Coping with Health Care Expenses Among Poor Households in Dai Dong, a Rural Commune of Hanoi Vietnam

Abstract:     
Context: With the 'Doi Moi' economic reforms in the 1980s, Vietnam transitioned from centralized, state-funded health care to an effectively privatized user fee system. This resulted in sanctioning user fees in public health facilities and an increase in private facilities and led to out- of-pocket payments constituting the vast proportion of health care expenditures.

Objective: To determine the coping strategies used by ill residents of Dai Dong, a rural commune of Hanoi, Vietnam, in paying health care costs and show the effects of user fees on economic and health stability.

Design, Setting and Participants: A 2008 survey of 706 households (166 poor; 184 near-poor; 356 others), containing 2697 household members, in Dai Dong, Vietnam.

Main Outcome Measures: Reported inpatient, outpatient, and self health care treatment, out-of-pocket expenditures, and funding sources (income, savings, funds from relatives and friends, loans, food consumption) for health care costs.

Results: While similar proportions of poor, near-poor and other households borrowed to pay for inpatient treatments, a much higher proportion of poor (44%) than other households (24%) borrowed again to repay these loans. Other households repaid loans with current income at a higher level (53%) than poor households (20%). Borrowing funded more outpatient treatments for poor and near-poor households (20% and 24%, respectively) than for other households (12%). Compared to low-cost inpatient treatments, extremely high-cost treatments were more likely to be funded by loans for households of all poverty levels (OR = 17.62 for poor, 144.75 for near-poor, and 10.98 for other households). For extremely high-cost outpatient treatment, there was greater likelihood of loans among poor and near-poor households (OR=5.04; OR=5.16) than other households (OR=3.70). Extremely high self-treatment costs were more likely to be funded by loans for all households, with the poor having the highest increased likelihood (OR=3.13). The likelihood of reducing food consumption to pay for extremely high-cost treatments, compared to low-cost treatments, increased most for poor in both inpatient (OR=44.12) and outpatient treatment (OR=3.90).

Conclusion: Decreased state funding for health care, increased absolute health costs, and user fees have posed substantial challenges for Dai Dong’s rural population. A greater proportion of poor households pay for health care by taking out loans, reducing food expenditures, and borrowing again to repay loans, particularly when faced with high treatment costs. Future reforms should focus on preventing detrimental coping strategies among at-risk populations.

Keywords: Vietnam, rural, healthcare expenditures, out-of-pocket fees, coping strategies, Hanoi, Dai Dong

JEL Classifications: I11, I18

Working Paper Series