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Jakarta Post

Your letters: Makassar Private sector in health care?

  • The Jakarta Post

    The Jakarta Post

  /   Wed, May 20, 2015   /  07:29 am

This is a comment on an article titled '€œInvolving the private sector in universal health care?'€ (The Jakarta Post, May 18) by Dominic Montagu.

The writer argues that the private sector, often with financial motives, is an important stakeholder in achieving universal health coverage (UHC).  Further, he also stated that UHC is the goal, and we should not be sidetracked with '€œmy way'€ or '€œyour way'€ as long as the goal is met.

Although I agree with some of the logic described in the article, one could argue that a well-functioning health-care system has three dimensions: the amount of population covered, the wealth and quality of services covered and the magnitude of financial protection.

Blindly taking the private sector into health systems may cause long-term problems.

First, the private sector operates with financial motivations, meaning underserved and poor populations in the more remote areas of Indonesia may not be palatable to the private investors.

As a crude example, North Sumatra has 176 hospital beds per 100,000 people, while West Sulawesi has only 67 percent of that hospital density.

Second, a regulatory system needs to be in place in order to prevent private hospitals merging with and monopolizing the Indonesian health-care system.

Profit-oriented monopolistic rational actors will both increase the price and reduce the service quantity or quality provided to the people.

Third, the more private involvement there is, the more government control and regulations are needed. Privately owned health centers and hospitals could very easily limit enrollment from unprofitable patients.

This adverse selection behavior of private providers is heavily documented in the UK'€™s general practitioner practices as well as the US'€™ health maintenance organizations (HMOs).

HMOs in the US provide attractive care for families and children, because a married individual with children is on average healthier and less costly to treat compared to the average single individual without children. Of course, the examples stated above are not isolated to the private entities alone. To some extent, the public sector can behave like a profit-maximizing actor if the proper incentive and regulatory systems are not in place.

However, it is widely known that profit-maximizing behavior with a negative adverse effect on services is more prevalent in privately owned entities. Opening up the national health system to the private sector needs to be done carefully to ensure the quality and quantity of services, as well as financial risk protection on the
individual level '€” in addition to the health-care access coverage of the UHC.

Christian Suharlim
Boston, Massachusetts

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