The current health care system is a legacy of Vietnam's traditional medical system based on autonomous villages and strong local forces. In addition, it has been shaped through the French colonial rule, which established a variety of national French institutes and hospitals between 1860 and 1945. In the 1950s and 1960s, the Vietnamese Communist government installed a wide-spread network of Commune Health Centres (CHCs) and village workers. During the 1970s, the Communist government tried to extend the primary health care system to the South.

In general, the four tier health system (central, provincial, district and communal) has enhanced the availability of health care throughout the whole country. However, the long period of war against France and the United States and the loss of financial aid from China and the Soviet Union led to severe financial constraints on the health care system (see also chapter 3). Education and training of health staff was neglected. Health care services thus were neither evenly distributed nor of comparable quality in the late 1970s.

Since the 1980s, the health care system has continuously deteriorated. At the end of the 1980s, Vietnam reacted to the crisis with a series of political measures to increase the financial means in the health care system. In 1989, user fees were officially introduced. At this point, many nurses and doctors had already left the public system or received additional payment from private patients. The public health care system since then has been privatized and decentralized slowly from within. Many private revenues and expenditures therefore remain undetected. This makes both budgeting and better targeting enormously difficult.

The direct expenditures by the Ministry of Health (MOH) represent only six per cent of all expenditures in the health care system. Furthermore, it is quite unclear according to which principles the few resources are allocated to provinces, districts and communes.