Private investment pushed for healthcare

January 15, 2021 | 15:00
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Vietnam’s healthcare sector will take on a number of new policies to attract more private investment in 2021 to fulfil set targets, expecting to further enlarge market entry for potential players.
1526 p15 private investment pushed for healthcare
Private investment pushed for healthcare, illustration photo

Minister of Health Nguyen Thanh Long said at last week’s National Health Conference in Hanoi that in the sector’s tasks and plans for 2021, his ministry (MoH) will submit to the government a draft decree on joint ventures and collaboration in the first quarter with a move to attract more private investment in the sector.

The minister also proposed a mechanism to increase mobilisation of private investment with appropriate forms such as outsourcing the whole IT service to save time and human resources.

Specifically, as part of the 2021 tasks, the sector aims to mobilise funds through the public-private partnership (PPP) model and encourage such investment in hospitals, especially in the high-end services.

To make this happen, the sector will build health finance policies to attract private investment and spur PPP in the field to further facilitate development of private health. It also wants to complete the legal framework and accelerate equitisation and divestment of state stakes in businesses and units.

“The sector plans to submit two draft amendments to the Law on Health Insurance and the Law on Medical Examination and Treatment this year, while continuing to cut administrative procedures,” Long added.

Accordingly, the amendments will be made towards creating more bankability for the private sector to join. Moreover, it will check and apply health service fees and vaccines in line with the roadmap to ensure transparency and bankability, while revising and completing technical-economic norms to build service prices.

On the other hand, the sector will also renovate the financial mechanism for preventive health and build a price frame of preventive healthcare packages. It will also continue to strictly implement the rules on tenders, expand the list of drugs for concentrated procurement, and boost online bidding.

With the changes, the sector expects the private sector will increase contributions in 2021, enabling it to fulfil the 2021 targets, including increasing the number of sickbeds per 10,000 people to 28.5 from 28 in 2020; health insurance coverage to 91 from 90.85 per cent in 2020; people’s satisfaction with health services to over 80 per cent; and others. In addition to this, the sector is focusing on dealing with hospital overloads.

A senior official at the MoH told VIR, “The health sector is carrying out heavy tasks amid the challenges. Thus, we are encouraging private investors to join to fulfil our targets. We are also considering and appraising procedures for some PPP projects in healthcare infrastructure and medical equipment.”

Thus far, despite strong interest, private investment in healthcare remains low due to shortcomings including a lack of a legal framework for PPP investment. With the new plans and, more importantly, the long-awaited legal framework within the Law on Public-Private Partnership Investment now in effect, the path for the private sector to seek new ventures will become smoother.

Under the law, health remains one of the priority sectors for that type of investment, making it the key piece of legislation governing such transactions in the country.

Accordingly, investors of PPP schemes will be ensured the right to access and use the land and other public assets. They will also be able to get the most-sought the government’s risk-sharing mechanism for minimum revenue.

Specifically, the state will hand over or lease land or allow them to use other public assets to implement PPP contracts. Moreover, related businesses will enjoy incentives in tax, land-use fee, land-leasing fee, and more in line with the prevailing rules on tax, land, and investment.

According to experts at the World Bank and the International Finance Corporation, other countries alongside Vietnam are facing growing pressures on public services, especially healthcare. Thus, attracting private investment via PPP is considered the optimal solution for healthcare sector development.

Nguyen Xuan Phuc, Prime Minister

1526 p15 private investment pushed for healthcare

The healthcare sector made great achievements in 2020. However, some shortcomings still remain, including hospital overloads.

In the coming years, the country’s socioeconomic development continues to put more new tasks and challenges on the healthcare sector, requiring it to make more efforts to create comprehensive evolution.

Some key issues the sector should pay due attention to in 2021 and in the 2021-2025 period include increasing health service quality; increasing transparency in public procurement; and closely working with ministries and agencies on investment attraction to soon modernise infrastructure and medical devices, so as to better serve people’s growing and diversified demands.

By Thuy Nguyen

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