Vibrant Investments into Vietnam’s Healthcare

During recent years, a series of new hospitals, which are equipped with modern machines and team of professional doctors, technicians, have been built in big cities in the south like Ho Chi Minh City, Hue, Da Nang, Can Tho. These hospitals have helped raise the science and technology of Vietnam’s health sector to a new height, bringing the country among regional nations which have medical welfare developed widely and deeply to all classes in the society. Generally, the medical network in localities, particularly in remote and mountainous areas has been actually expanded and upgraded. In addition, the Vietnamese Government has also offered fit policies with people’s wishes including those to ethnic minority groups.       

In recent years, many investment projects for healthcare using ODA sources have achieved high effects. Such projects mainly focus on upgrading the medical network and health clinics, developing special medical centers or supporting national health programs. Preventing and putting a check on malaria is among outstanding achievements. Compared to other areas in the entire nation, the malaria epidemic in southern provinces is more prolonged and on larger scale. Dr. Nguyen Manh Hung, Head of a national project for malaria prevention in Central Highlands, Southeastern, Southern Central and the Mekong Delta said this time the project has increased early discovery of malaria parasite by making prompt tests in health clinics in hamlets, villages and obeyed strictly treatment graph. By doing that, the project hopes to reduce the number of infections and fatalities respectively below 0.7 per every 1,000 habitants and 0.03 per every 100,000 habitants this year. It also targets to have no big outbreak, to boost sustainable preventive measures in order to remain the gained achievements. 

 

Recently, the Prime Minister has approved the project of a investment fund for local development with a cost of US$198.7 million and a supplemented expense for health in the coastal southern central region in order to improve the medical system of eight disadvantaged provinces; raise the quality of medical services and local residents’ access to these services. The project will be carried out from now till 2013.    

However, one challenge facing the country in general and southern provinces in particular is the serious shortage of doctors, pharmacists and technicians. Currently, there are only 6.5 doctors for every ten thousand people, much lower than the ratio in developed nations worldwide. In fact, the ratio is extremely low in some southern areas. For example, Dak Nong province has only 4.6 doctors per 10,000 people and Mekong delta area has 2.11 doctors per every 10,000 people. In front the real situation, the Prime Minister has issued Decision No. 1544/QD-TTg on training medical workers for disadvantaged localities, mountainous areas in the north, central, Mekong delta and central highlands. The scheme aims to train more 12,000 medical workers to provide these regions by 2018.   

More investment projects for health sector
Because almost all of foreign investment projects into the health sector are on medium and small scale with specific and practical purposes, these projects have so far showed certain effects. As a result, the investment flow into the sector is relatively plentiful. At the end of 2008, the Vietnam Ministry of Health noted the number of private and FDI-used hospital projects would continue to increase since a series of priority policies for healthcare investment have been promoted and many barriers to private medical activities have been removed after a special priority policy on tax. Businesses operating in the medical field are imposed a enterprise income tax of only 10 per cent for all operational duration instead of 28 per cent like in the past. For newly established enterprises, they will be exempted from tax for maximally four years rather than two years currently and reduced up to 50 per cent of tax for nine next years. Some investment projects to expand or rebuild hospitals will also be given priority loans, which possibly make up 70 per cent of total capital for each project.  

During the past years, the government has offered many policies to encourage and support the health sector’s development. Individuals are encouraged to invest in services with high profits like general hospitals or hi-tech testing services, which is not always available in public hospitals. One event, taking place in the end of 2008, showed the investment into health field is continuing amid the economic crisis: It is the construction of the U.S. international modern hospital with investment of hundreds of million dollars. Singapore investors are also running hi-tech medical project in Ho Chi Minh City. In detail, the Shangri-La Health Care Investment Ltd Co. is promoting the hi-tech medical complex project, which began in late 2007, on an area of 40 hectares in Binh Tan District, costing hundreds of million dollars.     

The health sector also received lots of ODA commitments. Recently, the World Bank (WB) and State Bank of Vietnam have signed a credit deal worth of US$66 million to improve medical services at district level and raise the quality of local health workers in seven northern mountainous provinces, comprising of Bac Kan, Cao Bang, Dien Bien, Lai Chau, Ha Giang, Lao Cai and Son La. In addition, the project also aims to create a health fund for the poor of the seven provinces. Apart from foreign-invested projects having just been promoted, some others involved in trading pharmacy and manufacturing medical devices which have become operational for several years are operating well inspire of the economic downturn. They include Shimadzu Medical Hi-Tech Factory, a Vietnam-Japan joint venture, another joint venture between Vietnam and Japan specialized in producing hand-held medical devices, polyclinic, and international testing surgery.     

Recently, leaders of the ministry of health have held a meeting with important partners like the World Bank (WB), the European Commission (EC), the World Health Organisation (WHO) and the Asian Development Bank (ADB) to discuss milestones in the implementation of health cooperation between the country and the international community. Representatives of the above-mentioned organisations all affirmed the special attention as well as investment inflow on large scale into Vietnam’s health sector. These showed that although being partially impacted by the global financial crisis, through foreign investment projects into the healthcare field for people, the country’s health sector has showed favorable development and positive achievements.