Vietnam

There is no distinct unit dedicated to Strategic Purchasing in Vietnam currently for either Social Health Insurance (SHI) and the state budget. Some policy documents regulate the responsibilities of corresponding agencies in performing functions of strategic purchasing (i.e., deciding what to purchase, whom to purchase from and how to purchase based on an assessment of (1) the health needs of the serviced population and (2) evidence on provider performance).

For example, the Health Insurance Law regulates the role of the Ministry of Health (MOH)’s Department of Health Insurance (DHI) in promulgating the health benefits package. The MOH revises the list of HI reimbursement medicines once every two to three years, and issues criteria for adding or removing a specific medicine from the list. However, the list is considered “quite generous” compared with other countries with similar income and the criteria are seen as “too simplistic”. Some criteria (e.g., cost-effectiveness and budget impact) could not be identified due to a lack of evidence.

In terms of the state budget, the Vietnam Communist Party defines the theory of development and sets major directions for the health sector (formally written in its Resolution, the latest being Resolution 27-NQ/TW dated 25/10/2017). The Vietnam National Assembly makes laws on the state budget and decides state budget estimates and the central government’s budget allocation. Provincial People’s Councils decide and approve local government budgets. Budgets are planned for every year and go through a review process before funds are channeled directly to service providers via the MOH (for central hospitals and centrally-affiliated agencies) or the provincial Department of Health/Department of Finance (for public providers in the provinces). The law on state budget regulates several criteria for allocating the state budget, such as based on assigned objectives which generally cover the health needs of the population. Some prioritised public health programs, such as the HIV/AIDS program, actively employ Monitoring & Evaluation data including needs assessments and service provider performance data in making their strategic budgets.

Medicine (national level)
Centralized Drug Procurement Centre, Ministry of Health
Department of Price Management, Ministry of Finance: give guidance on price registration and price apparaisal of medicines
Ministry of Planning and Investment: give guidance on appraisal in contractor selection
Vietnam Social Security: claims assessment and reimbursement for hospitals
Central-level hospitals

Medicine (subnational level)
Provincial Departments of Health
Provincial Departments of Finance
Provincial Departments of Planning and Investment
Provincial Social Security Agency: claims assessment and reimbursment for hospitals
Sub-national hospitals

Vaccines (national level)
General Department of Preventive Medicine, Ministry of Health
National Institute of Hygiene and Epidemiology: orders suppliers to provide vaccines for the national vaccination programme
Centralized Drug Procurement Centre, Ministry of Health
Ministry of Finance

Vaccines (subnational level)
Centre for Disease Control
Provincial Departments of Health
Provincial Departments of Finance
Lower-level health facilities: plan and submit their lists of required vaccines

Medical equipment and consumables (national level)
Ministry of Health
Ministry of Finance: assessment of bid selection
Ministry of Planning and Investment: guidance and supervision of the bidding process
Central-level hospitals

Medical equipment and consumables (subnational level)
People’s Assembly
Provincial Departments of Finance: assessment of bid selection
Provincial Department of Planning and Investment
Sub-national hospitals

Healthcare services (national level)
Vietnam Social Security: claims assessment and reimbursement for hospitals
Ministry of Health: preventive services

Healthcare services (subnational level)
Provincial Social Security Agency: claims assessment and reimbursement for hospitals
Provincial Departments of Health: preventive services

Healthcare support services (national level)
Ministry of Health
Ministry of Finance
Vietnam Social Security

Healthcare support services (subnational level)
Provincial Departments of Health
Provincial Departments of Finance
Provincial Social Security Agency
Hospitals
Emergency Centres (115)

Vietnam Social Security (VSS) is the single purchaser of curative services (both inpatient treatment and outpatient management, both for public and private hospitals).

The Ministry of Health (plus provincial Departments of Health) are the single purchasers of preventive services and of curative services in non-autonomous hospitals (i.e., partly self-financing hospitals and fully state-budget subsidised hospitals).

Purchasing is conducted separately between the curative and the preventive sectors. However, within each sector, purchasing is generally conducted universally within the legislative framework.

Yes, there are some discussions and advocacy activities to expand the Social Health Insurance (SHI) to cover preventive services.
The HIV/TB priority program has gradually shifted payment for HIV/TB treatment from external donors & government subsidies to the SHI fund. A centralised drug procurement procedure also illustrates the case of integrating purchasing of HIV/TB drugs together with other medications covered by SHI.

In million current $USD:

No criteria are explicitly stated in policy documents on the state budget and Social Health Insurance (SHI). However, by referencing the Law on State Budget, Law on Health Insurance and other guidance documents, the following criteria for selecting purchases and providers/suppliers emerge  (in no order of importance):

Government budget: 
1) Based on assigned tasks and objectives;
2) Compliance with pre-determined cost norms and budget allocation forms
3) Previous year expenditure;
4) Prioritisation based on urgency, importance and ability to perform the tasks.

SHI:
Purchasing is mainly based on reimbursement policies and caps. There are no criteria or processes to review the benefit packages of health services and procedures (e.g. X-rays).

Some criteria for selecting medicines for the benefit package exist, though the relevant assessment guideline is only under development:
1) Recommended by the MOH, WHO and other high-reputation organisations.
2) Budget impact evidence, as evaluated by the MOH (National Health Technology Assessment guideline currently under development).

For the Social Health Insurance (SHI) fund, the Law on Health Insurance specifies management principles, stating “the health insurance fund shall be managed in a centralized, uniform, public and transparent manner with management decentralization within the system of health insurance institutions” (Article 34). The following principles therefore govern the SHI’s use of funds (in no order of importance):
1. Centralised and uniform;
2. Public and transparent;
3. Management decentralisation within the SHI institutions.

The Law on State Budget (Article 8) also specifies eleven management principles, of which the following are relevant to purchasing (in no order of importance):
1. Uniform and democratic;
2. Public, transparent and ensuring equity;
3. Management decentralisation to provincial People’s Councils;
4. Efficient and prudent (economical);
5. Based on the approved budget plan and public cost norms imposed by authorities.

The Vietnam Communist Party (VCP) defines the theory of development and sets the primary direction for the health sector through Resolutions and directives. It concludes on health sector performance based on Ministry of Health (MOH) and other related agencies’ reports. The National Assembly approves legislation (e.g., Law on Health Insurance, Law on Medical Examination and Treatment…) drafted by the MOH to operationalise the VCP’s Resolution and directives.

The Ministry of Health (MOH) drafts Laws (and amended Laws) and issues Decrees and Circulars to provide detailed guidance on implementing such Laws. Other Ministries (mainly the Ministry of Finance and the Ministry of Planning and Investment) provide detailed guidance to implement laws related to health system financing (e.g. Law on State Budget, Law on Price, Law on Bidding). Vietnam Social Security also gives detailed guidance to its subordinate units on implementing the Law on Health Insurance. VSS also works with other ministries to draft related laws and regulations.

Provincial authorities and administrative agencies (e.g. Department of Health, Department of Finance, Department of Planning and Investment) are responsible for decision-making on health financing at the provincial level.

As Vietnam has no clear strategic purchasing unit/function, the same stakeholders involved in health financing also make decisions on health purchasing and any elements of strategic purchasing within.

In addition, current literature and key informants confirm that there is no regulated or transparent process for making decisions regarding the benefits package. There are no defined criteria, no specification of information to be considered and no rules regarding who should be on the committee to represent different stakeholders and provide an unbiased and expert opinion on the benefit package.

The following Laws and associated regulations provide guidance on healthcare purchasing:

The Law on Health Insurance outlines Vietnam Social Security (VSS)’s regime and policies (e.g. premium rates, payment methods, eligible beneficiaries).

The Law on State Budget outlines the mandates and roles of the central and provincial governments and related administrative agencies in revenue raising, management and allocation of the state budget (including the health budget).

The Law on Bidding provides guidance on using the state budget to purchase services, construction and goods.

The Law on Price prescribes the responsibilities of organisations and individuals relating to activities in the field of prices (i.e. managing and regulating prices of the State).

The Law on Pharmacy provides policies for pharmacy activities in Vietnam.

The Law on Medical Examination and Treatment defines the mandates and roles of healthcare providers in general.

The following Laws and associated regulations govern public finances and public spending:

The Law on State Budget and many regulations provide detailed guidance on governance and management of the central and local government budgets.

The Law on Bidding provides detailed guidance on using the state budget to purchase services, construction and goods.

The Law on Public Investment covers investments from the state budget of an amount of more than 45 billion VND.

The Law on Management and Use of Public Property provides guidance on infrastructure/construction investment toward Public-Private Partnership models.

The Law on Bidding and associated regulations provide guidance on using the state budget to purchase services, construction and goods.

The Basic Public Procurement process (Article 54) includes 5 steps:

1) Bidding planning: the bidding plan will itemize the names of the bidding packages in a certain project and provide information about the budget, financing source, bidding method, schedule and the form of contract, and schedule for contract performance of each bidding package. Such a bidding plan must be approved by the competent authorities defined under the Law on Bidding.

2) Bid opening: the submitted bids must be opened immediately after the bid closing time, on the date, and at the location stated in the bid invitation documents. In this step, the main information about each bid will be disclosed.

3) Bid evaluating: the procurement entity will review and evaluate the opened bids based on the requirements of the bid invitation documents and evaluation criteria. During this process the bid evaluators will – based on the bidding price offered by the bidders – make necessary corrections and adjustments to determine the “evaluation price” of the bids. Under the Bidding Law, the “evaluation price: is defined as the bid price proposed by a contractor after correcting errors and necessary expenses for operation and maintenance. The bid having the lowest “evaluation price” will rank first.

4) Bid awarding: The bidding result must be approved and then announced (e.g., winning bidder, winning price, the form of contract, etc.) by the Authorized Person.

5) Finalizing and contracting: The contract between the procurement entity and the winning bidder will be finalized and entered. If parties fail to negotiate and finalize the contract, the procurement entity will invite the next ranking bidder to negotiate and sign the contract.

The centralised procurement process is similar to the basic procurement procedure. However, in the bidding planning, the centralised procurement unit needs to collect and aggregate procurement needs at the national or provincial level. The Ministry of Health Centralized Drug Procurement Center is responsible for national procurement of 50 drugs for hospitals and 72 drugs for public health priority programs (e.g., HIV, TB, malaria, mental health).

Public procurement and tendering processes in the healthcare sector (e.g. for drugs, vaccines, equipment and consumables) are similar to those in other sectors and in compliance with the general Law on Bidding.

The Ministry of Health (MOH) has issued several regulations and circulars to guide the implementation of public healthcare procurement:

• Circular 15/2019/TT-BYT on the bidding process for medicine in public hospitals
•  Circular 14/2020/TT-BYT on the bidding process for medical equipment in public hospitals

For the centralised procurement process, the Centralized Drug Procurement Center (MOH) is responsible for the national procurement of 50 drugs for hospitals, 72 drugs for public health priority programs (e.g., HIV, TB, malaria, mental health) and 2 vaccines. The MOH issues the list of drugs eligible for national procurement. The Provincial Department of Health is the corresponding unit for implementing procurement processes at the provincial level.

The stakeholders defined in national laws and regulations (e.g., Law on Health Insurance, Law on Bidding) are responsible for enforcing the obligations from terms and contracts described in the corresponding laws/regulations.

However, there are concerns surrounding a lack of actual mechanisms to enforce contracts with service providers. The multiple layers of responsibility described above (with multiple stakeholders involved) weaken the overall accountability of both Vietnam Social Security (VSS) and the Ministry of Health (MOH). There are no legal specifications of the implications of this responsibility other than reporting requirements to higher authorities.

State budget: there are mainly input-based incentives created by the Global budget and line-item payment methods. However, some priority public health programs (e.g., HIV/AIDS, Tuberculosis programs) set goals and indicators for implementation. The local authorities approve the budget allocation for these programs based on the level of accomplishment of such indicators (e.g., the number of education and communication events; the number of patients reached).

Social Health Insurance: the dominant fee-for-service payment methods define input-based rather than output-based incentives.

The Ministry of Health (MOH) promulgates the Vietnam Hospital Quality Standard, which is widely adopted to assess the quality of hospitals. However, these assessments are not linked to strategic purchasing decisions.

The MOH also promulgates key health indicators to collect and report annually. Prioritised public health programs (e.g HIV/AID, Tuberculosis programs) also regularly collect and analyze some indicators that may refer to the performance of their service providers. Again, these are not closely linked to strategic purchasing decisions.

There is a mechanism to provide feedback for improvement to hospitals based on the assessment results from the Vietnam Hospital Quality Standard. However, these are not linked to strategic purchasing decisions. 

For the curative sector: since the Law on Health Insurance does not adequately outline reporting requirements, this results in minimal reporting from Vietnam Social Security (VSS). There is no regular systems-level analysis of quality, financial protection, and efficiency in the use of the fund. There is no mechanism for the VSS to assess the quality of services purchased. Although VSS can deny payment due to provider“mistakes” (e.g. violation of cost norm, overuse, etc.), claims after review regardless of the quality of services provided.

VSS could easily produce information on service utilisation. However, no regular systems-level analysis of this has been performed to aid purchasing decisions.

For the preventive sector: system-level information on several indicators (mainly utilisation and healthcare indicators) is available. However, no regular system-level analysis is performed and data is not linked to purchasing decisions. The MOH also delivers annual reports on health system activities, reviewing performance and current gaps.

The Department of Planning and Finance under the Ministry of Health (MOH) regularly collects data from hospitals. This data mainly covers the prevalence, incidence and mortality rate of diseases in hospitals and communal health centers.

Findings on health system performance are not closely linked to purchasing decisions either at the curative or preventive levels. In the curative sector, Vietnam Social Security data on service utilisation is not linked to strategic purchasing decisions. Additionally, the lack of established information-sharing mechanisms makes it difficult for the Ministry of Health (MOH) and other stakeholders to access and help the policy-making process in this respect.

In the preventive sector, while more data on health system performance is available, this is not linked to strategic purchasing decisions. While the Ministry of Health (MOH) delivers annual reports on health system activities, the connection to purchasing decisions is not clear.

The indicators used in monitoring and evaluation for purchasing decisions have not yet been defined.