The Impacts Of Households Insurance Enrollment

Published Date: 02 Nov 2017

Vietnam is a Southeast Asian developing country which shares the borders with China, Lao Democratic Republic and Cambodia. The country spreads the area of 330957.6 square km and with a population of about 87.840 million in 2011 (General Statistics Office, 2011). The Gross domestic product (GDP) per capita in 2011 is estimated as around US$1400, on a par with other low-middle income (LMI) countries such as Cameroon, India, Indonesia, Philippines and Laos. However, average life expectancy has improved astonishingly from 61.9 years in 1986 to 74.8 years in 2010 (World bank data), with 72.9 years for male and 76.9 years for female, and even higher than other LMI countries (India 65.1 years, Cameroon 51.1 years, Indonesia 68.9 years, Philippines 68.5 years and Laos 67.1 years…) (World Bank Data, 1986-2010).

Recently, The Government has implemented Law on Health Insurance by 2008, in effect on 1st July, 2009. The Law aims at reaching universal health coverage by 2014, it means that achieving full coverage in 2014 by mandatory law on national health insurance (Government of Vietnam, 2008). However, after nearly 2 years implementing, the insurance coverage rate has been achieved only 60% of the population (in 2010). To expand more population coverage by health insurance becomes such a challenge. Partial groups of the near-poor, students, farmers, workers’ dependents, self-employed and informal workers are still out of the scheme.

In Vietnam, total health expenditure has moved on a sharply increasing trend recently. Health expenditure per capita, PPP (constant 2005 international $) went up from $ 84.7 in 2002 to $ 215.3 in 2010, increasing almost by 2.5 times during 8 years (Figure 1) . Total health expenditure as a share of GDP increased from 5.2% in 2002 to 6.8% in 2010 (World Bank Data, 1986-2010).

Figure : Health expenditure per capita, Vietnam 2002-2010

(Source: World Bank Data)

Compared with other LMI countries, Vietnam spent as a large proportion of its GDP on health care (See Table 1). However, out-of-pocket (OOP) payments accounted for a larger share of the spending (more than 50%) while the Government budget for health was just 22% and Social Health Insurance fund was only 18% ( Figure 2).

Table : Comparative Health Care Spending as percentage of GDP

Country

Government

Private

Total

Vietnam

2.59

4.25

6.84

Cameroon

1.52

3.61

5.13

China

2.72

2.35

5.07

India

1.18

2.87

4.05

Indonesia

1.28

1.33

2.61

Lao PDR

1.49

2.98

4.47

Myanmar

0.24

1.73

1.97

Philippines

1.28

2.34

3.61

(Sources: World Bank Data 2010)

Figure : Composition of national health expenditure, 2009

(Source: (Van Minh, Kim Phuong, Saksena, James, & Xu, 2012))

Figure : Trend of health expenditure, 1999-2010

(Source: MOH/WHO 2010)

The chart above showed the high percentage of private spending for health from household budget during the whole period of 1999-2010. But the trend of reducing OOP seen higher up can be considered as a good point due to the increasing funding from Health Insurance (Figure 3). However, OOP payments are till high while nearly 40% of the population are not protected by any kind of public health insurance. It means that a lot of households, especially the near poor, farmers, and informal sectors somehow can not afford the health care cost and face up to adversity when they have illness and look for health care services. The problems could be more serious when the MoH must change the new fee schedule for all types of health care services in 2012, with increasing trend from 2-4 times higher than existing price, because the previous fee schedule was out-of-date and not changed anything since 1995, even to adapt with inflation. How to expand the coverage of health insurance becomes the most considerable question to all policy-makers, Vietnam social security agency (VSS), researchers and stakeholders.

Individual-based insurance has been performed since social health insurance (SHI) first introduced in 1992 and it seems to be not effective in term of management, monitoring and implementing. In practice, it’s too difficult for the insurance agency to verify and distinguish about the condition, classification and organizational responsibility of the insured people. Besides, the uninsured can not enroll easily due to do not have enough information with the complicated existing system about where and how to buy insurance and also their benefits. For example, a five-year-old and poor child can be classified into 2 types of health insurance by Government subsidy policies: either free health insurance card for members in a poor household or free health card for children under six years old. Also a near-poor student can get different discount rates for the health insurance premium (either 50% state subsidy for the near poor household or 30% for students). The school pupils or students must buy the insurance directly through their school or university while some of them can have free health cards for the poor at home. The internal migrant workers, who run small business or in informal sector, do not belong to any organization/company/governor’s residence to purchase health card. As the result, this approach can not continue to be used so the Government is trying to roll out the universal coverage at the household level by the next coming years.

However, evidences of Vietnamese health insurance impacts on reducing OOP and catastrophic payments were reported weakly in various studies (C. V. Nguyen, 2012a; Van Minh et al., 2012; Wagstaff, 2005, 2007). Experiences of Thai’s universal coverage scheme can not applied in the situation of Vietnam due to differences in term of Government funding capacity and tax system. The risk-pooling for health within a household hasn’t been considered yet since health insurance based on individual level and contribution rate was calculated for a single person rather than household level. How insurance coverage rate at household level may have an effect on reducing household’s burden for health care hasn’t been seen obtainable in any study.

In a context that yet hasn’t Vietnam achieved universal coverage and the Government and MOH would like to change the policy from individual-based enrollment into household-based insurance in the next coming years, but with lack of evidences, providing evidences on financial protection impact of different household insurance status is quite necessary and up-to-date valuable.

Research questions

Our study points toward answering these following questions:

The general research question:

Is there any different impact of health insurance enrollment rate within a household on out-of-pocket health expenditure and catastrophic health care spendings?

Specific research questions:

What is the current health insurance coverage among households, classified by different socio-economic characteristics?

Is there any difference on mean out-of-pocket payment among households with different health insurance coverage and socio-economic characteristics?

What is the impact of household insurance status on health care financial protection (e.g. from catastrophic spendings)?

Objectives:

The overall objective of this study is to determine the impacts of health insurance rate within a household on out-of-pocket health expenditure and catastrophic healthcare spendings.

Specifically, we aim at analyzing the patterns of the following:

Classification of household insurance enrollment regarding different socio-economics characteristics.

Out-of-pocket health expenditure of household with different household insurance status and socio-economics characteristics;

Catastrophic rate; and impacts of insurance enrollment from household perspective and associated factors on healthcare financial protection (e.g. from catastrophic spending).

Scope

This research will analyze the financial protection of health insurance from household’s perspective and household’s insured status together with other associated factors. Secondary data used in this study was selected from the latest nationally representative household surveys - Vietnam Household Living standard survey (VHLSSs) in 2010, after one year launching the Law on Health Insurance towards universal coverage.

Hypotheses

There is different mean of out-of-pocket spending among households with different insurance coverage status.

Household with higher enrollment rate has less likely chance incurring catastrophic payment.

BACKGROUND

Figure : Factsheet of Vietnam

(Source: World bank Data 2010)

The structure of health care system in Vietnam

The health care system in Viet Nam is structured as a three-level system (see Figure 5). Ministry of Health (MoH) plays a key role in the Health care administration as the tertiary level and the chief national authority which devises and performs any health policy and program in the country. At provincial level, there are 63 provincial health bureaus which follow MoH policies but are actually organic parts of the provincial local governments under the Provincial People’s Committees (PPCs). The primary health care level – or basic health network – consists of district health centres (DHCs), commune health stations (CHSs) and village health workers (VHWs). Village health workers, who receive basic medical training from district level, nowadays become more important to bring together medical doctors, health staff and patients in the community, and also to cope with common basic medical needs of the village, especially in the rural and remote areas (Ali, 2009) .

Figure : The structure of the health care system in Vietnam

Government

Provincial People Committee

District People

Committee

Commune People

Committee

Provincial Health Bureaus

Health Administrative Unit

District Health Center

District hospital

Commune Health stations

Inter-commune clinics

MoH’s departments

Research Institutions (NIHE, Pasteur Institutes etc)

Medical Colleges

Central Hospitals (General and Specialized)

Provincial Hospitals (General and Specialized)

Centers for preventive medicines

Medical Secondary Schools

MOH

VHWs

(Source: (Tien, Phuong, Mathauer, & Phuong, 2011))

Currently, Vietnam has 36 central hospitals, 409 provincial public hospitals, and 645 district hospitals; 48 industrial hospitals and 10748 CHSs, with total 164800 beds together with 121 private hospitals as regarding of nearly 6290 beds in the whole country. However, only 21 hospitals among 1300s hospitals above can achieve ISO 9001 standardize, stated by Dr. Luong Ngoc Khue - Director of Department of Health care management (Thuan, 2011).

Notably that almost 100% of communes in the nation of Vietnam have its own CHS (Ministry of Health & Health Partnership Group, 2010). To ensure the quality of care and infrastructure at grass-root level, MoH mandates the national quality standard for CHSs with 10 key groups of indicators, especially regarding that each CHSs must have at least one doctor working regularly or at least three times per week. According to a report from MoH, about 75% of communes nationwide has reached this standard (Chi, 2011).

One another important indicator is the number of beds per 1000 people , reported by MoH as 20.5 beds/ 10,000 people, higher than Indonesia (6 beds/10,000 population) and the Philippines (13 beds/10,000 population). (Department of Planning and Finance (MOH), 2010).

Despite wide scale of the institutional facilities, there still remains a big gap between infrastructure and quality of care in primary health care and higher level. Overloading and long waiting time are common in high level facilities (central hospitals, provincial hospitals) while low quality of care and limited services and infrastructure are existing in primary health facilities.

After decentralization, the public hospitals have more autonomy and authority to further improve their performance and efficiency, but also increase the chance to be more "privatization" with their own "for-profit units/services" (outpatient, inpatient) inside their hospitals. On another hand, the old reimbursement system by "hospital fee scheme", which has just only been changed within this year 2012 after being implemented nearly 20 years ago without any adjustment, can not allow the hospital to recover its own cost, especially in the primary healthcare level (for example, district hospital).

Historical development of Vietnamese Health Insurance System

The first period: Evolution of Vietnam Social Hearth insurance in early 1990s to 1998

In the past of early 1980s, the Vietnam health system was based entirely on the Central Government financing and regulation, which allowed people to enjoy free health care, but with limited resources and accessibility. Facing with a serious economic crisis at that time, there was no choice for the country but to launch a Doi moi (or "Renovation") reforms of the whole economy. Then by action, compulsory Social Health Insurance (SHI) was implemented in all provinces through the First Government decree promulgated in 1992 (Decree No. 299/1992/HĐBT) after a piloting voluntary health insurance scheme in some provinces during the period of 1989-1992. The scheme covered civil servants, workers in the formal sector of the enterprises with at least 10 employees (both state-owned or private enterprises), pensioners, social protection groups and remaining voluntary groups from the pilot such as pupils, students. However, the main problem of this period was that each province had its own provincial health insurance agency and funding, overlapped with a national insurance fund. Due to inefficiency in management and financing, the Government had to merge all provincial health insurance funds and agencies into a single national health insurance fund, managed by one agency, namely Vietnam Social Security office through Decree 58/1998/ND-CP in 1998.

Expanding the National Social Insurance Scheme to vulnerable and worse-off groups 1998-2008

In the first period of public health insurance in Vietnam, the coverage of it was based almost on individual enrollment, rather than families. Several policies targeted to the poor was implemented but not successfully. Continuously, in 2002, the Prime Minister signed the Decision 139 about raising "Health Care Fund for the Poor" (HCFFP) in any provinces in the country, which allow the poor beneficiaries to be able to access for health services free of charge. Besides, a different program was run in 2005 to provide free health care for children under 6 years old. By the end of 2006, nationally about 30.5 million people were covered by health insurance (about 36.3 % of the total population) (Heath Strategy and Policy Institute, 2006).

However, due to the problems of low contribution rate, severe adverse selection and supply-induce-demand, the Fund for Social Insurance of 2005 faced the deficit of 139 billion VND, and continued deficit of 117.9 billion VND with HCFFP and 162 billion VND with the voluntary health insurance scheme in 2006 (Ministry of Health, 2007). So that MoH had to implement Circular 22 for Voluntary Health Insurance (2005) specified that there was at least 10% of household in the commune or at least 10% of students in each school or college/university involvement in the scheme; 100% members in the household engagement; minimum 30% participation of total members in each association and mass organization as condition to join in the Voluntary scheme. Nevertheless, these conditions became barriers to expand the coverage, so they were sooner rejected and replaced by Circular 14 (2007).

Despite the fact that Vietnam had made big progress in expanding the financial protection for healthcare to the poor, minority and vulnerable groups (like children under 6 years old) in this period, social health insurance still remained a lot of challenges and issues, and required comprehensive and thorough reform in health sector and health financing.

Law on Insurance

In 2008, after many attempts of the Government and MoH, the Law on Health Insurance was approved and took effect on 1st July, 2009.

According to the Law, all the groups from 20 first categories below must be compulsorily enrolled in the National Health Insurance in 2009 at once. And then the students and pupils became mandatory on 1/1/2010; the agriculture families on 1/1/2012 and the rest on 1/1/2014. However, up to now, the groups remained uninsured are the near poor, students, farmers, informal sector and dependents. The Government has already subsided for the near poor household with at least 50% of the premium, the students with 30% of the contribution rate.

Table : Health insurance membership classification according to Law on Health Insurance, 2009

No.

Membership categories

Time to achieve

1

Workers, employers, managers of enterprises and civil servants

1/7/2009

2

Officers of the Ministry of Public Security

1/7/2009

3

Pensioners, person who receives monthly allowance

1/7/2009

4

Person who receives monthly social security allowance because of occupational injuries and diseases

1/7/2009

5

Workers who stopped receiving the social security allowance for disability to receive subsidy from the Government budget

1/7/2009

6

Retired commune civil servants who receive a monthly social security allowance

1/7/2009

7

Retired commune civil servants who receive a monthly subsidy allowance subsidy from the Government budget

1/7/2009

8

Unemployed who receive an unemployment allowance

1/7/2009

9

People awarded for revolutionary merit

1/7/2009

10

Veterans according to Law of Veterans

1/7/2009

11

Veterans who directly served in the war against the United States

1/7/2009

12

Representative of the National Assembly and People's Committees

1/7/2009

13

People who receive a monthly social protection subsidy allowance

1/7/2009

14

The poor, the ethnic minorities living in disadvantage areas

1/7/2009

15

Dependents of people awarded for revolutionary merit

1/7/2009

16

Dependents of officers from the Ministry of Defense and Ministry of Public Security

1/7/2009

17

Children under 6 years old

1/7/2009

18

Donors who donated organs

1/7/2009

19

Foreigner studying in Vietnam by Vietnamese Government scholarships and fellowships

1/7/2009

20

Near poor families

1/7/2009

21

Pupils and students

1/1/2010

22

Member of Agriculture households

1/1/2012

23

Dependents of employees and formal sector

1/1/2014

24

Members of cooperatives and self business

1/1/2014

25

Others

1/1/2014

Figure : Roadmap towards Universal Coverage

2003

1992

2005

2012

2009

2010

2014

Employees, Employers, civil servants

Pensioners, Social protection groups

Poor, Minorities, elderly>85, dependants of Army officers & soldiers

Children < 6 years old, near poor

Farmers

Students, pupils

Others & Remains

(Source: VSS)

Tran Van Tien et al. stated that since the Vietnam insurance system coverage relied mostly on individual-based, not by household-based, so the Vietnamese Social Security can not control, manage and monitor the membership and enrollment successfully (Tien et al., 2011).

Overview about current health insurance system in Vietnam

Currently, under Vietnam Social Security Agency (VSS), there are two main schemes: Compulsory Health Insurance (CHI) and Voluntary Health Insurance (VHI).

Figure : Social Health Insurance schemes

SOCIAL HEALTH INSURANCE

Contribution:

Employees

Employers

Civil servants

Farmers …

Non-contribution:

The poor

Children < 6 years

Social Protection groups…

MANDATORY

HEALTH INSURANCE

VOLUNTARY HEALTH INSURANCE

Informal sector

Dependents

In fact, the groups of informal sector and dependents till remain under the Voluntary Scheme due to they have not been mandatory by the Law yet, up to 2014. However, the enrollment compliance of other groups is not completely successful, especially the Government faces difficulty in the near poor group, agriculture households and private enterprises.

Contribution rate (or premium)

Those who receive wages: 4.5% of salary/wages; of which 2/3 paid by employer and 1/3 paid by employee.

Social protection group: 4.5% of minimum salary (at present: but was paid by government budget

Pensioners, unemployed and who received monthly security allowance: 4.5% of minimum salary, paid by Social Security agency

The poor, under-six children: 4.5% of minimum salary; paid by government budget.

The near poor: 4.5% of minimum salary; government subsidized minimum 50%

Student and pupils: 3% of minimum salary; government subsidized minimum 30%.

People in agricultural households, informal sector, dependents and others: 4.5% of minimum salary.

Benefit Package and conditions

Overall, Vietnam Social Health Insurance provides a quite comprehensive benefit packages including outpatient services and inpatient services, rehabilitation, antenatal care, delivery and screening some diseases. Beside, the Insurance also includes the high cost services like organ transplantation, renal replacement therapy, invasive cardiovascular treatment, magnetic resonance imaging (MRI). The benefit packages above are according to an all-embracing list announced by MoH and VSS. Moreover, the poor are also covered the transportation costs if have to be referral into higher level.

Exclusion are nursing and home care, additional drug, prostheses, teeth, glasses and hearing aids, occupational diseases and accident at workplace, self-injury, drug addicted.

Preventive healthcare actually is directly provided by State fund to CHSs level, so that both uninsured and insured are beneficiaries with fundamental preventive services.

The insured people will be exempted at register primary health care level (CHSs, District hospital) if total reimbursement is less than 15% minimum salary. Co-insurance is applied further with different rates: 0% for children under 6 years old, police officers and "war heroes"; 5% copayment for pensioners, the poor or who receive social monthly allowance; and 20% for others. The pass-by insured people without referral line must pay higher co-insurance rate: 30% at Grade III hospital (district hospital), 50% at Grade II hospital (provincial hospital) and 70% at Grade I hospital (Central hospital).

To control the fund and avoid deficit, reimbursement ceiling is applied with no more than 40 times of minimum salary.

However, patients sometimes must pay out-of-pocket first, then claim directly to the local VSS agencies, in case of traffic accident (but without violating traffic law)…

In term of quality control, The VSS plays very little role in keeping an eye on quality of services. The overutilization and overload of high level hospitals make the long waiting lines, the quality reducing, and corruption (under table money, kickback ...) and increasing more habits of spending out of pocket, even with the low income family...

LITERATURE REVIEW

Theoretical Framework

Health and related-health issues are inherently unpredictable. No one can anticipate when it can happen to him, how severe it is and how much cost he must bare (Brown & Churchill, 1999). Economists and academic scholars endeavor to find the reasonable way estimating the need and spending for health care, based on age, health condition, inherited factors and other socioeconomic characteristics. In order to manage uncertainty in health care costs, household can use some risk management method, such as change their life-style behaviors to lessen the risk of sickness and morbidity and financial strategies to deal with aftermath of health care. Three main financial strategies are: Risk lessening; Risk dealing and Risk pooling strategies (Ali, 2009). Among these mechanisms, risk lessening and risk dealing management are just concerned to self-protected, in term of individual, or family or small group of people through medical savings accounts, loans, credits. The worse-off group can not protect themselves due to they even can not afford or just cover their essential expenditure on food. As a result, the poor can not access to health care and bare the consequence of illness and disability like a vicious circle. Only risk pooling approach can be used by the Government as a key tool to ensure well-being and equity in the society. The WHO defines that risk pooling is "the practice of bringing several risks together for insurance purposes in order to balance the consequences of the realization of each individual risk" (World Health Organization, 2000). This concept is now further fulfilled into Universal Health Coverage and recommended to worldwide countries by WHO. So how can a country achieve universal coverage?

The World Health Report 2010 outlined a conceptual framework with three broad dimensions of universal health coverage (UHC): population coverage, service coverage, and financial coverage. However, there were a lot arguments about what indicators should be added up and measured under population coverage, service coverage and financial protection. For financial protection, researchers, econometricians and policy-makers had made agreement on the 2 important indicators: catastrophic and impoverishment spending.

Figure : Conceptual Framework towards Universal Coverage

(Source: WHO)

Both catastrophic and impoverishment are related to proportion of spending directly by a household for healthcare in the total budget of that household.

Applied studies

Regarding financial protection impact of health insurance, there are various studies not only in Vietnam but also in over the world reported about it. One of the very early-bird studies is by Adam W. and Eddy v D. about financial burden for health care in Vietnam during 1993-1998 (2002), using data from VLSSs in 1992-93 and 1997-98 (Wagstaff & van Doorslaer, 2003). Due to have no available information about health insurance at that time, Wagstaff just found that catatrophic at threshold 10% happen more among the rich rather than the poor.

Adam W. also studied about the impact of free health insurance for the poor (HCFFP) in Vietnam using the data from VHLSSs 2002 and 2004. However, due to limited dataset in VHLSS 2002, only single differences approach and propensity score matching with trimming sample could be used in his study. The results based on a comparison between 4153 individuals covered by HCFFP and 5916 entitled but uncovered individuals in trimming sample, showed that HCFFP considerably enlarge service utilization, especially inpatient service, and decreased the probability of suffering catastrophic spending (with cut-off 10%); however, not reduced mean out-of-pocket health expenditure (Wagstaff, 2007).

On a study aimed at explaining the incidence of catastrophic health expenditures from 6 Asian countries/areas, discussion about catastrophic of threshold 10% and its determinants had been performed deeply. The effects were differentiated through the mean and the variance of the OOP budget share by estimating a linear regression model with multiplicative heteroskedasticity. Source causes of catastrophic can come from: health status; household size; ability to pay; location using indicators of access to sanitary toilets, secure drinking water and solid house foundation; and also counted for age, gender, education, employment status and occupation of head of household. The only main omitted variable was price of medical care. For health insurance status, information was only available in Hong Kong, Thailand and Vietnam. To handle with endogeneity of total consumption, they used instrument variables as a dummy for land holdings and land size (Sri Lanka), wealth index (Thailand); or panel data (in Vietnam, using VLSS 1998). In this study, the researchers reported that chance incurring catastrophic medical spending are more likely in households with larger member , also higher in rural areas and lower among families with a sanitary toilet. After adjusted for endogeneity problem, the coefficient of total consumption became insignificant (Donnell & et al, 2005). However, for insurance status in Vietnamese data, Donnell used the number of kids, non-elderly adults and elderly with health insurance, which could not make any comparison between insured and non-insured household.

From a PhD dissertation, Shehazd I Ali measured the impact of Voluntary health insurance on OOP costs and inequity using a cross-sectional household survey data in 3 Vietnamese provinces in 1999, with sample size of 1065 adults and 1101 children interviewed. To solve the bias of care-seeking and insurance-seeking simultaneously, he performed analyses based on Heckman’s selection model, using probit model accounted for self-selection biases. The independent variables applied in his probit model for incidence of catastrophic health care cost were: Insured status, log of equivalent consumption expenditure, age, age square, female, interaction age*sex, living in rural area. The results shown that insurance is negatively associated with expected health care expenditure, robust after correcting the insurance self-selection biases (Ali, 2009). Despite the fact that the study was quite well-performed, but due to the data was not representative for the whole country, he couldn’t generalize the results as national impacts. Besides, Ali only paid attention on individual effects, but not household effects, whereas majority household acts like a single unit when any member in the family is facing with health problems.

A huge and latest research on financial burden of household’s OOP spending for health was published in 2012. The research using data from 5 VHLSSs in the whole period of 2002-2010 became a full picture of financing trend in Vietnamese household. Focusing on OOP health expenditure of household, incidence of catastrophic and impoverishment and their determinants (household with at least one insured, household size, sex of the head of household, living with elderly/children, location and quintile), they figured out that the rate of catastrophic and impoverishment kept remain highly from early 2000s until 2008 (before universal coverage), and only declined in 2010. Households lived in the rural area and with elderly were more likely to face with catastrophic and impoverishment; impact of health insurance was insignificant (Van Minh et al., 2012). However, in order to determine the capacity of financial protection of health insurance system in Vietnam for household perspective, using the enrollment of individual seemed not to be satisfied and comprehensive.

From another framework for analyzing financial protection in health sector, Ruger (2012) and Nguyen, K.T. (2012) brought a new point of view on financial protection concept: multidimensional profile approach, including not only direct effects (accessibility, comparative costs, health insurance status and utilization) but also social impacts (coping strategies and resource allocation in household spending). They collected the data from 706 households in Dai Dong commune, Hanoi (2008) clarified as the poor, near-poor and non-poor households, and run multivariable regression (OLS) on mean differences in treatment costs. However, the study performed the regression with regard to number of treatments and the insurance status of each individual who consumed healthcare service in the household. Overestimation was the main limitation in this study.

There were large number of studies evaluated the effects of particular health insurance programs or health policies in Vietnam. Nguyen (2012b) examined the impact of voluntary health insurance (VHI) on utilization and OOP payments, using the 2004 and 2006 VHLSS dataset with a panel of 4216 households (16,685 individuals). Application the method of difference-in-difference (DID) with propensity score matching (treatment group: insured VHI in 2006; control group: not insured) he ascertained that VHI could help increase utilization of out-patient and inpatient services as 45% and 70%, respectively; however, effect on OOP expense is statistically insignificant. In another research conducted by Nguyen (2012a), health insurance for Children was taken into account, using panel data from VHLSSs 2006, 2008 (4,090 household and 15,475 people). Poisson and Tobit regressions with fixed-effects technique were applied for health care contacts/year and OOP payments, while independent variables were dummy variable for a child’s insured status and other characteristics of both household and individual (household size, income, head of household characteristics, location; age, male and illness of that child). Impacts of health insurance for children are till modest. In both studies above, financial burden to household is not clarified clearly.

An interesting study about payment mechanism for health insurance in Vietnam was carried out in 2012 by Nguyen and Connell. They focused on examining the effects of implementing 20% co-insurance for VHI by a policy in 2007 to demand for health care, using a quasi-natural experiment study design with dataset of VHLSSs in 2006 and 2008. DID was employed with control group including both the insured in compulsory health insurance (CHI) and the uninsured while treatment group is VHI insured. To correct for endogeneity bias, the authors chosen instrument variables related to enrollment condition and location area. The finding was that co-insurance had no significant negative impact on health care demand. However, the study can not point out the marginal effect of coinsurance.

Researchers are now more interested in the remain groups like farmer, informal sectors and their dependents which accounted for a large proportion in the targeted population. Obviously that it’s too touch to expand the coverage by individual, which requires a lot of administration and supervision the overlap among members within one household. A study shown that 64.4 % of informal sector are earning income by a single activity, so increasing the coverage rate through business and employees registration may help. Besides, this study also suggested that individual are more disposed to participate in those regions where the implementation of health insurance has been more successful (higher rate of population coverage) (Castel, Oanh, Tam, & Dat, 2011).

Looking at a systematic review reported about the impact of health insurance for the poor and informal sector in developing countries in 2012, 34 studies were analyzed and evaluated. But almost studies paid attention on the specific type if health insurance or on individual level, rather than the rate of insured member within a household (Acharya et al., 2012).

As the existing knowledge above, it’s obviously to state that studying about impacts of household’s insurance status on health care financial protection is really necessary and valuable.

Conceptual Framework

Household insurance status can be defined as the rate of total number of insured people/household size.

With clear steps and explanations above, we can calculate the mean OOP health expenditure and the rate of incurring catastrophic payment. Determinants of catastrophic according to previous study can be low/lack of health insurance financial protection, having more the elderly and children in household, living in rural area, the poorest or poor household in the quintile scale; or the head of household’s characteristics (e.g. gender). However, the utilization of health insurance can be one of factors affected to catastrophic among Vietnam households due to pass-by and self-treatment are quite common.

Figure : Conceptual Framework

Out-of-pocket spending

Mean out-of-pocket for health

Catastrophic incurring

Household’s socioeconomic characteristics

(Hhsize, Have Elderly, Children≤5, Residence, Quintile

Use health insurance card when seeking care

Head of household’s characteristics (Sex, Educated)

)

Household’s Health Insurance Enrollment

(The rate of Number of insured/ Hh size)

RESEARCH METHOD

We use the data from the most recent survey in 2010 of Vietnam Household Living Standard Surveys (VHLSSs), the cross-sectional household surveys, which were performed by General Statistical Office of Vietnam (GSO) with the technical support from the World Bank (WB) every two years. The survey collected information through face-to-face interviews with household heads and key commune officials in communes containing sample enumeration areas. The numbers of households included in the VLSS in 2010 were 69,360: with 22,365 households investigated about income; 37,596 household about income and other issues and 9,399 households about income, expenditure and related issues. So that, the number of households included in this research (with information on expenditure) were 9,399. The weighted number of households for 2010 were 22,334,062. Data were analyzed using Stata statistical software version 11. All analyses of the data from household were weighted according to the probability of each household unit being sampled to reveal the full Vietnamese population. The weighting indicator is made available in the dataset by the GSO. Binomial regression were used to identify the household’s insurance status and socio-economic correlates of the catastrophic impacts of household out-of pocket health expenditure.

Definition of key variables:

In the VLSSs, all members of the household were listed with their clear insurance status by asking the heads of the household the questions: "Please tell full names of each household members in your household", then with the list of households’ members, continuous with "Over the past 12 months, has <Name> had a health insurance card or a free healthcare booklet/card/certificate?" and "Had <Name> used the health insurance cards or free health cards when seeking care and treatment?". To investigate the health expenditure of the household, the question was "Has anyone in your household visited health facilities or had home visits by physicians for check-ups and treatment over the last 12 months?" If the answer was "yes" the follow-up questions were: 1) number of outpatient visits and corresponding household expenditure over the past 12 months; 2) number of inpatient visits and corresponding household expenditure over the past 12 months and 3) other health services and spending.

As evidently defined in some books and articles, I use the definition of catastrophic of World Health Organization as below (World Health Organization, 2005; Xu et al., 2003):

Out-of-pocket health payments: Out-of-pocket health payments bear on the direct spending by households every time when they acquire health services, include doctor’s fees, spending for tests, medicines and hospital bills. Even though spending on alternatives and/or traditional medicine is included in out of pocket payments, expenditure on health-related transportation and special nourishment/ sustenance are excluded. OOP also subtracts with insurance reimbursement.

Household’s consumption expenditure: Household consumption expenditure embraces in term of either monetary or barter on all goods and services, and the money value of the consumption of home-based products.

Household subsistence spending: The household subsistence spending is the minimum prerequisite to sustain fundamental life in a society. A subsistence spending can be explored through a poverty line. Poverty line is defined from households’ spending on food as a share of total household expenditure, at the 50th of the country. Here I use the figure within the 45th and 55th percentile of the total sample to avoid measurement bias. Considering the economy scale of household consumption, the household equivalence scale is used rather than actual household size. The value of the parameter β has been estimated from prior studies derived from 59 countries’ household survey data, and it equals 0.56:

The equivalized food for household is calculated by the equation:

Then Poverty line is defined as below:

So that, subsistence expenditure for each household is equal:

Household’s capacity to pay: A household’s capacity to pay is derived as effective income remaining after fundamental subsistence needs have been met. Effective income is taken to be the total consumption expenditure of the household.

Catastrophic health expenditure: Catastrophic heath expenditure crops up when a household’s total out-of-pocket payments for health equal or transcend 40% of household’s capacity to pay (We also used the threshold point of 10%, 20% and 30%).

Living standard: The living standard of the households used in my study is based on their consumption expenditure. Households will be classified into living standards quintiles.

The dependent variable is dummy variable on incurring catastrophic health expenditure.

The independent variables are:

Household’s enrolled status: HI = Total number of insured member/ household size.

The percentage of members have insurance card and use it when seeking care

The percentage of members have insurance card and use it when hospitalization

Head of household characteristic: The gender of head of household (Male=1)

And other socio-economic indicators such as household size, number of elderly people in the household (>65years old) , number of children under 6 years old in the household, living area (urban/rural), household quintile.

The model can be represented by equations below:

Cata = f (Hi + UseHIop + UseHIip + Hhsize + Have children<5 + Have elderly + Rural + Quintile)

Or:

A number of specification will be experimented with:

(1)

(2)

Table : List of explanatory variables and expected sign of coefficients

Definition

Name

Type of Variable

Expected sign

Explanation

Previous findings

Household’s enrolled status

HI

Continuous

-

The more people are insured in household, the more clear effect of health insurance financial protection

No study use the rate of insured members/ hhsize. Use specific type of HI, the results are +/- ;

Not significant in some studies

Rate of members use HI when seeking care

UseHIop

Continuous

-

The financial protection of health insurance only affects when they use HI card every time they are seeking care

Not available in previous studies

Rate of members use HI when hospitalization

UseHIip

Continuous

-

The financial protection of health insurance only affects when they use HI card every time they are seeking care

Not available in previous studies

Residence (rural =1)

Rural

Dummy

+

Lower income and less awareness about diseases

+

Quintile i

Quintilei

Dummies

+/-

The poorest and poor household is low of capacity to pay

Can be +, with the poorest and near poor household

Definition

Name

Type of Variable

Expected sign

Explanation

Previous findings

Household size

hhsize

Continuous

+/-

More member, higher risk, but also higher chance to earn more income

- /+

Number of children <6 years old in household

Child

Dummy

+

The higher risk group

+

Number of elderly in household

Elderly

Dummy

+

The higher risk group, especially with chronic diseases and high cost care

+

Head of household is a man

Manhead

Dummy

+/-

The gender of head of household can affect on decision making process

+/-

Table : Overview of Research Questions and Method

Specific

objectives

1

2

3

Research

questions

What is the current health insurance coverage among households, classified by different socio-economic characteristics?

Is there any difference on mean out-of-pocket payment among households with different health insurance coverage and socio-economic characteristics?

What is the impact of household insurance status on health care financial protection (e.g. from catastrophic spendings)?

Study design

and study subjects

Secondary Data Analysis

VHLSS 2010: with 9399 households

Main

variables

Household insurance status

Mean out-of -pocket payment

Dummy variable on catastrophic.

Hi status, Use HI, and other socio –economic factors

Statistical

methods

CHI-SQUARE

ANOVA

Logit model

POSSIBLE BENEFITS

This study aims at providing timely and critical evidences for the Government and MoH about the impact of different scale of household’s insurance enrollment on reducing OOP and incurring catastrophic spending. With results of the study, The Government can carefully consider and adjust with the plan of family-based insurance in the next coming years as a new approach to achieve Universal coverage. By another hand, it can be applied in increasing awareness and compliance of the targeted remain population. The second application is quite important to address the root causes of the expanding the population coverage in Vietnam and also in other low-middle income countries.