An evaluation of initial impacts of hospital financing autonomy policy o­n provision of and payment for healthcare services

Nguyen Khanh Phuong, Dam Viet Cuong,

Le Quang Cuongand colleagues

Introduction

Public hospital system is considered as backbone of the health system in . Public hospitals’ expenditure accounted for a significant share of the total health expenditure. Of the total health expenditure in 2005, hospital expenditure accounted for 35.8%. Assurance of financial resources and improvement in hospitals’ effectiveness were the most critical issues in public hospitals. Hospital autonomy policy as specified in Decrees 10/2002/NĐ-CP and NĐ43/2006/NĐ-CP is expected to enhance performance effectiveness, save resources, raise revenue and promote responsiveness to local healthcare needs. Implementation of the autonomy policy could had certain impacts o­n provision, utilization and payment for health services. This study was carried out to evaluate the implementation of autonomy policy and its impacts o­n health service provision and utilization, and thus provide policy recommendations for developing the hospital system towards efficiency, equity, and development.

Methods

This is a semi-experimental cross-sectional study conducted in the 4 provinces of Quang Ninh, Quang , Da Nang, and Tien Giang. In addition, the study included two gynecology and obstetric hospitals and Tu Du Hospital in HCMC. In each province, the provincial hospital and two district hospitals (one of which having higher level of autonomy) were included in the study. Data were collected from 4 main sources: (1) Historical data o­n hospital performance, finance, manpower, and equipment were collected by designed forms; (2) Medical data of two selected tracers of caesarian sections and gastroduodentitis were collected by data collection forms; (3) Household survey (1,600 households)was conducted using structured questionnaire; (4) Focus group discussion and in-depth interview conducted among stakeholders including administrators, health service provider, and users.

Main findings

Implementation of the hospital autonomy policy was a complex process. It occurred in various forms and paces, depending o­n local political and socioeconomic conditions, awareness, understanding, and capacity of hospitals. There were no criteria and roadmap for implementation of the hospital autonomy policy. There was no clear mechanism of supervision, monitoring and evaluation of the autonomy policy implementation. In general, hospitals focused o­n two aspects of the autonomy policy: finance and operational organization. Autonomy policy brought about significant changes to the financial status of provincial hospitals, especially in gynecologic and obstetric hospitals but little effect was observed at district hospitals. Revenue from patient-requested services increased due to the implementation of Decree No. 10. At Hanoi gynecologic and obstetric hospitals, this source of revenue accounted for 25% of total hospital revenues in 2006. The higher degree of autonomy was, the higher proportion of hospital fees and health insurance reimbursement out of total expenditure was spent o­n personnel and equipment. As a result, hospitals were less dependent o­n government subsidy. Administrative expenses decreased, indicating the hospitals’ saving efforts. Hospitals were rather independent in setting fees for patient-requested services. Under the autonomy policy, investment in physical infrastructure and medical equipment increased and occurred in various forms especially at hospitals with high degree of autonomy such as big provincial hospitals and gynecologic and obstetric o­nes. Capital investment mobilized through joint ventures became more popular. Initial observation revealed that investment priority was given to high-tech services that served the group of patients who had higher payment ability. Several constraints and difficulties emerged during the implementation process, mostly due to shortcomings of Decree No. 43 and the inconsistency and incompatibility of the legal framework that regulated user fees, wages, and health insurance. Hospital management personnel’s lack of knowledge and management skills in health economics, health financing, hospital administration clearly revealed.

The autonomy policy had certain impacts o­n hospital outputs. The study found increases in bed occupancy rates, number of laboratory tests, imaging diagnoses, and length of stay. While qualitative studies shown that the autonomy policy contributed to enhanced technical capacity, quantitative analysis did not support that view. Some data shown no clear enhancement of technical capacity, decrease in number of surgeries, and higher referral rates. There was no clear evidence ofeffects of the autonomy policy o­n supplier-induced services such as unnecessary diagnostic tests and prescription. Hospitals of higher autonomy gave smaller prescription than those of lower autonomy. There was no clear link between the level of autonomy and patient satisfaction.

This study also found that the impact of autonomy o­n accessibility to, utilization of and payment for health services was not clear. To some extent, the implementation of autonomy policy was associated with increase in healthcare service prices, especially for patient-requested services.The study found no evidence of impacts of the autonomy policy o­n accessibility to and utilization of healthcare services.

Conclusion

Despite of itsseveral limitations, this study provided evidence o­n significant influences of the autonomy policy o­n hospital performance. Its points to the necessity of improving legal documents, setting an appropriate and consistentenvironment that helps facilitate the implementation of the autonomy policy especially in financial and organizational matters. The government’s management role should be strengthened through issuing criteria and conditions for undertaking autonomy policy, increasing supervision, monitoring, and inspection to avoid negative effects such as overuse of lab tests and increase in service prices. It is necessary to formulate quality assurance and price monitoring system. There is alsoa need to enhance hospital management capacity. Further studies o­n impacts of hospital autonomy focusing o­n equity and efficiency are warranted.

Other news:

---

• An assessment of hospital financing – Findings from a survey in some selected hospitals (20/03/2009)
• Current situation of health insurance, healthcare utilization, and health expenditures in Hai Duong and Bac Giang provinces - Findings from a baseline survey (20/03/2009)
• Development of equitable and sustainable health insurance in rural Vietnam (RHINCAV) – Findings from a qualitative research (20/03/2009)
• An evaluation of health insurance policy and its implementation in Vietnam (20/03/2009)
• Overview of community-based financial models (03/08/2006)