1. Review of piloting capitation payment method for Health Insurance -based healthcare in some provinces of Vietnam
CBEH Vietnamese group

2. Review of piloting capitation payment method for Health Insurance -based healthcare in some provinces of Vietnam
Team Group:
Nghiêm Trần Dũng
2. Hoàng Thị Phượng
3. Tran Quang Thong
4. Dương Đức Thiện
5. Nguyễn Bích Lưu
6. Nguyễn Thị Vân Anh
National Coordinator
Nguyễn Thị Kim Phương
Hanoi 4/2010

3. Background
Current fee for service payment system has led to over-supply and over consumption
HI funds faces serious deficits in recent years: 2005: bill.; 2008: 1500 bill.
There have been several pilots in introducing capitation payment methods in the last several years but there is no critical evaluation of these pilots so that lessons can be learnt and forwarded steps can be recommended.
The government is interested and commited to reform provider payment mechanism in health insurance

4. Objectives
To describe the piloted capitation mode in selected provinces in Vietnam.
To analyze advantages and disadvantages challenging healthcare providers and HI agencies upon implementation of the capitation mode in the current context in Vietnam.
To make policy recommendations on continued improvements towards an appropriate reimbursement mode in Vietnam.

5. Methodology Study design: A cross – sectional study Data collection:
Collecting available information and data
In-depth interviews
Focus group discusions
Study site: Hai Duong, Thanh Hoa, Ha Nam, Hoa Binh
Target group: i) Health policy maker; ii) Health manager; iii) Health Insurance Agency; iv) Health Care Provider

6. Main finding Premium design, identification
Situation of piloting capitation payment method for health insurance in selected provinces.
Premium design, identification
Changes after implementation of capitation payment method
Constraints and difficulties in the pilot design and implementation

7. Situation of piloting capitation for HI in selected provinces (1)
HI coverage and enrollment composition in selected provinces

8. Situation of piloting capitation for HI in selected provinces (1)
Scope and point of time starting capitation-based mode pilot

9. Situation of piloting capitation for HI in selected provinces (2)
Some characteristics of piloting district hospitals
Located in poor districts, among them there is one mountainous district (Mường Lát, Thanh Hoa)
Lact of material facility, equipment and manpower
Scale of planed hospital beds from 50 – 120 and actualy beds from 50 – 262
Most hospital overloaded, capacity of bed over 150% (Hà Trung, Mường Lát, Nam Sách, Tân Lạc)
Responsibility for examination and treatment for 70% HI’s patients
The big difference between scope and capacity of perfoment of hospital related to cost and premium design, idetification in each hospital

10. Situation of piloting capitation for HI in selected provinces (3)
Implementation process
Implementing follow the regulation of MoH, MoF and VSS
Developing pilot project had involved stakeholders (Both PSS and Health Bureau)
Training for leaders, health staffs and all head of commune health stations
However:
- Less participating of Provincial Health Dept. and health facilities
- Most of medical doctor was lack of knowledge on capitation payment method because of limited dissemination and training insufficiency

11. Premium design and identification (1)
Content
Hải Dương, Thanh Hóa
Hà Nam
Hòa Bình
Payment method applied
Capitation
Capitation + user fees
Capitation implementer
District hospital + CHS
Beneficiaries
All PHC registers at district or commune level
Benefit package covered in the capitation fund
(Excluding some costly services)
Commune services
District services
Provincial + central services
Bypassing patients

12. Premium design and identification (2)
Content
Hải Dương, Thanh Hóa
Hà Nam
Hòa Bình
DHS fund
Local spending, direct and multiple-level reimbursement
Q = M x N x k
- Thanh Miện: 156,070
- Nam Sách: 154,829
- Mường Lát:
- Hà Trung:
Local spending and direct
Q = M x N x k
Bình Lục: đ (40.1% local spending)
Phủ Lý: đ (17.7% local spending)
Half premium – only aply for local spending (district and communue)
Mai Châu: đ
Tân Lạc: đ
CHS fund
Medicines, medical material, technical services
CHSF = (MxNi)x90%x20%
Qi = ni x d package excluding bird attendence

13. Premium design and identification (3)
Content
Hải Dương, Thanh Hóa
Hà Nam
Hòa Bình
Fund surplus
Incompliance with Decree 43
Fund overuse
Commune social security fund settled 50%,
50% submitted to competent authorities
Support by KICH project: VND10,000/card (reservation fund)

14. Premium design and identification (3)
List of items not covered in the premium
Continuous blood dialysis
Thẩm phân phúc mạc
Cancer
Transplants
Hemophilia disease
Thanh toán hộ
Co - payment
People’s vuluntary HI
k : annual cost index (currently 1.1)

15. Changes after piloting capitation payment method (1)
Card composition prior to and after piloting

16. Changes after piloting capitation payment method (2)
Assignment of capitation fund in the year of piloting (including commune fund) in selected district hospitals

17. Changes after piloting capitation payment method (3)
Average cost of outpatient consultation prior to and after the year of piloting

18. Changes after piloting capitation payment method (4)
Average cost of inpatient contact prior to and after the year of piloting

19. Changes after piloting capitation payment method (5)
Fund balancing capacity prior to an after applying capitation

20. Changes after piloting capitation payment method (6)
Fund overspending in the last 6 months in 2008 and first 6 months in 2009 in Hải Dương province

21. Changes after piloting capitation payment method (7)
Overspent amount in 6 months in 5 district hospitals in Ha Nam

22. Changes after piloting capitation payment method (8)
Expenditure composition by hospital (%)

23. Changes after piloting capitation payment method (9)
Increase rate of hospital service provision in the year piloting compared to previous year (%)

24. Constraints and difficulties in the pilot design and implementation (1)
From policy perspective:
Legal framework and document were not adequate, systematic and overlapping
User fees policy has reflected a lot of disadvantages
Change of health financing policy with the hospital autonomy (Decree 43) and social mobilization (Circular 15)
Technical delineation of area is not adequate
Regulation on referral
Slippage in prices (k) was not appropriate

25. Constraints and difficulties (2)
From social security
FFS was applied very long
Awareness on capitation payment method was still limited
Social insurance examiners were short in quantity and poor in quality
Lack of tool for controlling quality of health care service
Hospital do not have IT management and unified report system
The pilot capitation was not adequate

26. Constraints and difficulties (3)
From health facility perspective
Most hospital did not balance fund, due to
Premium of capitation was inappropriate
Quality of health service of hospitals was not uniform:
Health staff was short in quantity and poor in quality in both district and commune
Material facilities and equipments are backward
District hospitals did not have specialized departments
The rate of patient referral was very high (the average 50%, Phủ Lý 80%)
Did not control multiple – level payment

27. Constraints and difficulties (4)
From health facility perspective
The reimbursement mechanism of HI generated difficulties challenging hospital
Assign HI card was not pay attention to age, sex, patent of disease and region…
Health worker’s awareness and behavior are challenging Most of medical doctor do not want to apply capitation because they did not have incentive motivation

28. Conclusion (1) Process of piloting capitation
The stakeholders were aware of right policy and importance of renovating the payment methods.
There was higher consensus in central level and provincial than in health facilities
The role of health bureau and health facilities was limited in developing and designing of project

29. Conclusion (2) Premium design and identification
Calculating premium based on the expenditures in the previous year seemed not to be rational. Tend to spend more to be a basis for a larger capitation fund assigned in the subsequent year.
k = 1.1 seemed not truly reflect the factors driving health cost increase.
Premium including local and by-passing multiple-level payments when hospitals could not control expenditures

30. Conclusion (3) Changes after piloting capitation
Improving self – motivate and responsibly of health facilities in providing health care services
Patient’s spending did not decrease but it tended to increase in some professional activities
Deficit fund in most hospital
Material facilities, equipment and capacity can be impacted on quality services and balance fund
No evidence was available of impacts of the capitation method on service quality and patients’ satisfaction.

31. Recommendation (1) Premium design, identification
The capitation payment mode should be applied to local payments at the grassroots level
The premium should base on the available fund taking into consideration of the harmonized healthcare need at the district and upper levels

32. Recommendation (2) Premium design, identification
Need to calculate premium for the whole province or nation based on the financing capacity and adjustment with some factors (mountainous, remote areas, gender, age, disease pattern of card holders…).
Formulate solutions in terms of payment methods in provincial and central hospitals as well as specialized ones.

33. Recommendation (3) Implementation
Need to guide specify management, use or solutions in case of capitation fund surplus or deficit
Link the reimbursement mechanism to assurance of services quality in health facilities
Improve social insurance examiner and adjust of roles and tasks of the HI staff
Establish to converge the highest qualified experts in the HI to carry out HI-related technical

34. Thanks for your attention