The role of health insurance in health care financing in Vietnam 1990 – 2016 : an equity perspective

Equity in health has been defined by the World Health Organisation as “the absence of avoidable or remediable differences among groups of people, whether those groups are defined socially, economically, demographically or geographically”. Further, universal health coverage (UHC) encompasses “all people having access to quality health services without suffering the financial hardship associated with paying for care”, and thus embodies equity in health. UHC is an objective pursued by many countries to provide better health care for their citizens. Social health insurance (SHI) is an insurance mechanism often run by government to enable the population to access health services with reduced financial hardship and is one of the main financing mechanisms to achieve UHC. To support equity in health, it is considered essential that equity is embodied in policies and practice, and that the performance of the implementation of those efforts is monitored. Vietnam introduced SHI in 1992 as a social, non-profit financing mechanism to achieve UHC, and primarily is operated at the provincial level. There has been limited investigation into the role of SHI in supporting equity objectives at system and individual levels in Vietnam, and no investigation at a provincial level. Given the importance of the provincial level to the operations of SHI, the lack of information at the provincial level is a critical gap for policy development towards achieving UHC in Vietnam and supporting equity in health. Through this thesis, I explore the evolution of SHI in Vietnam since inception and assess its functioning and performance at system, provincial and individual levels in supporting equity objectives - coverage, service provision and financial protection to inform future policy development. The thesis is comprised of a series of three studies. 1. An examination of the evolution of SHI in Vietnam between 1992 to 2016, and system level coverage and expenditure over this period 2. An equity analysis of SHI performance across Vietnam’s 63 provinces in 2014; and 3. An analysis of individual level health care coverage, service utilisation and out-of-pocket payments in 2014, by health insurance status at individual and provincial levels Using population coverage, benefit coverage, and financial protection as indicators of progress towards UHC, five stages of SHI development were identified. During the study xxi period, SHI coverage expanded from 5% of the total population in 1992 to 82% in 2016. Vulnerable groups were included and subsidised from Stage II (1998 - 2005) onwards. The benefit package always included inpatient and outpatient services, which include consultation fees, pathology, medications, and consumables with the inclusion of additional items expanded over the study period. The expansion of the essential drug list included expensive items not included on the World Health Organization Essential Drug List. SHI became a significant source of health-care finance for treatment and prevention, increasing from 5% of total health expenditure in Stage I (1993) to 48% in Stage V (2016). Additionally, out-of-pocket payments increased from 37% to 45% of total health expenditure between 2001 and 2016 when assessed per the definition of the World Bank. In the provincial level analysis, concentration curves and concentration indices for SHI coverage and premiums (total, government subsidies, and individual premiums) exhibited a “pro-poor” trend across provinces ordered by monthly income per capita. However, SHI service utilisation (total, inpatient, and outpatient) and payments (total, inpatient, and outpatient) were “pro-rich”. Thus, the evidence indicates that, while poorer provinces had greater levels of subsided premiums, richer provinces received the greatest payments from the scheme due to higher service utilisation and expenditure suggesting inequity at the system level. At the individual level, approximately 10% of the Vietnamese population held voluntary SHI, concentrated among Kinh, middle and older age people, urban residents, and people whose households’ income lay in the fourth and the fifth highest of five income bands. People with voluntary insurance used the highest number of outpatient services and had the highest average out-of-pocket payments for outpatient and inpatient services. The compulsorily insured had the highest number of inpatient services on average, and the lowest average out-of-pocket payments for outpatient and inpatient services. The coverage of individuals with socioeconomic disadvantages supports equity objectives. However, there was evidence of dysfunction within the system as reflected incomplete coverage of compulsory groups: salaried worker, older people and children under 6 year. There were signs of adverse selection in which people with voluntary insurance used the most outpatient services, with their average out-of-pocket payments for outpatient and inpatient services the highest across categories of insurance status. Trends of richer groups using more outpatient services and poorer groups using more inpatient services also raise concerns of inequality in service accessibility and/or affordability. In conclusion, this thesis provides a comprehensive analysis on SHI policy development and a snapshot on its performance in supporting equity objectives at system, provincial and individual levels. Significant progress towards achieving UHC through SHI was identified, and Vietnam’s SHI policy and performance was found to support equity objectives through coverage and premium indicators. However, there is evidence of potential inequity in the functioning of SHI with people in more wealthy provinces using more outpatient (and total) services and receiving higher payments towards all types of services. This latter finding may be reflecting unequal access to expensive services and medications. The individual level analysis highlighted dysfunction within the SHI enrolment mechanism, with incomplete coverage of fully subsidised individuals and even, salaried workers. Pursuit of equity objectives for funding were not supported given inequitable service utilisation across provinces and at the individual level, and also for out-of-pocket payments at the individual level in rural areas and poorer provinces. Moving forward it is considered crucial to the achievement of UHC that Vietnam prioritises population coverage employing a mechanism that can effectively target both formal and informal sectors. Further, the benefit package should be revised in the light of cost-effectiveness and other recommended considerations and the roles and responsibilities of purchasers, service providers and regulators should be clearly established to minimise conflicts of interest and to ensure transparency. Finally, to reduce inequalities in service utilisation and subsidisation of the rich by poor provinces, the pooling and funding mechanisms should be reviewed to ensure that there is no cross subsidisation of rich provinces by poor provinces, and that equitable levels of service provision in poorer provinces are ensured