Moving toward Universal Coverage of Social Health Insurance in Vietnam: Assessment and Options (Directions in Development - Human Development)

Over the past two decades Vietnam has made enormous progress towards achieving universal coverage (UC) for its population. Significant challenges remain, however, in terms of improving equity with continuing low rates of enrollment. Ensuring financial protection also remains an elusive goal. The Master Plan for Universal Coverage approved in 2012 by the Prime Minister directly addresses both these deficiencies in coverage. The objective of this report is to assess the implementation of Vietnam SHI and provide options for moving towards UC. This is a joint assessment with development partners, World Health Organization, United Nations Children's Fund (Unicef) and Rockefeller Foundation. Expanding breadth of coverage, particularly for those hard to reach groups such as the near-poor and informal sector would require substantially increasing general revenue subsidies and fully subsidizing the premiums for the near-poor. High enrollment rates would, however, have little impact on financial protection and equity if OOP costs remain high. Achieving UC will require sustained efforts to improve efficiency in the system, and gain better value for money from available budgetary resources; without these efforts, any further progress towards UC would be financially unsustainable. There is considerable scope for improving efficiency in Vietnam. Fragmentation in the pooling of funds gives rise to unnecessary costs. Inefficiencies in resource allocation and purchasing arrangements include: (i) an overly generous benefits package; (ii) provider payment mechanisms and the mix of incentives facing providers which result in an oversupply of services; (iii) high prices, overconsumption and inappropriate use of pharmaceuticals; and (iv) the structure and incentives embedded within the delivery system. The organization, management and governance of SHI are fragmented and often dysfunctional. The present institutional setting for SHI needs to be assessed and changed.