25% of those registered for health-insured medical care services delivery), which has not been reflected in the hospital inspection data by the Medical Services Administration. Therefore, in reality the ratio of health-insured outpatient visit would be much higher. An uniform reporting system of medical services delivery in all public and private facilities nationwide must be available. On the other hand, study results also show the uneven distribution of private health facilities throughout the nation leading to different participation in health insurance among locations. Most private health facilities signing health-insured medical services delivery contract are located in HCMC and Ha Noi. Only some are in other cities and provinces. Although the nation has more than 30,000 private clinics but scattering. Most of them cannot have sufficient conditions for health-insured medical services delivery according to criteria set by the Vietnam Social Securities (VSS) such as not having all 6 specialties. At the same tiem, MOH has not classified and divided private health facilities by referal levels. At presenty they are considered as at district level. Some private facilities are not ready for registration due to price variance between health insurance reimbursement and prices set by private facilities. An other reason, private clinics are also overloaded and cannot supply health-insured services or health insurance reimbursement procedures are still complex, creating more workload. Uneven distribution of private health facilties will affect people’s accessibility to medical services in many provinces. If there are favourable mechanisms to encourage and create conditions for participation, the private health sector would have great potentials to provide out-patient services, contributing to reduce overload in public facilities.  Private health facilities signing contracts to provide non-medical services tend to bloom at most hospitals

35 Medical Services Administration, Hospital Inspection Results 2009 57

According to study results, most hospitals sign contract with private partners to have non-medical services like environmental sanitation, laundry, security, nutritional portion and information technology. Similar results are reported in the Study on impact assessment of financial independence policy implemented according to Government Decree 10/43on services suppliers and payers conducted by HSPI in 2008. Applying this method helps hospitals to reduce pressure on personnel quota, focusing available staff on technical activities. Moreover, it is more cost saving and efficient compared with self-supply by hospitals. The above model is widely applied in the world. Many PPP models in countries have proven the effectiveness in contracting private to provide non-medical services. They include nutritional portion supply for patients in Bombay of India, hospital cleaning contract in BangKok of Thailand, medical equipment supply in Thailand and others. The private provide full package services. Such contract type help the public sector to reduce management overload, save human resources and obtain better prices[14]36.

In short, in the world, there are many reviews of PPP models in medical care with manifestation of certain achievements. These are ‘private wing’, contract signing (consisting of services, management, construction and maintenance), franchising (selling public hospitals to private), BOO (private builds, owns and operates to sell services to the government), BOT (private tenders to build hospitals and lend to the government for operation). In Vietnam at the moment, none of the above mentioned models have been piloted. However there are models which are not available in Vietnam compared with the rest of the world. It is government and private contribution to supply services in public facilities and get benefits from such partnership. The present ‘public and private mix’ is of great concern of MOH leaders. Intensive study is needed to provide timely instructions and adjustment.  PPP in prevention remains very limited

PPP in prevention is currently implemented in Vietnam but at limited scale, mostly piloted in certain locations and national health target programs such as EPI, TB, HVI/AIDS, reproductive health and STDs. There are few PPP in prevention because in Vietnam most private health facilities are for profit. They only supply high- income generating services and pay less attention to low-income generating ones. On the other hand, in legal documents there are no obligations requiring private participation in this area. Private health only takes part in epidemic control upon occurrence and government request. As shown in study results, private health sector has made active contribution in preventing diseases for the people and at the same time increase their accessibility to health facilities. For example, private companies sign contract with Provincial Preventive Medicine Centers (PPMC) to open vaccination and counseling sites, creating conditions for people to easily access to quality 36 Anne Mills. To contract or not contract? Issues for low and midle income countries. Health Policy Planning: 1998; 13(1): 32-40 58 immunization services. Other examples are application of model to early discover TB, counsel and refer to TB treatment facilities and participation in DOTs in Ha Noi, HCMC and Thai Binh; care and support, and OI counseling for patients and support for PLWHIV in community by the Thien Long Charity Clinics of the Church and Tue Tinh Clinic, which bring about positive impacts. Participation of private health sector in prevention has clearly shown their corporate responsibilities in public health activities. Models of condom social marketing, clean syringes and needles, and “sisterhood” social franchising are implemented to improve the quality and increase the needs for reproductive health care services at commune level in remote areas. At the same time, communication activities are carried out to disseminate for the Commune Health Center (CHC) and the “sisterhood” reputation. The model has attracted many women, their families and other potential clients[11]37. The above PPP models tend to be effective at community with large scale coverage. There should be more intensive study and evaluation for scaling up. However at the time being, Vietnam has few documents or reports evaluating private health participation in health, in general and in prevention, in particular. A recent report (2007) by Pathfinder with support from Pfizer Foundation, PEPFAR/USAID and PACT was conducted to help improve capacities for public health sector in effective training and monitoring private sector, supporting effective dialogue mechanisms between public and private in HIV/AIDS prevention. At the same time evaluation was carried out ti have more understanding the current interaction and potentials between public and private health sectors in Vietnam. At the beginning, the activities were carried out in An Giang Province and recently replicated to HCMC and Can Tho. According to evaluation results, private health sector is relatively active in STDs area. About 16% of private health services are related to STDS and more than 80% of pharmacists sell drugs to treat STDs. 47% of STDs service providers provide STDs diagnosis services. More than 77% of private health facilities and 85% of pharmacisits disclose that they do not have any staff trained to supply STDs-related services[10]38.

37 Social progress promotion center, Report on project need assessment “Social frahnchising on reproductive health care for commune health network in Thai Nguyen, Thua Thien Hue and Vinh Long”, 2009 38 Pathfinder International, Develop public and private health cooperation in prevention, care and support for HIV/AIDS in Vietnam, 2007 59

V.1. The models of public and private partnership in Vietnam

The world has many PPP models in prevention with positive results, as presented in the overview. Besides, there are models like the Global Alliance on Vaccinication and Immunization (GAVI). The aim is to strengthen donor cooperation in improving immunization services at national level and reduce vaccine costs, support for study on development of new vaccines specific to developing countries with international organizations and NGOs. As result, 300 billion US dollars have been raised to support national health programs of 21 nations, vaccine costs reduced, vaccine market in poor countries created. The condom social marketing program among female sex workers and client in the red lamp areas in Indonesia with support from USAID HIV/AIDS Prevent Project (HAPP), FUTURES has increased condom use in target groups[14]39. The effectiveness of the above programs shows great potential of PPP in prevention.

V.2. PPP potentials in Vietnam  Inmedical care: Analysis results show great PPP potentials in medical care in Vietnam. The nation may learn from successful experiences of hospital PPP in the world to well organize for its own. Accordingly, private may construct new hospitals with full advanced medical equipment at international standards, high quality and intensive services targeting at high-income clients to limit Vietnamese client seeking overseas services (BOO). Private may also invest in constructing hospitals under BOT (Build-Operate-Transfer) where private construct physical infrastructure, supply services and transfer ownership to the government. Others may include contract and expansion of private health sector in health- insured medical services delivery.

With regard to legal basis, the Government of Vietnam has created a rather streamlined investment environment for PPPs in medical care to attract local and foreign investors. More treamlined legal documents have been enacted like the Law on private medical and pharmaceutical practice, Law on Treatment and Examination (in effect from 1 Jan 2011), Health Insurance Law (2009) with the objective of universal health insurance by 2014 and the Corporate Law (2005), Common Investment Law (2005). This is a breakthrough in create a healthy investment environment, assuring the rights of doing business in areas not forbiden by the laws instead of just doing what are allowed to state agencies and organizations. More over the social mobilization policy in health sector implemented for more than 10 years aslo created new breakthroughs in the health sector. This policy has been institutionalized via many sub-law documents like Government Decrees 18, 153 and 69, and Decree 108/2009/ND- CP on management and encouragement of investment accoding to PPP method

39 Ann Thomas; Dr. Valerie Curtis. Water and Sanitation Program. The World Bank 1818 H Street, NW Washington, D.C. 20433; Website: www.globalhandwashing.org 60

in infrastructure projects. Accordingly, there are many incentive policies to attract private investment in health such as VAT and im-export duty incentives, priorities in land allocation for constructions, handing over clear land or support land clearance costs, or land rental charge reduction or exemption, exemption of registration fees for land use rights and assets on land. Newly established hospitals enjoy corporate income tax exemption in a certain number of years, commonly 4 years since the first year of having taxable income and 50% of corporate income tax reduction in the following 5 years and 10% of corporate income tax during the whole operational period. They also enjoy incentive credit and development credit polcies (Vietnam Development Bank of Investment Development Fund of Ha Noi and HCMC). Other incentives include capital borrowing in the form of shares, capital raising from laborers, join-venture and partnership with organizations and individuals, support after investment, etc. The incentive policies to attract private investment in health were regulated in legal doccuments, however, in fact, legal enforcement is very limitted. Therefore, benificiaries have meet many dificulties in implementation these policies above.

To mobilize resources in the community, MOH recently held a thematic workshop on PPP in HCMC (May 2010). At the workshop MOH Minister concluded that the Government of Vietnam wishes to promote comprehensive private health development, especially in medical care, technical development and transfer in intensive areas and pharma production, medical equipment and prevention. Vietnam also wants to have international standard health care companies. The nation will strive to gradually improve investment climate and create condifions for investment in health as well as applying appropriate.

Moreover, Decision No. 71/2010/QD-TTg of Prime Minister dated 9 November 2010 issued Regulation on pilot investment using PPP model. It is expected that a firm legal corridor for PPP in Vietnam will be created, bringing about great potentials for the health sector of the country.

 In preventive care Study results also show some PPP areas in preventive medicine are in Vietnam with certain achievements. This is also correspondent with results of literature review on international PPP experiences as analyzed above. The models which are recoginzed with high efficiency in Vietnam include the early TB discovery and DOTs treatment in Thai Binh, HCMC and Ha Noi, free ARV for HIV/AIDS patients, condom social marketing, syringes and needles exchange, social franchising to attract private investment to health centers to improve the quality of reproductive health care services for people in rural and remote areas. However, in reality, PPP models in prevention area in Vietnam remain limited, developed spontaneously and at small scale, and 61 mainly dependent on international organizations, NGOs and charity organizations leading to poor sustainability. With regard to legal basis, Vietnam currently lacks legislation on PPP in preventive medicine. Vietnam really needs to have incentive policies, both in economic and non-economic aspects for private health facilities such as recognition and improvement of reputation of private health in the society. At the same time, a PPP legal frameworks must be available in preventive medicine, in which private health sector must take two obligations: 1) mandatory participation in some services/activities within national health target progams like EPI, TB, HIV/AIDS, STIs and mental health, which is associated with the registration for private medical and pharmaceutical practice; and 2) consolidation of conditions for extending business licences to encourage private health facilities to improve the quality of services and implement legal obligations.

V.3. Limitations of the study The study was conducted according to steps of an academic research however during data collection, there were certain limitations as follows. PPP concept is still new in Vietnam and respondents’ knowledge in this area remain limited. Inappropriate perception of the private health sector stills exists. Many still believe private sector associated with for-profit and poor quality. Thus, it affects the study results. PPP models in Vietnam are not clear and there are not sufficient conditions for evaluation according to assessment criteria applied to world PP models. Therefore the study group did not have bases to evaluate PPP models in the equity and efficiency aspects. Databases of the private health sector are modest, especially in private general clinics. Most data on medical care services delivery by private facilities cannot be monitored in serval provinces. Health financial and human resources information are considered sensitive and difficult to collect data. The actual human resources coming from the public are not fully reported. Therefore, lack of human resources and actual needs of public and private health in the future cannot be reflected. Besides, due to difficult cooperation conditions and data collection from private general clinics, the study group cannot collect data from these facilities as expected in the beginning. 62

VI. CONCLUSION AND RECOMMENDATIONS:

VI.1. Conclusion: PPP in the health sector is really needed in the context of increasing health care needs, more complex disease pattern and limited state budget allocation. PPP will bring about benefits and share risks between the public and private in a common goal of health care and protection for the people towards equity and efficiency. However, the current PPP models in Vietnam are limited. Private participate in health care service delivery with small scales and unevenly distributed. Most of private health facilities operate for profits. The private investment via joint venture and partnership in public health facilities has evolved but mainly concentrates in large and populous cities with better economic conditions. Less investment is made in rural areas with less economic conditions. Invested medical equipment is mainly used for easy-to-make-profit services and targeted at affordable clients. Private health facilities modestly participate in health-insured service delivery with extremely low rates of registered health insurance card (less than 4% of total health insurance cards). Only 65% of private health facilities and 25% of general clinics sign health-insured service delivery contracts. PPP in prevention is also limited. At present there are several PPP models in primary health care and health programs but with low coverage and large dependence on support from international organizations, NGOs and charity organizations. This shows a poor sustainability. There is an absence of legal framework, mechanism and supporting or binding conditions to promote PPP as well as the potentials of private health sector in both medical care and prevention.

VI.2. Recommendations: To expand PPP in the health sector, it is needed to carry out the following solutions:  Government policies + A complete legal framework should be issued for PPP in health + Complete and supplement related legal documents + Existence of overall solutions for better qualified human resources development – create conditions to open private medical schools + Create real equity environment between public and private sectors based on state legislations  Ministry of Health should: + Develop private health sector development targets on scope, quantity and quality standards, specific to the Vietnamese context 63

+ Develop quality control for the public and private hospitals, considering private as an integral part, equal to public facilities + MOH should develop a departmental level unit, competent to evaluate the quality of hospitals, monitor and examine the implementation of Government policies on social mobilization of health activities as well as evaluation and licensing for private hospitals and support private health activities + Enhance the state control role in joint venture and/or partnership to invest in procurement of medical equipment at public faclities to minimize risks and unwanted impacted based on equity and effieciency criteria + Improve technical and managerial capacities for state governance agencies in health + Expand social health insurance contract signing with private health facilities, contributing to reduce workload for public sector and speeding up the progress of universal health insurance; establish mechanism to encourage private health sector to participate in delivering medical care services for the poor and vulnrable groups in the community or remote and disadvantaged areas + Create mechanism to encourage and mandate private participation in delivering some services within national health target programs, primary health care on the bases of equity and mutual benefits in order to ensure preventive and health promotion services + Improve awareness, perception of PPP both in the public and private sectors + Develop an uniform e-health information system in public and private health facilities and strengthen sharing informaton on patients, disease patterns and epidemies between public and private facilities + Conduct comprehenvise study on PPP in Vietnam, covering risk and benefit assessment criteria to provide evidence for policy making + Implement pilot PPP projects in prevention, diversify health programs tailoring potential clients, including people in community, vulnerable groups, disadvantaged and remote areas (develop projects on social franchising, social marketing, training, education and training, etc.) 64

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1. Medical Service Addministration, MoH, Report on National Private Hospital Rountine Meeting in Hue city, 2009. 2. Vietnam Social Security, Report on Statement Health Insurance, 2009 3. Medical Service Addministration, MoH, Hospital Review, 2009 (Including 1015 public hospitals and 69 private hospitals) 4. Cuong LQ, PPPs in health care: benefits and risks, Health Policy Jounal, 2010 5. Duc HA and et al. Current situation, role and potentiality in Public Private Partnership in health care provision by private sector in the Mekong Delta, 2009. 6. Vietnam National Health Survey, 2001-2002 7. MoH Minister’s Conclusion in Public Private Partnership and Investment Abtraction workshop in HCMC on 26/5/2010. 8. Long NH and et al. Current situation, role and potentials of health care provision by private health, Health Publicing Hourse, Hanoi 2007 9. Decision No.153/2006/QD-TTg and Decision No. 30/2008/QD-TTg 10. Pathfinder International Organization in Vietnam, Assessement on Public Private Partnership in preventive care and treatment HIV/AIDS in Hanoi, HCM, Cantho, Angiang and Quangning, 2007 11. Central for Social Approaching, Assessement report on Project need “Social Fanchising on reproductive health care service for health community network in Thainguyen, Thuathienhue and Vinhlong, 2009. 12. Heath Strategy and Policy Institute and Department of Planning and Financing of MoH, Review of the Implentation of Decree No. 43/2006/ND-CP in public hospitals in Vietnam, 2010 13. Alexander S. Preker and April Harding (2003). Innovations in Health Service: Delivery The Corporatization of Public Hospitals 14. Anne Mills. To contract or not contract? Issues for low and midle income countries. Health Policy Planning: 1998; 13(1): 32-40 15. Ann Thomas; Dr. Valerie Curtis. Water and Sanitation Program. The World Bank 1818 H Street, NW Washington, D.C. 20433; Website: www.globalhandwashing.org 16. Benjamin Loevinsohn, April Harding. “Buying results? Contracting for health service delivery in developing countries. Lancet 2005; 366:676-81 17. Dr. A Venkat Raman and Prof. James Warner Bjorkman, Public – private – partnership in the provision of health care services to the poor in India. 18. Gede Patra, Tabana hospital Profile, Building Public Private Partnership in Health System Strenthening 65

19. Güntert, B. J. Public Private Collaboration in the Healthcare Sector: Definitions and Overview 20. Harding and Preker, Private Participation in Health Sector, 2005 21. Hjertqvist, Johan. 2000. “Swedish Health-Care Reform:From Public Monopolies to Market Services.” Paper pre-sented at conference on the Future of Health Care in Quebec, Montreal Economic Institute, Montreal, Canada,18 October. 22. Hung DV., Ly HM., Lien NT, Expanding TB and TB/HIV Intergrated Services in Thaibinh province of Vietnam. 23. James Warner Bjorkman (2008). PPPs in health care services of less developed countries. IPSA Conference. Concordia, Quebec, Canada 24. Johannes Jütting (1999). Public-private-partnership and social protection in developing countries: the case of the health sector. The extension of social protection. Geneva Switzerland 25. Knut Lönnroth; Mukund Uplekar; Vijay K. AroraII; Sanjay Juvekar; Nguyen T.N. Lan; David Mwaniki; Vikram Pathania, Public–private mix for DOTS implementation: what makes it work? Bull World Health Organ vol.82 no.8 Genebra Aug. 2004 26. Martin McKee, Nigel Edwards, & Rifat Atun, Public–private partnerships for hospitals. Bulletin of the World Health Organization, November 2006; 84 (11) 27. Rob Taylor and Simon Blair, Public hospitals options for reform through public-private partnerships, 2002 28. World Health Organization. 1999. Who Guidelines on Collaboration and Partnership with Commercial Enteprise. Geneva: World Health Organization. 29. World Economic Forum 2005 66

Annex 1

Joint Venture Investment in Equipment in selected hospitals

Joint venture equipment investment type Joint activities Investors installed machines and Pooling in capital from hospital staff with investors took monopoly in supplying (medical chemicals, consumables Hospital equipment (Hospitals) without being Direct capital Hospital borrowed companies) to being put under controled in pooling and money from install control as terms of use of profit hospitals staff and machines and regards use of chemicals and distribution paid interests like distribute chemicals, consumables based on the bank interest profit gained consumables capital pooled Saint Paul hospital X X x Thanh Nhan X hospital Son Tay general X X hospital Thuong Tin x hospital Thai Binh hospital X X x Dong Hung district X X hospital – Thai Binh province Traditional X x Medicine Hue Health Care Center X Hue Thu Duc Hospital X X x Cho Ray hospital X X Total hospital 8 0 7X 5 0 67

Annex 2

INVESTMENT IN EQUIPMENT FROM SOCIAL MOBILIZATION SOURCE IN STUDY HOSPITALS

Contents Saint Paul Thanh Nhan Son Tay General Thai Binh Hospital hospital hospital Hospital Investment - Joint activities - Joint activities with Joint activities with - Joint activities with type with investors investors (medical investors (medical investors (medical (medical equipment equipment equipment equipment companies) to install companies) to install companies) to install companies) to machines and machines and machines and install machines distribute profit distribute profit distribute profit and distribute gained gained gained profit gained - Investors installed - Investors installed - Investors installed - Investors machines and machines and machines and installed machines hospitals would have hospitals would have hospitals would have and hospitals to procure chemicals to procure chemicals to procure chemicals would have to and consumables of and consumables of and consumables of procure chemicals the company installed the company the company and consumables machines installed machines installed machines of the company - Hiring machines in - Pooling in capital installed machines a certain epriod of from hospital staff - Pooling in capital time from hospital staff - Taking soft loans from bank Achievements - Number of NA NA NA NA invested machines by investment type 68

Contents Saint Paul Thanh Nhan Son Tay General Thai Binh Hospital hospital hospital Hospital

- Type of 06 para-clinical 03 para-clinical NA 18 para-clinical machines machines machines, 02 clinical machines invested machines and others (clinical and (unable to list) para-clinical) - Total - Total investment - Total investment Total investment - Total investment capital by capital: VND 19 capital: VND 20 capital: VND 5 capital: VND 30 investment billions billions billions billions type

Pricing Following Following Following price Following ‘socilization’ ‘socialize’ prices ‘socialization’ prices regulated by the ‘socialization’ prices services developed by developed by hospital former HaTay developed by hospital based on based on price provincial People’s hospital based on price approved by approved by committee price approved by Provincial Provincial People’s Provincial People’s 69

Contents Saint Paul Thanh Nhan Son Tay General Thai Binh Hospital hospital hospital Hospital People’s committee + có tích committee + committee + có lũy lũy tích lũy Profit - Profit is - Machine installment - Machine - Machine distribution distributed by type: Joint activities installment type: installment type: by different rate: with investors Joint activities with Joint activities with investment 35/65; 40/60, (medical equipment investors (medical investors (medical type 30/70 based on companies) to install equipment equipment type of machine machines and companies) to install companies) to install distribute profit machines and machines and gained: 35/65; 40/60, distribute profit distribute profit 20/80 based on type gained: 35/65; 40/60, gained: 35/65; 40/60, of machine 20/80 based on type 20/80 based on type of machine of machine

Hue Traditional Medicine Hospital and other district hospital/health center

Content Thu Duc Dong Hung Thuong Tin Hue city health Hospital district hospital center hospital – Thai Binh province Investment type - Pooling in - Joint activities Pooling in capital - Installing capital from with investors from hospital staff machines hospital staff to to install buy equipment machines and - Joint activities distribute with investors to profit gained install machines - Investors + medical installed equipment machines and companies hospitals + hospital staff would have to procure chemicals and consumables of the company installed machines - Achievements - Number of - Joint investment 02 machines 01 automatic 03 X-ray machines invested machine with hospital staff: biochemical 70

03 machines testing machine including: máy điện tim + phần mềm, máy soi cổ TC và máy đốt điện - Joint venture with external partners: 01 X-ray machine máy XQ KTS and 01 CT-Scanner - Hematology and biochemical testing machine: Investors installed machines and hospitals would have to procure chemicals and consumables of the company installed machines - Type of 5 CLS, 1LS CLS: 02 CLS: 01 CLS: 03 machines invested (clinical and para- clinical) - Total capital by - With hospital staff: - Total invested - Total invested - Total invested investment type VND 140 millions capital: VND 1 capital: VND 237 capital: NA - With external billions millions partners: CT- Scanner VND3,3 billions; X-ray machine: price was not informed KTS không rõ giá Pricing Service price follows Service price Service price Service price follows ‘socilization’ the regulation of follows the follows the the regulation of services MoH regulation of QĐ/QĐ – the Provincial People’s Provincial former Ha Tay committee People’s provincial committee People’s committee Profit Profit is distributed Profit is Profit is Profit is distributed distribution by by rate of 30/70, distributed by rate distributed by rate by rate of 30/70 investment type 35/65 based on type of 30/70, 35/65 of 35/65 of machine/ thời based on type of gian KH máy machine/ thời gian KH máy 71

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