MOIT VIETNAM | Change payment method: To control health insurance costs effectively

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Change payment method: To control health insurance costs effectively

2nd October 2020 post by MOIT Vietnam

After Yen Bai, Vietnam Social Insurance (Social Insurance) and the Ministry of Health continued to hold a training conference on methods of paying medical expenses covered by health insurance (medical check-up and treatment by Health Insurance) by capitation and by diagnosis relevant group (DRG).

Vietnam Social Security - said that the renewal of the method of paying health care costs under health insurance by capitation and diagnostic relevant group (DRG) is to reduce problems in paying medical costs of health insurance insurance nowaday to  limit the negative impacts on the health care fund under health insurance when implement the provincial level of inpatient health care coverage nationwide by 2021 in accordance with the Law on Health Insurance.

Accordingly, the health insurance fund of each province and city will be allocated annually and assigned to each health facility. Outpatient care costs will be allocated by cappitation which is calculated based on the following factors: Rate of basic one-time medical care in the province, the number of patients using the health insurance card, the frequency of insured medical services and the ratio of the fund delivery. .. The cost of inpatient care will be applied according to the DRG with a flat rate divided by disease group and condition.


The capitation method of paying the medical service costs under health insurance is applicable basing on the background of outpatient with health insurance; patients with medical services covered by outpatient health insurance at district-level or lower facilities and those with primary health insurance at provincial and central health facilities. The DRG-based payment method of curative care costs is applicable to facilities with inpatient health insurance coverage at district, provincial and central levels; Medical patients with inpatient health insurance at all facilities which are applied according to the DRG payment method.


Both of these payment methods are specified in the Law on Health Insurance (payment by service price, by capitation and by case of illness). However, Vietnam is still mainly paying by FFS (FFS). Meanwhile, researches have shown that this payment method is showing many shortcomings in reality, moreover, it is difficult to control costs, especially in the context of hospitals implementing autonomous and the roadmap policy that is specified in the Law on Health Insurance.

Under the FFS approach, the share providers receive increases with the resources input to the patient, the more services are, the higher the revenue is. However, when hospital revenue is tied to the number of services, the system can create an incentive to oversupply of services and drugs or increase treatment days ect. easily that lead to the risk of receipt and payment imbalance of Health insurance fund ...

It is known that the capitation method of payment for medical care costs covered by health insurance for outpatient care has been developed by the Ministry of Health in collaboration with the Vietnam Social Insurance Agency based on practical experience implemented from 2009-2015 in medical facilities of district level. It is adjusted to be suitable with the current reality. At the same time, the Ministry of Health and Social Insurance of Vietnam has studied the Thai model to build a method of paying for medical care costs according to DRG recently - specifying the rate of payment per case of inpatient treatment ( Inhospitalization contracting).

Deputy General Director of Vietnam Social Insurance Pham Luong Son - emphasized that the renewal of medical care payment method under health insurance has become a strategic goal in the implementation of health insurance policies in Vietnam to help to ensure harmonious benefits such as organizing the implementation of an effective health insurance policy. Capitation of health service payments for insured patients on outpatient care and DRG for inpatient care will contribute to improve the effectiveness of people in controlling medical costs of health insurance and out-of-pocket expenses.

Deputy Minister of Health Nguyen Truong Son - said that the capitation and DRG payment method of medical examination and treatment expenses is identified as one of the solutions to ensure the humanity of health insurance; At the same time, it can solve the problem of health facilities oversupply of services that cause excess and failure of health insurance funds. This is also the driving force for health facilities to strengthen comprehensive autonomy, change service delivery behaviors, use resources effectively, improve the quality of medical services at lower levels and limit overcrowding for upline