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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!

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.