Joint Circular No. 06-TT/LB on the management of expenditures at hospitals based on quotas

JOINT CIRCULAR

On the management of expenditures at hospitals according to norms

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Under our regime, people are the most precious asset, the Party and the State always care for and enhance and protect the health of the people. The State budget allocates an increasing amount of funds each year for the development of healthcare services, serving production, combat, and the daily life of the people.

In recent years, hospital management has made significant progress, contributing positively to serving patients and continuously improving the quality of medical treatment work. However, there are still many shortcomings in the management, allocation, and utilization of State budget funds allocated to hospitals: many hospitals have not carefully considered and calculated their expenditure in line with needs and capabilities; labor, materials, and financial management still have many loopholes and in many cases, do not focus on the main purpose of directly serving patients; in some localities, even the normal operating conditions of hospitals are not guaranteed; the amount of funds allocated to hospitals, averaged per bed, still shows unreasonable disparities between different localities (for hospitals of the same type). These shortcomings have affected the operation and the quality of medical treatment work in many hospitals.

To implement Resolution No. 05-CP dated January 13, 1972 of the Council of Ministers, to strengthen and improve the financial management work, promote comprehensive management in all aspects of hospitals to ensure that hospitals fulfill their tasks with increasingly high-quality work, and based on Decree No. 73-CP dated December 24, 1960 of the Council of Ministers promulgating the regulations on financial management of cultural, educational, health, and social welfare institutions, the Ministry of Health and the Ministry of Finance hereby stipulate and guide the management of expenditures according to norms at hospitals.

I. OBJECTIVES, REQUIREMENTS, PRINCIPLES, AND CONTENT OF EXPENDITURE NORMS FOR HOSPITALS

1. Expenditure norms for hospitals aim to encourage the responsibility and initiative of hospitals, promote the most rational use of labor, materials, and finance; on this basis, ensure operational conditions for hospitals suitable to our economic circumstances and with increasingly high-quality work. Expenditure norms serve as a foundation for planning work at hospitals and a basis for allocating State budget funds, implementing supervision and control over financial management, and managing other performance indicators at hospitals.

2. The scope of expenditure norms for hospitals under this system includes all regular and common expenses of hospitals:

- Salaries and allowances for staff working at hospitals;

- Administrative and management expenses of hospitals;

- Expenses for patient treatment work.

While awaiting the Ministries to study and issue separate management regulations for outpatient clinics, all expenses for outpatient clinics will temporarily be included in the hospital's expenditure norms.

The following two items will be allocated outside the expenditure norms by the financial authority:

a) Expenses for medicines for patients belonging to the category entitled to free medicine at outpatient clinics affiliated with hospitals;

b) Daily food expenses for inpatients entitled to State budget support for this expense according to current policies, regulations, and standards.

3. The following non-regular expenses will not be included in the hospital's expenditure norms:

- Purchasing equipment and large-value furniture and supplies for administrative and management purposes;

- Major repairs (buildings, equipment) and small-scale construction;

- Basic investment;

- Scientific research projects assigned by the State.

4. The State assigns a combined expenditure norm averaged per bed used annually (340 days) for each type of hospital. Hospitals are classified according to their functions, tasks (treatment level), area of operation, and organizational and technical level of each hospital.

For hospitals under the Ministry of Health, the combined expenditure norm per bed/year for each type of hospital is assigned to the Ministry of Health. For hospitals under other Ministries, the aforementioned combined expenditure norm is assigned to the respective supervising Ministries.

For provincial hospitals, the State assigns two expenditure norms for each type of hospital along each level to both ensure reasonable minimum requirements for the operation of each type of hospital and maintain reasonable relationships among hospitals in different localities.

5. The combined expenditure norm per bed/year applicable to each type of hospital during each period will be issued by the Ministry of Health and the Ministry of Finance through a separate decision.

These expenditure norms serve as the basis for annual State budget fund allocation, inspection, and financial management. When conditions change and it is necessary and feasible to modify the norms, the Ministries will decide accordingly.

6. Each hospital is assigned a combined expenditure norm averaged per bed used annually (340 days). At the end of the year, if expenditures are below the norm due to improved management and rational use of labor and materials while still fulfilling tasks in terms of quantity and quality, hospital directors have the right to transfer the surplus funds to the next year to increase funding aimed at continuously improving service quality for patients.

If there is a surplus due to failing to meet bed usage targets or reduced functional tasks, the hospital must return to the State budget the corresponding portion of funds for medical operations and administrative management.

If a hospital exceeds its bed usage targets and daily bed capacity, additional funds provided to the hospital will correspond to the excess tasks performed.

7. For non-budgeted expenditures such as annual large-scale repairs and asset purchases at hospitals, health authorities (Ministry, Department, Bureau) shall base their requests on actual needs, the State's capacity to provide equipment and materials, and budgetary capabilities, consulting with financial authorities at the same level to propose necessary funds. After approval by the competent authority, these funds will be allocated to the health authorities for centralized management and discretionary distribution to address the specific needs of each hospital in a focused manner.

The Ministry of Health will study and issue standards for equipping, repairing, and maintaining hospitals, and together with the Ministry of Finance, guide the planning and utilization of annual funds.

Expenditures within the scope of basic investment shall continue to follow the current State regulations.

Expenditures for scientific research projects assigned by the State shall be governed by the provisions set forth in Circular No. 898-TT/LB dated August 24, 1971, issued jointly by the State Science and Technology Commission, the State Planning Commission, and the Ministry of Finance.

Regarding drug expenditures for recipients under current State policies and regulations at clinics affiliated with hospitals, separate joint circulars from relevant ministries will provide guidance.

II. TASKS OF SECTORS AND LEVELS IN MANAGING EXPENDITURES AT HOSPITALS UNDER BUDGETED LIMITS

1. Based on the average annual bed expenditure standard established for central-level hospitals, the Ministry of Health shall determine the average annual bed expenditure for each specific hospital under its jurisdiction.

2. Based on the average annual bed expenditure standards set for hospitals at levels IV (provincial and centrally-administered municipalities) and III (districts, wards, towns, centrally-administered cities within provinces), the provincial or centrally-administered municipal administrative committees, upon proposal by the Health Departments or Bureaus and with the participation of the Financial Departments or Bureaus, shall establish the average annual bed expenditure for hospitals at levels IV and III under local jurisdiction. The Health Departments or Bureaus shall allocate the average annual bed expenditure to each specific hospital under local jurisdiction.

3. Hospital directors, based on the allocated average annual bed expenditure, shall prepare the annual budget for their hospital according to the State's budget classification and must ensure:

- Compliance with national plan indicators (bed capacity, staffing and salary fund, number of bed days used, number of beds/day treated);

- Adherence to current national policies, systems, and standards, particularly those concerning medical examinations and treatments for war invalids, veterans, families of martyrs, etc.;

- Ensuring a reasonable proportion of expenditures dedicated to directly serving patients within the total expenditure limit.

Hospital directors are responsible for setting expenditure limits for each specific item to ensure compliance with the average annual bed expenditure and the proportion of expenditures dedicated to direct patient service, as well as the annual budget estimate.

Within the framework of the average annual bed expenditure limit and the proportion of expenditures dedicated to direct patient service, and based on current national policies and standards, hospital directors have the authority to decide all hospital expenditures.

At the end of each quarter and annually, hospital directors shall organize reviews and draw lessons from hospital management, compare actual expenditures with the budgeted limits, promptly disseminate innovative management improvements, appropriately reward units and individuals with achievements, analyze unreasonable expenditure phenomena, develop plans and measures to improve management work, and ensure compliance with approved budget limits.

Financial authorities at all levels are responsible for allocating funds in a timely and adequate manner based on the established expenditure limits and informing the hospitals accordingly.

The funds for the social relief fund previously allocated to hospitals need to be recalculated accurately, distributed promptly, and ensured to be used for the intended purposes as prescribed.

Financial agencies need to work closely with health agencies, follow guidelines, assist, and inspect hospitals to improve and strengthen management, utilize labor, materials, and finances effectively, ensuring the completion of tasks with increasingly high quality.

III. IMPLEMENTATION PROVISIONS

The expenditure management system according to the quota mentioned in this circular shall take effect from January 1, 1972, and apply to all treatment and rehabilitation facilities at the district level and above, confirmed by the Ministry of Health (for facilities directly managed by the Ministry of Health as well as those under other central ministries) or by the provincial or centrally-administered municipal administrative committees (for facilities under local administration), based on standards set by the Ministry of Health and including:

- General and specialized hospitals;

- Research institutes with hospital beds;

- Rehabilitation houses.

For hospitals under other central ministries, it is recommended that each ministry study and propose specific expenditure levels for their respective hospitals based on this circular. The Ministry of Health will discuss with the Ministry of Finance to review and approve specific expenditure levels and guide the implementation of these regulations for hospitals under each ministry.

Effective expenditure management according to quotas will create additional operational conditions for hospitals, especially at the provincial and particularly at the district level. To truly enhance the effectiveness of this expenditure management system, hospital directors must ensure that all staff fully understand the purpose and significance of this new management system and develop concrete plans and measures to continuously improve operations to use state labor, materials, and capital most efficiently, promptly identify and contribute to preventing unreasonable or non-compliant financial expenditures; they must closely monitor and organize comprehensive and accurate accounting in accordance with the State Budget ledger for all hospital expenditures: it is necessary to strengthen and improve the quality of the hospital's accounting and finance department to ensure the fulfillment of assigned tasks.

In implementing expenditure management according to quotas, if hospitals encounter difficulties such as excess staffing not yet resolved... health agencies and financial agencies should consider these issues specifically and resolve them appropriately based on current state policies; if these issues fall within the jurisdiction of provincial or centrally-administered municipal administrative committees or inter-ministries, they must jointly submit requests to these bodies for resolution.

The issue of hospital expenditure management according to quotas is a new and complex matter; inter-ministries recommend that provincial and centrally-administered municipal administrative committees and ministries with affiliated hospitals promptly report results, experiences, and issues requiring further research and resolution to inter-ministries.

In implementing expenditure management according to quotas, if hospitals encounter difficulties such as excess staffing not yet resolved... health agencies and financial agencies should consider these issues specifically and resolve them appropriately based on current state policies; if these issues fall within the jurisdiction of provincial or centrally-administered municipal administrative committees or inter-ministries, they must jointly submit requests to these bodies for resolution.

The issue of hospital expenditure management according to quotas is a new and complex matter; inter-ministries recommend that provincial and centrally-administered municipal administrative committees and ministries with affiliated hospitals promptly report results, experiences, and issues requiring further research and resolution to inter-ministries.