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At present the Communist Party of Vietnam is engaged in planning for the 10th National Party Congress, which is scheduled for April 2006. This Congress will mark the 20th anniversary since the introduction of the Doi Moi policy. Whereas famine was widespread in the early 1980s, Vietnam is today a major rice exporter. This economic transformation, which began in 1986, has also contributed to the overall wellbeing of the population - health being crucial also for the further economic development of Vietnam.
With an average GDP per capita of US$560 in 2004, Vietnam is still a relatively poor country. Its health indicators have steadily improved since the 1980s, and have achieved a level that is much higher than that of other nations with a similar per capita income. For example, according to the government report 'Vietnam Achieving the Millennium Goals' of August 2005, the under-5 mortality rate per 1000 live births decreased from 58 per thousand in 1990 to 31.5 per thousand in 2004. The percentage of undernourished children under the age of 5 has fallen from 33.8 per cent in 2000 to 25.2 per cent in 2005. Despite the significant achievements in health care, not everyone has had access to the gains. Access to the health care system has been largely determined by a person's or family's standard of living.
Although programs such as the Hunger Eradication and Poverty Reduction Program (HEPR) have effectively reduced the percentage of poor households, some 24 per cent of the population were still living below the poverty line in 2005. Furthermore, what has been achieved may be relatively unstable, as a fair number of households are extremely vulnerable to external shocks such as disease, natural disasters or economic instability.
A current policy that is attempting to ensure access to health care for the underprivileged is the Health Care Fund for the Poor (HCFP). It was established in 2003 to facilitate access to health care free of direct user charges through providing health insurance cards or by reimbursing providers directly. Since July 2005 all poor are entitled to membership in a general social health insurance scheme with the premium being covered by the HCFP. A national health insurance scheme had already been launched in 1993, but it did not include the poor. Thus, the introduction of the HCFP can be seen as an important step towards a universal health insurance scheme, which government planners hope to implement by 2010.
HCFP revenues in 2004 amounted to US$46.6 million, of which only 66 per cent were disbursed. This low spending rate is rooted in the low quality and lack in accessibility of public health facilities at the grass roots level.
Most of Vietnam's 83 million people have up until now not been covered by any health insurance scheme. They have relied on direct out-of-pocket payments for health care provided by either public or private facilities. Direct out-of-pocket payments make up more than 70 per cent of the total health expenditure. At the end of 2004 only a total of 18 million people had health insurance cover. The remaining majority in the population without cover will need to be targeted in order to achieve the goal of universal health insurance by 2010.
Vietnam's health care system has lately been challenged by outbreaks of avian flu (2004 to the present) and SARS (2003), but has performed fairly well in combating these. Moreover, Vietnam is facing an 'epidemiological transition'. Vector-borne and communicable infections have decreased, though still persist especially among the poor in the mountainous and remote areas, while non-communicable, lifestyle-related diseases such as cardiovascular diseases, cancers and diabetes are increasing. Injuries and deaths related to traffic accidents are on the rise as are the number of people infected with the HIV/AIDS. Official governmental statistics indicate that at the end of 2005 some 103,000 people carried the virus. Vietnam is thought to be a 'next wave' country, implying that it is on the threshold of a disastrous epidemic, unless extensive measures are taken.
Overall, the transition in disease patterns is putting enormous pressure on the existing health care system, which needs not only to expand its services, but also to improve its quality.
2006 is the first year of the implementation of the overall health care strategy for the 2006-2010 period. The expansion of the national health insurance scheme is a part of this strategy to facilitate universal coverage. Regulations on health insurance (Decree 63, issued May 2005) distinguish compulsory from voluntary health insurance schemes, but these will need further clarification in the future. Certain aspects are not being concretised, such as the nature of the benefit following enrolment in the scheme. But incentives are crucial in order to convince the population of the advantages of joining.
Immense obstacles remain to realizing universal health insurance coverage, but they need to be overcome in order to guarantee a healthy population that can contribute to sustained economic development and growth.
WATCHPOINT: Decisions regarding the party leadership at the 10th National Party Congress will influence implementation of renovation programs such as the health care strategy that are being put in place in 2006. But expansion of universal health insurance alone will not be sufficient to ensure health improvements. The quality of public health service delivery, the staffing of health facilities in poorer regions, and the monitoring and re-evaluation of health policies, remain of concern.
About our company:
AFG Venture Group is an Asia and Australia based corporate advisory and consulting firm with over 20 years experience in creating alliances, relationships and transactions in Australia, South East Asia and India; including a 15 year history of corporate and equities advisory in Australia, undertaking merger, acquisition, divestment, fund raising and consulting for private and public companies.
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