Vietnam thirsts for high-profile PPP projects in health sector
By Do Thanh Nhan
September 05, 2017 | 06:47 AM GMT+7
Hospitals are overloaded, a series of infuriating cases related to medical ethics have been disclosed while public-private partnership (PPP) investors who socialize hospitals are tiredly waiting for the state to impose appropriate policies.
Phuc An Khang hospital in District 2, Ho Chi Minh city was closed in April 2017 after 2 years of operation.
There are still limited PPP projects in the health sector in Vietnam while the state has strived to invite PPP investors like imposing such incentive policies as the land rental and business income tax exemption.
Even though it is undeniable that PPP projects in health care bring to low investment efficiency, the main cause for the shortage of those projects in Vietnam mostly comes from interest groups.
Firstly, investors who pay 100% of the capital have to share at least 30% profit with the state who is the administrative department of the hospitals in this case. The figure can be up to 45% or even 55%, making it impossible for investors to recover the capital and maintain the control over the project in the future.
Secondly, if the PPP projects are developed, the patients can take the advantages the most but they have no right to make the decision.
Besides, the interest group coming from hospitals and Department of Health Services would lose a significant amount of income; therefore, it is normal to see them showing no interest to PPP investment.
Problem related to investment policies
While investors have to compete to get the PPP traffic projects, the red carpet is rolled out for the PPP investors in the health sector. However, investors start to face problems when pouring their money into the projects.
A lot of hospital infrastructure PPP projects which were potential and carefully planned were stopped as they said it was unaffordable for investors to continue. Some hospitals are overloaded and patients have to share their beds with others regularly, with the bed occupancy rate being 180% in 2016 and being predicted to reach 250% in 2018 but the PPP projects are still impossible. The reasons given are that the overload is necessary for hospitals to gain other amounts of income and investors meanwhile could not accept the unreasonable ratio of capital contribution.
There are still too many problems in the health care area which would be effectively alleviated by PPP projects. However, the efficiency of such projects seems so far to be reached if the government act more drastically against interest groups who seriously undermine the PPP projects in particular and health care services in general.
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