Human Development - Building the Foundation for Inclusive Growth September 2013 81129 Indonesia’s Path to Universal Health Coverage: Key Lessons from the Implementation of Jamkesmas Background P. 1 Jamkesmas: Indonesia’s P. 2 Health Insurance Program for the Poor and Near-Poor The Three Dimensions of P. 3 This policy brief assesses UHC: Lesson from Implemen- Indonesia’s progress tation of Jamkesmas towards attaining universal health coverage Some Policy Implications for P. 5 (UHC) across the three the UHC Agenda different dimensions of breadth, depth, and height by studying the implementation of Jamkesmas, the government-financed Background health insurance program for the poor and near-poor Indonesia has made steady and significant nutrition, a growing HIV/AIDS epidemic, and currently the largest progress on several key population health persistent geographic and income-related social health insurance outcomes over the past few decades. Life inequalities in health outcomes, as well as program in the country. expectancy has steadily increased to almost high levels of out-of-pocket (OOP) spending 70 years in 2011, up from about 45 years for health despite high and increasing in 1960. The under-five mortality rate has coverage rates. declined steadily from 216 per 1,000 live As Indonesia transitions births in 1960 to 82 in 1990 and 32 in 2010. Indonesia’s maternal mortality ratio towards a merger of At current trends, Indonesia is projected to (MMR) remains high compared to other most of its existing social meet the child-health related Millennium countries with similar income levels, health insurance programs Development Goal (MDG) which calls for a and projections are that Indonesia will not under a single-payer two-thirds reduction in under-five mortality be able to reach the maternal mortality administrative umbrella between 1990 and 2015. MDG target by 2015. Although Indonesia is in 2014, the policy brief projected to achieve the MDG target on the highlights key lessons Despite notable progress on some fronts, prevalence of (severely) underweight among from the implementation the Indonesian health sector faces under-5 children, reduction in stunting of Jamkesmas that could considerable challenges. First and foremost has been stagnating and in some parts of help inform reforms aimed is the fact that Indonesia is in the midst of the country stunting rates are comparable at attaining UHC in the a rapid epidemiological transition. Non- to those observed in far poorer countries. country by 2019. communicable diseases (NCDs) now account Despite robust economic growth over the for the largest share of the overall burden last decade, there remain large income and of disease in the country: whereas in 1990 geographic inequalities in health outcomes; only about 37% of morbidity and mortality access to quality health care remains a huge in the country was due to NCDs, by 2010 this problem, particularly in the remote provinces number had risen to 58%. In conjunction with and districts of the archipelago. the growing burden of NCDs, Indonesia faces relatively poor levels of maternal health, a From a health systems and service delivery double burden from both over- and under- perspective, Indonesia is characterized THE WORLD BANK 1 Human Development - Building the Foundation for Inclusive Growth by low levels of spending, as well as generally low and Jamkesmas: Indonesia’s Health Insurance variable levels and distribution of human resources and Program for the Poor and Near-Poor health facilities. Indonesia has a mixed model of public- private provision of health care services, with the public sector generally taking a more dominant role, especially The Jamkesmas program began in 2005 as the Askeskin in rural areas and for secondary levels of care. Public sector program for the poor2 and currently targets a third provision is decentralized to the district level. The central of Indonesia’s population. In 2007, it was renamed as government remains the dominant source of overall financing Jamkesmas and was expanded to also cover the near-poor. of the health sector, but district governments have discretion Jamkesmas currently targets almost a third of Indonesia’s over how budgets are allocated and how much gets spent population (official estimates now indicate that there are on health. With regard to health financing, in addition to the 76.4 million poor and near-poor beneficiaries)3. The program continued high dependence on OOP payments, Indonesia is is fully financed out of central government revenues and is characterized by relatively low levels of total and government administered by the Ministry of Health (MoH). Jamkesmas health spending per capita (US$77 and US$38 per capita, has an annual operating budget based on an estimated respectively). In fact, in global comparisons, Indonesia has one “premium” rate of Rp 6,500 per person per month (about of the lowest levels of total and government health spending US$84 per person per year), amounting to about a quarter as share of GDP.1 of the central government’s annual health budget (between 2006 to 2010).5 One immediate key policy challenge facing the country is implementation of health system reforms aimed at The Jamkesmas provider network comprises mainly public attaining universal health coverage (UHC) by 2019. The facilities with some participation from private hospitals. universal right to health care was included as an amendment At the primary level of care, the program includes only to Indonesia’s constitution in 1999. However, the impetus for Puskesmas (health centers); for referral services both public UHC came a few years later, in a 2004 landmark legislation -- and listed private hospitals are included. The participation the Sistem Jaminan Sosial Nasional or the SJSN Law – which of private hospitals in the network has been increasing; formed the legal basis for attaining several social protection currently, 30 percent of Jamkesmas network hospitals are objectives in the country. In 2011, the government passed a private. Private and public hospitals are reimbursed at the ground-breaking follow-up law that defined the administrative same rate under the program. The reasons private hospitals and implementation arrangements -- the Badan Penyelenggara have joined the network are likely driven by the assurance of Jaminan Sosial or BPJS Law – which stipulated that existing volume of patient inflows; some private providers (which have contributory and non-contributory social health insurance large fixed costs and excess capacity) accept Jamkesmas since, schemes be merged to provide streamlined, uniform benefits at the margin, benefits from partial-cost reimbursements can under a single-payer umbrella beginning in 2014. Following outweigh average costs. Some private religious hospitals institutionalization of the single-payer insurance administrator are not-for-profit and will also accept Jamkesmas patients. (BPJS) in 2014, the government plans to phase in expanding In some cases, private hospital participation is mandated by coverage to the entire population by 2019. local governments. As Indonesia transitions towards a merger of all its To date, Jamkesmas has seen some degree of success existing social health insurance programs under a single- with increased outpatient and inpatient utilization rates payer administrative umbrella in 2014, this policy brief among program cardholders. In addition, there is evidence highlights key lessons from Jamkesmas -- the government- that levels of catastrophic health payments have declined, and financed health insurance coverage program for the poor there is generally a positive perception about the program and near-poor and currently the largest social health among those who are enrolled. However, there is evidence of insurance program in the country. The brief can help inform high levels of mis-targeting and leakages to the non-poor, low reforms aimed at attaining UHC in the country by 2019. More levels of socialization, lack of awareness of benefits, regional specifically, this brief assesses Indonesia’s progress towards inconsistencies in the availability of the benefits package, attaining the three dimensions of UHC – depth, breadth, and relatively shallow levels of financial protection, as well as poor height -- using the experience of Jamkesmas. accountability and feedback mechanisms. 1 Public spending on health is only 1.3% of GDP in Indonesia; by contrast, Thailand’s ratio is 2.9%, China’s 2.7%, Vietnam’s 2.6%, Malaysia’s 2.4%, and Cambodia’s is 2.1% (WHO - NHA 2011). 2 However, the origins of health-insurance for the poor date to 2001, when the Fuel Tax Compensation Scheme (PKPS-BBM) was established as a response to the end of the pro-rich government fuel subsidies, which were partly redirected into programs to compensate the poor. 3 The poor and near-poor equal roughly the bottom three economic deciles of the population. There are ongoing discussions to increase the number of targeted Jamkesmas beneficiaries to 86.4 million in 2013. 4 Based on the average 2011 exchange rate. 5 Jamkesmas Health Service Fee Waiver, Social Assistance Program and Public Expenditure Review 4, The World Bank 2012. 2 Human Development - Building the Foundation for Inclusive Growth The Three Dimensions of UHC: Lessons The suboptimal performance of Jamkesmas in terms of from Implementation of Jamkesmas targeting is likely due to variation in the proxy-means- testing criteria used across districts, and to poor program knowledge among the targeted beneficiaries. The criteria In its 2008 World Health Report, the World Health Organization used to identify household characteristics vary across (WHO) outlined three dimensions of UHC coverage: breadth, districts; in some districts, village midwives and subdistrict depth, and height.6 The breadth of coverage addresses who is health center officials often distribute health cards according insured. The depth of coverage refers to the range of services to their own criteria, regardless of economic status (World to be covered (i.e., the extent of benefits package). Finally, the Bank 2012).7 There are no specific incentives in the system to height of coverage captures the financial protection aspect: either maximize enrolment or minimize mis-targeting. There the degree to which those covered pay OOP in accessing is some anecdotal evidence and allegations of fraud and health services. In order to help inform Indonesia’s reform political clientelism, but only a few cases have been reported. efforts, we assess the experience of Jamkesmas in terms of Since enrolment of the poor and near-poor is not mandatory, these three dimensions of UHC. there is some evidence that the target beneficiaries enroll only when they need to use health services (that is, there is Breadth of Coverage adverse selection). Additionally, the list of eligible beneficiaries compiled by district officials is not subject to validation from Officially, Jamkesmas now targets all poor and near-poor the central government, resulting in mis-matching, poor households: a total of 76.4 million individuals, which is coverage, and leakage of health insurance benefits to the nearly a third of the country’s population. Targeting is non-poor. Furthermore, poor and near-poor households that based on a government-wide identification system used for were denied the card despite being eligible do not have a all social assistance programs in Indonesia and has been used clear recourse. for Jamkesmas starting in 2013. Estimates from the national socioeconomic survey in 2011 suggest that only about 33 The issue of low coverage rates and high levels of leakage percent of all poor and near-poor households had Jamkesmas are key considerations as the government moves to coverage. On the flip side, among Jamkesmas cardholders, implement UHC in the country, wherein a large share of survey data indicate that 47 percent of households were poor those currently uncovered are non-poor and employed in or near-poor, indicating a leakage rate of about 53 percent the informal sector. By law, this latter group is expected to (Figure 1). Although some of the mis-match between official contribute a partially-subsidized fixed premium amount (the government numbers and those from survey data is likely exact contributory premium amount is yet to be decided). a result of variations in the definition of the government’s International experience has shown the collection of target population versus survey estimates, the relatively large premiums from the informal sector to be a key challenge in magnitude of coverage under-estimation is indicative of attaining UHC, and this will likely be compounded given the substantial mis-targeting and leakages under the program. extent of mis-targeting and leakage currently extant under Figure 1: Estimates of Coverage and Leakage Rates for Jamkesmas, 2011 COVERAGE LEAKAGE Insurance Coverage Among Poor and Near-Poor Jamkesmas Bene ciaries by Economic Status Other Insurance Top 3 deciles 6.2% 20.7% Jamkesmas 33.0% Middle 4 deciles Bottom 3 deciles 32.3% 47.0% No insurance 60.8% Source: SUSENAS 2011 6 The World Health Report 2008: Primary Health Care – Now More Than Ever. Chapter 2. 7 World Bank. 2012. “Targeting Poor and Vulnerable Households in Indonesia.” PREM Indonesia, World Bank, Washington, DC 3 Human Development - Building the Foundation for Inclusive Growth Jamkesmas implementation, resulting in capture of benefits an incubator. The availability of medical equipment and of full subsidization to ineligible households and undermining diagnostic tools is also highly variable across urban and rural the principle of solidarity and cross-subsidization. areas; preliminary 2011 RIFASKES9 data estimates indicate that few Puskesmas had equipment close to stipulated national Depth of Coverage standards, and only 5.9 percent of urban Puskesmas and 6.4 percent of rural Puskesmas had more than 80 percent of the On paper, Jamkesmas offers a comprehensive benefits 56 ambulatory clinical devices available, respectively; around package that is more generous and inclusive than that of 10 percent of Puskesmas had less than 20 percent. In terms of other social insurance schemes in the country, including the essential drugs, only around 60 percent of Puskesmas both in contributory civil servants health insurance program (Askes) rural and urban areas fulfilled 60 to 79 percent availability of and that of the program covering formal sector employees 83 types of essential drugs, and only around 15 percent had (Jamsostek). Jamkesmas benefits are set and updated by 80 percent of the required drugs. MoH and the National Social Security Council; there is no copayment, coinsurance, or extra-billing or balance-billing There are also clear shortages of qualified doctors and allowed under the program. As described, the Jamkesmas specialist doctors at the secondary level of service. provider network comprises mainly public facilities; however, Preliminary RIFASKES estimates from 10 provinces show that an increasing number of private hospitals have begun to only 25 percent of type D, 50 percent of type C, and 70 percent participate in the program. of type B public hospitals have trained doctors on staff for emergency care.10 For specialist care, the facility census shows In reality, the access to the benefitspackage is limited by that 20 to 30 percent of public hospitals were without one of poor supply-side availability and readiness, especially four basic specialties (ob-gyn, pediatrician, internist, surgeon). in remote, rural locations of the country. Supply-side It is almost impossible for those living in remote and rural constraints comprise all the factors that limit health care areas of the country to receive appropriate first management delivery at the point of service, including the number of care at emergency units and to access basic specialized of doctors, nurses, and midwives; the number of beds; services at hospitals. medical equipment and technology; medicine supplies; and other basic amenities. Given Indonesia’s geography, The availability of hospital beds is also low in the country. supply-side constraints reflect not only shortages in overall In terms of inpatient capacity, Indonesia faced an estimated numbers, but also in distribution. Rural and remote areas shortage of 13,875 beds. Some regions face particularly are disadvantaged in that they not only have fewer health severe shortages and meet less than 50 percent of actual bed facilities but also face the difficulties associated with the needs. Furthermore, hospitals—especially district hospitals— retention of health personnel, especially doctors. The ratio face shortages of both human resources and medical of doctors in Indonesia is 0.2 per 1,000, one of the lowest devices/facilities. RIFASKES estimates from 142 hospitals in 10 in the region. The PODES 2011 survey (the village facilities provinces indicate that 32 had no pediatric specialist, 27 had survey) reported that 92 percent of Puskesmas had at least no internist or surgeon, and 20 had no obstetrician. one doctor, which is similar to administrative data. However, more realistic estimates suggest that as many as 2,250 These supply-side constraints conceal the real costs of Puskesmas (around 25 percent of the total number) are the Jamkesmas program and act as an implicit cost- without doctors, most of these being in the more remote management strategy. Although Jamkesmas offers a areas of the country8. The distribution of doctors is highly comprehensive benefits package of services, in practice, concentrated in the Java-Bali region (which accounts for utilization and the associated claims reimbursements do not around 65 percent of all doctors); fewer than 6 percent of reflect the actual cost of health coverage due to the limited doctors practice in the eastern part of the country. supply of services. If the utilization rates were higher, the actual costs of the Jamkesmas program would likely be much Analysis of the 2011 PODES survey indicates that 96.7 higher. Furthermore, Puskesmas and public hospitals continue percent of Puskesmas had electricity, 88.1 percent had to receive government subsidies for salaries and capital, which a water source, 87.5 percent had a cold-chain facility are also not included in the overall cost of Jamkesmas and for the storage of vaccines, but only 36.4 percent had therefore skew the perceived cost of the program. 8 “Distribution of Doctors is Unequal” Kompas (Indonesia), November 12, 2011. 9 RIFASKES Riset Fasilitas Kesehatan, a census of health facilities conducted by the National Institute for Health Research and Development, Ministry of Health in 2011 10 Ministerial Regulations 986/1992 classifies five types of public hospitals; Type A is the top referral hospital; Type B is a provincial-level hospital that provides specialist and subspecialist services; Type C is district/regency hospitals that provide at least four basic specialties (surgeon, internist, ob-gyn, and pediatrician); and Type D provides, at a minimum, a general physician and dentist, but also has a transient status before it is upgraded to a Type C hospital. Type E hospitals are special hospitals, such as mental hospitals, maternal and child hospitals, lung hospitals, or heart/ cardiac hospitals. 4 Human Development - Building the Foundation for Inclusive Growth Height of Coverage via government budgetary transfers (central, provincial, or district, depending on the type of public facility). Low levels of One measure of UHC is the extent to which coverage reimbursement from demand-side financing programs such provides financial protection in terms of lowering or as Jamkesmas combined with low levels of public spending eliminating OOP payments at the point of care. Despite on health, supply-side deficiencies, and poor accountability rising coverage rates, the OOP share of health spending in mechanisms are key factors underlying the relatively high Indonesia has remained stubbornly high (Figure2). From a OOP spending in Indonesia, even among those with coverage. health financing perspective, high levels of OOP spending pose significant financial barriers to accessing health care and Some Policy Implications for the UHC result in a lack of financial protection for those who do utilize Agenda health care. High OOP payments are a prominent “risk factor” for impoverishment, especially given that a large proportion of Indonesia’s population is vulnerable and lives just above As Indonesia moves towards implementing UHC under a the poverty line. Although household health insurance single-payer umbrella, some key policy implications are population coverage rates have increased in the last decade evident as highlighted by the experience of Jamkesmas: or so -- from 15 percent in 1995 to more than 40 percent in 2011 – the OOP spending share of total health spending has Improve targeting of non-contributory population sub- remained in the 40-50% range in Indonesia (Figure 2). groups. The Jamkesmas experience highlights the need to significantly improve targeting of the poor and near-poor in Figure 2 : Coverage vs OOP share of total health spending, Indonesia. Increased socialization among targeted beneficiaries 1995-2011 will be needed to raise awareness and to encourage active enrollment among vulnerable population sub-groups. In this 70 regard, incentive programs for local governments to enroll OOP share of total health spending 60 targeted beneficiaries could also be considered. For example, 50 some proportion of resource transfers to local governments could be based on verified numbers of those in the target Percentage (%) 40 population group that actually enroll in the program, as 30 opposed to being based solely on capitation and utilization as is currently the case under Jamkesmas. 20 coverage Reduce mis-targeting and leakages. Jamkesmas targeting 10 of the poor and near-poor needs significant improvements. 0 More than half of Jamkesmas beneficiaries are not from the 1995 1998 2001 2004 2007 2010 Year bottom three deciles. As mentioned, the country is in the Source: WHO process of improving beneficiary identification methods to improve coverage and reduce leakages. To achieve universal coverage, one of the most debated issues is expansion to cover The current configuration of public financing for the non-poor informal sector. According to global experience, Jamkesmas does not lend itself to a system that can be other countries, such as Brazil, China, Mexico, South Korea and easily or adequately scaled up in order to expand financial Thailand have had difficulties covering this particular group. protection and ensure the program’s sustainability. As The debate involves discussions around the level of premium mentioned earlier, the Jamkesmas budget is based on a contributions and collection mechanisms, both of which are premium of RP 6,500 per person per month (or approximately expected to be extremely challenging. US$8per person per year). Jamkesmas reimbursements do not cover the full cost of care: more than two-thirds of the Ensure supply-side availability and readiness. Ensuring estimated cost of care at public facilities still comes from the availability of quality health services remains one of the supply-side subsidies. Salaries, capital, and some of the biggest challenges facing UHC in Indonesia. The experience operating costs at public facilities continue to be paid for of Jamkesmas highlights the significant disconnect between 5 Human Development - Building the Foundation for Inclusive Growth About this brief what the benefits package entitlements are at the district or catchment-area level.12 This policy brief is a summary on paper versus what the system is actually Whereas the incentives on the demand side of the World Bank UNICO able and ready to deliver. As the system gears (for beneficiaries) under the program are Case Study (2013) The Nuts towards increasing demand-side financing relatively clear, supply-side incentives need and Bolts of Jamkesmas: via expansion of social health insurance, to be better aligned and adjusted to ensure Indonesia’s Government- it will be key to clarify and enhance the the program is attaining its objectives. Financed Health Converge accountability of the health system and of Program, UNICO Studies local governments to ensure provision of Establish a robust and reliable information Series No. 8 prepared by benefit entitlements, especially in terms of system to support monitoring and Pandu Harimurti, Eko Setyo adapting to the evolving burden of disease evaluation. The information on service Pambudi, Anna Lorenza that Indonesia faces.12 utilization and reimbursement claims Pigazzini and Ajay Tandon. serves as key input to monitor program Ensure sustainability through improvements performance, and to continuously update The findings, interpretations in efficiency and effectiveness of the calculation of the program’s costs. Also, and conclusions expressed implementation of UHC. Jamkesmas the information collected will describe in this publication do not is entirely financed through central changes in attitudes of both members and necessarily reflect the views of government taxes. Premiums are not based providers’ behavior toward how services the Government of Indonesia, on sound actuarial calculations. Supply-side are delivered and financed. Improved the World Bank, its Executive constraints and supply-side subsidies have information and reporting systems present Directors or the governments given the false impression that financing opportunities to implement innovative they represent. of Jamkesmas is sufficient. The program community accountability mechanisms and does not reimburse the full cost of services beneficiary satisfaction surveys to improve and relies heavily on supply-side subsidies. health service delivery. Consequently, the program does not provide strong incentives to the providers to deliver Learning lessons from selected provinces/ high-quality services. In addition, fund flows districts that have attained UHC. Some from the central levels to public health provinces/districts in Indonesia have For more information, please centers have proven to be problematic in a already attained UHC (including Bali, Aceh, contact Megha Kapoor decentralized setting, given conflicting and and Jakarta). In looking at issues related to (hdIndonesia@worldbank.org) confusing financial arrangements between public financing, it is imperative that the central and local governments that have government examines these experiences, hampered health centers’ use of funds. These estimates costs of UHC from these provinces/ Human Development Sector pressures will continue to mount as the health districts and identifies lessons learned. World Bank Office Jakarta system faces new burdens such as rising Indonesia Stock Exchange NCDs. In the face of these challenges, health Building system economic and fiscal sustainability, Tower 2, 12th Floor including improvements in efficiency and Jl. Jenderal Sudirman effectiveness, will be required to help ensure Kav. 52-53 the financial, political and social sustainability Phone: (021) 5299 3000 of universal health coverage.11 Fax: (021) 5299 3111 Make provider payment mechanisms more results-focused. Under Jamkesmas, www.worldbank.org/id/health payments to providers are basically fee- for-service (including diagnosis-related @BankDunia groups (DRGs) for hospital-based care). At present, there are no additional World Bank Indonesia incentives to improve quality and provider performance. More fundamentally, there are no mechanisms to incentivize providers to attain population-level targets, for example, 11 Thomson, S, T Foubister, and E Mossialos. 2009. Financing Health Care in the European Union. Edited by European Observatory on HealthSystems and Policies Studies Series N. 17. World Health Organization. 12 Langenbrunner, J. C., and A. Somanathan. 2011. Financing Health Care in East Asia and the Pacific: Best Practices and Remaining Challenges. Washington, DC: World Bank. Printed on recycled paper 6