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Health insurance victim of political short-termism
The Healthcare and Social Security Agency (BPJS Kesehatan) has been crippled; it is bleeding Rp 18
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span>The Healthcare and Social Security Agency (BPJS Kesehatan) has been crippled; it is bleeding Rp 18.7 trillion (US$1.4 billion). The government blames the providers’ moral hazard and insurers’ misconduct, probably hoping it can let itself off the hook.
The National Health Insurance (JKN) program provides comprehensive, universal health coverage that is free to more than 176 million Indonesians. Healthcare, especially for inpatient services in rural areas, has increased significantly.
Now, it is coming to a crashing halt, though since the beginning critics saw the JKN as financially precarious. The snowballing effect of the underfunded system on quality and clinical effectiveness are political risks that President Joko “Jokowi’ Widodo must consider. The public will soon notice that the quality of care they receive is being affected.
In recent years, think tanks have warned of a burnout of the system. Medical professionals are becoming disaffected. Yet, the true scale of the crisis does not appear to have resonated with the President.
It is important to let BPJS Kesehatan stand on its own feet. Still, the sensible President should not leave the JKN to flounder and perform “heroic” actions by injecting trillions in state investments when it has spent a year failing to work.
Indonesia’s healthcare system is under-resourced, with public expenditure at 1.5 percent to gross domestic product. This is 50 percent much lower than in other developing countries that have already attained three health-related sustainable development goals and have significantly reduced out-of-pocket spending.
The JKN, in fact, accounts for only 13 percent of total health expenditure, although it covers more than 65.98 percent of the population. The scale of the deficit makes it clear that overspending is largely not attributable to mismanagement or fraud.
The recent proposed strategy of stringent internal control to reduce the risk of fraud, and short-term fixes — such as driving efficiency by introducing cost-sharing mechanisms — have masked the main underlying drivers of the deficit.
Jokowi should move beyond the search for consensus among 27 different scenarios to balance the books. A better managed JKN needs willingness to take bold risks for long-term gains.
First, JKN demands an increased in pooled funds. Scaling up coverage to informal workers will provide an avenue for resource generating. Contribution-based, compulsory enrolment of non-poor, informal workers has promoted high drop-out rates and adverse selection.
The BPJS Kesehatan needs to simplify the JKN scheme into two categories: the formal sector (contributory scheme) and informal sector (subsidized scheme). A partial subsidy scheme on a sliding scale based on income may work in the short run despite technical difficulties. However, in the long run, fully subsidized schemes would offer a better social base and administrative apparatus for the JKN.
Where the fiscal space of capacity does not exist, Indonesia may need alternative earmarked funds for universal health coverage, for example by raising “sin taxes” on tobacco, sugar, other unhealthy foods and non-environmental friendly products such as gasoline and plastics.
Second, the link of JKN contributions to benefit packages must be raised to ensure financial protection. An optimum contribution ratio would be associated with effective coverage.
The JKN contributions, however, are regressive. There is a cap so that higher income earners pay a lower proportion of their overall income than lower earning people.
The President needs to amend the contribution ceiling annually, considering changes in wages. This is more politically popular than imposing waiting times, benefit adjustments or price-based, demand-side cost-sharing.
Third, a full-fledged JKN encourages greater plurality and competition in the provision of healthcare services. It requires a government moving from direct service provisions to policy-making, strategic purchasing and regulating.
While the monitoring of under-and over-provision of healthcare within JKN system is imperative, the design of capitation and INA-CBGs payment schemes must also ensure contestability. The Health Ministry must put in place policies that encourage private-sector participation in the market to avoid creating a two-tier health system.
Lastly, according to the principles of prudence, accountability and transparency, BPJS Kesehatan is responsible for producing reports to the President, with a copy of the report going to the National Social Security Agency (BPJS) and the public.
However, the National Social Security Board (DJSN) lacks enough power, technical expertise or legal support necessary for supervisory functions. The public is also paralyzed as the active engagement of citizens regarding their health needs and priorities is not yet fully realized.
There is also an unclear stewardship between BPJS, the Health Ministry, DJSN, the Supreme Audit Agency (BPK) and Financial Services Authority (OJK). The incapable Coordinating Human Development and Culture Minister Puan Maharani has clearly failed to lead the coordination task. Jokowi must take over the responsibility to address the imbalance of power in the JKN’s leadership and governance.
Achieving universal coverage is a long term process that involves innovation, continuous improvement and a process of trial and error. The government should do it the hard way; stop blaming others, start fixing the system.
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The writer is a physician, health policy analyst and consultant for the Center for Health Economics and Policy Studies (CHEPS).
