The impact of government free health insurance for children in Vietnam

1. The impact of government free health insurance for children in Vietnam Ha Nguyen, Ph.D. Abt Associates Inc. Montreux November 16, 2010

2. Background • Widespread adoption and expansion of social health insurance in many developing countries. • Growing body of literature evaluating impact of health insurance on service utilization, out-of-pocket expenditure, and other outcomes. • Limited evidence on insurance’s impact specifically among small children.

3. Rationale for assessing insurance’s effects among children • Children are among vulnerable groups. • Investing in children is likely to bring about positive externality and long term impact. • want to see tax payer’s money benefit children • Children may have different (cross) price elasticity and preferences. • want to design programs appropriately to respond to children’s need and preferences

4. Objectives • To evaluate the Vietnamese government’s Policy on Free Care for Children under 6 on: • Health service utilization • OOP expenditure • Intermediate health status

5. The Free Care for Children under 6 Policy (FCCU6) • Adopted according to 2004 Law on Protection, Care, and Education of Children, became effective in 2005. • Covers all services in the public sector (generic drugs approved by Ministry of Health). • Requires adherence to official referral system for full reimbursement. • Covered 11% of population (22% of the insured) and accounted for 9% of government budget for health in 2005.

6. Difference-in-differences design using Vietnam Living Standard Surveys pseudo panel: 2004: 2990 observations 2006: 2505 observations Outcomes: In- and out-patient care OOP expenditure Catastrophic OOP payment (>20% non-food consumption) Number of sick days Covariates: Child characteristics Household SES Exclude children from poor households (already eligible for a different program) The impact evaluation study

7. Sample description: Insurance coverage by type and age group

8. Results 1. FCCU6’s effect on service utilization among age group 0 - 3 ** p<0.05; *** p<0.01

9. Results 2. FCCU6’s effect on service utilization among age group 4 - 5 * p<0.10; ** p<0.05; *** p<0.01

10. Results 3. FCCU6’s effect on OOP expenditure and number of sick days *p<0.10; ** p<0.05; *** p<0.01

11. Main conclusions • FCCU6 has not resulted in consistent increase in service utilization of all public services. • Rather, there was a substitution between different levels of public providers (from commune clinic to hospital; from tertiary to secondary hospital). • No significant effect on the use of private services. • Reduction in OOP payment, incidence of high payment, and number of sick days were experienced among older children (ages 4-5).

12. Notes on study findings • Small number of observation limits the ability to detect statistically significant results. • Impact is measured one year into implementation, so may not have been fully materialized. • Impact is measured among children from households not eligible for Insurance for the Poor program, i.e., not the most disadvantaged population.

13. Implications • Insurance may not necessarily lead to increase in overall volume of service, but to better quality service. • Insurance can improve efficiency by strengthening referral system. • Insurance can bring about positive externality by saving days parents take care of sick children. • Government insurance program should be responsive to children’s preference for private services. • Improving quality of care in the commune clinics will help reducing time and monetary cost of travel for care givers.

14. Thank you