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Monday, 28 October 2019 10:06
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Public investment in healthcare infrastructure in the Northwest region

(LLCT) - Investment in healthcare infrastructure to improve the quality of medical examination and treatment at communal health stations, regional polyclinics and district health centers always receives due attention from the Party and the State of Vietnam. Through analysis of the current situation of public investment in the development of healthcare infrastructure in the Northwest region, the article points out the difficulties and limitations, such as: investment capital mainly comes from the state budget; public-private partnership (PPP) has not yet played a clear role, the effects of socio-economic infrastructure investment in general and healthcare infrastructure in particular are insufficient. Therefrom, the article proposes solutions to synchronously develop socio-economic infrastructure, invest in healthcare infrastructure, increase the number of  stations, improve the quality of medical examination and treatment, and provide access to health services for people in the Northwest. 

Keywords: public investment, state budget capital, healthcare infrastructure in the Northwest.

1.  Investment capital for healthcare infrastructure in the Northwest in 2011-2017 period

The Northwest is the sub-region of the Northern Midland and Mountain region, including 6 provinces: Lao Cai, Yen Bai, Lai Chau, Dien Bien, Son La and Hoa Binh. It is a strategic area of particular importance in socio-economic development and national defense and security of the whole country. Over the past years, the Party and State have issued many guidelines and policies for socio-economic development in the Northwest region(1). As a result, the regional infrastructure system has developed, gradually meeting the requirements for socio-economic development, and the people in the region have access to fundamental social services, especially healthcare and education. However, investment in infrastructure, especially healthcare infrastructure, is still mainly based on the state budget.

According to reports of the provinces (2), in the 2011-2017 period, the total state budget invested in healthcare infrastructure in the Northwestern provinces was VND 7,126.915 billion (Table 1), accounting for 92.52% of the total investment capital in healthcare infrastructure. This shows that the efforts to mobilize other resources remain insignificant, and non-state capital accounted for only 7.48%.

From the data table, in the 2011-2017 period, investment capital for healthcare infrastructure was mainly from the state budget. In Lao Cai province, the total investment capital for healthcare infrastructure was VND 983.863 billion, of which investment from the state budget was VND 950.360 billion; socialized capital VND 11.26 billion; and other legal sources VND 22.3 billion. In Lai Chau province, the total investment capital for the 2011-2017 period was VND 829,230 billion, an average of VND 118.4 billion per year, of which capital from the State budget accounted for 98.42%, socialized capital and other sources only accounted for 1.58%. In Yen Bai province, for the same period, the total investment capital was VND 2,149.800 billion, of which the State budget capital was VND 1,875.800 billion, accounting for 87.25%, and socialized capital was VND 274 billion, accounting for 12.75%.

Typical in attracting non-State budget capital is Son La province, with the total investment capital in the 2011-2017 period of VND2,562.912 billion, of which State budget was VND2,147 billion, accounting for 83.77%, socialized capital was VND 366.9 billion, other sources VND 48.44 billion, accounting for 16.23%. Although in recent years, the ratio of investment capital from the state budget to the provinces in the region has decreased, however its rate has been insufficient. This shows the difficulties in the trend of diversifying capital sources for healthcare infrastructure in the Northwest region. The reason is that due to the regional natural conditions, the difficult topography is a barrier to investment in healthcare infrastructure, while grassroots healthcare plays a very important role. According to a survey by Action Aid Vietnam (AAV), two of the main factors affecting households’ access to health services are the geographical distance and cost of medical treatment. If there are more and more medical examination and treatment facilities, especially grassroots health stations (village and commune health stations), the local residents will enjoy more opportunities to get access to health services. In fact, medical examination and treatment facilities are ensured, the number of patient beds has gradually increased in the years; together they have met the medical examination and treatment needs of the local people.

There is almost no change in the number of healthcare facilities, especially district and provincial hospitals, during the 2011-2017 period in the Northwest provinces. The change mainly takes place at commune and village levels. The number of commune healthcare stations has increased significantly (10 new stations in Lai Chau; 18 in Dien Bien). After that, although the number of medical facilities at the grassroots level increased slowly; the facilities have been upgraded thanks to the investment in the healthcare infrastructure. During the 2011-2017 period, the patient beds in the provinces of Lao Cai, Yen Bai, Dien Bien, Lai Chau and Son La grew to 745, 636, 374, 250 and 900, respectively. This investment is necessary, because village and commune healthcare is the form more easily accessed in disadvantaged areas such as the Northwest due to proximity to residential clusters and lower costs than district or province lines.

Some projects have attracted capital from the state budget to enhance facilities and improve the capacity of the healthcare system, for example, the “Healthcare assistance in the Northeastern provinces and Red River Delta” project with loans from the World Bank (WB); Government bonds to upgrade infrastructure to purchase essential equipment for provincial hospitals and district hospitals; loans from the World Bank to invest in the system of treating liquid and solid waste water, improving the capacity of provincial hospitals and district hospitals; EU health policy support fund for building 3 new commune healthcare stations in Hoa Binh province; Son La hydropower resettlement program, Program 30a (in Dien Bien). Testing Center, Lao Cai General Hospital is invested with Korean ODA and investment in medical equipment for medical stations, in which donated funds from international organizations through the Ministry of Health (Global Alliance for Vaccination and Immunization - GAVI, European Union) for 83 healthcare stations, 1,200 medical bags in villages (in Lao Cai).

As a region with many extremely disadvantaged communes, the Northwest region receives prioritized investment in healthcare infrastructure. From its efforts to mobilize from other sources, the healthcare coverage at grassroots level in the Northwest region in 2017 was as follows:

The indicators show that the construction of hospitals and clinics at the provincial, district and commune levels in the Northwest region is growing, but this rate is only about 33 -70% of the national average, lower than that in the Central Highlands. In terms of the ratio of doctors and healthcare workers per 10,000 residents, it is better in the Northwest than in the Central Highlands. The proportion of doctors per 10,000 residents in the Northwest reaches 8.29, while that of the Central Highlands is only 5.81, and the whole country 6.23. The proportion of healthcare manpower per 10,000 residents in the Northwest is the highest, at 35.56, while that of the Northern Midlands and Mountain Region is 33.01, the Central Highlands 22.92, and the whole country 24.74.

Although the healthcare infrastructure system has been improved, through surveys in some communes of Hoa Binh and Yen Bai provinces, we see that people  use mainly medical examination and treatment at commune healthcare facilities and folk medicine. Up to 46% of people who regularly go for medical treatment chose commune healthcare stations as a place for medical examination and treatment. This demonstrates the positive role of commune-level healthcare for the people. However, 26% of the people surveyed still said that they used traditional healing methods from folk healers and doctors. The role of district hospitals is quite weak, because of the long geographical distance, difficult transport infrastructure, and few people can use them.

Through the survey findings, among those who did not seek medical treatment at healthcare facilities, up to 50% were self-treated at home based on experience, 25% reported that the medical counseling and support information was not clear enough to help them seek medical or treatment facilities. The reason of not going to a nearby healthcare facility and high medical fee occurred at 20% and 5% of the people surveyed in the group of having no treatment at healthcare facilities.

In addition to the positive results, including the yearly increase in healthcare facilities at the grassroots level and the number of patient beds, considering the level of attracting investment capital to the development of healthcare infrastructure, there have been a lot of limitations:

Attracting non-State investment for socio-economic infrastructure development in general and healthcare infrastructure in particular is not much, with non-state capital accounting for a very small proportion. In fact, the state budget plays a decisive role in the total investment capital. The reliance on the capital from the State budget increases the passivity in implementing the policies of attracting investment from outside sources.

The PPP cooperation form does not yet play a clear role in healthcare infrastructure investment in the Northwest region.

Effects of socio-economic infrastructure investment in general and education infrastructure in particular are not high. In terms of basic healthcare ratios, the Northwest region is at a high level compared to the Central Highlands or at average level compared to the entire nation. However, the quality of, and access to, healthcare in the Northwest are still not high; the rate of home or traditional experience healthcare remains high.

2. Some solutions

In order to synchronously develop socio-economic infrastructure, especially to invest in the development of healthcare infrastructure to raise the rate of solidified medical stations, improve the quality of medical examination and treatment as well as access to medical services for the people in the Northwest region, due attention should be paid to some following solutions:

Firstly, improving the quality and implementation of infrastructure development planning associated with socio-economic development planning. Reviewing and improving institutions to improve the quality of socio-economic infrastructure development planning of the sectors, regions and localities to ensure consistency and connectivity within the sectors, among sectors and regions meeting the regional and national socio-economic development requirements.

Secondly, completing the legal framework for investment (especially public investment) and decentralizing public investment management. Some of the existing contents in the current legal framework also need to be adjusted to effectively implement decentralized functions, authorities and responsibilities in ministries, sectors and localities. For example, it is necessary to increase the norms of costs related to public investment management, especially the cost of verification, monitoring and evaluation - but it must be associated with strengthening the responsibilities of the implementing agencies and decisive individuals.

It is required to decentralize the management for investment capital to enhance the responsibilities of both central and local levels, contributing to improving the efficiency of attracting and using investment capital. It is also obligatory to complete the mechanism of investment decentralization, allocating capital to promote the activeness and the responsibility of the local government, while ensuring the unified management of the Central Government, strengthening supervision, inspection, and strict handling of violations. This decentralization does not mean that these agencies and bodies can approve all projects, but must do it on the basis of increasing accountability and greater involvement from these levels in the process of investment decentralization. Capital allocation must be done according to management authority to avoid widespread and unfocused project approval.

Thirdly, having preferential mechanisms and incentive policies for investment in healthcare infrastructure in the Northwest region: policies on land, on exemption of land rents for investing enterprises attracting socialized capital and public-private cooperation to invest in fundamentally solving bottlenecks, overloads and step by step formulate a relatively synchronous socio-economic infrastructure system, ensuring fast and sustainable development, narrowing the gap between regions and improving people’s lives. Along with the requirements of synchronous development of socio-economic infrastructure system, it is necessary to focus resources on developing the healthcare infrastructure system from commune to provincial levels to improve the quality of medical examination and treatment, and access to health services for people.

Fourthly, having mechanisms and policies to attract and effectively use investment capital sources to develop infrastructure systems, especially ODA. Promoting the mobilization of partners and donors to continue providing ODA to develop healthcare infrastructure. Amending and supplementing regulations on financial support policies, taxes, prices, fees, charges, etc. to increase the commercial nature of the projects and user contributions. Reviewing the mechanisms and policies, promoting the reform of administrative procedures to create a transparent environment for investors to invest safely.

Fifthly, it is necessary to clearly define the roles and responsibilities between the State and the private sector. In the current trend, mobilizing financial resources to invest in socio-economic infrastructure from non-state sector is inevitable. In order to mobilize finance from the PPP sector, the State’s support on policies and mechanisms is very important and necessary. The Government should understand the aspirations and purposes of the private sector. Private investors not only rely on incentives from the State but also need a clear delimitation of the rights and obligations of each party involved in the project implementation.

Sixthly, for investment capital from the State budget (including ODA capital), central investment credit sources, sources of excessive revenue, increasing revenues from the local economy should give priority to development investment in public investment, and synchronous development of socio-economic infrastructure should prioritize investment in developing transport infrastructure and healthcare and education infrastructure. The development of transport infrastructure should be prioritized in disadvantaged areas, so that people can have better access to healthcare and education.

Seventhly, strengthening the inspection and supervision of functional financial management agencies in the financial sector for the process of formation, mobilization, allocation, payment control and settlement of capital construction investment from the state budget. Strictly implementing the inspection, examination and supervision of investment activities. Making publicity and transparency of investment activities. Improving the capacity of investors, project management units, design consultancy organizations, supervising, reviewing and eliminating immediately contractors having low capacities in order to have measures to promptly prevent losses and waste that may happen.

In order to create consensus in society, encourage all people to support and share responsibilities with the State in investment in socio-economic infrastructure development, including investment in healthcare and education infrastructure development, it is necessary to well mobilize people’s participation through, for example, communication or campaigning.



(1) Resolution No. 13-NQ/TW dated January 16, 2012 on building a synchronous infrastructure system to make Vietnam basically become a modern industrialized country by 2020; Resolution No. 37-NQ/TW dated July 1, 2004 of the Politburo (term IX) on the direction of socio-economic development and ensuring national defense and security in the midland and mountainous regions of the North to the year 2020; Resolution No. 26-NQ/TW dated  August 5, 2008 of the 10th Central Executive Committee on agriculture, farmers and rural areas ...

(2) Lao Cai, Yen Bai, Lai Chau, Dien Bien, Son La and Hoa Binh.

Dr. Le Thi Huong

Department of Social Affairs, Central Economic Committee

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