The circular, which replaces Circular 37/2015/TTLT-BYT-BTC jointly issued by the Ministry of Health and Ministry of Finance on October 29, 2015, will become effective on July 15, 2018. It will be applicable for medical facilities, units, organisations and individuals engaging in the process of medical check-up, treatment and payment for insurance-covered medical service costs.

Accordingly, the price structure of medical services will be kept unchanged as stated in Circular 37, comprising direct costs and medical staff’s salary, regular allowance and surgery and procedure allowances.

Meanwhile, the prices of medical check-up and hospital beds will be adjusted along with 1,093 technical and testing services stipulated in Circular 37. The new circular also supplements notifications on and changes the prices of 60 technical services stipulated in Circular 50/2014-TT-BYT.

On October 29, 2015, the Ministry of Health and Ministry of Finance jointly issued Circular 37 on the uniform prices of medical services among hospitals of the same level across the country, which took effect from March 1, 2016.

After two years of implementation, the circular showed many shortcomings, affectingeffecting the implementation of health insurance policies.

The building of economic-technical norms as basis for calculating medical service prices was not based on careful surveys at health care facilities, and the economic-technical norms of many services were not based on the foundation of professional and technical procedures (nearly 70 percent of medical services have neither technical procedure nor economic-technical norms).

At the same time, the prices of many medical services were set too high, out of tune of the service supply capacity of the majority of healthcarehealth care facilities, especially at local level, leading to the fact that medical materials costs submitted for insurance payment by hospitals were much higher than the real costs. For example, the price of ENT endoscopy service was 203,000 VND as stated in Circular 37, but after the re-design of economic-technical norms, the real cost for the service is reduced by half.

The social insurance agency’s inspections showed that in many medical establishments in several localities like Thanh Hoa, Nghe An and Thai Binh, there were differences amounting to tens of billions of Vietnam dong worth of chemicals, medical materials, human resources quota, and duration using health services between the real use in health clinics and pricing norms of the Health Ministry.

Circular No.37 only defined specific prices for nearly 1,000 medical services, while thousands of other services were calculated on an equivalent basis. However, the equivalent conversion was not accurate due to a lack of stipulated professional and technical processes, leading to big differences in costs compared to the reality. In addition, the classification of surgeries and manoeuvres showed several shortcomings (manoeuvres classified as surgeries, or one service classified as both surgery and manoeuvre in the same department), resulting in inaccurate calculation of salaries and specialised allowance in medical service prices.

The incorrect determination of economic-technical norms and the setting of high prices that did not conform with the reality have pushed medical check-up and treatment costs up in an unreasonable manner, reduced the efficiency of the use of the health insurance fund and affected the interests of patients holding health insurance. Signs of the abuse of the health insurance fund for profit have been detected in several medical clinics, and are being investigated by authorised agencies. Moreover, payment at the same price regardless of service quality results in inequality and lack of transparency, thus failing to encourage health clinics to improve the quality of their services.

Prompted by the above mentioned shortcomings, the Vietnam Social Security (VSS) proposed the Health Ministry revise Circular No.37, firstly focusing on medical services with high prices, high frequency of use and having big gaps between set price and actual costs, such as prices of patient beds, health check-ups, several tests, diagnostic imaging, traditional medicine and functional rehabilitation.

However, the new circular No.15 still contains some important contents that have yet to meet economic and technical requirements.

According to the VSS’s point of view, the insurance agency should only pay for expenses of services which are included in economic-technical norms and are actually used for patients during the treatment process, and not pay for expenses that patients do not benefit from despite their inclusion in norms, in order to ensure financial transparency and service quality and patients’ interests.

For medical facilities which have limited health services and do not use up economic-technical norms stipulated for the calculation of medical costs, the insurance agency should only pay for the actual expenses of what patients used during the treatment process.

However, in Circular No. 15, the Ministry of Health stipulates that the insurance agency should pay for medical costs based on the set price of health services (including expenses not used in the actual treatment), rather than based on review and assessment using technical and economic norms, arguing that the norms are only the basis for calculating the prices of medical checkup and treatment services.

This provision is inappropriate because the service prices are determined based on the norms and if the norms are not applied correctly, the service price will not be correct.

One of the outstanding shortcomings of Circular No. 37 is that the economic and technical norms for calculating the price of medical services issued by the Ministry of Health did not suit the reality and the ability to provide services of each hospital group. Those norms were mainly based on survey results in some higher-level hospitals, leading to the fact that the total volume of medical materials based on norms submitted to the insurance agency by many medical facilities was higher than the amount they actual used.

These shortcomings have not been addressed by the Ministry of Health when drafting Circular No. 15. Many technical and economic norms serving as basis for calculating medical services prices have not been properly devised in accordance with the service supply capacity of each hospital group. The problem of hospitals unable to use all medical materials and medicines stipulated by the norms during actual treatment has not been solved.

For example, among medical supplies included in the economic and technical norms, there are still many types with abnormally high unit price. The set prices of medical materials and hospital blankets for calculating the average cost of hospital beds in all hospitals nationwide are based on the prices at central -level hospitals (Viet Duc and Bach Mai hospital.

The prices of some services (such as room lights, pillows and pillowcases) were decided without any reference, while prices for some other services were based on surveys in only two to five healthcare facilities, with big differences in prices of some same products, sometimes of even up to 100 times.

For the price of hospital beds (beds with handles at special class hospitals and first-class hospitals): The Ministry of Health proposed that all beds in special class and first-class hospitals under the ministry use plastic beds with handles priced at 9.8 million VND, which is more than double the price of electric beds NIKITA-85, and about 4 to 6 times higher than the price of stainless steel beds with two handles (from 2.45 - 2.9 million VND). Meanwhile, central and provincial-level hospitals are using stainless steel beds, many emergency cases must use stretchers.

The same situation also goes for other types of equipment such as bed mattress, cabinets, patient chairs, tool cabinets, medicines, and trolleys.

In addition, the economic-technical norms have been developed on the basis of professional and technical processes and procedures, serving as the basis for the calculation of medical service fees and at the same time, they are also among important basis for the medical establishments to perform medical services and ensure the quality of health care services provided for the patients.

Moreover, the building of the norms has yet to take into consideration different groups of hospitals, but is mainly based on the upper average costs, so that many medical establishments would not be able to apply them.

If the insurance agency does not pay medical expenses in accordance with real execution of norms, it will create inequality between medical establishments that deliver good services and those with poor service quality. This, hereby, would not motivate the hospitals to improve their service quality, because regardless of how they perform the norms, they will get payment at the maximum level.

It is essential to replace Circular 37 with a new one to ensure the legitimate rights and interests of those involved, enhance the effectiveness of the management and use of the health insurance fund. It will also ensure the proper use and payment of health insurance and prevent frauds and abuses of the fund.