Health financing in Viet Nam

Health financing is one of key functions of a national health system. Health financing is about mobilizing funds, pooling them and using these funds to pay for health services in order to meet the people’s need for health care, for individuals and society at large. The way the country mobilizes funds and pays for health care largely influences availability, accessibility and affordability of services and therefore is critical for reaching universal health coverage (UHC).

Countries around the world use different ways to mobilize funds for health care; usually classified as public” or “private.” When the funds used to pay for health care is from the government tax revenues or from social health insurance revenues, they are regarded as public financing. If payments for health care are from household or patients’ out-of-pocket payment, or through private health insurance, they are regarded as private financing. Private financing based on out-of-pocket payment can limit access to health care when needed and put households at financial risk or impoverishment. Public financing allows for collecting funds based on household’s ability to contribute, and paying for health care based on needs, while protecting households from financial hardship.

Social health insurance in Viet Nam was established in 1992, and is now regarded as the main method of public financing for health care. The government uses its tax revenues to subsidize vulnerable groups such as the poor, the ethnic minority, children under 6, and the elderly above 80. The current health insurance coverage is about 87% of the population. There is a need to improve equity and efficiency in the fund’s use through strategic purchasing. Out-of-pocket payment for health has decreased but remains high, and accounts for about 41% of total health expenditure (2016).