FFS - Fee For Service GDP – Gross Domestic Product GNI – Gross National Income GP - General Practitioner HSCSP - Health Sector Capacity Support Project HI – Health Insurance ICT - Information and Communication Technology MoH - Ministry of Health NGO – Non-Governmental Organisation OECD – Organisation for Economic Co-operation and Development OOP - Out-Of-Pocket PHC - Primary Health Care PPC - Provincial Peoples Committee/Council PPM - Provider Payment Mechanism PSS – Provincial Social Security SHA – System of Health Accounts SHI – Social Health Insurance THE - Total Health Expenditure UHC - Universal Health Coverage WHO – World Health Organisation VND – Vietnamese Dong VSS – Vietnam Social Security Executive Summary The objective of the analysis is to examine current provider payment mechanisms in place, as well as to elaborate on those that were piloted, but are not in use at the moment. Based on the results of the analysis and findings, the report will provide recommendations for provider
DRG + Budget Australia, Czech, Denmark, Germany, Hungary, Italy, New Zealand, Norway The case mix adjusted budget will improve accessibility of services. In Portugal the case-mix adjusted component of each hospital budget has been increased; the implementation of the model started in 1997 as 10% DRG- based and reached 50% in fiscal year 2002. FFS + Budget Czech, Hungary, Netherlands, Poland The tendency of overprovision of services under FFS can be capped by limits of price or volume. Since 2000 in Netherland, hospital financing efforts have been undertaken to integrate the fee-for-service system for specialists and the hospital budget system into a single integrated budget. However, reforms in the OECD countries demonstrated a movement towards the simultaneous use of different provider payment mechanisms, in other words paying the same provider in different ways. Some reform experiences with mixed provider payment mechanisms in the OECD countries are elaborated in Table 2 on the previous page. Table 3 provides an overview of purchasers and applied provider payment mechanisms by type of health care providers in Vietnam. The provider payment mechanisms arrangements vary depending on type of a health care provider. The purchasing arrangement for public health care providers is more diverse than for private health care providers that are usually reimbursed on FFS basis. Table 3. Purchasers and provider payment mechanisms by type of a provider in Vietnam PROVIDER PURCHASER MoH PPC/DoF/DoH Other Ministries VSS PSS Households Central Hospital Budgetary transfers FSS FSS FSS Provincial Hospital Budgetary transfers FSS FSS Provincial Preventive Centre Budgetary transfers FSS District Hospital Budgetary transfers FSS FSS District Budgetary FSS
Table 4. Budgetary transfers Key features International practice Vietnamese practice Budget calculation -Budgets based on inputs (the least advisable) -Budgets based on projected volume of services (more acceptable) -Budgets based on catchment area and population or other proxies for health care needs (the most advisable) Based on input norms: either number of beds, number of staff Cost items Budget excludes some cost items Budget excludes some cost items Fund holding If there is fund holding, the rules of payment to providers should be transparent, and providers should not be at greater financial risk than they are able to manage -Health centres and district hospitals hold budgets for commune health stations –Payment rules are transparent -Providers are at greater financial risk than they are able to manage Payment Caps, Deficits and Surpluses -There is a hard budget cap and overruns are carefully managed and controlled -Providers are allowed to keep a portion of surpluses, with financial accountability for its use -Payment caps are used for reimbursement of primary health care facilities and for reimbursement of referrals -Autonomous health care providers are allowed to keep surplus and use it in accordance with Decree 16/2015/ND-CP - Managers of health care facilities are responsible for managing and controlling the balance of revenues and expenditures Budget allocation Standardized procedures with no delay in payment Standardized procedures with occasional delay in payment Key positive features of the budgetary transfers are: it is predictable for the fund holder; it permits more efficient use of resources, but gain in efficiency depends how resources are managed;