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Confronting Corruption in the Health Sector in Vietnam. Health and Development Discussion Paper No.14 October 2011.


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Corruption in Vietnam is a national concern which could derail health sector goals for equity, access, and quality. Yet, there is little research on vulnerabilities to corruption or associated factors at the sectoral level. This article examines current patterns of corruption in Vietnam’s health sector, identifies key corruption vulnerabilities, and reviews strategies for addressing corruption in the future. The article builds on the findings and discussion at the sixth Anti-Corruption Dialogue between the Vietnamese Government and the international donor community. Development partners, government agencies, Vietnamese and international non-governmental organizations, media representatives and other stakeholders explored what is known about important problems such as informal payments, procurement corruption, and health insurance fraud. The participants proposed corruption-reduction interventions in the areas of administrative oversight, transparency initiatives and civil society participation, and health reforms to change incentives. The analysis assesses the prospects for success of these interventions given the Vietnamese institutional context, and draws conclusions relevant to addressing health sector corruption in other countries. A revised version of this discussion paper was published in Public Administration & Development in 2012.
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Center for Global Health and Development
Boston University
Confronting Corruption in the Health
Sector in Vietnam: Patterns and
Taryn Vian
Derick W. Brinkerhoff
Frank G. Feeley
Matthieu Salomon
Nguyen Thi Kieu Vien
Health and Development
Discussion Paper No. 14
October 2011
Center for Global Health and Development
Boston University School of Public Health
801 Massachusetts Ave., 3rd fl
Boston, MA 02118 USA
Confronting Corruption in the Health Sector in Vietnam HDDP 14
Taryn Vian and Frank Feeley, Department of International Health, Boston University School
of Public Health; Matthieu Salomon, formerly with Towards Transparency, Hanoi, Vietnam
(now independent consultant, Jakarta, Indonesia); Nguyen Thi Kieu Vien, Towards
Transparency, Hanoi, Vietnam; Derick W. Brinkerhoff, RTI International, Washington, DC.
Correspondence concerning this article should be addressed to Taryn Vian, Department of
International Health, Boston University School of Public Health, 801 Massachusetts Avenue,
Crosstown Building 3rd floor, Boston, MA 02118. E-mail:
Corruption in Vietnam is a national concern which could derail health sector goals for equity,
access, and quality. Yet, there is little research on vulnerabilities to corruption or associated
factors at the sectoral level. This article examines current patterns of corruption in Vietnam’s
health sector, identifies key corruption vulnerabilities, and reviews strategies for addressing
corruption in the future. The article builds on the findings and discussion at the sixth Anti-
Corruption Dialogue between the Vietnamese Government and the international donor
community. Development partners, government agencies, Vietnamese and international
non-governmental organizations, media representatives and other stakeholders explored
what is known about important problems such as informal payments, procurement
corruption, and health insurance fraud. The participants proposed corruption-reduction
interventions in the areas of administrative oversight, transparency initiatives and civil
society participation, and health reforms to change incentives. The analysis assesses the
prospects for success of these interventions given the Vietnamese institutional context, and
draws conclusions relevant to addressing health sector corruption in other countries.
Keywords: corruption, Vietnam, informal payments, health reform, health insurance fraud,
Confronting Corruption in the Health Sector in Vietnam HDDP 14
Strong health systems are essential for improved health outcomes. Increasingly,
development partners such as the World Bank, World Health Organization (WHO) and the
Global Fund for AIDS, Tuberculosis and Malaria (GFATM) are putting health systems
strengthening at the top of the agenda for global health, supporting efforts to transform
health systems to expand access, coverage, quality, and efficiency of health services.
Governance is one of the building blocks of strong health systems. With good governance,
policy makers and leaders are able to align financing and human resources with policy
objectives, procure medical supplies efficiently and effectively, and deliver quality services
that people want and need (WHO, 2007).
Corruption, defined as abuse of entrusted power for private gain, is a major threat to health
system performance (T. Vian, 2008). Theft of medical supplies from facilities and the
practice of extorting informal or ―envelope‖ payments decreases demand for services and
prevents quality service delivery. Absenteeism and an internal ―market‖ for positions make it
difficult to have competent people in the right jobs and to use human resources efficiently.
Weak financial systems allow opportunities for embezzlement and permit limited resources
to be spent on non-priority activities or to support networks of patronage rather than
maximizing health benefits. Where citizens lack information, they do not have the tools they
need to participate in policy decision making or hold their government accountable for
performance. Good governance in support of strong health systems therefore requires
effective control of corruption (Lewis, 2006; Taryn Vian et al., 2010).
In Vietnam, the government and donors are increasingly concerned about corruption. A
governance study in 2004 identified control of corruption as a key challenge in the country
(World Bank, 2005). After passing a new Anti-Corruption law in 2005, the Government
established a Central Steering Committee for Anti-corruption (CSCAC) headed by the Prime
Minister to coordinate implementation on anti-corruption efforts. Regional committees on
anti-corruption were also established, a specialized Anti-Corruption Bureau (ACB) was
created within the Government Inspectorate, and special anti-corruption units were placed
within the Ministry of Public Security and at the People’s Supreme Court, charged with
monitoring, detection and enforcement (T. T. T. Ha et al., 2011).
Yet, perceptions of corruption are still high: in 2008, 85% of citizens perceived corruption in
central-level health services, while 65% perceived corruption in local health services (World
Bank, 2010a). National surveys in 2006 and 2009 found that while Vietnam’s anti-corruption
law is strong, enforcement and monitoring are weak (Global Integrity, 2006, 2009;
Transparency International, 2006). Politicized institutions, overlapping mandates,
widespread nepotism, and restrictions on freedom of expression are persistent challenges to
good governance, while weak public administration systems for functions such as financial
management and procurement are also a problem (Global Integrity, 2006, 2009; Jones,
2009; World Bank, 2005). Anti-corruption approaches need to take into account such
institutional constraints and characteristics (Fritzen, 2005). This is especially important when
mainstreaming anti-corruption policies and programs in specific sectors such as health
(UNDP, 2008).
At present in Vietnam there is little research on corruption risks or associated factors at the
sectoral level. This article seeks to fill this gap by examining patterns of corruption in
Vietnam’s health sector, identifying key risks, and analyzing possible strategies for
addressing corruption in the future. The article builds on the findings and discussion at the
Donors Roundtable held as part of the sixth Anti-Corruption Dialogue between the
Vietnamese Government and the international donor community (hereafter the ―Roundtable‖)
in November 2009 (Towards Transparency & Embassy of Sweden, 2010). At that meeting,
development partners, government agencies, Vietnamese and international non-
governmental organizations, media representatives and other stakeholders explored what is
known about important problems such as envelope payments to medical staff, corruption in
the pharmaceutical supply system, and health insurance fraud. The participants proposed
Confronting Corruption in the Health Sector in Vietnam HDDP 14
interventions in the areas of enhanced administrative oversight, transparency, and structural
health reforms. The analysis assesses the prospects for success of these interventions
given the Vietnamese institutional context, and draws conclusions relevant to addressing
health sector corruption in other countries.
Patterns of corruption vary depending on how funds are mobilized, managed, and paid to
providers (W. D. Savedoff & Hussmann, 2006). It is helpful, therefore, to describe the actual
relationships, responsibilities, and health financing systems in Vietnam in order to
understand the context in which corruption risks arise.
Vietnam is a middle income East Asian country of 86 million with a per capita GDP of $1,051
in 2009. In 1986, the government committed to a political reform and development strategy
based on a market economy with socialist orientation, referred to as doi moi (renovation).
This resulted in the introduction of market forces in the health system as well as changes to
health care financing (Gabriele, 2006). Some of these changes included legalization of
private medical practice in 1986, de-regulation of the pharmaceutical market in 1989,
introduction of mandatory state-funded and voluntary health insurance programs in 1993,
and financial decentralization based on cost recovery principles (Ekman et al., 2008; Fritzen,
2007; Gabriele, 2006; A. T. Nguyen et al., 2010; Phuong, 2009). In 2002, the government
expanded financial autonomy in government health care facilities, giving hospitals the
flexibility to raise remuneration as well as expanding interactions with private and non-state
actors (T. T. T. Ha et al., 2011). In addition, policy reforms have increased the role of private
clinics and companies, and private financing, in delivery of health services.
About 42-49% of patients are covered by health insurance programs (Ekman et al., 2008;
Phuong, 2009). Higher level care is mainly delivered in public hospitals, outpatient care is
sought in public and private facilities, and most pharmaceuticals are purchased without
prescription in the private sector (Ekman et al., 2008). Recently, efforts have also been
made to revitalize the network of public, primary health care clinics, called commune health
centers, which serve rural populations (Fritzen, 2007).
While the liberalization of the Vietnamese economy initially helped promote fast growth and
was successful at alleviating poverty (Gabriele, 2006), the effects on the health sector have
been less positive over time (B. T. Ha et al., 2010). Health sector reforms have resulted in
more choices for treatment and fewer protections for patients, increasing overall health care
costs while placing a substantial burden on households and exacerbating income inequality
(P. Nguyen et al., 2009b). Health care spending as a percentage of GDP is high in Vietnam:
7.1% in 2007, compared to 3.7% in Thailand, 4.4% in Malaysia, and 4.3% in China (World
Bank, 2010b). However, a very large proportion of health spending is out-of-pocket (B. T. Ha
et al., 2010) and the burden of health care costs is limiting access to care. In 2006,
household out-of-pocket payments accounted for 61% of total health expenditures (Phuong,
2009). Moreover, the poor spend a higher percentage of income on health compared to less
poor households, and for the poorest quintile of the population nearly 15% of non-food
expenditures go for medicines (World Bank, 2010a). Economic shock from ill health is the
most common cause of poverty, pushing an estimated three million people per year below
the poverty line due to the burden of paying for catastrophic illness (Thanh et al., 2010).
Medicines account for over 50% of total health care expenditures in 2005 (A. T. Nguyen et
al., 2009a) and rising prices are a concern. A study of medicines prices, availability and
affordability in five regions of the country found that public procurement prices paid by
facilities were 8.3 times the international reference prices for brand name drugs, and 1.8
times the international reference prices for lowest-price generic drugs, while prices to
patients were 46.6 and 11.4 times the international reference prices for brand name and
generic drugs, respectively (A. T. Nguyen et al., 2009a; A. T. Nguyen et al., 2010). At the
same time, low-priced generic drugs were generally less available in public sector facilities
Confronting Corruption in the Health Sector in Vietnam HDDP 14
compared to brand name drugs. In contrast to most other countries, medicine prices were
higher in the public sector than in the private sector, and were unaffordable for the lowest
paid government workers or others earning similar wages (A. T. Nguyen et al., 2009a; A. T.
Nguyen et al., 2010). High prices may be due to corruption in procurement systems: in a
2005 survey of business opinions on the frequency of bribery in public procurement, Vietnam
scored a low 3.0 out of 7 (with 1 being ―common‖ and 7 being ―never‖) (Jones, 2009).
Overuse and irrational prescribing of drugs are also persistent problems (Chang & Trivedi,
2003; Larsson et al., 2000).
Fritzen (2005) argues that the key to predicting success or failure in implementation of anti-
corruption measures lies in institutional constraints: in the case of Vietnam, the role of the
authoritarian state is an important factor. According to Fritzen, while political will for
combating corruption in Vietnam is high, approaches to anti-corruption have been hampered
by factors such as the dominance of powerful actors in policy-making, unclear
responsibilities for oversight, lack of resources, and a state-centric system that leaves little
scope for civil society activity (Fritzen, 2005). Table 1 summarizes national anti-corruption
approaches, institutional constraints, and the impact of these factors on reform progress in
Table 1: Institutional Constraints Affecting Anti-Corruption Approaches
Vietnam Anti-
Institutional Constraints to
Implementation and Effectiveness
oversight and
inspections (e.g.
asset disclosure,
technical audits)
Executive dominance: executive
authority is uncontestable, few
checks and balances
Bureaucratic fragmentation: results
in weak authority relationships and
unclear oversight roles between
executive and non-executive actors
Under-resourced enforcement
efforts, lack of investigation capacity
Weak incentives for
enforcement. Actors in
system resist or evade
stepped-up enforcement
efforts. Particularistic interests
of executive win out.
Policies vulnerable to reversal
at implementation stage.
Low numbers of employees
Transparency and
citizen complaints &
participation (e.g.
State-centric system leaves little
scope and few organizational
platforms for civil society.
Civil society characterized by many
smaller, informal organizations,
rather than strong mass
Corruption is systemic; transparency
has less effect on systemic
corruption so overall effectiveness
of this strategy is low
Range of independent
political action within civil
society is limited.
Civil society groups unable to
use information disclosed to
hold government agents
May work in selective settings
with strong tradition of civic
Administrative and
structural reform
(reduce opportunities
and incentives for
Closed and centralized policy
process produces vague policies
that give appearance of unity and
allow party insiders discretionary
power to interpret as they like
Contestation for power and
influence among elites dominates
reform incentives; implementation of
reform is undermined
Reform process is complex,
conflict-ridden, little
agreement over controls and
Reversals of reform,
controversies and complaints
Source: Adapted from Scott Fritzen (2005).
Confronting Corruption in the Health Sector in Vietnam HDDP 14
In analyzing patterns and risks of corruption in the health sector, we adopt a similar
institutional perspective. We apply a governance framework (Brinkerhoff & Bossert, 2008)
that allows us to look closely at roles and level of engagement between health systems
actors (see Figure 1). These include government agencies (―regulators and payers‖),
facilities and personnel (―providers‖) and patients or other civil society organizations who
have an interest in health (―clients‖). Government regulators and payers include Ministry of
Health, the Vietnam Health Insurance program, the Drug Administration of Vietnam,
provincial government structures, and other regulatory agencies. Providers include doctors,
nurses, pharmacists, and health facilitiespublic, private for-profit, and voluntaryas well
as suppliers. Clients are represented by patient advocacy groups, non-governmental
organizations (NGOs), associations of health professionals, and other civil society groups
active on health issues (Brinkerhoff & Bossert, 2008). Using this framework, we can begin to
analyze incentives and where space for abuse exists.
Figure 1: Health Governance Framework
Source: Brinkerhoff and Bossert, 2008
Government is responsible for system performance and achievement of policy goals
(Balabanova et al., 2008), including oversight of revenue collection, pooling of funds, and
paying providers in ways that encourage efficient, quality service availability. Government
also has a standard setting and regulatory role to assure that medicines are safe and
effective, individual practitioners are skilled, and facilities are staffed and equipped to assure
good care.
The government has expressed concern over equitable access to medicines and has made
efforts to stabilize prices through regulatory intervention (A. T. Nguyen et al., 2010). In 2003,
the government began requiring price declaration and publication to ensure transparency,
although medicine suppliers were still allowed to set prices based on market conditions.
While this reform shows government commitment to the goal of affordable care, success has
been limited due to the structure of the regulations and lack of monitoring and enforcement.
For example, the regulations did not require the declared prices and published prices to be
reasonable, and tools for assessing reasonableness of prices (such as specifying
international comparison procedures) were inadequate or incomplete. Since drug suppliers
Confronting Corruption in the Health Sector in Vietnam HDDP 14
cannot sell at prices above the declared prices, there is an incentive to declare very high
prices (A. T. Nguyen et al., 2010).
Studies have shown that providers often do not follow clinical protocols (Bailey et al., 2010),
and quality of care is weak. The government has tried to address these problems through
the Law on Examination and Treatment (LET), which was adopted in 2009. The process of
developing and passing the LET shows some of the weaknesses and strengths of the health
regulatory environment in Vietnam.
The LET was designed to update the legal framework for regulating health professions and
protecting patient rights (Wedeen et al., 2011). The draft law proposed to create an
independent, accountable and transparent regulatory system for licensing of facilities and
certification of individual practitioners, with provisions for continuing education, re-licensing,
and complaints management. A centralized, independent Medical Council would be the
regulatory body.
LET was the result of an improved policy development process characterized by the use of
international evidence, extensive technical consultations, and the first Regulatory Impact
Assessment ever conducted in the health sector (Wedeen et al., 2011). The process was
participatory, involving People’s Committees, provincial health authorities, public and private
hospitals, and professional associations, and drawing on technical assistance through WHO,
ADB, AusAID and other international organizations. Despite this, key provisions of the draft
law the creation of a centralized, independent Medical Council as regulatory authority and
re-licensing facilities and practitioners were not adopted. Some of the reasons included the
Cabinet’s concern that the Medical Council structure did not align with the country’s
decentralization goals, questions about the appropriateness of relying on a parastatal
organization for state administrative functions, and the fact that implementation of the re-
licensing provision in the lawwhich would require new systems and procedureswas not
aligned with the government’s goal of bureaucratic streamlining for public administration
The revised law approved by the National Assembly is vulnerable to inconsistent
interpretation and to the forces of corruption, including bribes to issue licenses to individuals
who have not achieved standards, or to reissue a license that has been revoked (Wedeen et
al., 2011). In addition, the complaints process specified in the law is to be managed at the
facility level, which could result in inconsistent application of disciplinary actions and allow
opportunities for conflict of interest or corruption.
In addition to bribes related to licensing, as mentioned above, types of corruption arising with
providers include insurance fraud and over-treatment of patients. Provider payment
methods, asymmetric information, and conflicts of interest are risk factors. Information
asymmetry occurs when health providers and consumers of services have unequal
information about health care needs, service quality, and cost. Conflict of interest occurs
when a provider has a secondary financial interest which appears to influence the exercise
of professional practice in providing patient care.
Insurance fraud involves billing for ghost patients or services not provided. One story
reported in three newspapers (Lao Dong 03/10/2009, Tuoi Tre 03/10/2009 and Vietnam Net
19/06/2009) alleged that a hospital in Hanoi had faked 1,500 claims, totaling about 10 billion
VN Dong (approx. $510,200) before the fraud was detected. In addition, fee-for-service
insurance reimbursement procedures prompt providers to over-utilize more profitable
diagnostic and treatment services (Tangcharoensathien et al., 2011). This is made possible
because of information asymmetry: often patients have no other source of information
except their doctor, especially in rural areas.
Confronting Corruption in the Health Sector in Vietnam HDDP 14
Another risk is that Vietnamese public hospitals are allowed to contract and share user fee
revenue with private medical equipment or diagnostic testing companies, bringing profit
motivations into public service provision without adequate accountability for performance
(Towards Transparency & Embassy of Sweden, 2010). Weak monitoring systems make it
difficult to assess whether such public-private partnerships encouraged by government are
achieving desired outcomes of service expansion and efficiency, or simply enriching the
particular managers involved.
The level at which fees are set, and the frequency with which they are updated, is also a
corruption risk factor. Reimbursement rates for basic patient services such as simple
diagnostic procedures have not been raised since 1994, which means the fees no longer
cover true costs. Fees for newer, high tech services were established more recently and
bear a closer relation to the true cost of these services; however, the price of newer
technology may be set too high, as experience generally lowers unit costs and volumes
increase. This creates an incentive for providers to avoid supplying basic services and to
substitute higher tech services.
The Key Improvements in Community Health (KICH) project in Hoa Binh province has tried
to develop measures of treatment patterns, in order to identify inappropriate use of services.
The project found wide variation in diagnostic testing rates ranging from 6.4 tests per patient
visit in Lac Thuy versus 0.3 tests per patient visit in Cao Pong and Ky Son hospitals, as
shown in Figure 2. In addition, the analysis noted that among 200 people who had a CT
scan, 80% also had an ultrasound, a rate which they considered excessive (Towards
Transparency & Embassy of Sweden, 2010).
Figure 2: Variation in number of tests per patient-visit in hospitals, Hoa Binh, 2008
Hospital Mai Chau Tan Lac Hoa Binh Ky Son Lung Son Da Bac Lac Son Yen Thuy Lac Thuy Kim Boi Cao Phong
Source: Presentation by Birgit Wendling on behalf of the EU Health Sector Working Group
The pharmaceutical distribution system provides another example of how information
asymmetry can result in abuse of power and over-treatment. Government controls on
pharmaceutical promotion are weak (Okumura et al., 2002), allowing pharmaceutical
representatives to influence the choices of doctors and hospitals through ―commissions‖ or
Confronting Corruption in the Health Sector in Vietnam HDDP 14
kickbacks based on prescribing patterns. An investigation by the Ministry of Health reported
that 41% of patients studied had received combined antibiotics, 10% of patients had
received 11-15 types of medicine and 7.7% of patient received three types of antibiotics
(Acuña-Alfaro, 2009). These numbers indicate irrational drug use and may be caused at
least in part by the pharmaceutical company incentives to prescribers. Excessive drug
promotion activities result in inflated spending on pharmaceuticals. According to one media
story, medicines account for 45% to 60% of hospitalization costs incurred by households
(Phap Luat, 29/08/2009). Deficiencies in legal and institutional frameworks may also be a
factor in inflated costs, including loopholes under which open competition bidding can be
avoided, lack of mandated disclosure of information related to the procurement process, and
inadequate legal safeguards proscribing conflict of interest (Jones, 2009).
Finally, informal or ―envelope‖ payments between patients and providers are a growing
concern. Informal payments are contributions made to health care providers in addition to
any officially-required contributions, for services to which patients are entitled (Gaal et al.,
2006). Informal payments may be made in cash or in kind. A Medical University of Hanoi
study reported that 70% of medical staff interviewed admitted that they sometimes or often
ask for or accept informal payments, though some consider these payments to be gifts (Tuoi
Tre, 09/08/2009). In another study, 29% of urban residents who had had contact with health
services in the last 12 months said that they had to pay bribes, about double the number
who reported paying bribes in 2007 (Towards Transparency, 2011). A recent survey of
Vietnamese youth found that 33% of youth who came into contact with medical services
reported experiencing corruption, and 8% of youth perceived corruption as ―widespread‖
(Transparency International, 2011).
Informal payments appear related to overcrowding and high demand at the tertiary level.
This in turn creates pressures for patients to bribe doctors and nurses in order to be seen
sooner, or to be assured of adequate time and attention from providers (T. T. T. Ha et al.,
2011). Yet, informal payments also seem to be driven by cultural expectations and ideas of
social reciprocity and prevailing attitudes toward corruption. For example, when asked
whether a government official receiving a ―small gift or money after performing duties‖ was
corruption, 45% of Vietnamese surveyed said yes, while 37% said no and 18% were
undecided (World Bank, 2010a). Similarly, when faced with the situation of ―giving an
additional payment or a gift to a doctor or nurse in order to receive better treatment‖, 32% of
Vietnamese youth consider this behavior ―not wrong,‖ while an additional 13% of youth
acknowledge that it is wrong but still ―acceptable‖ (Transparency International, 2011).
An important factor in the control of corruption is external oversight and patient involvement,
including reporting by media and participation of citizens in facility oversight (Gray-Molina et
al., 2001). One-party states such as Vietnam tend to be protective of their legitimacy and
seek to minimize dissent (Jones, 2009). Indeed, it is complicated for civil society
organizations to be registered as NGOs; the 6-month process is cumbersome and gives
State institutions numerous opportunities for discretion over authorization to register in
general, as well as the definition of areas of activity in which the organization can engage.
At the same time, media reporting on health sector corruption in Vietnam is surprisingly
robust though mainly focused on issues of petty corruption, i.e. front-line government
officials or providers accepting bribes or engaged in abuse of office. To assess corruption-
related reporting, the United Nations Development Program (UNDP) funded a study which
examined reporting from five national-level Vietnamese media outlets between 2008 and
2009 (Acuña-Alfaro, 2009). Topics related to health covered by media reports covered a
wide-range of areas, including gaining commissions from sale of medicines (18% of the
stories reported), personal gains from health insurance funds (14%), corrupt practices
related to financial incentives in management of public hospitals, also known as
Confronting Corruption in the Health Sector in Vietnam HDDP 14
―socialization‖ of public hospitals in Vietnam (7%), demands for bribes and abuse of patients
through unnecessary treatment (31%), corruption in licensing (6%), abuses of management
power in decisions related to properties or donations (11%), and corruption in personnel
management and oversight of medical facilities (13%). The data showed a rise in reporting,
with 88 articles published in 2008 and 122 in 2009. In a tightly controlled environment, media
still exposed more than two stories per week.
While media reports on corruption may raise public awareness about the problem, this has
not created a strong anti-corruption movement in the health sector. One reason is that state
controls limit the space for NGOs to operate, especially organizations seeking to engage the
public on issues such as government transparency, accountability, and abuse of office.
Despite perceptions that corruption is prevalent, Vietnamese are generally satisfied with
health services: over 50% are satisfied with central health services, and 45% are satisfied
with local health services (World Bank, 2010a). This suggests that people may be resigned
to corruption. Corruption may even increase patient satisfaction among those with adequate
financial means, because they are able to pay a bribe to access better and faster care. In
any case, most people think corruption has not diminished over time (World Bank, 2010a)
and many citizens are pessimistic about the fight against corruption. For example, when
asked their reasons for not reporting corruption, 28% of Vietnamese youth surveyed stated
it would not help.(Transparency International, 2011)
Roundtable participants identified and discussed both current and planned initiatives to
address corruption in Vietnam. Using the framework in Figure 1, we can categorize these
initiatives in terms of which health system actors are most directly engaged. Table 2
captures graphically the results of this mapping. This table clearly reveals the dominance of
government actors in accountability and transparency reforms in the health sector, and the
relatively limited role of citizens and service users.
Table 2: Current and Planned Anti-corruption Reforms and Governance Linkages
Anti-corruption interventions, current &
planned in Vietnam
Governance Linkages by Health System Actor
regulators &
regulators &
payers 
 Providers
Redesign of provider payment systems
to change incentives
Increased transparency in medicines
Expanded avenues for patient feedback
Reduced informal payments to providers
Streamlined administrative procedures
Improved information systems to detect
and deter fraud
Expanded civil society watchdog
monitoring and media reporting
Managing conflicts of interest among
public sector providers
Increased detection and punishment of
officials who accept bribes, kickbacks
Confronting Corruption in the Health Sector in Vietnam HDDP 14
Two current reforms are attempting to increase the engagement of civil society and service
users in reforms. Examples include work on payment system reform, and efforts to increase
accountability through patient feedback.
Clinical Pathways and Payment System Reform
Researchers from Vietnamese Health Economics Association (VHEA) are developing a
case-based reimbursement methodology which they believe can help improve transparency
and reduce perverse incentives in the health care delivery process. Case-based payments,
established prospectively based on estimated resource needs for standard care, would
replace fee-for-service reimbursement. Under this kind of payment system, providers no
longer have the incentive to use many diagnostic tests or potentially ineffective treatments to
maximize revenue.
The research team developed care pathways for normal delivery and the treatment of
pneumonia and appendicitis. These standard pathways were then compared to actual
utilization data to reveal problems (for example, clinicians using expensive sutures without
any clinical indication). In late 2009, the researchers began pilot implementation of the case-
based reimbursement system in two hospitals. The pilot uses standard costs to reimburse
hospitals for the cases treated, a payment method expected to reduce length of stay and
unnecessary spending on drugs, diagnostic procedures, and surgery.
Patient Feedback
A second example of a citizen/client focused anti-corruption intervention involves increased
pressure for integrity. The Hanoi National Hospital for Pediatrics introduced a patient
feedback system in 2009 as a way to improve service delivery after their project won a
Vietnam Innovation Day (VID) award sponsored by donors. The hospital had problems with
overcrowding and waiting times of 4-5 hours.
The intervention team developed six tools to collect feedback from doctors and patients.
Patients responded positively to being asked their opinions and were eager to participate.
Data from the study are being used to set benchmarks and to identify specific issues for
problem-solving. The feedback included information on whether patients felt compelled to
pay informal fees, and has contributed to increased transparency about this practice.
The two examples of experimentation with citizen/client focused reforms notwithstanding, the
mapping of reforms in Table 2 reveals the predominant role of government actors in current
and planned reform initiatives. The institutional factors constraining anti-corruption reforms
highlighted in Table 1 offer some explanatory clues. For example, while NGOs are allowed
to exist they are scrutinized by government and their independence is limited. In such an
environment, independent structures which could increase accountability for medical care
such as the Medical Council regulatory authority proposed in the draft Law on Examination
and Treatmentare too uncomfortable for government and may be considered a
circumvention of state responsibilities. In addition, the overall direction of public
administration reform in the countryto decentralize and streamlineleads to a climate
where people may not adequately consider the risks involved in decentralized regulatory
authority and the special requirements for quality control in the health sector (Wedeen et al.,
2011). Spending to strengthen quality monitoring, complaint systems, and audit functions
may be seen as a low priority in such an environment.
A major challenge to government stewardship in the health sector is the government’s desire
to both operate and manage health care delivery systems and set policies and regulations
for financing, purchasing, and monitoring quality outcomes. There will be endemic corruption
until the government realizes it cannot be both a ―player‖ and a ―referee‖ at the same time.
Confronting Corruption in the Health Sector in Vietnam HDDP 14
To effectively mainstream the national anti-corruption approaches (described in Table 1) in
the health sector, given the institutional constraints, adaptation and support are needed. The
following options could improve the prospect for success. These are based on the
discussions at the Roundtable, and are supported by experience and analysis in other
countries as well.
Approach 1: Enhanced administrative oversight
Many of the health sector anti-corruption strategies listed in Table 2 focus on creating
effective checks and balances through administrative oversight. Yet, capacity constraints
impede the government from implementing these approaches. Greater attention is needed to
identify and fill gaps in government capacity for implementing regulatory action, especially
through stronger information and audit systems. Weak accounting systems are risk factors
which allow embezzlement, as shown in Zambia. There, a lack of procedures to monitor
health spending in relation to performance, and a long and cumbersome audit process, were
causal factors in a $4.8 million embezzlement detected in 2009. While procedures were in
place to follow up on funds and results, these procedures were not followed (Pereira, 2009),
and although previous audits had revealed many problems, audit findings were not released
in a timely manner and were not acted upon by the legislature.
Information systems can also help to deter corruption through improved transparency of
procurement decisions and doctors’ prescription practices. Monitoring of doctors’
prescription practices can detect relationships between physicians and pharmaceutical
companies which can be investigated for kickbacks. Investment in these types of
management systems may work because it fits within the strong executive structure favored
in Vietnam. Oversight capacity must also be strengthened to assure that complaint
mechanisms are being used by clients and staff, and provide adequate protection to
Approach 2: Transparency, citizen monitoring, and participation
Constructive engagement of clients and citizens is helpful in policy dialogue and
collaborative problem solving, while citizen monitoring can help promote transparency and
accountability. The Affiliated Network for Social Accountability for East Asia and the Pacific
(ANSA EAP) has developed many tools and methods for public engagement to increase
accountability, and has been involved in initiatives such as training youth to monitor local
service delivery in Cambodia, citizen report cards in the Philippines, and participatory
budgeting in Indonesia ( In addition to capacity strengthening of civil
society organizations, Vietnam should loosen State controls constricting the establishment
and operation of NGOs engaged in advocacy. This will allow them to function more
effectively as watchdogs and increase opportunities for citizen voice in the policy-making
Civil society organizations engaged in research also have a role in promoting transparency
through data gathering and use. For example, if public and private providers are required to
disclose procurement bidding information, external monitoring groups could examine the
losing bids compared to winning bids, creating more pressure for accountability on decisions
to procure cost-effectively. Right now, winning bids may be neither technically better nor
cheaper than their competitors, but only winning bids are disclosed.
In the Philippines, Procurement Watch ( has been engaged in
building accountability into government procurement systems by measuring fair market
prices and comparing them to what is actually paid. This type of approach has also been
implemented in Argentina and Bolivia to deter corruption and inefficiency (W. Savedoff,
2008). Analysis of insurance claim databases is another area where monitoring may help to
detect where hospitals are abusing the reimbursement system by ordering excessive testing.
Confronting Corruption in the Health Sector in Vietnam HDDP 14
The balancing of Vietnam’s market-driven economic reform agenda within its Socialist
political framework suggests that the policy reform process must include more engagement
of political leadership, the press, and the public at earlier stages. Such engagement can
create stronger incentives for government responsiveness (Brinkerhoff & Bossert, 2008).
Technical stakeholders must learn to discern and appreciate political interests, and develop
skills in policy advocacy. The Reform Impact Assessment process can be used more
effectively if it is implemented early in the law development process and used to formally
assess the costs and impact on quality, safety, and consumer satisfaction of reform options.
Health sector reform efforts should be attentive to those issues where concern about
corruption is strong. For example, inappropriate drug promotion and physician-pharma
interactions may lead to higher prices and inappropriate prescribing. These things can be
measured and monitored. The WHO has created process indicators for transparent and
accountable drug promotion practices as part of the Good Governance in Medicines (GGM).
The GGM program approach to increasing transparency in public pharmaceutical systems
includes three steps: risk assessment, development of a national framework for responding
to identified needs, and implementation of approaches such as procedures for disclosure
and management of conflict of interest, web-based medicines registration and licensing
systems, and other interventions. To date, 26 countries are participating in the GGM,
including Cambodia, Malaysia, Mongolia and the Philippines.
Another important area of patient discontent is informal payments. Informal payments are a
complex problem, exacerbated by underfunding of public entitlements to service,
overcrowding in tertiary facilities, providers who are inadequately paid, and lack of
transparency. While some hospitals have tried to control informal payments, there has been
limited success in Vietnam. Government is essentially licensing itself, and may not be likely
to condemn government-run institutions where informal payments are prevalent. While
patient complaint mechanisms exist, their independence and effectiveness has been
questioned, and public trust is low. Greater transparency could help create pressure for
policy change. Civil society organizations could try to provide patients with information on
their rights and official fee policies. In an environment where there is political pressure on
government to reduce informal payments, provider payment reform, which links
remuneration more closely to performance indicators, is a strategy that has had some
success in Cambodia and Kyrgyzstan (Barber et al., 2004; Gaal et al., 2010; Miller & Vian,
Controlling corruption in the Vietnamese health sector, as in any country, requires changes
in institutions, attitudes, and behavior. Controlling corruption is a critical component of
governance and is essential to achieve health sector goals of improved quality of care and
equity in access and outcomes. Government, providers, and citizens and service users each
have a role to play in promoting good governance for better health. Key to success is
unlocking the incentives that enable and motivate health system actors to fulfill their roles,
and adapting strategies to work within and overcome institutional constraints.
Confronting Corruption in the Health Sector in Vietnam HDDP 14
The authors would like to acknowledge the Vietnamese and international collaborators who
participated in the 6th Roundtable on Corruption in Hanoi, Vietnam on November, 17, 2009.
Towards Transparency (TT),, a non-profit NGO and the
national contact for Transparency International (TI) in Vietnam, paid for the participation of
the lead author in the Vietnam Donors Roundtable in 2009. While two authors are current or
former employees of TT, the opinions expressed herein are those of the authors and do not
necessarily reflect the views of TI or TT.
The authors do not have any conflicts of interest to disclose that could inappropriately
influence this work.
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How does corruption impact a nation’s capacity for well-being? Expanding government services and funding for health may not be effective at increasing well-being if corruption is rampant in government authorities. Therefore, both petty and grand corruption in different government bodies have the potential to greatly decrease the effectiveness of health expenditure at improving infant and child health, yet this relationship is understudied in the cross-national literature. Using two-way fixed effects models for a sample of 90 low- and middle-income nations from 1996 to 2012, I examine how the interaction between corruption in the executive and public sector and health expenditure impact infant and child mortality. The findings reveal the importance of controlling for corruption in improving the development effectiveness of health expenditure. In short, while states must have the fiscal capacity to generate enough funds for health expenditure, they must also reduce grand and petty corruption in the executive and public sectors to reduce infant and child mortality.
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Objectives: The objective of this paper is to provide an analysis of the medicine pricing policies in Vietnam. These policies are reflected in legislation and associated governmental administrative instruments. Methods: All the legislation and sub-legislation such as laws, ordinances, decrees, and circulars relating to medicine pricing policies in the period of health reform from 1989 to March 2008 and the policy context were examined using a documentary analysis. The analysis was constructed around the three components of the policy cycle: policy formulation, implementation and accountability. Results: The Vietnamese Government has sought to limit inappropriate increases in medicine prices through legislation designed to ensure public access to essential medicines. The principal legislative mechanism has been one of transparent declaration and publication of medicine prices. The most progressive regulation has been Joint Circular No.11/2007/TTLT-BYT-BTC-BCT, which controls the wholesale mark-ups in the medicine supply chain through the declaration of a reasonable wholesale price to the Ministry of Health. These marked legislative changes have yet to reach their full potential because some administrative prerequisite elements have yet to be implemented. Conclusions: Analysis of the regulatory reforms demonstrates that Vietnam medicine pricing regulations have become increasingly sophisticated. While appropriate legislation is pivotal to control medicine prices, it is an insufficient mechanism alone to achieve the level of change required. Enforcement of legislation at the administrative level is also of critical importance, as is ongoing monitoring of legislative effects including the socio-economic factors affecting prices. More work is needed to ensure reasonable prices of medicines in Vietnam.
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Objective: To assess the price, availability and affordability of a sample of medicines in Vietnam. Methods: Data on the price and availability of 42 medicines were collected using the standard World Health Organization/Health Action International (WHO/HAI) methodology in five geographical areas in Vietnam. The median price of these medicines was compared with the Management Science for Health international reference prices (IRPs), expressed as median price ratios. Affordability was measured as the number of days' wages required for the lowest-paid unskilled government worker to purchase one course of therapy. Of the 42 medicines studied, 15 were chosen for international comparison, which were included in at least 80% of other country surveys using the WHO/HAI methodology. Results: Public sector availability of generic medicines was 33.6%. The median public procurement price was 1.82 times the IRPs for generics, but for some individual medicines it was less than half the IRP. The price to patients in public outlets was higher than in private pharmacies. Adjusted for Purchasing Power Parity in 2005, the lowest generic prices in private pharmacies were still 8.3 times the IRPs. Treatments were thus unaffordable for a large part of Vietnam's population. Conclusions: Medicines in Vietnam were high in price, and low in both availability and affordability, especially in the public sector. To make public facilities a primary treatment option for the poor, Vietnam must reduce medicine prices in this sector by improving procurement efficiency, ensuring and promoting low-priced generics, and regulating reasonable mark-ups.
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This paper analyzes Vietnam's health policies. It adopts an interpretative framework stressing that policy approaches to strategic and commercial services, on one hand, and social services, on the other hand, should be fundamentally different, given the structurally different nature of such diverse services activities. The paper analyzes the evolution of health policies during the doi moi period and reviews the national and international debate on health systems reforms, arguing that an approach prone to blur the intrinsic difference between social and non-social services has led to market-oriented health reforms that are severely flawed in Vietnam, with negative impacts on universality of access, equity, poverty, and efficiency. In sum, social services policies, and policies in the domain of health in particular, appear to constitute the weakest and most contentious component of Vietnam's otherwise extremely successful development strategy. Therefore, they are a prime candidate for critical re-examination.
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In this sixth paper of the Series, we review health-financing reforms in seven countries in southeast Asia that have sought to reduce dependence on out-of-pocket payments, increase pooled health finance, and expand service use as steps towards universal coverage. Laos and Cambodia, both resource-poor countries, have mostly relied on donor-supported health equity funds to reach the poor, and reliable funding and appropriate identification of the eligible poor are two major challenges for nationwide expansion. For Thailand, the Philippines, Indonesia, and Vietnam, social health insurance financed by payroll tax is commonly used for formal sector employees (excluding Malaysia), with varying outcomes in terms of financial protection. Alternative payment methods have different implications for provider behaviour and financial protection. Two alternative approaches for financial protection of the non-poor outside the formal sector have emerged-contributory arrangements and tax-financed schemes-with different abilities to achieve high population coverage rapidly. Fiscal space and mobilisation of payroll contributions are both important in accelerating financial protection. Expanding coverage of good-quality services and ensuring adequate human resources are also important to achieve universal coverage. As health-financing reform is complex, institutional capacity to generate evidence and inform policy is essential and should be strengthened.
Many anti-corruption initiatives face an inherent dilemma: the very actors which must adopt and implement policies to curb corruption are those which may face weak, or even negative, incentives to do so. Where corruption in authoritarian states is already endemic, a vicious form of this “orthodox paradox” emerges, as elites adopting anti-corruption measures attempt to police themselves. This paper presents an institutionalist approach to linking the context of anti-corruption reforms to their likely effectiveness and sustainability. It applies this approach to the assessment of Vietnam’s 2005 anti-corruption law.
Corruption in the government procurement of goods, services and public works has been commonplace in Southeast Asian states (with the exception of Singapore) over many years. It has affected the provision of vital services and infrastructure and has been a key factor in undermining standards of governance. In recent years, reforms have been introduced in the region to combat corruption in the procurement process. However, to date their impact in many of the states has been at best limited. The article will consider the nature, types and extent of corruption in government procurement in the various states of Southeast Asia, following which it will discuss the reforms that have been introduced to address the problem. The article will then assess the limited impact of the reforms, and discuss the two reasons for this. The first reason was that the reforms were not sufficiently comprehensive and precise in tackling the entire spectrum of corruption in procurement and in creating the necessary legal powers for watchdog and enforcement bodies when dealing with such practices. Second, there were serious weaknesses in the implementation of these reforms, especially in translating legal provisions into everyday practice. Of particular importance are the limited capacity and status of watchdog and enforcement bodies, and the extent to which they are also compromised through corruption. The conclusion will consider the lessons to be learnt in tackling procurement corruption from the experience of the states of Southeast Asia and the challenges they face in pursuing further reform in the future.
User fees at public health care facilities and out-of-pocket payments for health care services are major health financing problems in Vietnam. In 2002, the Government launched the Health Care Funds for the Poor (HCFP) policy which offered free public health care services to help the poor access public health services and reduce their health care expenditure (HCE). This paper is an assessment of the implementation of the HCFP in a rural district of Vietnam. The impacts of HCFP on household HCE as a percentage of total expenditure and health care utilization were assessed by a double-difference propensity score matching method using panel data of 10,711 households in 2001, 2003, 2005 and 2007. The results showed that the HCFP significantly reduced the HCE as a percentage of total expenditure and increased the use of the local public health care among the poor. However, the impacts of HCFP on the use of the higher levels of public health care and the use of go-to-pharmacies were not significant. In conclusion, this assessment indicates that the HCFP has met its objectives by reducing HCE for the poor and increasing their use of the local public health care services. However, further efforts are needed to help them access higher levels of public health care. Pharmacists should be better regulated and incorporated with primary health care to improve efficiency of the system.
To describe and analyse the policy processes related to maternal health in Vietnam. A multi-method, retrospective comparative study of three case studies of maternal health policy processes-skilled birth attendance, adolescent reproductive health and domestic violence. It drew on primary qualitative data and secondary data. The underpinning conceptual framework of the study with key elements of policy processes is described. The study identified significant differences between the policy processes related to the different case studies. Various factors affect these processes. Critical amongst these are the nature of the policy, the involvement of different actors and the wider context both nationally and internationally. The changing national context is opening up increasing opportunities for civil society to interact with policy processes. Understanding the nature of policy processes is critical to strengthen them, particularly in a changing environment. There is potential for a review of government policy processes which were developed in the period prior to Doi Moi to reflect the changing composition of civil society.