aldeon-as 255.1 paper

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Globalization, Health, and Doi Moi in Vietnam

By

ALDEON, MELANIE POBLETE

201078108, MAS, Asian Center

Submitted to

The Faculty of the Asian Center, University of the Philippines Diliman

In Partial Fulfilment of the Requirements of AS 255.1

(Social and Economic Development in Southeast Asia)

October 2011

First Semester, AY 2011-12

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Introduction

In the two decades since Vietnam launched its doi moi (renovation) market reforms,the results have been widely hailed for sustaining economic growth, reducing poverty andincreasing the standard of living.Doi moi marks a new stage in the economic development of

the country since its aim is to transform the failed command/control economy to a market-oriented one. The transformation from a poor agrarian economy to an increasingly globallyintegrated market economy generated considerable optimism about the countrys economicoutlook (Bingham and Leung 2010; Than and Tan 1993). Vietnam has been characterized byremarkably pro-poor economic growth since the start of its doi moi in the late 1980s. Thepercentage of the population living on less than 2100 calories per day fell from 58 to 29percent between 1993 and 2002. This spectacular success results from the combination ofsound macroeconomic management, increased reliance on market mechanisms, a strongemphasis on the delivery of social services, and sustained improvements in infrastructure(Adams 2005).

The process of renovation in Vietnam that started in 1986 has since been expanded in

all areas. This has reduced bureaucracy and the state-subsidy system, developed the multi-sector market-oriented economy, and initiated an open-door policy. This has resulted in manyimportant achievements, but at the same time has created a number of social problems whichneed to be studied and solved in time.

Hainsworth (1993) finds that there is considerable scope for increasing productivity,national output, and per capita incomes along with improving the quality of life. However, inorder to improve human resource development, there remain many issues such as reductionof infant mortality, elimination of unavoidable sickness and suffering, improving the level ofeducational attainment, full exercise of human rights, among others. Human resourcedevelopment must rank among the most formidable challenges facing Vietnam as it seeks toundertake economic revitalization and reconstruction.

While doi moi has been comprehensive, most attention has focused on the economyand the renovation of economic policies. It is now time to pay equal attention to one facet ofthe social sector, that is, health.

This paper provides a survey of Vietnams challenges and problems in health care.

The paper is divided into three parts. The first part reviews development in Vietnams healthcare since doi moi and highlights the role of the state and the changing role of the publicsector vis--vis healthcare. The paper then considers the development of health care prior to,and since doi mo. The third part will attempt to look into the recent phenomenon ofglobalization and its effect on the growing importance of the private sector in providing equaland better health care. The paper will also try the least to incorporate Vietnams health-

related Millennium Development Goals and the progress of the country in achieving thesegoals. Finally, I will try to look into the possibility of the convergence of the public andprivate sector in the advent of globalization, although I make no claim to be comprehensive.The paper highlights the perception that public systems for health care provision arose inmost developing countries because private systems proved inadequate and inequitable. Orvice versa. Whatever is the case for Vietnam is the aim of the paper to shed some light into.Specifically, it tries to answer the question, who should provide health care best, the state orthe private sector, or both? The paper argues that both the state and the private sector hadmade significant progress in their respective roles in the provision of health care for theVietnamese people. But despite this, there is still much to be done for the improvement of theVietnamese health care system. The paper will not focus on a specific aspect of health care

delivery (i.e., financing, regulating, promoting, enhancing access, etc.) but will from time totime touch some of these areas in the course of the discussion.

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I. The State and HealthBefore discussing the role of the state in the health sector, literatures on the nature of

the state are presented to understand and have a clear view on how the Vietnamesegovernment lays out a path of transition from a centrally planned to a market-oriented one, as

what they call market economy with socialist orientation.1

And how this transition affectthe part played by the state in health care provision in Vietnam.

Socialist states have stable and centralized governments, cohesive bureaucracies, andeffective coercive institutions internal structures quite similar to those possessed bycapitalist developmental states. The Vietnamese state was formed through an accommodationpath characterized by elite compromise and mass incorporation. In the accommodation pathtaken by Indonesia and Vietnam in the 1940s, elite compromise and mass incorporationproduced moderate and inclusive states in unified nations. The path became institutionalizedin fractured state structures, fragile political organizations, and ideological incongruence(Tuong 2010). He argues that accommodation through compromise and incorporation helpedboth the Vietnamese and Indonesian nationalist movements to grow rapidly. Yet

accommodation also created for both postcolonial states divided or decentralizedgovernments together with political organizations that were characterized by blurredboundaries and weak corporate identities. To build a cohesive state structure, the VietnameseCommunist Party carried out a massive purge while launching its radical socioeconomicagenda. The backlash generated by the purge caused it to halt its policies and losemomentum.

The terminal crisis of state-socialism involves the erosion of one welfare regime andits replacement with another. Everywhere, however, the transition involved the breakdown ofexisting welfare regimes and their replacement by new ones. Vietnam is frequently lumpedtogether as instances of gradual transitions. The most essential feature of market transitionin the country was the ability of Leninist states to survive the erosion of state socialisteconomic institutions and to employ markets to promote state goals, including the politicalsupremacy of the communist party (London 2008). The author concluded that Viet Namscommunist party has displayed greater determination in advancing Universalist principles ofsocial citizenship than China, though the progressiveness of Vietnamese market-Leninismshould not be overstated. Although Viet Nam spends less than China on health, Viet Nam hasbeen more committed to ensuring access to preventive services. And though China iswealthier than Viet Nam, Viet Nam outperforms China on many health indicators (table 1).

Ramesh and Asher (2000) in their book Welfare Capitalism in Southeast Asia, putforth the convergence thesis, which implies that the states role in social affairs willincrease with industrialization and, overtime, social policies in Southeast Asia resemble their

counterparts in the West. The aspects of industrialization that are attributed causalsignificance by this approach include economic development, urbanization, and ageing.Vietnam has experienced a heavy state involvement in social affairs prior to doi moi, whenhealth services were provided through the public sector.

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Table 1. Viet Nam and China: Key Health Indicators 1990 and (2002-2006)HEALTH INDICATORS

Viet Nam China

1990 Latest (Year) 1990 Latest (Year)

Life Expectancy atBirth (years)-Female

67 73 (2005) 70 74 (2005)

Life Expectancy atBirth (years)-Male 63 68 (2005) 67 70 (2005)

Crude Birth Rate (per1,000 people)

31 18 (2005) 21 12 (2005)

Crude Death Rate (per1,000 people)

7 6 (2005) 7 6 (2005)

Infant Mortality Rate(per 1,000 live births)

38 16 (2005) 38 23 (2005)

Total Fertility Rate(births per woman)

3.7 2.2 (2005) 2.2 1.8 (2005)

Maternal MortalityRatio (per 100,000 livebirths)

160 130 (2000) 95 56 (2000)

Proportion of Births

Attended by SkilledHealth Personnel (%)

95 90 (2004) 50* 97 (2004)

Prevalence ofunderweight (% ofchildren under age 5)

41** 28 (2003) 19 8*** (2002)

Under-Five MortalityRate (per 1,000 livebirths)

53 19 (2005) 49 27 (2005)

Proportion of 1-YearOld ChildrenImmunized AgainstMeasles (%)

88 95 (2005) 98 86 (2005)

Daily Per CapitaProtein Supply

(Grams)

50 65 (2003) 65 82 (2003)

Daily Per CapitaCalorie Supply(Calories)

2,148.8 2,616.7 (2003) 2,709.0 2,940.2 (2003)

Population withAccess to ImprovedWater Sources (%) -Rural

59 80 (2004) 59 67 (2004)

Population withAccess to ImprovedWater Sources (%) -Urban

90 99 (2004) 99 93 (2004)

Population withAccess to Improved

Sanitation (%) -Rural

30 50 (2004) 7 28 (2004)

Population withAccess to ImprovedSanitation (%) -Urban

58 92 (2004) 64 69 (2004)

Governmentexpenditure for health(% of GDP)

.8 .9 (2005) 2 3.5 (2006)

Source: Adopted in London 2008.

That (1993) emphasized political leadership of the Communist Party of Vietnam inensuring an optimal environment for domestic economic creativity as well as for foreigninvestment, trade and assistance to grow to the fullest potential. Since 1986 the current

leadership has demonstrated good intentions with regard to doi moi, which is supposed tobreak away from past mistakes and install a new style of management. However, a

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bureaucracy, reminiscent of a centrally directed economy still prevails and official statementswith regard to the strategy for development are still vague.

The government of Vietnam is still trying to reform large state-owned enterprises(SOEs), many of which may not be profitable without state support and whose managersfrequently view their objectives more in terms of employment protection than profit

generation.

The Changing Role of the Public SectorHainsworth (1993) maintains that human resource development must rank among the

most formidable challenges facing Vietnam as it seeks to undertake economic revitalizationand reconstruction. Not only is the whole population undergoing a fundamental reorientationin its value system, world-view, and ideological perspective, but every citizen is expected tobecome substantially more self-reliant in finding employment, acquiring skills, adjustingwork habits and providing for basic needs. Individuals and families also face an urgent needto increase money incomes to catch up with inflation and to pay for food, housing and health

requirements at full market prices now that state subsidies on these and other necessities arebeing withdrawn.

Much of the impetus for the move to a free-market economy thus came out of theruinous inflation experience in the 1980s which slashed real incomes of many workers andmany civil servants by over 50 percent during 1985-88. Concern over the precipitous declinein living standards confirmed the need to press forward to a market-led economy, but it alsoled the government to announce what it called a new human strategy development policy

following the Sixth National Congress in 1986. This involved a promise to bring into fullplay the human factor in Vietnams development, by seeking

to ensure employment for all working people, especially for young people and thoseliving in urban areas; (to) ensure adequate real income for the working people; (to)satisfy the peoples educational and cultural development; (and to) improve the

countrys heath system, etc. (emphasis added, Vo Nhan Tri 1991, p. 75)

For the first time, social policy was place in its proper position and importance at theSixth Congress of the Vietnamese Communist Party. The Congress documents asserted thenecessity to stop making light of social policy n\by paying closer attention to the fact thatalthough economic growth is the material basis for implementing social policies, socialobjectives are the aim of economic activities. Chuan et al. (2000) enumerate the five mainfields that form the system of social policies. Public health is under the sociocultural

activities along with education, physical culture and sports, cultural-artistic activities,information, publication, the press.A fundamental deregulation of the health care system was implemented in 1991.

Doctors, nurses and other health care personnel were allowed to establish private clinics, andprivate shops and individuals were permitted to sell a wide range of drugs. Both public andprivate facilities were able to charge fees for medicines and health services. In 1994, thecentral government assumed the responsibility of paying employees in commune healthcenters, which previously had been the responsibility of the communes. In 1993, a healthinsurance program was started, which by 2001 covered 12 percent of the population (Glewwe2004).

As Prescott (1998) points out, the priority function of the public sector in health is to

provide preventive health care which produces widespread benefits to a society as a wholeand to ensure adequate access to basic health services provided by the private sector. By

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liberalizing the private sector and imposing user fees for government health services,Vietnam has taken important steps towards mobilizing private sector resources so as to allowthe public sector to focus on these priority areas of government involvement.

The state enterprise system often also involved direct provision of employee benefits,including health and education services. Under central planning, state-owned and state-run

health care systems offered free or low-cost services, and few alternative systems existed.Under restructuring, many services that were hitherto provided free by the state are no longerguaranteed to all. With changes in property rights, market opportunities, competition, newfinancing systems, and fiscal pressures, old systems are being dismantled or privatized, whilenew institutional and market structures are slowly evolving.

In an update on the health sector in Vietnam from the Joint Annual Health Review(2008)2, the role of the Ministry of Health was reiterated through the promulgation of theDecree No.188/2007/ND-CP. It stipulated again the function, tasks, authority andorganizational structure of the MoH. The major changes in this Decree include the transfer ofresponsibility for population-family planning and some health insurance duties to the MoH,and specifying more details on regulations for drug management, food hygiene and safety,

health human resource training and management.However, the public sector no longer monopolizes the delivery of health care, except

for hospitals which remain wholly owned by the public sector. Hospital inpatient care is still100 percent provided by the public sector. But the public sector is no longer the mainprovider of outpatient patients, which are delivered by a wide range of providers includingnot only public hospitals and commune health centers but also private doctors andparamedics, many of whom are public employees operating private practices.

Brooks and Thant (1998) identify decentralization of service provision and/orfinancing as the common aspect of transition. The rationale behind decentralization is thatgovernments closest to the citizens can best deliver services with spatially limited benefitsand plan budgets that are responsive to community preferences. Decentralization in Vietnamallows provincial and local authorities to enjoy considerable economic independence fromthe central government (Probert and Young 1995).

The early transition period witnessed declining quality in health care. As budgetswere squeezed, hospitals failed to upgrade their equipment. It was nearly impossible torehabilitate and modernize public health facilities. Funds for maintenance expenditures wereinsufficiently, if at all, included in the national and provincial health budgets. A response tothis inability to properly maintain public health facilities was the decline in the use ofhospitals.

In 1992, the Government of Vietnam declared the countrys health care system

unsustainable. This decision came about in light of the following developments: (i) the

declining financial resource base after reunification and the phasing out of aid from the FSU;(ii) the rapidly deteriorating health care infrastructure; (iii) the worsening health status of thepopulation; (iv) the preference of consumers for the use of informal sector facilities and theincreased occurrence of individual financial arrangements between health providers and usersin the public and private sectors; and (v) the increased marginalization of official policies,

plans, and health program implementation. The unsustainability of Vietnams public health

care system emerged from a failure to adapt the governments political and ideological

concept of health care to change in the countrys financial and human resource base after thewar (Guldner 1995).

Prior to doi moi reforms of the late 1980s, health services in Vietnam were providedat the expense of the taxpayers, with the patients paying only the cost of drugs (Bloom 1998).

The decollectivization of agriculture and the liberalization of the economy led to a swifterosion of the governments role in financing health care in Vietnam. Following changes in

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1989 government facilities were allowed to charge fees, and the 1991 legislation was passedthat paved the way for a private health sector (Bloom 1998, Glewwe 2003). The share of thecost of health care borne directly by households is likely to have increased considerablyfollowing these reforms. This prompted the concerns about the affordability of health care,especially among the poor, which in 1993 still accounted for 58 percent of the population

(Glewwe 2003). Subsequent analysis of data from the 1993 Vietnam Living Standard Survey(VLSS) bore these concerns out: a single visit in 1993 to a public hospital by someone fromthe bottom quintile would have cost the equivalent of 41 percent of their annual non-foodconsumption (World Bank et al. 2001).

It was against this background that in 1993 the government introduced a healthinsurance scheme, known initially as Vietnam Health Insurance (VHI). Civil servants, stateenterprise workers, the military, Communist Party officials and pensioners who werepreviously in one of these government jobs were (and continue to be) covered, and privatefirms with more than 10 employees were (and still are) required to enroll their workers. Astransition toward a socialist market economy proceeds, Vietnams health care sector faces

numerous challenges. With developments such as widespread poverty, the shifting burden of

financing health care to households, regional disparities in income, and the decentralizationof financing social services, ensuring that health care is accessible to the majority of thepopulation is an urgent concern.

The introduction of user fees, especially for inpatient services, may prevent the poorfrom receiving medical attention. While the existence of a compulsory health insurancescheme should help alleviate the increasing burden of health care financing on households, alarge proportion of workers and state employees more than 300 million people remainwithout insurance coverage.

From Havana to HanoiScholarly literatures have described Cubas health care system as more advanced than

any system found in Latin America and even superior than the United States (Iatridis 1990,Nayeri 1995, Brown 1992, Benjamin and Haendel 1991). The Cuban health system under theCastro regime has been lauded as one of the major achievements of the Cuban revolution.Based on such key statistical indicators as infant mortality, longevity, infectious disease rates,and provision of health services, Cuba appears far superior to neighboring countries.

The 1980s was also the decade for two decisive developments which becamehallmarks of Cuban medicine. The first was the takeoff of the biotechnology industry, whichwould put Cuba in the forefront of global vaccine research. A vaccine with proveneffectiveness against Meningitis B was developed in Cuba in the 1980s. Since then, 55million doses have been administered in Cuba and other countries. The second was the

introduction of the Family Doctor Program in 1986, which located doctor-and-nurse teamsliterally next door to their patients. Small towns all have doctors the people can visit for free.Cuba now has one doctor per 200 citizens, compared to one per 400 in the US. The doctorslive in the buildings their offices are in and keep track of the histories and needs of all theirpatients. By the early 90s, over 95% of Cuban families would receive primary medicalattention in their own neighborhoods.

Although scarcities abounded, they were shared, prompting a report published by theUNDP in 1999 to state, An evaluation of 25 countries in the Americas, measuring relativeinequalities in health, revealed that Cuba is the country with the best health situation in LatinAmerica and the Caribbean. It is also the country which has achieved the most effectiveimpact with resources, although scarce, invested in the health sector. (Study on Human

Development and Equity in Cuba. UNDP,1999: p.103).

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In Cuba, health care is considered a human right for all citizens; health care istherefore a national priority. Cuba's health policy emphasizes prevention, primary care,services in the community, and the active participation of citizens. These emphases haveproduced an impressively high ranking on major health indicators, despite economichandicaps. The Cuban experience demonstrates the influence of ideological commitment and

policy-making on the provision of health care and challenges the assumption that high-qualitycare for all citizens requires massive financial investment (Iatridis 1990).

Hirschfeld (2007) conducted a nine-month qualitative ethnographic and archivalresearch in Cuba. Contrary to the above-mentioned literature, she found a number ofdiscrepancies between the way the Cuban health care system has been described in thescholarly literature, and the way it appears to be described and experienced by Cubansthemselves. She further went on to say that during the Soviet era, however, the true extent ofrevolutionary health efforts can also include such practices as deliberate manipulation ofhealth statistics, aggressive political intrusion into health care decision-making, criminalizingdissent, and other forms of authoritarian policing of the health sector designed to insurehealth changes reflect the (often utopian) predictions of Marxist theory. These practices, as

Hirschfeld noted, were virtually unknown in the West. Western social scientists interested inthe question of socialist health frequently cited favorable health statistics from the USSR,China, and Cuba, but did not look critically at the ways state power was used to create andmaintain these health indicators. In some cases it is likely that the socialist system didgenuinely improve health and health care delivery.

In her research, it became increasingly obvious that many Cubans did not appear tohave a very positive view of the health care system themselves. A number of peoplecomplained informally that their doctors were unhelpful, that the best clinics and hospitalsonly served political elites and that scarce medical supplies were often stolen from hospitalsand sold on the black market. Further criticisms were leveled at the politicization of medicalcare, the unreliability of health data and the overall atmosphere of secrecy surrounding theprevalence of certain infectious diseases such as HIV and tuberculosis. Anecdotes of medicalmalpractice and bureaucratic mismanagement seemed common. The Cuban health caresystem, as described by Cubans in informal speech, seemed quite different from the Cubanhealth care system as described by North American social scientists and public healthresearchers (Hirschfeld 2007).

As a former centrally-planned economy, Vietnam can learn many lessons fromCubas health care system. The health system introduced in Vietnam in 1976 was adapted

from the Soviet model. Services were provided by state- or collective-owned facilities at nocharge to the user. Policy making and planning were highly centralized. The delivery systemwas built along the four levels of governmentcentral, provincial, district, and commune.

After the establishment of the Vietnam Democratic Republic in 1945, the governmentput increasing emphasis on the provision of social services, especially health and education.As such, many improvements in the health and educational status of the population wereachieved under the centrally planned economy. Infant mortality rates decreased from 90 per1,000 live births in the 1970s to about 50 in the mid-1980s (Dung and Canh 1998: 284).

The collapse of state socialist institutions in the late 1980s placed the financialviability of the state-run health sector into question. Since the late 1980s, public healthexpenditure has remained low as a proportion of GDP and low in comparison with othercountries. However, Viet Nams state first with foreign donor support and later on its ownhas effectively preserved and strengthened the state run health network, and state healthproviders remain the most important providers of health services. Many of the improvements

in the countrys health status since 1989 may be linked to the states maintenance of a basicstations and public hospitals.

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With the collapse of the collective economy in 1987, administrative and financialsupport for the network of health stations, brigades, and village nurses was difficult tosustain. Commune peoples committees (CPCs) took primary responsibility for financing,operating, and maintaining this network, as well as implementing primary health careprograms. Operating funds were no longer sourced from the cooperatives but from local

taxes. However, because of shortfalls in tax revenues, the necessary resources to run thenetwork of health care providers were difficult to come by. As a result, the staff of thecommune health stations did not receive their allowances for months. Moreover, equipmentand supplies for health stations of poor communes were becoming obsolete, and funds forupgrading facilities were unavailable. Some of the very poor communes were not even ableto build their own health stations (Dung and Canh 1998).

The commune health stations (CHS) were always a core element in Viet Namsnational health system. In the early 1990s, however, the CHS were facing acute shortagesowing principally to an absence of local sources of financial support. In 1994, Viet Nams

Prime Minister issues Decision 58, which permitted use of the central budget (thoughprovince budgets) to pay and or supplement salaries for three to five CHS staff per commune.

Though most of this supplemental funding came into the budget from foreign donors,decision 58 is credited with improving the income and morale of CHS workers and perhapseven rescuing the primary health system of the country.

II. Doi moi and HealthBefore reviewing the status of health care in Vietnam prior to, and since doi moi, it is

important to analyse the factors or situations which forced the leadership of the CommunistParty of Vietnam to implement the reform. Before reunification with the southern part of thecountry, Vietnams economic policy was based on collective agriculture, heavy industry andinternational trade mainly with former CMEA countries. Meanwhile, South Vietnams

economy was dependent on privately-owned small scale agriculture, small-and medium-sizedlight industries participating in international trade with western developed countries.Organizational restructuring by collectivization and cooperation has been taking place in theSouth during the post-unification period (1976-1980). These measures were followed by aFive-Year Plan (1981-1985) which saw the preliminary steps towards the decentralizationprocess. However, the plan did not deliver the desired goods. Gross domestic product (GDP)started to falter from 1985, when it fell from 8.4 percent in 1984 to 5.6 percent, 3.3 percentand 3.6 percent in 1985, 1986, 1987, respectively. The annual inflation rate was more than400 percent mainly due to a decline in food production (Than and Tan 1993). All theseeconomic ill forced the country to a radical reform and doimoi appeared on the scene in 1986.

Dung and Canh (1998: 283-284) noted that following the former Soviet Union (FSU)command system, Vietnams state sector employees received housing, health services,education, public utilities, and other basic services (including food staples) either free orhighly subsidized by the state budget. In sharp contrast to the FSU, however, the state sectorin Vietnam accounted for only 15 percent of total employment. Further, the costs of socialservice provision amounted to less than 2 percent of gross domestic product (GDP) in themid-1980s and were essentially limited to urban areas. In rural areas, support for socialservices was generally provided by cooperatives that were extension of the household.

The mid-1980s was a period of high inflation for Vietnam, with prices increasing at amonthly rate of more than 10 percent. This was mainly due to attempts at financing thebudget deficit that resulted from massive government investments in a wide range of state-

owned industrial and commercial enterprises and basic social and economic infrastructure.By 1988, the fiscal deficit was about 7.1 percent of the countrys GDP. Likewise, there were

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moves toward enhancing government revenue through nontax sources. User fees and cost-recovery programs, such as the collection of health charges, were responsible for the rise innontax revenues at the provincial level.

Provincial governments have been assigned a wide range of spending categories, thelargest of which are capital expenditure, economic services, education and health. Included in

these categories are local law and order, small scale investment projects, primary andsecondary education, and local health services (Husband 1995).

Health Care in Vietnam before 1986In the 1980s, Vietnam was one of the poorest countries in the world, and its prospects

appeared bleak. Economic growth was stagnant and the production of rice, the main staplewas insufficient to feed its growing population. For some essential goods, such as drugs andmanufactured products, Vietnam was dependent on heavily subsidized imports from theSoviet Union (Glewwe, Gragnolati, and Zaman 1999).

Comprehensive public health systems sought to provide free access to primary health

centers in all agricultural communes across the countryside. Vietnam has one of the highestlife expectancies and lowest infant mortality rates. Primary health care is available atcommune level, and 90% of Vietnams 9,000 rural communes are reported to have health

centers, each serving 5,000 -10,000 people (Hainsworth, 1993). Access to primary health carein Vietnam was for decades free of charge.

Health centers were the basic components of the commune health system staffed bycommunity health workers, responsible for providing primary care to residents of thecommunity. Before 1975, the network of commune health centers was already developed inNorth Vietnam with more than 5,000 units. In contrast, commune health centers in the southwere sparse. With the countrys reunification in 1975, North Vietnams network was

extended to the south, and soon after, the number of health stations in the country almostdoubled.

Health problems that could not be handled by the commune health centers werereferred to the district general hospitals. These were usually equipped with a laboratory andstaffed by epidemiologists and malariologists. In general, cases that could not be addressedby one facility were referred to the next higher-level facility. Apart from providing curativecare, district health systems worked closely with commune health centers in implementingprimary health care programs. To support this wide range of responsibilities, there were otherhealth care facilities in the district health system, including district health bureaus, sanitationand epidemic control, intercommunal polyclinics, and mid-wiferies. The District HealthOffice was charged with overseeing operations of the district health system (Hainsworth,

1993). In each province, there was at least one general hospital tasked to provide referralservices for districts. The provincial health system was administered by the Provincial HealthOffice. The PHO is commissioned to coordinate the treatment and preventive care activitiesof its localities; train assistant physicians; and manufacture pharmaceuticals as delegated bythe Ministry of Health (MOH). A few general and specialized hospitals were directlyadministered at the central government level. In addition, MOH took charge of health-relatedactivities such as the manufacture and distribution of pharmaceuticals, coordination ofmedical research, and training of doctors (World Bank 2005).

Before the advent of the market system, it was not uncommon for individuals toillegally possess and distribute drugs. There was a shortage of drugs because state-owned

pharmaceutical enterprises could not accommodate the growing and more diversified medicalneeds of the population. Consequently, private medical providers filled these supply gaps and

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charged black market rates. Also, although public hospitals did not charge their patients for

services rendered richer patients usually gave tips to doctors and nurses to be assured ofbetter care.

Health Care since Doi moi

In line with the governments objective of providing wide accessibility of health care,a large network of health care facilities and workforce were established after the countrysreunification. In 1994, there were at least 500 district hospitals, nearly 200 provincialhospitals, more than ten central general hospitals, seven specialized hospitals, and tenresearch institutes tasked with providing curative care to the entire population. Moreover,there were 1012 intercommunal polyclinics that accounted for more than 10,000 beds and 60midewiferies with close to 1,000 beds. The health sector was likewise not lacking in terms ofstaff. Between 1945 and 1990, the number of doctors per 10,000 population increased by anaverage of 9.2 percent per year but remained low by international standards. During the sameperiod, the number of nurses per 10,00 population rose at an annual average rate of 5.2percent. Although the number of doctors per population still seems to be on an upward trend,

the number of nurses per population appears to have reached its maximum level in 1965, andthen it began to level off in the 1980s. The number of hospital beds per population has beendeclining in recent years. From a ratio of 0.32 beds per 10,000 population in 1990, thenumber decreased to 0.23 beds three years later because of funding constraints. This ratio isby far the lowest among the developing countries in the Asian Pacific region, where the nextlowest ratio is recorded in Afghanistan, at 2.5 beds per 10,000 populations (Dung and Cahn1998).

The doi moi period saw the declining importance of health in the public sector budget.The cutoff of foreign aid from the Eastern Communist Bloc was important factor that led tothe decline in public sector spending on health. By the late 1980s, Vietnam began to receivefinancial support from the non-Communist bloc for specific health programs. With thesqueeze in public sector spending as well as foreign aid, more health care finances weresourced from the private sector. In 1995, private spending on health care, most of which werefor drugs, was estimated to be about five times that of the state (Husband 1995). The pre-reform health care system characterized mainly by public provision at no cost shifted to onewherein (i) user fees are charged; (ii) health insurance mechanisms are emerging as majorinstitutions of health care financing; (iii) local taxes are becoming an important source ofhealth care funds in richer local governments.

As of 2009, there are reported to be 13,450 health establishments, with 1, 684hospitals and clinics (Table 2), with a combined staff of 209, 001 trained medical workers(Table 3), and as of 2009, there were 7.1 doctors per 10,000 people, compared with 4.5 in

1990 (General Statistical Office 2009).Access to primary healthcare in Vietnam was for decades free of charge, but user feeswere introduced in 1989. Although charges may appear nominal, they have apparently beensufficient to discourage many families from seeking medical assistance, and many healthcenters and district hospitals report declines of up to 50 percent in their rates of utilization.This may also be attributable in part to a deterioration in availability of medical supplies andquality of service of health centers and hospitals (Hainsworth 1993).

As part of the government-sector decentralization process, state subsidies for medicalsupplies, personnel training, and maintaining health infrastructure have been drasticallyreduced. Provinces are generally unable to make up the shortfall, and district and communelevels have thus had more self-reliant, which has led to a widening of disparities in quality of

health care between more and less prosperous regions: increasing non-availability ofequipment and sharp increases in the price of drugs (which previously had been freely

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III. Globalization and HealthAs the world around us is becoming progressively interconnected and complex,

human health is increasingly perceived as the integrated outcome of its ecological, social-cultural, economic and institutional determinants. Globalization has driven changes in many

aspects of human life, including health. While it carries with it opportunities for a moreliberalized trade and increased economic growth, it also raised new challenges for the healthof human beings.

Good health for all populations has become an accepted international goal and we canstate that there have been broad gains in life expectancy over the past century. But healthinequalities between rich and poor persist, while the prospects for future health dependincreasingly on the relative new processes of globalization. Global governance structures aregaining more and more importance in formulating health (-related) policies. According toDodgson et al. the most important organizations in global health governance are the WorldHealth Organization (WHO) and the World Bank (WB). The latter plays an important role inthe field of global health governance as it acknowledges the importance of good health for

economic development and focuses on reaching the Millennium Development Goals. TheWB also influenced health (-related) policies together with the International Monetary Funds(IMF) through the Structural Adjustment Programmes (SAPs). In order to give a more centralrole to pro-poor growth considerations in providing assistance to low-income countries, theIMF and WB introduced the Poverty Reduction Strategy approach in 1999. Fidler argues that'from the international legal perspective, the centre of power for global health governance hasshifted from WHO to the WTO'. Opinions differ with regard to whether the WTO agreementsprovide sufficient possibilities to protect the population from the adverse (health) effects offree trade or not. Globalization is causing profound and complex changes in the very natureof our society, bringing new opportunities as well as risks. In addition, the effects ofglobalization are causing a growing concern for our health, and the intergenerational equityimplied by 'sustainable development' forces us to think about the right of future generationsto a healthy environment and a healthy life

According to McMichael and Beaglehole (2000), economic globalization has beendescribed as a mixed blessing for health. Human resources economics have demonstratedthe positive correlation between income per capita and health, but only recently has theliterature recognized that health is fundamental to sustained economic growth. Healthierpopulations have lower mortality and fertility rates and higher labor productivity, and aremore inclined to invest in higher levels of skills training for themselves and education fortheir children, leading to higher permanent incomes, savings rates, and national investmentover time (Bloom and Canning 2000)3

Another important development is the growing number of public-private partnershipsfor health, as governments increasingly attract private sector companies to undertake tasksthat were formerly the responsibility of the public sector. At the global level, public-privatepartnerships are more and more perceived as a possible new form of global governance andcould have important implications for health polices, but also for health-related policies(Huynen, Martens, and Hilderink 2005).

This section focuses on the phenomenon of globalization and its effect on the growingimportance of the private sector in providing equal and better health care and the possibleconvergence between the public and private sector. A glimpse on the progress of Vietnamshealth-related Millennium Development Goals is also presented.

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Rise of the Non-state SectorOver recent years the thrust of Vietnams health sectorstrategy has emphasized active

prevention, public service delivery at the grass roots level, the need to mobilize the entiresociety in support of improved health care, the expansion of health insurance cover, the valueof traditional medicine, and the active participation of the private sector under the

governments leadership. The high annual GDP real growth rate of 7 percent has enabledpeople to pay increasingly out of pocket, to the neglect of Governments increasing its shareof expenditures allocated to health.

In 1989, the Council of Ministers legalized private medical practice and the sale ofdrugs in the open market activities that had long been in inexistence. Some citygovernments, in fact, had begun to recognize the presence of the informal health sector asearly as the mid-1970s. In Ho Chi Minh City, for example, private health services wereavailable before 1975. After the countrys reunification, these facilities were merged with the

National Health System and received subsidies for their operations. By 1979, publicphysicians were allowed by the City Health Office to hold private clinic hours in the eveningsto augment income, as well as to respond to the growing community demand for health care.

One year later, private pharmacies were recognized by the city government, primarily to curbabuse by black market traders. By 1989, MOH issued decrees legalizing private pharmacies

and the practice of private health professionals in the entire country. These laws provided forthe organization of special departments in provincial and city health offices for the regulationof the private health institutions (Trivedi 2004).

These developments partly solved the problem of frequent drug shortages under theplanned economy. Importation of drugs, including finished drugs and pharmaceuticalmaterials for local production, has been on the rise.

Meanwhile, the emergence of private markets appears to have accentuated the widegaps in health care usage. The rich tend to overuse facilities and sophisticated care, patenteddrugs, private health insurance coverage, and reputable physicians. When sick, they generallyseek care in private clinics and admission to private rooms in state-owned facilities. On theother hand, the poor prefer local healers and traditional or domestically produced, low-costmedicine. On the supply side, there is a tendency for physicians in public hospitals todiscriminate against the poor who cannot pay hidden fees that the richer patients give aspremiums for quality.

Prior to economic reforms, private sector was not tolerated in Vietnam. Privatepractice was legalized in 1993 and the range of private practice is still quite limited andcontracting between the government purchasers and private providers has not yet occurred inVietnam.

The table below summarizes the contact rates for the main types of providers in 1993

and 1998. The show that other govt health facilities and traditional providers are a small partof the total number of visits pharmacies and drug vendors, GOVHOSP, PHF, and CHCaccount for the bulk of the total usage. All types of use have grown since 1993, but the use ofdrug vendors has shown the fastest rate of growth. It has more than tripled. This lists to theoverwhelming importance of self-medication. Pharmacies are both private and public. Privatepharmacies are more prevalent in urban areas and public ones are more prevalent in ruralareas. The VHSR (Vietnam Health Sector Review) (World Bank 1999, p.56) points out thatthe increase in the average number of pharmacy visits is accompanied by a decline in outof

pocket expenditure on drugs. Also notable is the growth of use of private health facilities,which has increased more than 2.5 times.

The growth of private health providers is another important fact of health care use.

There are two main types of private health providers: Full-time providers who own privatefacilities and Part-time providers employed by the public health facilities who (CHCs are

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typically not used by the higher-income & better-educated groups. the quality of regarded bymost users to be very are) also engage in private practice during off-hours (World Bank1999, p.101).

Table 4. Annualized Health Service Contact Rates by Provider

Year GOVHOSP CHC Other Public Providers1993 0.32 0.19 0.03 0.541998 0.60 0.57 0.25 1.43

Year PHARVIS PHF TRAD All Providers1993 2.14 0.66 0.03 3.371994 6.78 1.76 0.36 10.33

Note: definition of variables: CHC= Commune Health Center, GOVHOSP= Govt Hospital, Other= Other

govt facilities, PHARVIS= Visits to pharmacy or drug vendor, PHF= Private Health Facility, TRAD=Traditional (Eastern) Practitioner.Source: Adopted in Pravin Trivedi (2004).

One way to get a better understanding of the role of the private sector is to look atVietnams national health account. The national accounts decompose total expenditure intosources and users of funds.

Table 5. Annual Health Care Expenditures in Selected Asian Countries, 1991

Country 1992 GDP Expenditures Expenditures Public expendituresPer capita as a percentage per capita as a percentage

(US dollars) of GDP (US dollars) of total

Vietnam 170 7.4 12 16.2Nepal 170 4.5 7 48.9Bangladesh 220 3.2 7 43.8India 310 6.0 21 21.7Pakistan 420 3.4 12 52.9China 450 3.5 11 60.0Sri Lanka 540 3.7 18 48.6Indonesia 670 2.0 12 35.0Philippines 770 2.0 14 50.0

Papua New Guinea 950 4.4 36 63.6Thailand 1,840 5.0 73 22.0Malaysia 2,790 3.0 67 43.3Korea, Rep. of 6,790 6.6 377 40.9

Source: World Bank 1993.

In 1991, an astounding 84 percent of total expenditure are out-of-pocket expenditures,or about five times of the public expenditure (table 5). 90 percent of public funds are spent onhospital services, and only a very small amount on primary and preventive services. Above9.5 percent is spent on primary care through commune health centers, and about 2.1 percenton preventive and communicable disease control activities. As Gertler and Litvack (1998)pointed out, the most remarkable in the national health accounts data is that an astounding

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80.1 percent of health care expenditure goes to drugs all of it out-of-pocket. About 60percent of drugs are purchased from private drug vendors, and the rest from public facilities.Not only do the people using private providers purchase drugs from the private sector, so domany of those using public facilities. The main reason is that the state budget allocates only asmall amount for drugs to be provided free of charge as part of treatment at public facilities.

As a result, there are severe drug shortages in the public sector, as the 1993 VNLSS indicates.While the spending share for pharmaceuticals suggests that drug utilization dominates healthcare services in Vietnam, the public sector plays little direct role in providing, financing, orregulating drugs.

Table 6. Uses and Sources of Health Sector Funds in Vietnam, 1993

(as a percentage of total health expenditure)

Use Source

Public Private All

Public 16.2 3.5 50.8Hospitals 14.8 2.9 44.0Drugsa --- 31.5 31.5Primary care 0.4 0.0 4.5Preventive health care 0.4 --- 1.4Other 0.7 0.1 0.7

Private 0.0 49.3 49.3Providers 0.0 0.7 0.7Drugs 0.0 48.6 48.6

All 16.2 83.8 100

--Not available.a. Public sector expenditures on drugs could not be separated out from other public uses offunds.Source: Adopted from Gertler & Litvack (1998).

The Joint Annual Health Review of Vietnams Ministry of Health and Health

Partnership Group (2008) stipulated the promotion of private medical and pharmaceuticalservices in ordinances, and resolutions of the National Assembly. The legislation has createdthe legal basis for the establishment of nearly 70 private hospitals, almost 30,000 private

clinics, 21,600 private pharmacies and distributors, and 450 traditional medicine productionfacilities manufacturing more than 2,000 herbal products. The private health care sector hastaken care of a large proportion of outpatients, relieving the overcrowding in public facilitiesand providing more convenient conditions for the public in need of health care. Some privatehospitals have invested in advanced technologies, which allow patients to seek treatment inViet Nam, rather than spending large amounts of money to seek health care overseas.

However, the performance of the private health sector, both in terms of quantity andquality, has yet to realize its full potential. Most private facilities only offer easy-to-deliverservices and lucrative tests and clinical imaging services. Most private hospitals are small insize and are mainly located in large cities, with low bed occupancy rates. According to the2007 hospital inventory report of 731 hospitals, conducted by the MoH Department of

Therapy, bed occupancy rates in private hospitals were 67.8% in 2006 and 74.7% in 2007;while average bed occupancy rates across all levels of public hospitals were 118.1% in 2006

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and 122.4% in 2007. The number of inpatient visits treated in private hospitals accounted fora relatively small share of total inpatients in all levels of public hospitals: only 1.9% in 2006and 2.2% in 2007 (JAHR 2008).

Millennium Development Goals

Health is at the heart of the Millennium Development Goals (MDGs). Goals 4, 5 and6 specifically focus on health, but all the MDGs have health-related aspects; achieving themwill not be possible without progress on food security, gender equality, the empowerment ofwomen, wider access to education and better stewardship of the environment (WHO 2009).

Rapid economic growth and poverty reduction has meant that Vietnam has met ornearly metsome of the MDGs within a decade of the internationally chosen starting pointof 1990. Adam Wagstaff and Nga Nguyet Nguyen (2004) examine infant and child mortalityin Vietnam and that compared with other lowincome countries, Vietnams performance inthis area is unusually good, in that it much lower infant & child mortality rates than othercountries at its level of income (which is less than US $ 1 a day, or about US $ 300 percapital annually). In addition, its infant and child mortality rates dropped steadily in the

1990s. Despite this progress, Wagstaff and Nguyen point out a worrisome finding most ofthe reductions in these mortality rates occurred among poor households, so that inequality inmortality rates across different income groups increased significantly in the 1990s Indeed, it

appears that there has been no reduction in infant mortality among the percent 25% of thepopulation.

The authors carefully examine the determinants of infant & child mortality inVietnam. They find that many factors played a role, including incomes. These estimatesprovide suggestions for policies to reduce infant mortality in the future. Finally, they use theestimates to predict future infant & child mortality rates through 2015. The authors find that itmay be possible for Vietnam to reach its goal of reducing child mortality by two-thirds from1990 to 2015, but this will depend on whether reductions in child mortality can be acceleratedamong poor households.

According to the data from United Nations Development Program (2009), Vietnamhas already achieved the targets for both under-five mortality and infant mortality, with boththese rates being halved between 1990 and 2006. The infant mortality rate was reduced from44.4 per 1,000 live births in 1990 to 16 in 2009. The under-five mortality rate has also beenreduced considerably, from 58 per 1,000 live births in 1990 to 24.4 in 2009. Furthermore, theratio of children under five who are underweight fell from 25.2 per cent in 2005 to 18.9 percent in 2009. Maternal mortality has declined considerably over the last two decades, from233 per 100,000 live births in 1990 to 69 per 100,000 live births in 2009, with approximatelytwo thirds of this decrease related to safer pregnancy. Good progress has also been made in

expanding access to quality reproductive health, including maternal and neonatal health;family planning; increased use of modern contraception; and establishment of strongerprogrammes, policies and laws for reproductive health and rights, as well as measures toprovide quality services to the poor and other vulnerable groups.

In Vietnam, the doi moi economic reforms that began in 1986 and the PublicAdministration Reform of 1995 shaped health decentralization. Basic primary health careservices are assigned to communes, primary-level health facilities are assigned to districts,secondary-level hospitals are assigned to provinces and tertiary-level and specialty hospitalsare mainly the responsibility of the central government that is, the central health ministry ofthe country. Decentralization occurred gradually in Vietnam and without setbacks. Localmobilization was seen as a key element in the countrys impressive achievements by the mid-

1980s in delivering primary health care. As mentioned, the combined province and communeshare of government health outlays was already significant in the early 1990s. Thus, local

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officers had experience with decentralization when the 1996 State Budget Law assignedadditional health tasks to provinces and districts (Fritzen 1999).

Public and Private Sector in Health: Doi Moi II?

Good health is a desirable end in itself in that it makes people feel better withoutadversely affecting others. Yet it also others broader benefits to the society as a whole. Whileones health depends ultimately individual congenital endowments, lifestyle and efforts, thereis a lot that governments can do to promote good health. In a sense, health is like any othergood or service which could be delivered by the market free interaction between the sicksearching for the best care for a certain price and producers searching for maximum profitshave the potential to produce and produce health care in most efficient manner possible.Competition among producers would ensure not only that desired services are provided, butalso that prices are closely related to opportunity costs, at least in the long run (Newbranderand Moser 1997).

Yet there are aspects of health care which limit the markets potential for political and

economic reasons. Modern societies regard quality health care as something that must beavailable to all those who need it, regardless of individuals ability to pay some aspects ofhealth care are pure public goods or have significant positive externalities which makes stateintervention necessary general sanitation, health research and health information are nearlypure public goods-in the sense that they are neither exclusive nor divisible which the marketwill not provide on its own. Aspects of health-such as family planning, child health andimmunization-also involve positive externalities which benefit not only the individualsconcern, but also those around them while such services could be provided by the market,the prices may be set too high for some who need them (Berman, 1997).

State intervention is also justified on the grounds of market failures related toasymmetrical information whereby health care providers have significant informationaladvantages over the buyers while the reverse hold in the case of insurance products.Moreover, markets function efficiently when consumers known what they want when makingpurchasing decisions, w/c in fact, they do not in the case of health care. If left unchecked, theproducers are likely to oversupply their unsuspecting customers.

The transition of the economy affects the governments ability to generate revenues,

which in turn affects expenditures, and through it, the delivery of social services such ashealth cares. Constraints in the dynamic process under way in Vietnams transitional

economy are raising questions about the public versus private good aspects of health

service delivery. I argue that the debate of distinguishing health as public or private good isno longer relevant. What is important here is to exhaust all means to ensure efficient and

quality health care for the people with emphasis on the larger role played by the state in caseof market failures.The proliferation of publicprivate partnerships (PPPs) is rapidly reconfiguring the

international health landscape. The trend towards PPPs may be related to the change in publicattitudes and the growing response of the private sector to concerns and vocal demands forcorporate responsibility and accountability (K. Buse and G.Walt 2000).

Public-private partnerships (PPPs) are now at the top of the United Nations list ofapproaches to enable UN agencies to be more effective and efficient. The trend of workingmore closely with the commercial sector in the name of partnership started over almost twodecades ago during the run-up to the UN Conference on Environment and Development(UNCED), dubbed the Earth Summit. For example, Gro Harlem Brundtland, the World

Health Organizations Director-General from 1998 to 2003, and former chair of the

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Brundtland Commission whose report Our Common Future significantly influenced the EarthSummit Process, said already in 1990:

Partnership is what is needed in todays world, partnership between government andindustry, between producers and consumers, between the present and the futureWe

need to build new coalitionsWe must agree on a global agenda for the managementof changeWe must continue to move from confrontation, through dialogue tocooperationCollective management of the global interdependence isthe onlyacceptable formula in the world of the 1990s. (Lohmann, 1990:82).5

Doi moi presents an opportunity for improving the quality and accessibility of healthservices. Nevertheless, two problems are arising; first, scarce public resources are spreadthinly across many types of curative and preventive services, resulting in poor quality. Thepublic sector emphasizes curative hospital care, rather than complementing the private sectorby narrowly targeting its limited resources to priority areas of primary and preventive careservices for the poor. And since hospitals are located in urban areas and the poor reside

primarily in rural areas, the benefits of public expenditures accrue mostly to the non-poor.Second, the private sector is unregulated in an area where consumer information isextremely weak. Lack of regulation in the pharmaceutical market is a particular concern sincepatients often spend tremendous sums of money for unnecessary (and sometimes fake)medication. Because the quality of public health care is so poor and medicines are availabledirectly from drug shops, patients often by pass medical consultation and produced directly totreatment.

These problems along with rapid changes in the health sector, suggest that it isappropriate for Vietnam to reconsider governments role in the sector, to see how both thepublic and the private sectors can become more effective in performing their uniquefunctions. There are two main justifications for public intervention in the health sector; the

first is to promote efficiency, such as through subsidies to raise the assumption of healthservices with positive externalities to a society desirable level. The government should focusits limited funds on health services that are pure public goods and subsidize health serviceswith significant externalities (immunizations, infections disease control). Again to promoteefficiency, government has a unique role to play in providing information to consumers onthe value of preventive health care and regulating the quality of health providers andpharmaceutical supplies-both areas in w/c consumers are poorly informed (Glewwe et al.1998).

The other main justification for government intervention in the health sector is toensure equity, which seems to be an important objective of Vietnams leaders. Spendingmore of Vietnams public resources on services lived disproportionately by the poor (such as

CHCs) can enhance equity, as can providing subsidizes targeted to the poor for other healthservices that are sometimes necessary but may be prohibitively expensive (such as hospitals).

In the late 1980sDoi Moi opened the door to private financing and delivery of healthis in hopes of improving health services. In addition, public hospitals and, to a common muchsmaller degree, health centers began charging patients for consultations and drugs in order tomobilize private financing for the public sector system. The expansion of the private sectoroccurred very quickly and with minimal government regulation to ensure quality, especiallyin pharmaceutical supplies and dispensing practices. The government hoped that the openingof the private sector coupled with increases in the real budget for the public sector healthsystem would reverse the decline in the health sector.

The public health sector began to deteriorate following reunification, and the decline

accelerated during the 1980s. Commune health centers and district hospitals were unable toreplace broken equipment and suffered several shortages of medical supplies. The facilities

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were unable to receive and keep qualified medical staff as salaries declined in real terms andrelative to new labor market opportunities. The collapse of the Soviet Union meant thatsubsidized drugs in large quantities were no longer available w/c led to severe shortages atpublic facilities.

At the same time that the public sector contracted during the transition period, out-of-

pocket expenditures increase because of expansion of the private sector and the increase infees in public facilities.

A series of factors have led to deterioration the quality of care, especially in ruralcommunes, where most of the poor live. The private sector has become dominant in both thedelivery and the financing of care during the transition period but much of the private marketactivity takes the form of self-diagnosis and drug purchases from private pharmacies ordispensaries. The pattern of public spending benefits the poor the least. Government spendingis concentrated on hospital care which is used more by the well-off than by the poor thebenefits of spending for hospitals also accrue to the better off because they live on andaround urban areas, where hospitals are located, while the poor live primarily in rural areas,where public care is provided by CHCs.

To some extent, the private sector fills the gaps created by charges in the delivery ofpublic health care, though less so for the poor. Doi Moi has mobilized private resourcesalone, given budget constraints. But the emergence of the private sector is creating anothergap, it is facilitating access for the non-poor to private pharmacies and drug dispensaries,which are supplying medicines where they would not otherwise be available.

In order to implement the social mobilization policy, a project called Promotion ofsocial mobilization for the protection, care and improvement of peoples health was approved by a MoH Decision dated 21 June 2005 and recommended a series of solutionsincluding mobilizing resources for development of the state health care system.Specifically, this solution calls for encouragement of health services, sanatoria andrehabilitation centres to mobilize non-state financial resources, engage in businesscollaborations and joint-ventures with businesses and individuals to develop infrastructure,upgrade equipment and provide health services in line with the approved plans (JAHR2008).

The mobilization of resources for investment in state health services is currently beingundertaken in two main forms:

Joint ventures and business collaborations for the upgrade of medical equipmentin public hospitals.

Development of elective4 servicesin public hospitals.One outcome of the social mobilization of funds for investment in health facilities

through joint ventures, business collaborations to upgrade equipment and the development ofelective health care services in public hospitals has yielded some positive benefits. However, ithas also created many concerns about equity and efficiency.

For the past 10 years, social mobilization has become a major orientation and an important solution, especially in reforms that have taken place in the sectors of health care,education and culture in Viet Nam. In 1996, the VIIIth Party Congress asserted that all socialpolicy issues will be addressed through the principle of social mobilization. According toGovernment Decree No. 73/1999/ND-CP, dated 19 August 1999, Social mobilization in theareas of education, health care, culture and sports is the promotion and facilitation of theextensive involvement of the people and entire society in the development of these fields in orderto steadily improve the level of benefit from education, health, culture and sports in both thephysical and mental development of the people (JAHR 2008: 74).

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Conclusions

Vietnam has historically shown a strong commitment to its populations health.Before doi moi, Vietnam financed and delivered medical care publicly. An extensive networkof public health care facilities delivered health services free of charge, and health workers

and community outreach organizations provided comprehensive preventive health care.Pharmaceutical supplies were subsidized by the Soviet Union. Realize to the national incomelevel, Vietnam had achieved remarkably good access to health care even for the poor.

Studies presented in this paper noted in particular, the decline of the traditional publicsector provider of health care to the poor, the commune health center, and the incipient rise inthe early 1990s of private sector health providers. The deregulation of the pharmaceutical

industry has followed by a dramatic of private pharmacies as the single most important typeof contact between the provider and patient while the role of the commune health centerdeclined. Deregulation permitted the emergence of private care facilities provided by doctors,nurses, some of whom and simultaneously employed in govt hospitals and other publicfacilities. Another major new feature of the health care sector largely absent in 1993, is the

Vietnam Health Insurance (VHI) program, with mandatory coverage for some sections of thecommunity and voluntary coverage for others. This is an important new development that hassignificant implications about the rate at which the relative importance of different providersin the health sector has changed and is likely to change in the future.

Although many significant achievements have been made, Vietnams health caresystem still faces many difficulties and challenges, including the central problem of how toimprove the health care system to move towards greater equity, efficiency and developmentin a socialist-oriented market economy.

The fundamental issues of the appropriate roles of public and private sectors in theprovision of public services are being reexamined by policymakers and the societies ingeneral. The evolving public sector must support or provide the legal, institutional, andadministrative framework and infrastructure required for the functioning of private enterprise.During the early years of doi moi, the role of the private sector has been significant asproviders of health care. Private sector involvement is expanding and evolving. Thoughallowing private practice does not always produce positive results. Many problems thatexisted in pre-market reform days still persist.

The area to which public and private may converge is through social mobilization.Social mobilization is a key policy on the agenda of the Party and Government, aiming tomobilize resources and the potential of the entire society for the purposes of protection andcare of the peoples health. While the Government retains a key role, the people, businesscommunity, social organizations, individuals and international organizations should be

encouraged to work together to solve social issues, in this case, health issues. Since thegovernment was not able to regulate the quality of service by the private sector vis--vis thehigh out-of-pocket spending of households since doi moi, it is suggested that convergence orpartnership of the two is a good alternative. The government must assume some of theresponsibility for protecting the public from poor-quality care.

Vietnams transition to the market in the health sector must be handled carefully.

Wholesale transfer of functions to the private sector can lead to inefficient and ineffectiveforms of care. The private sector has the potential to complement the public sector combinedwith an underfunded public sector is a dangerous one. Evidence suggests that the privatesector could provide services and drugs to the non-poor with proper regulatory oversight. Butseveral important roles remain for the government. It needs to provide effective regulation of

quality standards in both the public and the private sectors, especially with respect to drugs,as long as consumers lack sufficient knowledge to judge for themselves.

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Public-private partnership in health is not yet established in Vietnam. Prudent policiesinvolving the two sectors in health care have not yet conferred in the country. If Vietnamshealth care system is to be transformed into a modern and responsive 21 st century health caresystem, it needs to be decidedly consumer-focused. In particular, it needs to be competitive interms of price and quality because that is what consumers everywhere expressly look for.

Who (public or private) does what is not as important as what gets the job done.6

To end,any society that could kick out the French, kick out the Americans, and then live in caves,can do anything.7

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Notes

1. Articulated in the Socio-Economic Development Strategy (SEDS) prepared by theCommunist Party of Vietnam and endorsed at the Ninth Party Congress in 2001. Itcommits Vietnam to full openness to the global economy over the coming decade, and

the creation of a level playing field between the state and private sectors. Itemphasizes that the transition should be pro-poor, and notes that this will requireheavier investment in rural and lagging regions, and a more gradual reformimplementation than is often recommended by the international community. It givesstrong emphasis to poverty reduction and social equity, and a more modern system ofgovernance.

2. In 2007, the Health Partnership Group (HPG), which includes the Ministry of Health(MoH), together with international and external organizations giving health caresupport to Viet Nam, agreed to conduct, on a yearly basis, a Joint Annual HealthReview (JAHR). The JAHR 2007 comprehensively addressed the major segments ofthe Vietnamese health care system, including: 1) Health status and health

determinants; 2) Organization and management of the health system; 3) Health humanresources; 4) Health financing; and 5) Provision of health services.

3. As cited in Peralta, G. and Hunt, J. (2003). A Primer on Health Impacts ofDevelopment Programs. Manila: Asian Development Bank.

4. Many hospitals have plans to build and expand, but with a strong focus on wards forproviding elective health services, i.e. where the facility can charge additional fees

for preferential or priority services. The elective health services approach hasdeveloped primarily in larger hospitals, such as provincial and district hospitals wherethe population density is higher and people are better off. Forms of elective healthservices vary across hospitals, from special patient rooms and elective surgery

to after-hours examinations, etc.5. As cited in Judith Richters Public-Private Partnerships for Health: A Trend with No

Alternaaives?. Society for International Development. 2004:43.6. Lim, K.M. Transforming Singapore Health Care: Public-Private Partnership.

Department of Community, Occupational and Family Medicine. August 2005, Vol. 43No. 7.

7. Former Philippine Senator, and now Secretary of Transportation Mar Roxas in adialog and repartee with young Chinese-Filipino businessmen at the Anvil ExchangeForum, November 2007.

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