Industry Development Orientation and Public Investment Capital Needs to Meet the Development of the Healthcare Industry in the 2022

specific conditions of the project, ensuring the implementation of investment objectives, and project efficiency have been approved " for projects without construction components [28]. Thus, regardless of the scale of the DTC project, if it has a construction component, it is necessary to comply with the provisions of the law on construction investment.

Since October 16, 2018, the Ministry of Health has issued Decision No. 6226/QD-BYT on Regulations on management of investment projects in construction of works and medical equipment under the approval authority of the Minister of Health, still including " Investment projects using capital sources from group C and below and investment projects to renovate, repair and upgrade works using public capital sources of an investment nature ;" [19], for beneficiary units to be project investors, which lacks legal basis. The inevitable consequence is that the health sector's investment capital is dispersed, the actual capacity of the Investment Project Management Boards at affiliated units does not meet the requirements of investment capital management in the new conditions, wasting human resources in all aspects, and inevitably the efficiency of investment capital management for health is poor. There is a major change in the organizational model of the Project Management Board, so the units are still confused in project implementation. The newly established Medical Service Management Board must still perfect its organizational structure and operational capacity to meet the tasks assigned by the Ministry of Health. Allowing investors to be medical service units under the Ministry to sign project management contracts with the Medical Service Management Board, but because there are no specific instructions on project management contracts, it is difficult to assign tasks between investors and the Medical Service Management Board. At the same time, in some projects, investors have submitted to the Ministry of Health for approval of non-industry entrusting units such as the specialized project management boards of the Ministry of Construction, the Ministry of Justice, etc., which is illegal. For these units, they are performing non-industry project management consulting services, so the contract must be signed through bidding, not by being assigned tasks by the Ministry of Health as the specialized project management board of the Ministry of Health is a unit under the Ministry of Health.

Second, the basis for making medium-term and annual capital investment plans

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incomplete and difficult to estimate. As presented in section 2.2.2, the planning of capital investment at the Ministry of Health in the medium term and annually depends largely on the estimated cost of medical equipment installed together with the volume of construction and installation; because the value of these equipment often accounts for a high proportion of the total capital investment for each project in the health sector. Unfortunately, up to now, there is still no standard cost of machinery and equipment prescribed by competent state agencies in the system of legal documents on management of capital investment for health. Therefore, investors do not know where to base their estimates and explanations for this expenditure on machinery and equipment. Investors must report to the Department of Medical Equipment and Construction for comments. Therefore, before the law, investors cannot defend their views on the content of investment in purchasing machinery and equipment for use.

The basis for planning the medium-term and annual capital investment of the Ministry of Health is still difficult to estimate; because the progress of compensation and site clearance is often prolonged. The time to complete compensation and site clearance work often lasts from 2 to 3 years or more. For example, the project to build Can Tho University of Medicine and Pharmacy, Tan Trieu K Hospital took from 5 to 7 years, because the unit price of land compensation and construction on the land was not close to the market, the resettlement housing fund for households that had to be relocated was still lacking, or not ready to meet the demand.

Third, the investment preparation time from the time of investment policy to the commencement of construction is often prolonged; especially for large-scale projects with complex techniques. The work of examining, appraising, and approving the design and construction estimates of construction investment projects implemented under the form of EPC, EP, EC contracts is still confusing because the regulations on examining, appraising, and approving design and construction estimates are not suitable for the nature of these contracts. There are no regulations on the content, level of design detail, and bid package estimates of projects implemented under the form of EPC, EP, EC contracts. Therefore, it affects the progress of examining, appraising design and construction estimates such as the project of Bach Mai Hospital Facility 2 and the facility

2 Viet Duc Hospitals in Ha Nam.

The procedures, management authority, project appraisal, and basic design of ODA-funded projects are unclear, causing difficulties for investors and project management boards during the appraisal process. This is clearly shown in the implementation of the Hanoi University of Pharmacy construction project funded by Korean ODA capital and the Cho Ray Vietnam-Japan Friendship Hospital construction project funded by Japanese ODA capital, both of which took a long time due to having to do it over and over again.

Fourth, in the 2016 - 2020 period, the State budget faced numerous difficulties and challenges, so it had to tighten spending. 2019 is the fourth year of the medium-term investment plan, but the State budget has only been able to allocate about 60% of the investment plan capital approved by the National Assembly for the health sector. At the same time, the requirement to retain 10% of the total approved capital also makes it take health sector investors a lot of time to readjust the cost items of the investment project. Typically, the investment project of Bach Mai Hospital 2 and Viet Duc Hospital 2 in Ha Nam has been approved for a total investment of nearly 5,000 billion VND/project, but the State budget only ensures 4,500 billion VND/project, and currently there is only a plan to allocate capital of 4,050 billion VND/project (one time saving and one time 10% reserve). Therefore, the YTTĐ Project Management Board had to spend a lot of time and effort to research, balance, review, and adjust design solutions and material usage solutions to suit the allocated financial resources. As a result, investors had to renegotiate with contractors to adjust or re-sign procurement contracts according to the total investment after deducting contingencies and mandatory savings. This is an extremely arduous activity that investors of DTC projects - in general, and the health sector - in particular, had to carry out in the medium-term period of 2016 - 2020.

Fifth, acceptance and handover of works into use is always considered a common weakness in the management of investment projects in the health sector. This phenomenon arises because medical facilities in general and medical examination and treatment facilities in particular

Central hospitals in particular are always overloaded, the need to put the project into use is very high. Therefore, many projects have not met the standards for completion and handover according to construction technical standards, but the investors have also requested the contractor to hand over parts (maybe some rooms, or some floors, ...) to put into operation immediately to meet the urgent need for use. However, the law on construction investment does not have regulations or guidelines for accepting and putting the project into use in parts in this way, so investors are also concerned.

Sixth, the heads of the investment units are often hospital leaders who are busy with medical professional work, so they lack construction investment expertise and do not regularly inspect and evaluate the activities of the Construction Investment Project Management Board to promptly detect and handle actual shortcomings arising in investment management taking place at the unit; the responsibility in preparing, approving, and submitting for approval the final settlement of completed projects and annual settlements has not been promoted. The evidence is that most heads of investment units are not confident enough to explain the cost items that make up the value of completed construction volume; or explain the actual changes that have occurred during the project investment process at the unit. In particular, when facing inspectors or the State Audit, the heads of investment units are even more confused.

The process of appraising and synthesizing the final project settlement and annual settlement at the functional agencies under the Ministry is still heavily formalistic in order to promptly cope with the time requirement for preparation and submission to the functional Ministries and the Government Office according to the provisions of law. This phenomenon has "suggested" to investors ways to easily and quickly bypass the strict final settlement appraisal of the superior agencies and created a bad precedent of always being late in submitting the financial statements. While there are no sanctions strong enough to deter, this bad precedent continues to occur in the final project settlement and annual settlement of the health sector. However, it must also be frankly admitted that the activities

Inspections and audits to rectify the inertia in preparing and sending financial statements of superior agencies to investors are not regular and are handled in a formal manner.

Seventh, the capacity of each individual involved in managing the Ministry of Health's public investment capital is still limited. This is the most fundamental and overarching reason; because all issues in managing public investment capital for health care are ultimately determined by the human factor.

First of all, the capacity of the workforce at the Project Management Boards: Nominally, those who have been selected to work at these Boards all meet the requirements of the employer; but in the process of implementing the task, most of them are very passive, doing whatever they are told, and have a poor grasp of the legal regulations related to investment in construction. Therefore, when performing the task of supervising consulting contractors or construction contractors, they are not confident enough. However, it is not easy for the Director of the Project Management Board to consider dismissal or transfer to other positions. From that situation, the Project Management Boards mainly focus on resolving investment procedures to implement the capital plan assigned for the year, not paying due attention to their responsibilities in managing all project investment activities; including management and use of investment capital.

Next, the capacity of the functional agencies under the Ministry: There are 2 functional Departments advising the Minister of Health on the management of public investment and public investment capital, which are the Department of Planning and Finance, and the Department of Medical Equipment and Construction. Each of these Departments has been issued a decision by the Minister of Health to stipulate the functions, tasks and organizational structure to perform those functions and tasks in each specific period. In fact, the Departments have also effectively advised the Minister of Health on the management of public investment capital of the sector in recent years and have made significant contributions to the process of building facilities for central-level medical facilities to gradually modernize. But what investors most desire are regulations on the definition of public investment capital.

The level of investment in medical equipment in terms of quantity, type and value of each type as a basis for establishing a medium-term and annual capital investment plan; unfortunately, there is still no such plan. This factor has pushed investors into a situation where they have to roughly establish an estimate of medical equipment expenditure, and often the entire package of expected equipment value to be installed along with the completed construction volume. Meanwhile, the value of equipment is always an expense that accounts for a large proportion of the total investment of medical projects. Therefore, before the State Treasury and competent agencies for inspection, examination and audit of completed project settlement, investors also find it difficult to explain the legality of the equipment expenditure requested for settlement approval.

CONCLUSION OF CHAPTER 2

With the goal of analyzing and evaluating the current status of capital management at the Ministry of Health, it must be linked to the specific management environment. Chapter 2 of the thesis presents the following issues:

Firstly , an overview of the functions, tasks, and organizational structure of the Ministry of Health to obtain basic information about the management entity holding the position of the central-level agency in charge of public investment capital. The legal basis for the Ministry of Health to decentralize management and implement public investment capital management according to the process: establishment, implementation, and settlement of public investment capital has also been described in the first part of this chapter. Through this, it aims to provide additional basis for comparison and assessment of compliance in public investment capital management at the Ministry of Health in recent years.

Second , the current status of public investment capital management at the Ministry of Health is analyzed and evaluated from two perspectives: management decentralization and capital management process. In which, the public investment capital management process for health care at the Ministry of Health is analyzed and evaluated according to three stages: (i) planning public investment capital; (ii) implementing public investment capital plan; and (iii) monitoring, evaluating, auditing, and settling public investment capital at the Ministry of Health.

Third , the thesis has summarized the entire assessment of the current situation of public investment capital management at the Ministry of Health in the period of 2016-2020 according to 07 achievements, 06 limitations and clearly pointed out the causes leading to those limitations. Through that, it helps readers easily identify the practice of public investment capital management at the Ministry of Health in the period of 2016-2020 in a more intuitive and logical way.

The analysis and evaluation of the current status of public investment capital management at the Ministry of Health in the period of 2016-2020 will become a valid practical basis for the thesis to propose solutions to improve public investment capital management at this Ministry in the new conditions.

Chapter 3

IMPROVING PUBLIC INVESTMENT CAPITAL MANAGEMENT AT THE MINISTRY OF HEALTH

PERIOD 2022 – 2025, VISION TO 2030

3.1. ORIENTATION FOR INDUSTRY DEVELOPMENT AND PUBLIC INVESTMENT CAPITAL NEEDS TO MEET THE DEVELOPMENT OF THE HEALTHCARE INDUSTRY IN THE PERIOD 2022 - 2025, WITH A VISION TO 2030

3.1.1. Orientation for health sector development in the period 2022 - 2025, vision to 2030

Recognizing the importance of people's health in the process of national construction and development, the Communist Party of Vietnam always affirms: " Protecting, caring for and improving health is the duty and responsibility of every citizen, of the entire political system and the whole society, requiring the active participation of Party committees, authorities, the Fatherland Front and organizations, sectors, in which the health sector is the core " [3].

However, to continuously improve the ability to care for and protect people's health, it is necessary to have strong enough financial resources to invest in input factors; especially modern medical facilities to serve medical examination and treatment. While the state's financial resources are limited, when considering prioritizing budget allocation for health, there may still be many conflicting opinions. At the 6th Conference of the Central Executive Committee of the 12th Communist Party of Vietnam, the viewpoint was officially affirmed: " Investing in protecting, caring for and improving people's health is investing in development. The state prioritizes budget investment and has mechanisms and policies to mobilize and effectively use resources to protect, care for and improve people's health " [3].

On that basis, the Communist Party of Vietnam also set a common goal for health care for people in the period of 2021 - 2025 and orientation to 2030 as follows:

Industry Development Orientation and Public Investment Capital Needs to Meet the Development of the Healthcare Industry in the 2022 - 2025 Period, Vision to 2030

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