Expanding Markets While Improving Health In Indonesia: Private Health Sector Market in the JKN Era

Indonesia’s private health sector has seen robust growth over the last decade, in alignment with the overall Indonesian economy. Indonesia’s economy hasperformed well and is expected to continue to grow at around 5 percent per year to 2020 (International Monetary Bank, 2017). Industries, including healthcare, have benefited from robust domestic demand. As the middle class has grown, demand for health services has also increased. With a growing and young population, social investments to generate a productive workforce can have multiplicative effects on economic growth.

Indonesia’s national health insurance scheme, JKN, supports the government’scommitment to ensuring a healthy population. Law 24 of 2011 established the national health insurance agency (BPJS-K), and JKN, rolled out in January 2014, covered approximately 75 percent of the population by April 2018. With the goal of covering 95 percent of the population by January 2019, JKN is rapidly increasing access to and demand for health services, especially for the poor and the near-poor (defined as the bottom 40 percent of the population by income).

The Government of Indonesia embarked on a comprehensive assessment ofJKN’s impact to assess the scheme’s achievements and areas that needstrengthening. Coordinated by the National Team for the Acceleration of Poverty Reduction (TNP2K) with support from the U.S. Agency for International Development (USAID)-funded Health Policy Plus project (HP+), this study assessed the scheme through four key perspectives: payer, patient, provider, and private sector. It aimed to understand thescheme’s value for money given other demands on government spending. The evidence generated should inform policymakers to refine, put in place, or remove policies so that the scheme can achieve universal coverage by 2019 while ensuring the scheme’s sustainabilityand improved access to healthcare for the population, especially the bottom 40 percent.

Responding to the growing healthcare needs of the population will require strong partnership between the government and the private health sector. BPJS- K has contracted with private hospitals and clinics since scheme initiation, and as of September 2017, 1,335 private hospitals (approximately 78 percent of private hospitals registered with the Ministry of Health) (Ministry of Health Database, N.D.) were offering health services through the scheme, making up 60 percent of all contracted hospitals (Idris, 2017). The Indonesian health system relies on private manufacturers and importers for essential drugs and medical devices. The significant increase in the population with ability to pay through a national health insurance scheme is a business opportunity. Prior to JKN, civil servants and formal sector employees had government-run insurance schemes that provided them access to health services through a limited set of private providers. JKN brought the poor and near-poor into the market, providing them with a benefit package equal to those previously only offered to the formal sector. The Government of Indonesia has invested heavily in JKN to improve health outcomes and provide financial protection for its citizens. Furthermore, it hoped the scheme would motivate health sector growth with additional employment opportunities and lead to a healthier workforce and a more productive economy. Various policies have been put in place to incentivize the private health sector market.

This report assesses whether the Government’s intentions are being fulfilled through its current policies. Are the health facility gaps being filled through the private sector, and is the presence of a large single-payer program crowding private investment? Has the monopsonistic nature of BPJS-K and the concentration of purchasing power negatively affected the health sector? To assess the impact of JKN on the private sector, HP+/TNP2K posed the following three key research questions:

  •   What has been the impact of JKN on providers?
  •   Are the reimbursement processes (rates, performance adjustments, mechanism)attractive and fair for providers?
  •   Has the total market for healthcare in Indonesia increased choice and competition due to JKN?

This report focuses primarily on how the total market for healthcare has shifted due to JKN. To answer the first two research questions, HP+/TNP2K conducted a private hospital survey. The survey captured changes in services from 2013 (pre-JKN initiation) to 2016 (post-JKN initiation), such as patient volume, services offered, and human resources. Furthermore, it illuminated the private hospital sector’s perspectives on how thereimbursement rates are influencing services provision. These insights are primarily captured in the Private Hospital Survey Report. Looking beyond the healthcare providers, the third research question focuses on how the total market has changed due to JKN, and whether that has increased choice and competition and has motivated improvement in healthcare quality, patient experience, and cost containment.

This study focused on the healthcare providers, pharmaceutical manufacturers, and medical device manufacturers. Understanding that the private health sector market is composed of a variety of players beyond these three, such as diagnostic service providers, importers and distributors, and medical training institutions, this assessment took a deeper look into subsectors that JKN directly impacts (i.e., directly paid by BPJS-K) and have direct impact on the financial sustainability of JKN (i.e., major cost drivers). Accordingly, private hospitals, pharmaceutical manufacturers, and medical devices manufacturers were the primary focus of this analysis, with supplemental insights into private health insurance.

The following chapters are organized by these three major private health subsectors. Each chapter starts with a rationale for the subsector’s analysis focus and summarizes the subsector and government or JKN regulations and systems that have an effect on the subsector players. We then analyze whether the incentives placed by JKN and its policies are appropriately directing the private markets toward the intended effects. We conclude each chapter with a set of policy recommendations that can further incentivizeprivate sector investments into health to achieve JKN’s policy objective of improved access tohigh-quality healthcare, especially for the poor and near-poor. The conclusion summarizes the trends seen across the private health sector as a whole, incorporating learning fromSouth Korea and Canada’s single-payer programs to draw out insights that could informimprovements to Indonesia’s system, and recommends policy changes that could ensure a robust private health sector remains to partner with the Government of Indonesia to grow and expand access to care.

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Global Action for Physical Activity 2018-2030

Regular physical activity is proven to help prevent and treat noncommunicable diseases (NCDs) such as heart disease, stroke, diabetes and breast and colon cancer. It also helps prevent hypertension, overweight and obesity and can improve mental health, quality of life and well-being. Yet, much of the world is becoming less active. As countries develop economically, levels of inactivity increase. In some countries, these levels can be as high as 70%, due to changing transport patterns, increased use of technology, cultural values and urbanization.

Failure to act to increase levels of physical activity will see related costs continue to rise, with negative impacts on health systems, the environment, economic development, community well-being and quality of life.

This new global action plan to promote physical activity responds to the requests by countries for updated guidance, and a framework of effective and feasible policy actions to increase physical activity at all levels. The plan sets out four objectives and recommends 20 policy actions that are universally applicable to all countries and address the multiple cultural, environmental and individual determinants of inactivity.

Effective implementation will require bold leadership combined with cross-government and multisectoral partnerships at all levels to achieve a coordinated, whole-of-system response.

The World Health Organization will support countries to scale up and strengthen their response with evidence-based policy solutions, guidelines and implementation tools, and will monitor global progress and impact.

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Health In All Policies: Seizing Opportunities, Implementing Policies

Health is a human right and a central element of well-being. Health is also an essential prerequisite for the achievement of our governmental goals.

One of our major concerns is to prolong the working life: to ensure that our youth enters work as soon as possible; that we have a healthy, motivated and capable workforce; and that even those close to retirement age maintain their ability to work. We have made major efforts across sectors to prevent social exclusion of young adults, to maintain the work capacity of those outside the workforce and to facilitate the attainment of employment. Health has an intrinsic link to the ability to work: it plays a core role in addressing poverty and social exclusion, and enhances our potential for economic growth and competitiveness. The other side of the coin must not be ignored: we need to ensure that there are employment opportunities for all and that employment conditions and workplaces promote health and prevent ill-health.

Most public policies have the potential to influence health and health equity, either positively or negatively, and many of our societal goals cannot be achieved without a healthy and well-educated population. Finland has a long tradition of working across administrative sectors, and structures and processes have been developed to accomplish this. Open and transparent policy-making is a foundation for good public policies and adequate resources for implementation and monitoring are essential. An educated and well-informed population forms a basis for functional democracy.

We need a good knowledge base to have evidence-informed policy-making. As regards the Health in All Policies, we need assistance from our Ministry of Social Affairs and Health, as well as the institutes subordinate to it, on how best to incorporate health considerations into policy-making in order to reach our goals as a whole, to enhance well-being, and to improve health and reduce inequity.

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