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MOF halts school, hospital equitization
Joint stock companies will become the modern model for schools’ and hospitals’ operations, however, this is a long term goal and unsuitable to the current situation, the Ministry of Finance has concluded.
The Government and Ministry of Finance (MOF) are determined to make current State-owned hospitals and schools into joint stock companies. MOF once drafted a decree on this issue, which it intended as a legal framework for the equitization of these institutions.
However, they seem to be unsure about this plan now, after the equitization of Binh Dan Hospital and Medical and Pharmaceutical University in HCM City which, on a trial basis, failed completely.
The question raised after the equitisation failure is if Vietnam should continue with its equitization plan for hospitals and schools, public service providers, or keep them State-owned.
Analysts say it is a good idea to turn State-owned hospitals and schools into joint stock companies, because this can help mobilize manpower and financial resources from the public, which can help improve the quality. However, they also say that the process requires thorough research and planning. The pickle is in the fact that hospitals and schools provide services to the public that should, many argue, be available to all; while joint stock companies are profit oriented entities.
The analysts said the equitization of Binh Dan Hospital and Medical and Pharmaceutical University in HCM City failed because people do not want public service agencies (social welfare) to become companies, which operate under the market.
Facing strong public opposition, MOF has decided to delay the equitization of Binh Dan Hospital, though its staff already began selling their rights to buy Binh Dan’s immediately after hearing about the equitization plan.
MOF thinks that hospitals and universities need to be well prepared before equitization. They have to change their operating orientation to that of a business, first, i.e they need to have chartered capital and get earnings by providing services. The Ministry thinks that in the immediate time, hospitals should shift into limited companies or joint ventures, in which the state holds 100% of capital, or call for capital from other partners. The joint stock company form proves to be the modern model for hospitals and schools, but it does not fit into Vietnam’s current situation and shouldn’t be carried out until the time is right.
MOF said it is drafting the Government’s decision on shifting public service agencies to operate as an enterprise (hospitals and schools do not rely on the State budget, but collect service fees to run). The draft is now open to suggestions from relevant Ministries and branches before it is submitted to the Prime Minister in the first quarter of 2008.
Thanhnien
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