As a partner of the Indonesia Health Economics Association (InaHEA), ThinkWell is excited to showcase its achievements in the last year at the 8th Biennial InaHEA Scientific Meeting. Our USAID Health Financing Activity (HFA) is one of our most influential projects in Indonesia and will be featured in several topic areas.

HFA is a five-year project that provides technical assistance to strengthen local capacity in financial analyses, stakeholder engagement, learning, and decision-making in Indonesia. Our HFA team collaborates with Indonesian leaders and institutions to strengthen health financing and propel Indonesia towards achieving universal health coverage. Our team is participating in eight presentations at the conference covering a vast range of topics; our presentations are detailed below. If you are unable to attend, on the last day of the event, the titles of the presentations will link to the presentation materials.

Anita Damayanti Putri, a Pubic Health Analyst with ThinkWell working on Strengthening Strategic Purchasing for Primary Health Care, will be presenting “Assessing Readiness for Service Delivery Redesign in Indonesia for Emergency Obstetric and Newborn Care Services.” Her presentation will be linked below following the conference.

InaHEA has released a series of potential topics for the meeting that includes demographic transition and economic challenges, non-health-related determinants of health, post-pandemic health issues, health behaviors and financing, and tobacco economics. Find the full list, sub-topics, and more information on the meeting here.

Online participation is available. Please take a look at registration details here.

Sarah Saragih, Firdaus Hafidz, Aditia Nugroho, Agnes Caroline, Adwoa Twum, Laurel Hatt, Cheryl Cashin, Nana Tristiana, Tiara Pakasi, and Hasbullah Thabrany

This study, initiated in 2020, aimed to simulate a pay-for-performance model in tuberculosis (TB) service delivery, with strictand flexible payment scenarios based on guideline adherence, using TB service delivery data in 2019 at one Puskesmas and one clinic in Medan. Recommendations for the government include considering flexible reimbursement standards and conducting additional research on payments to hospitals for referred patients.

Ruli Endepe Al Faizin, Miftakhun Nafisah Yannis Putri, Iko Safika, and Hasbullah Thabrany

The purposes of this study are as follows:

  • To document the prevalence of e-cigarette consumption in Indonesia.
  • To identify the effect of smoking on various groups and poverty levels among households in Indonesia.
  • To compare and contrast the spending on e-cigarette and food consumption  among households in Indonesia.
  • To show the trend of e-cigarette consumption among vulnerable populations (e.g., late teens and young adults).

The research team recommends additional data collection on e-cigarettes and their effects, a higher tobacco tariff on e-cigarettes and a ban on aromatic and flavored e-cigarettes, and a government-led campaign on the health and economic risks of smoking both cigarettes and e-cigarettes.

Rizki Tsalatshita Khair Mahardya, Yudistira Permana, Ririn Ariani Dewi, Putri Listiani, Muhammad Akmal Farouqi, Naufal Mohamad Firdausyan, Astara Lubis, Yosinda Arsy, Inraini Syah, Maria Hotnida, Iko Safika, and Hasbullah Thabrany

This analysis aimed to demonstrate improvements in access and the quality of maternal and newborn health (MNH) services with the new tariff stated in the Minister of Health Decree (Permenkes) No. 3/2023). The decree was on new standard tariffs for health services under the National Health Insurance (JKN) scheme and the implementation of non-payment interventions. The team concluded that continued monitoring of the governance process around MNH services provision would ensure better communication between health providers, local health offices, and BPJSK branch offices and improve MNH outcomes.

Mutia Astrini Pratiwi, Iko Safika, Anita Damayanti, Halimah Mardani, Febriansyah Budi Pratama, Made Anggarawati, Rahmad Asri Ritonga, and Rahma Anindita

Though Ministry of Health Decree No. 64/2016, mandated that JKN tariffs, both at the hospital and primary levels, should be adjusted every two years, the tariff has not been adjusted since its introduction eight years ago. Operating costs continue to increase, so, to promote fairness at primary health care centers (PHC), this team used age and gender as risk factors to calculate a new, risk-adjusted tariff. Ultimately, they recommend that the tariff be regularly evaluated and adjusted, an M&E dashboard should be used to analyze use trends, and another payment mechanism should be determined for PHCs in remote areas.

Mentari Widiastuti, Abigael Wohing Ati, Lambang Wahyu Nugroho, Shita Dewi, Yuli Farianti, Mazda Novi Mukhlisa, Elvina Diah, Iko Safika, Ruli Endepe Al Faizin, and Hasbullah Thabrany

The research question for this study was “how much did the patient pay out of pocket at a facility for the current visit for the following items: registration, laboratory/radiology examination, medical procedures and consultation, medicines, preventive services, and a bed.” Based on responses to this question, the team recommends enhancing the coverage of JKN and reassessing membership types, expanding JKN’s connections with PHCs, and conducting further qualitative studies and data triangulation.

Iko Safika, Yuli Farianti, Ackhmad Afflazir, Hasbullah Thabrany, Sushanty, Sarah Straubinger, and Ritu Kumar

The goal of this study was to examine the challenges and opportunities of improving the capacities of Government of Indonesia, which is HFA’s main counterpart, specifically the Center of Health Financing and Decentralization Policy (Pusjak PDK). The researchers concluded with two recommendations:

  • With the introduction of new laws, organizational changes, and subunits within the establishment, a concentrated effort is needed to foster enhanced analytical skills and understanding of health financing concepts. Additionally, it is essential to develop capacity for creating evidence-based policy briefs that effectively communicate ongoing progress in health financing and information reform initiatives.
  • Continued capacity building can be achieved through on-the-job training, coaching, and mentoring. These strategies will effectively address the high turnover and demanding schedules of staff members, allowing them to participate in training sessions.

Diah Eva Sari Husnul Khotimah, Ruli Endepe Alfaizin, Dini Kurniawati, Mutia Astrini Pratiwi, Iko SafikaNurhalina Afriana, Romauli, Indah Budiarty, Maria Hotnida, Amalia Zulfah Dani Hari WijayaWindi Haryani, Nana Tristiana Indriasari, and Hasbullah Thabrany

This team aimed to calculate the cost of viral load (VL) testing per patient per year, including the cost for specimen transport, at health facilities. They applied unit costs to inform a budget impact analysis and estimate the costs of covering comprehensive HIV services, including VL testing, under JKN. The researchers recommend that further expansive of VL test coverage at the PHC level should be targeted, regional variations of VL testing machines should be considered when determining reimbursement rates for such services, and necessary specimen transport costs should be included in these rates.

Dini Kurniawati, Iko Safika, Hasbullah Thabrany, Ackhmad Afflazir, Tri Indah Budiarty, and Lanny Luhukay

This study was conducted to understand the demographic status of respondents, understand access and adherence to antiretroviral treatment (ARV) among JKN members, and explore factors associated with access and adherence to ARV treatment among members. The researchers recommend health care providers consider implementing multi-month dispensing of ARV to ensure that PLHIV have an adequate supply and offer counseling services aimed at reducing internal stigma and encouraging ARV adherence.

By Nirmala Ravishankar, John Kinuthia, Agnes Gatome Munyua, Boniface Mbuthia, and Anne Musuva

The Facility Improvement Financing (FIF) Bill unveiled by the Government of Kenya in August 2023 is a win for health facilities in the public sector. If passed, the FIF Bill will allow them to directly receive funds and spend them on some operating costs. How big of a win the legislation will be depends on how easy (or complex) it is for facilities to use the funds. The FIF Bill is a step in the right direction, but some of the specifics remain to be fine-tuned.

Devolution and its implications for facility financing arrangements

Kenya shifted to a devolved system of government in 2013. This proved to be a turning point for facility financing arrangements in the country. Prior to 2013, health facilities retained and spent revenue from user fees, health insurance, and other payment schemes. Following devolution, the newly formed county governments asserted control over all revenue in the county.

To substantiate their control, the counties cited the Public Financial Management (PFM) Act of 2012 to require facilities to remit their revenue to a county revenue fund. While the PFM Act does describe this as the default position, it also allows county governments to authorize entities like health facilities to retain their revenue. But many county governments asserted control over all facility revenue, which hampered the latter’s ability to function effectively.

Some counties have tried to rectify the problem using different approaches, resulting in considerable variation in facility financing arrangements across Kenya’s 47 counties. While 10 county governments have passed laws or adopted practices to grant financial autonomy to facilities, 21 counties still claim all facility revenue. In the remaining 16 counties, facilities have access to some of the funds they collect, while the rest goes to the county. Among these 16 counties, 10 have created a central, special purpose “FIF fund” to hold all facility revenue. Through this fund, a county retains a percentage of the funds to cover its administrative costs and transfers the rest back to the facilities; however, county-level structures and processes to administer the fund typically result in a delay in fund flow.

Restoring autonomy to health facilities

The FIF Bill corrects for several things.

  1. First, it states unequivocally that health facilities can retain all revenue they generate in their own accounts, restoring to facilities autonomy that they had before devolution in Kenya. This is especially important for the 21 counties where facilities presently cannot retain any of their revenue. It also rules out the continuation of county-level “FIF funds” to pool facility revenue.
  2. Second, the bill stipulates that facilities can retain any unspent funds at the end of the fiscal year. This prevents county treasuries taking back all unspent funds. Having residual rights over its revenue will hopefully create incentives for a facility to use its funds judiciously.
  3. Third, it does away with the need for each county to pass enabling legislation to grant facilities financial autonomy. Having such laws passed and implemented has proven arduous and time-consuming. Indeed, several counties have enacted laws, but not operationalized them.
  4. Fourth, the bill calls for the integration of facilities into the Government’s financial management information system and routine budget implementation reports. This will give facilities greater legitimacy within Kenya’s PFM architecture and enable greater visibility over facility revenue and expenditure.
  5. Fifth, the bill emphasizes ongoing monitoring of its implementation. In so doing, it sets the stage for greater learning and knowledge-sharing about best practices.

How the bill could be improved

While the bill empowers facilities to retain their revenue, the processes described for them to spend these funds seems unnecessarily bureaucratic. As is standard practice for government entities in Kenya, health facilities must prepare annual budgets for approval by the county government and receive an “authority to incur expenditure” (AIE) from the county government on a quarterly basis to spend their money. But the bill stipulates that, even after receiving AIE, facilities must raise vouchers for approval by the county department of health accountant. Then the subcounty accountant, who is a co-signatory on the facility account along with the facility in charge, must authorize the transaction. The number of steps needed by various government officials for the facility to merely spend funds in its account against its approved budget seems excessive. Moreover, these provisions go beyond what is current practice in many counties, meaning some health facilities will have less flexibility than they presently enjoy.

It is also interesting to note the comparison between the health and education sectors in this area. Schools receive public funds from the national government on account of education not having been devolved. Each school has a management board comprised of officials from the school and community members, which approves its budget. The school in charge is the accounting officer for the school’s accounts and can spend funds as per the school’s approved budget after receiving the quarterly AIE from the county department of education. In contrast, the FIF Bill stipulates that health facility budgets must be approved by the county. The county chief officer for health is the accounting officer for health facilities. And the county health accountant must approve each transaction. In other words, even after the bill, it seems health facilities will have less autonomy than public schools presently enjoy in Kenya.

When it comes to public moneys, authority to spend must be balanced against financial controls. While the FIF Bill reflects this imperative, it seems to err on the side of more rigid control. The process seems especially onerous given that county governments will continue to pay for big expenses (like worker salaries, infrastructure, and most drug costs), while facility funds will pay for relatively small operating costs. The over-prescription of process will erode the very autonomy that the bill aims to establish. Correcting for this—in the implementation regulations if not in the bill itself—will ensure that this important piece of legislation leads to meaningful change.