Public investment factor cannot be underestimated

May 29, 2024 | 09:10
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With its experience in dealing with world-scale epidemics such as SARS and H5N1, or the COVID-19 pandemic, Vietnam’s healthcare system has proven its ability to provide prompt respond in the face of epidemics, thereby showing great strides in the healthcare quality of Vietnam and reaffirming the immense importance of this sector in the new era of technology.

Nevertheless, with a great deal of challenges remained in meeting the technical infrastructure and medical equipment demands for medical examination and treatment facilities and healthcare centres, there needs to be clear, effective solutions and orientations regarding public investment from the government to support and promote the development of this field.

Public investment factor cannot be underestimated
Duong Thi Mai Hoa, managing partner, I-V Legal

In February, the prime minister approved the planning of the medical facility network towards 2030, with a vision to 2050. The goal is to build and develop a national network of medical facilities in accordance with the requirements of protecting and improving people’s health; ensuring feasibility and compatibility with the country’s socioeconomic development; and improving the quality of medical services on par with advanced countries.

Accordingly, a series of projects using state budget capital will be implemented in accordance with the Law on Public Investment, through the development of local annual and medium-term investment plans to develop a network of exam and treatment facilities. A number of modern, high-tech specialised hospitals will be developed, and central and regional disease control centres will be formed.

The implementation of this planning will open up opportunities to develop a series of large-scale public projects in the health sector in the upcoming periods, which is expected to bring Vietnam’s health sector to a new level of technical infrastructure, medical equipment, and technology.

The allocation/usage of state budget capital of public ventures, the procedures and application for approvals of medical construction schemes, as well as the procurement process of medical equipment for many a year, has always been a blockage causing delays in medical facilities’ operation. As a result, leaders of facilities have often avoided implementing public investment and bidding for medical equipment at all levels.

Currently, Vietnam’s policy is to focus on public investment in the health sector, aiming for healthcare coverage and health insurance for all people. The allocation of state budget prioritises resources for the health sector and is clearly shown in Resolution No.973/2020/UBTVQH14 dated 2020 prescribing principles, criteria, and norms for allocating public investment capital from the state budget for 2021-2025.

In it, there is a strong emphasis placed upon the health sector, ventures on the construction of infrastructure, facilities, and equipment serving healthcare, population, family, reproductive health, and food hygiene and safety. According to Resolution No.29/2021/QH15 on the medium-term public investment plan from 2021-2025, the health sector is allocated over VND24.1 trillion (almost $1 billion) in public capital from the state budget; approximately just under half for projects managed by ministries and central authorities, and the rest for local-managed projects.

Such capital source is mainly focused for high-quality human resources training, infrastructure construction, medical supplies procurement, and public health development. However, in practice, the implementation of public projects using state budget capital is no simple task.

In recent years, despite being allocated a large proportion in the budget, the disbursement rate of public investment in the health sector has always been lower than the national average due to legal obstacles, from the preparation and approval of investment and bidding projects to the contract performance of bidding packages. Moreover, regulations and policies fail to be timely issued, resulting in the state having money but not spending it, causing significant losses to the health sector.

For now, with the provisions of the Law on Bidding 2023 taking effect from January, accompanied with its guiding documents, they will create greater initiative for medical facilities to implement public bidding projects in drug and medical supplies in order to provide better medical services for the people in the near future.

In addition, one of the solutions to promote initiatives in the health sector is to create conditions that attract private capital to participate in public projects through public-private partnerships. So far, the legal framework on this in the health sector is quite complete, yet the actual implementation of attracting investors is not truly attractive.

Therefore, it is crucial for the government to have an incentive mechanism and increase benefits for investors, rather than maintaining only the mechanism of sharing the increase/decrease in project income as prescribed in the Law on Investment through public-private partnerships. With the changes in policies, it is hoped to attract more potential for public initiatives and mark the blossoming of Vietnam’s healthcare sector.

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By Mai Hoa

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