VietNamNet Bridge – Public hospitals still face significant financial hurdles in developing healthcare facilities and have urged for more preferential policies to address the monetary shortfall.

According to the Ministry of Health, the healthcare sector needs at least VND25 trillion (US$1.2 billion) yearly to invest in its public network including hospitals, provincial medicine centres and healthcare centres at district and commune levels.

However, average yearly funding for the sector including that from Government bonds, the State budget and local budgets amounts to just VND10 trillion ($480.2 million), posing difficulties to improving healthcare infrastructure.

Since November, 2007, the Prime Minister has directed the Health Ministry and other relevant ministries to develop projects through which hospitals overloaded with patients could access Viet Nam Development Bank loans to expand and improve their facilities.

Last year, a Governmental decision, Decision 85/2012/ND-CP, allowed public hospitals to access loans from other credit institutions in addition to the Viet Nam Development Bank (VDB), according to the ministry.

So far, eighteen hospitals have applied for VDB loans including Bach Mai, Viet Duc, National Hospital of Obstetrics and Gynecology in the north, Hue General Hospital in the central and Cho Ray and HCM City-based National Hospital of Odonto-Stomatology.

Six of the hospitals signed contracts to borrow nearly VND900 billion ($43.2 million) to provide 2,000 sick-beds and two thirds of the borrowing was disbursed.

However, at a meeting with the National Assembly's Committee for Social Affairs early this month, the ministry raised concerns that public hospitals found it hard to afford repayment of the loans, which normally had a grace period of two years, duration of 12 years and yearly interest rates between 6.9 per cent to 11.6 per cent.

It was explained that during the grace period, borrowers did not have to pay in principal, but the interest and the 12-year duration was too short for them to return both principal and interest as the construction of hospital buildings usually took years.

Meanwhile, National Institute of Hematology and Blood Transfusion director Nguyen Anh Tri said that in cases where the hospital could not repay the debt, there is currently a lack of clear regulations. Tri noted that interest rates for the hospital were equal to other kinds of enterprises.

Moreover, Tri said that if the hospitals increased healthcare fees to cover their debts, patients would be badly affected.

The Health Ministry calculated that to have one more bed, hospitals needed to invest about VND500 million ($24,000). If the investment was paid after 12 years, every single day, patients lying on the bed had to pay VND120,000 ($5.7) plus interest of VND120,000 -160,000 ($5.7- 7.6), Tri said.

He added that patients, especially those who suffered from serious illness like blood diseases, would be added burdens.

At present, Viet Nam has over 1,100 hospitals, 400 medicine preventive centres at provincial level, 700 districal healthcare centres and about 11,000 centres at communes.

Over the last four years, healthcare funding from Governmental bonds was around VND18.8 trillion ($902.8 million), just 40.4 per cent of approved budget.

Source: VNS