Health Financing in Indonesia Prior to Universal Health Coverage Implementation: Value for Money Analysis

Abstract

Universal Health Coverage (UHC) has become an ultimate commitment of WHO country members, including Indonesia. Good health financing system which comprises well-funding, reduction of out-of-pocket expenditure and efficient use of fund, is critical to move toward UHC. The aim of this study is to give greater understanding of value for money of Indonesian health financing system, that is, the efficiency of Indonesian spending on healthcare prior to the implementation of universal health coverage. This study also provides preliminary evaluation of current health system from key informants. Three methods are used to analyse the value for money: general descriptive of Indonesian health expenditures relative to health outcomes achieved, data envelopment analysis, and key informants interview. The first two methods compare Indonesia’s results with those of benchmark countries which are classified into three categories: APEC members, lower middle income countries, and countries with medium level of HDI. The findings of this study suggest that Indonesia had low value for money with very small change of technical efficiency over the past decade. Indonesia has relatively low health expenditure, particularly public health expenditure, and high out of pocket share. It scored poorly on all of health indicators used in this study. Key informants believe that current health system is also inefficient. Some rationales behind these low attainments explicated by key informants including: 1) Underfunding 2) High accentuation on curative sector than preventive and promotive ones. 3) Poor access that comprises geographical reason and disproportionate distribution of health personnel; 4) Poor resources management involving infrastructure, physician regulation issue and undersupply of health personnel, and; 5) Political will. However, deeper research on exploring these reasons is encouraged.