Voluntary Health Insurance in Vietnam: an Evaluation

This paper summarises the findings of a series of articles which evaluate the impact of State-implemented voluntary health insurance (VHI) on the Vietnamese health system. The results are generally positive with clear equity gains in terms of utilisation and expenditures, and no evidence of consumer moral hazard. However VHI appears to negatively affect the quality of care, which patients trade off with expected financial gain. Whilst VHI suffers from adverse selection, rather than limiting access to high-risk individuals, more concerted and marketing strategies are required, in particular those targeting the low-educated and remote communities. There is clear evidence that members of voluntary organisations are significantly more likely to purchase a VHI policy. Whilst targeting such groups would promote risk-sharing and limit adverse selection, it is likely that government subsidies will be required for the foreseeable future. Many governments in low and middle-income countries are introducing health insurance schemes, on the basis that they will increase the private financing of health care services, in turn reducing the burden on the public sector, whilst protecting individual welfare through maintaining or improving access to health care services . 1 In 1986 the Vietnamese Government introduced market economic reforms, known as doi moi (renovation). For government health services this meant the introduction of user charges in 1989, followed by the government implemented not-for-profit health insurance in 1992. The system comprises two schemes: compulsory insurance and voluntary insurance. ____________________ *Financial and Economic Policy Advisor, European Commission on Health and Family Welfare Programme, India.