World Bank Office Indonesia Stock Exchange Building Tower 2, 12th Floor, Jl. Jendral Sudirman Kav.52-53, Jakarta Contact: Randy Salim Tel: (62 21) 5299-3259 rsalim1@worldbank.org
Closure on Government’s final vision of proposed system and its related details crucial to implementation of universal health insurance coverage
JAKARTA, May 28, 2009 –As one of the few developing countries attempting to provide comprehensive health insurance coverage for its entire population, Indonesia faces major policy challenges in terms of how the reform will be financed, which groups should be subsidized by the government, what specific health benefits should be covered, what changes are needed in the service delivery system and how to pay those who provide the care, and a host of other regulatory and administrative issues. According to a new World Bank report, how these parameters are set will determine the affordability and sustainability of the reform, its impact on population health status, the extent to which individuals are protected from large unpredictable medical costs, and whether Indonesia’s health costs will increase from just over 2 percent of the economy today. Presently Indonesia spends half of what other comparable income countries spend on health, but this could increase to as much as 10 percent in 2040, if Indonesia succumbs to the same cost pressures as the industrialized countries.
Health Financing in Indonesia: A Reform Road Map , prepared in consultation with the government, academics, development partners and other key stakeholders, examines the government’s historical commitments to reform, its efforts to provide health insurance coverage to the entire population, and its concrete actions to provide health insurance coverage for the poor and near poor through the Askeskin/Jamkesmas programs. It examines the performance of the health system in terms of the basic health system goals of assuring access, quality, health outcomes, financial protection, efficiency, equity, and financial sustainability.
“Very few middle income countries have succeeded in providing universal health insurance coverage for their populations. Already we are seeing the government of Indonesia make positive and laudable headway on this agenda through the Askeskin dan Jamkesmas programs for the poor and near-poor. However, the country still faces significant challenges in developing and implementing an effective and sustainable health financing reform,” said Joachim von Amsberg, World Bank Country Director for Indonesia. “The key to success is specifying the final vision of its proposed system along with its transition steps, obtaining the necessary information for decision-making, and assuring that the policy process addresses both the big picture elements of the reform as well as the key design parameters. The World Bank stands ready to further assist the government in the development and implementation of this critically important initiative.”
Among the broad policy issues which the government needs to address are the final system design for the provision of universal coverage and the various transition steps to get there. The report highlights several potential final visions including:
A single national mandatory health insurance system where the government subsidizes the poor and other disadvantaged groups, similar to the systems in Thailand and Turkey.
A ‘Jamkesmas for all’ approach which is fully financed by the government, similar to the national health service systems in Sri Lanka and Malaysia.
These big picture issues must also be reconciled with more detail-oriented issues such as the design of the basic benefits package; how medical care providers will be paid; how the reform will be financed; as well as how to assure better health outcomes, financial protection, consumer responsiveness, quality, efficiency, equity, and financial sustainability.
If upon achieving universal coverage, Indonesia’s spending level jumps to the level of other comparable countries and Indonesia succumbs to the cost pressures of the industrialized countries, total health spending in 2040 could reach almost 10 percent of GDP compared to just over 2 percent today. If the Government can hold future cost pressures to their historic rates of increase, then spending will be on the order of 6 percent of GDP. The report highlights the importance of getting the key design elements of the reform ‘right’, a rather complex policy challenge given the interactions among reform components as well as Indonesia’s socioeconomic situation which includes a large number of poor, much of the population living in rural areas, a high percentage of informal sector workers, and a large number of very small firms.
RSS