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Counterpoint, Provider Payment Reforms in Indonesia: Lessons and future directions

29 May 2024

Like South Korea, Thailand, and other countries in the region, Indonesia rolled out foundational provider payment reform with its national health insurance scheme, Jaminan Kesehatan Nasional (JKN). Years of research show that the use of capitation-based payments for primary care is the most cost-effective way to deliver a set of services; thus, Indonesia adopted this into JKN.

This rollout entailed several different types of payment mechanisms focused on maximizing efficiency, reducing moral hazard, and guaranteeing delivery of benefits to Indonesians. Capitation in Indonesia has not only attracted additional enrollees, but it has also limited the overuse of resources and made care more efficient. But this progress is hampered by under-provision of services, referrals to higher-level providers for non-specialist care, and limited success in prioritizing less expensive health promotion and prevention.

To address these ongoing issues, Indonesia has taken a multi-faceted approach. The government has adapted diagnosis-related group (DRG) systems from countries like the United States and Australia and some European nations to fit their local context, needs, and capacities. The government has also pursued performance-based capitation to incentivize fewer unnecessary referrals. Though these initiatives have received mixed results so far, there is a rich trove of lessons to be taken from Indonesia’s experience with blended provider payment systems. And these lessons can be applied to nations across the globe.

In our latest Counterpoint webinar on June 12, we explored the topic of provider payment reforms in Indonesia and future direction with a tight focus on integrated health system reforms.

Watch the recording

In this edition, ThinkWell’s Nida Hameed, a Technical Advisor in Pakistan, hosted a panel of four local experts:

  1. Dr. Hasbullah Thabrany, MPH, DrPH, the Chief of Party for ThinkWell-implemented USAID Health Financing Activity and a leading public health and health financing expert, covered the background and economic concepts behind prospective provider payments within JKN.
  2. Dr. Atik Nurwahyuni, SKM, MKM, a health financing expert at Universitas Indonesia and a leading technical advisor on provider payment reforms and health financing to MOH, presented and discussed the rationale and the process of setting INA-CBG and DRG payments.
  3. Prof. Dr. Ali Gufron Mukti, MSc, PhD, the Director of BPJS-Kesehatan Indonesia, presented IT support, pay-for-performance mechanisms, and recent achievements in provider payment initiatives.
  4. Dr. Ahmad Irsan A. Moeis, SE, ME, the Head of the Center for Health Financing Policy and Decentralization for the Indonesia Ministry of Health, presented how the government set capitation amounts and INA-CBGs to ensure effectiveness and efficiency in JKN payments.

Some questions that were addressed during the webinar include the following:

  1. How has Indonesia effectively integrated different provider payment methods to incentivize high-quality care delivery while controlling costs for different types of providers and facilities?
  2. What are the key system capacities required for continued provider payment reforms and how do these considerations differ across different priority health areas?
  3. What types of incentive structures and ‘experiments’ has Indonesia done to incentivize quality of care and performance? Which have worked?
  4. With the health transformation agenda and shift to an integrated and life cycle-, promotion-, and preventive care-focused health system, what changes will Indonesia need to make to provider payment processes achieve those goals?

Thanks to all who joined. If you missed it, please take a look at the recording here!