UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS HEALTH INSURANCE AND PUBLIC HEALTH CARE UTILIZATION IN VIETNAM BY TRAN THE HUNG MASTER OF ARTS IN DEVELOPMENT ECONOMICS HO CHI MINH CITY, DECEMBER 2014 123doc UNIVERSITY OF ECONOMICS INSTITUTE OF SOCIAL STUDIES HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM - NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS HEALTH INSURANCE AND PUBLIC HEALTH CARE UTILIZATION IN VIETNAM A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By TRAN THE HUNG Academic Supervisor: Dr. TRUONG DANG THUY HO CHI MINH CITY, DECEMBER 2014 123doc ABSTRACT Vietnam is in the process of improving health system. To achieve this goal, the Vietnam Government attempts to expend the coverage of public health insurance which is an effective tool in low and middle income countries to finance health care provision (WHO, 2000). Although the insurance coverage increases significantly over the last ten years, the private expenditure on health is still high.
It only reduces 6%, particularly from 69.1% of total expenditure on health in 2000 to 62. This comes up with a question that whether health insurance improves access to care? To answer this question, this study will assess the impact of health insurance on health care utilization, particularly public health services through two purposes: medical examination and treatment. A binary probit model is used to estimate the impact of health insurance on public health care utilization. Then we investigate determinants of insurance enrollment to increase the number of insurance participators if insurance affects positively significant on health care use.
Data are obtained from Vietnam Household Living Standard Surveys (VHLSS) in 2010. The empirical results indicate that insurance has a positively significant effect on public health care utilization. In other words, we can conclude that health insurance actually improve access to care. Moreover, the results of insurance participation show that insurance enrollment is affected strongly by income and interaction terms of frequency of illness.
It is also remarked that demand for insurance is different between five income quintiles. Finally, household’s characteristics including household’s size, income and illness ratio affect significantly to insurance enrollment. 123doc ACKNOWLEDGEMENT This thesis is not only the result of my own effort, it also consists direct and indirect supports of other individuals and organizations. I would like to express my deep gratitude to them.
My academic supervisor, Dr. Truong Dang Thuy, is the person that I would like to thank firstly. Without his comments and supports, I would not finish my thesis in time and as good as this. Furthermore, I would also like to acknowledge the Scientific Committee, the lecturers and staffs of Vietnam-Netherlands Programme for the knowledge and guidance during the period of studying and writing thesis.
Last but not least, I am grateful to my family for create favorable conditions to help me learn better. Finally, I would like to thank my friends, especially “HLNTTV Group” for their supports in the whole time of studying. HCMC, December 2014 Trần Thế Hùng 123doc TABLE OF CONTENTS LIST OF FIGURES. iii LIST OF TABLES.
iii CHAPTER 1: INTRODUCTION .4 Research scope and data .5 The structure of this study. 4 CHAPTER 2: LITERATURE REVIEW .1 Relationship between health utilization and insurance .1 Health care usage theory .2 Theory of relationship between health insurance and health utilization .3 Empirical reviews of relationship between health insurance and Health utilization: .4 Theory of insurance participation:.5 Empirical reviews of insurance participation:. 24 CHAPTER 3: RESEARCH METHODOLOGY. An overview of Vietnam health system and health care use.
Access and utilization of medical examination and treatment services. Overview of health insurance. Methodology and data. Measurement of variables and expected sign.
Impact of health insurance on public health care use. Determinants of insurance participation. 54 CHAPTER 5: CONCLUSIONS AND POLICY IMPLICATIONS .1 Conclusion remarks and policy implication .2 Limitation and further research. 75 123doc LIST OF FIGURES Figure 2.
1: Initial behavioral model of health services utilization. 2: Modeling the effect of insurance programme on the use of health services. 1: Proportion of seeking care in 2010. 2: Timeline and roadmap of universal health insurance coverage.
3: Trend in health insurance coverage from 1993-2010. 36 LIST OF TABLES Table 3. 1: Measurement of variables. 1: Descriptive statistics of using public health care services by purpose.
2: Descriptive statistics of insurance participation. 3: Descriptive statistics of continuous independent variables. 4: Public health care use and insurance enrollment by gender. 5: Public health care use and insurance enrollment by employment status.
6: Public health care use and insurance enrollment by area (rural). 7: Public health care use and insurance enrollment by minor ethnic people. 8: Results of impact of health insurance on medical examination. 9: Results of impact of health insurance on medical treatment.
10: Results of insurance participation (household level). 11: Results of insurance participation (individual level). 12: Results of insurance participation by different income quintile. 61 iii 123doc Tran The Hung Master’s Thesis VNP19-2014 CHAPTER 1: INTRODUCTION 1.1 Problem statement After “Doi Moi” program in 1986, Vietnam has experienced rapid and continuous economic growth with GDP per capita increases from 140 USD in 1992 to 1,168 USD in 2010.
Moreover, Vietnam’s poverty headcount drops from 60% to 20.7% in the past twenty years (Work Bank, 2013). When people become more affluent, they will have higher demand for care (McPake et al. 2002; Folland et al. Therefore, the rate of healthcare usage increases significantly from 2002 to in 2010.
Typically, percentage of people having health treatment in 2002 is 18.9%, and then they rise to 40.9% of total population in 2010. Over the period of 2002-2010, healthcare utilization in Vietnam increases dramatically. It suggests that people pay more attention to their health. As for 2010, the percentage of people having health treatment is about 40.
Of which, the rates of inpatient and outpatient are 8. There are two main kinds of health care services that people use in Vietnam, including public and private health care services. The percentage of people using public health care services is nearly seventy percent; particularly, the ratio of inpatient hospitalized in public health services is around 90.1% of total inpatient and 57.2% is the percentage of outpatient using public health care services in 2010. In the last ten years, Vietnam households still have to concern with a burden of health care expenditure.
The amount of money that people have to spend in health care is much more than Government spending; private expenditure on health accounts for around 62.9% of total expenditure on health while general Government expenditure on health is around 37.1 in 2010 compared to Thailand with 25% of private expenditure 1 123doc Tran The Hung Master’s Thesis VNP19-2014 and 75% of Government expenditure on health (World Health Organization 2013). The major element that makes the large proportion of private expenditure is households’ out-of-pocket payment. Out-of-pocket expenditure is about 93% of private expenditure on health in Vietnam 2010 (WHO, 2013). An increase in out-of-pocket payment on health may lead households to sell their assets to be able to pay the treatment fees.
Most of households, especially poor households, have to pay such a substantial share of their income for health service. As the result, they are pushed into poverty (World Health Organization, 2004). Health risk is probably the greatest threat to people’ lives because it impacts on their direct expenditure and it also reduces their health affecting to labor supply and productivity leading to income poverty (Asfaw, 2003). This author suggests that health insurance is an effective tool to deal with health risk for the poor.
In addition, health insurance is as a part of income protection because it reduces financial burden of treatment at low income levels (Jutting, 2003). Health insurance is also a tool in order to create an equitable access to health services throughout the population at low- income countries (WHO, 2000). Ensor (1995) discusses that voluntary health insurance plays an important role in reforming overall health care system by making health service provision more efficient. Recognizing the important role of health insurance, many authors study the relationship between health insurance and financial risk protection or health, especially, impact of health insurance on health utilization.
Saksena et al (2010) state that health insurance has statistically significant positive impact on health care utilization of health services when people are needed. For the poor, health insurance is an effective tool which increases health care usage when they are sick (Jutting, 2003). Health insurance does not only rise health care utilization, but it also increases the 2 123doc Tran The Hung Master’s Thesis VNP19-2014 usage of physician services and preventive services and so it improves health (Freeman et al, 2008). Health utilization is affected by many determinants including demographic factors; social structures, characteristics of family and community (Anderson, 1995).
The author argues that demographic variables such as age, gender, education have low mutability, so they cannot be altered to change utilization; and cultural backgrounds (ie, ethnicity, region) are not changeable to promote health care usage (Anderson & Newman, 2005) while personal/family and community’s characteristics which include an important factor: health insurance are quite mutable and strongly associated with health utilization. For example, the impact of health insurance on health care use has been demonstrated dramatically by The Rand Health Insurance Study such as the studies of Manning et al (1987) and Jutting (2003). As a result, we can conclude that increasing insurance participation is a good choice to accelerate health utilization; and it is necessary for policy makers to adopt how the impact of insurance on health care utilization is and then assess what are determinants of insurance participation so as to create favorable conditions for people to join health insurance scheme, specially, for the poor who do not have enough resources to use health services. In this situation, the study will examine the effect of health insurance to health care utilization at public health care services with different purposes including health test and treatment.
In other word, we will hypothesize whether health insurance improves access to health care since many studies use health care utilization as a proxy for access such as Fox (1972); Aday & Anderson (1974; 1995). After measuring the impact of health insurance on health care usage, if the effect is positively significant meaning that health insurance actually improves access to health care, we then investigate determinants affecting to insurance enrollment. Then, the results are used to recommend policy implications to improve insurance participation including: 3 123doc Tran The Hung Master’s Thesis VNP19-2014 administrating stringently the insurance participation of employees and financial intervention such as subsidies for different income quintiles, especially for low income households with high illness ratio.2 Research objectives This study aims to identify relationship between insurance and public health utilization of people in Vietnam. After that, determinants affecting health insurance enrolment are measured in order to improve insurance enrollment.
As such, there are two main objectives in this study: - Impact of health insurance on health care utilization at public health services using data from Vietnam Household Living Standard Survey in 2010. - Investigating determinants which impact to join the insurance scheme of people. Then, policy implications are recommended to increase the number of insurance participators.3 Research question This research aims to handle the question: Does health insurance actually improve access to care at public services? If yes, how to improve insurance participation? 1.4 Research scope and data The study examines the impact of insurance on health care usage of individuals and determinants affecting insurance participation of households and individuals using cross section data of Vietnam Household Living Standard Surveys (VHLSS) in 2010.