Does Autonomization of Public Hospitals and Exposure to Market Pressure Complement or Debilitate Social Health Insurance Systems? Evidence from a Low-Income Country

Abstract

Granting public hospitals greater autonomy and creating organizational arrangements that mimic the private sector and encourage competition is often promoted as a way to increase efficiency and public accountability and to improve quality of care at these facilities. The existence of good-quality health infrastructure, in turn, encourages the population to join and support the social health insurance system and achieve universal coverage. This article provides a critical review of hospital autonomization, using Vietnam's experience to assess the influence of hospital autonomy on the sustainability of Vietnam's social health insurance. The evidence suggests that a reform process based on greater autonomy of resource mobilization and on the retention and use of own-source revenues can create perverse incentives among managers and health care providers, leading to the development of a two-tiered provision of clinical care, provider-induced supply of an inefficient service mix, a high degree of duplication, wasteful investment, and cost escalation. Rather than complementing social health insurance and helping the country to achieve universal coverage, granting public hospitals greater autonomy that mimics the private sector may indeed undermine the legitimacy and sustainability of social health insurance as health care costs escalate and higher quality of care remains elusive.

Analysis of out-of-pocket costs associated with hospitalised injuries in Vietnam

“…This can be related to an issue commonly found in low-income countries (LMIC), supply of unnecessary care induced by providers. This is common in LMICs because these are where professional regulation and supervision are poorly enforced, the public health sector is underfunded and the providers are mainly paid through a retrospective provider payment mechanism, such as a fee-for-service reimbursement mechanism 16. In Vietnam, the rolling-out of financial autonomy in government hospital policy since early 2000s provides hospital opportunities to generate additional resources.…”

“…This is common in LMICs because these are where professional regulation and supervision are poorly enforced, the public health sector is underfunded and the providers are mainly paid through a retrospective provider payment mechanism, such as a fee-for-service reimbursement mechanism. 16 In Vietnam, the rolling-out of financial autonomy in government hospital policy since early 2000s provides hospital opportunities to generate additional resources. The policy has helped hospitals improving their financial sustainability and able to provide wider range of healthcare services.…”

A systematic review of the health-financing mechanisms in the Association of Southeast Asian Nations countries and the People’s Republic of China: Lessons for the move towards universal health coverage

“…Consequently, the greater financial protection for the higher income enrollees who usually seek treatment at the higher-level state hospital has been found. The lower income enrollees who usually contact at the community health center where out of pocket payments are higher due to the limited drug coverage, lack of central procurement agency and frequent shortages of drugs [77].…”

“…This explains the low enrolment rate in Lao and the low utilization rate of health cards to access health services in Viet Nam. The uneven quality of health care can be found not only between different providers (public/private) e.g., Philippines [46], but also within the same facility if the private fee-paying ward is established e.g., hospital automatization in Viet Nam [77].…”

Cost and impoverishment 1 year after hospitalisation due to injuries: a cohort study in Thái Bình, Vietnam

“…Even in the poorest group in the population, the usage of insurance was just 62% 36. Differential treatment in almost all public hospitals of insurance enrolees, including longer wait time and lower quality of care at overcrowded facilities, are crucial factors leading to insured patients forfeiting all insurance benefits and paying out-of-pocket to receive better services 37 38…”