In 2014, the Government of Indonesia’s launched Jaminan Kesehatan Nasional (JKN), the single payer national health insurance system. Since the launch, Indonesia faces a range of choices on how to continue to increase coverage, efficiency, quality, and sustainable financing. ThinkWell leads USAID’s Health Financing Activity (HFA), a five-year $15 million contract awarded in 2019. HFA is a technical assistance project designed to strengthen local capacity in financial analyses, stakeholder engagement, learning, and decision-making. HFA supports the Ministry of Health’s (MOH) leadership and vision to improve financial protection, equitable access to quality health services, and health outcomes.
ThinkWell is joined by Indonesia’s premier institutions in health financing – the Center for Health Economics and Policy Studies at the University of Indonesia and the Center for Health Policy and Management at Gadjah Mada University. The HFA team also includes Results for Development, an international leader in strategic purchasing methods to pay health service providers for efficient, quality health care.
The health sector currently faces several challenges. No matter how you slice it, Indonesia spends far less on health than its regional peers. On a per capita basis, Indonesia spent only $115 in 2017 on health, the lowest among the Association of Southeast Asian Nations (ASEAN) (see figure). As a percent of gross domestic product (GDP), health captured only 3.2% of GDP in 2017. In addition, household out-of-pocket spending is still high at 31.8% of total health spending, and the financial sustainability of JKN is threatened due to the ever-increasing deficit.
HFA collaborates with Indonesian leaders and institutions to strengthen health financing as a lever to propel Indonesia towards achieving universal health coverage. Indonesia has many comparative advantages among middle-income countries, such as stable government, economic policy, and growth. The design of HFA recognizes these strengths by prioritizing capacity building of government agencies, civil society, media, academic institutions, and the next generation of health financing experts. The goal is to enable these institutions, groups, and individuals to engage, generate, and use evidence without external assistance, so they continue the journey independently toward financially sustainable universal health coverage.
JKN, managed by the Social Security Administrative Body (BPJS-K), has run a deficit every year since its launch. To improve the financial sustainability of JKN, HFA supported the MOH to raise awareness about the need for a rationale increase in premium contributions. This contributed to the successful passage of a presidential decree to raise premiums in an equitable manner. The new premium policy will improve the financial sustainability of JKN, fully subsidize the poorest Indonesians (40% of the population), and partially subsidize the informal sector.
In 2020, a new issue of excluding primary care services like maternal healthcare and infectious disease services from the JKN benefit package became a hot topic. Such an exclusion would fragment the delivery of these essential services nationwide. HFA seized the opportunity to contribute to the debate with a policy brief explaining the advantages to the beneficiaries of keeping MNH, TB, and HIV services within the JKN benefit package. HFA’s current work on strategic purchasing for TB, MNH, and HIV services will strengthen the evidence that integration will produce best outcomes for the Indonesian people.
Breaking New Ground
Indonesia has a shortage of qualified health economists. HFA addresses this need by building a network of mid-career health financing experts who bring evidence and informed advice to policymakers. ThinkWell’s Ryan Nugraha, a mid-career economist himself, is managing the effort that has achieved several early successes:
- Mentorship of a group of 30 health economists, 21 of whom are women, from various regions in Indonesia
- Hosted a series of webinars on hot topics with hundreds of attendees. For example, in September 2020, HFA hosted two webinars: The Role of Health Economists – A Macroeconomic and Microeconomic Perspective attracted 230 participants of which 72% were women. The Roadmap of Health Financing Reform in Indonesia was attended by 458 participants of which 71% were women.
- Trained young health economists how to write in a journalistic style on technical topics for mass media and the general public. We submitted two articles for publication.
- Recruited senior and junior economists to create teaching modules on health economics topics in Bahasa Indonesian since health financing literature is not available in the national language.