Indonesia’s Nationwide Health Care Plan Stumbles at First Hurdle

By Randy Fabi & Nilufar Rizki 20 May 2013

JAKARTA — When a sick Indonesian baby died after 10 hospitals in Jakarta turned her family away in February, critics blamed a pilot health insurance scheme that had overwhelmed the city’s public hospitals.

The program, introduced in November, gave health insurance to around 5 million people in Jakarta categorized as poor. Long queues quickly formed at already stretched hospital emergency rooms as many patients, some who were not even ill, sought to take advantage of being covered for the first time.

Some health experts said it was a sign of the chaos to come when the government begins rolling out a nationwide health insurance program early next year, especially since Jakarta, a city of 10 million people, has the country’s best public hospitals and doctors.

“If Jakarta itself is not ready, I don’t know how we can say other less advanced cities can be ready,” said Palmira Bachtiar, senior researcher at Indonesia’s private SMERU Research Institute, which focuses on health and poverty issues.

Lisa Darawati said her family sought treatment for her one-week old daughter Dera across the Indonesian capital over a four-day period. The 10 hospitals were either too crowded or lacked the equipment to treat Dera, who had been born one month premature, Darawati said. Dera later died from respiratory complications.

Her death triggered an outcry in local media, which listed the 10 hospitals. Some editorials said the pilot scheme had been implemented too hastily. Under the scheme, the poor are eligible for free or subsidized hospital care. Previously, patients without insurance had to pay for treatment on the spot.

Jakarta governor Joko Widodo and the Indonesian health minister have defended the program.

Widodo said thousands of people in Jakarta had been dying at home because the lack of insurance stopped them seeking medical treatment in the first place.

“If we did not start in November, there would be 500,000 people sick, but at home,” Widodo told Reuters during a recent interview.

Nationwide Health Care a ‘Game Changer’

The nationwide health care plan and the Jakarta pilot scheme has caught the attention of the private sector, which senses an opportunity to tap into demand for better health services from Indonesia’s rapidly growing middle class.

Local companies with an interest in health care such as PT Lippo Karawaci and Kalbe Farma are investing in new private hospitals and clinics, anticipating that Indonesians who can afford it will pay more to avoid the queues and dilapidated equipment at public facilities when the national scheme gets under way.

“Universal health care is a game-changer … and if companies are not prepared for that then they are going to lose out,” said Emmanuel Wehry, chief Indonesia marketing officer for French insurer AXA Financial.

The nationwide program also includes a plan to sharply increase the number of hospitals beds. That would reverse decades of underfunding that has left Indonesia, a sprawling archipelago of 240 million people, with one of the worst ratios of hospital beds per capita in Asia.

The initial insurance roll-out begins in January, with the aim to cover all Indonesians by 2019 from the 52 percent who currently have some form of insurance.

The program will integrate various public health care schemes into one. It will give free or subsidized coverage to 86.4 million poor and so-called “near poor” Indonesians in 2014, 10 million more than are covered now. Around 35 million Indonesians who get health insurance from employers, the military and police will also be included.

The World Bank estimates the insurance scheme would cost $13-$16 billion each year once it is fully implemented. The government has said it would double its spending on health to 16 trillion rupiah ($1.64 billion) next year to cover the poor and the “near poor.”

The Jakarta pilot scheme encourages residents to go to a clinic first, then get a referral from a doctor if they need to visit a hospital. The aim is to prevent hospital overcrowding.

But this had not been fully explained, said researcher Bachtiar, adding that people were flocking to hospitals instead.

Governor Widodo acknowledged there was not enough beds in hospitals and clinics to meet the demand. He said he had asked hospitals to try to make more beds available to the poor.

“It is better to start it and then when there is a problem, we improve it,” said Widodo, who won office last year in a landslide and is one of Indonesia’s most popular politicians.

The number of patients at Jakarta’s hospitals had jumped by up to 70 percent, local media quoted him as saying in March.

Dera was born at a small Jakarta hospital that didn’t have the necessary neo-natal medical equipment. She died there after her family failed to get her treated at another hospital, Darawati, 20, told Reuters recently.

“At these other hospitals, we didn’t know what actually was happening. I could have burst into anger but I would have felt bad with people around me. I had to let go,” said Darawati, fighting back tears at her daughter’s grave in a poor neighborhood in South Jakarta.

The local media attention on Dera’s death has put pressure on Jakarta’s hospitals, said Parulian Simanjuntak, executive director of the International Pharmaceutical Manufacturers Group, an industry body in Indonesia that represents multinational pharmaceutical firms.

A few weeks after Dera’s death, local media reported that a teenage girl had died from an intestinal infection after hospitals in Jakarta denied her treatment because they were too crowded.

“If you look at what is happening after these deaths, hospitals are now afraid of it being reported that babies are not being well taken care of. It is quite chaotic,” said Simanjuntak.

Jakarta’s Cipto Mangunkusumo Hospital, one of Indonesia’s top public hospitals, was one of the 10 that rejected Dera. It has only 10 beds in its intensive care unit and they were all being used when she was brought in, said its president director, Dr. C.H. Soejono.

The number of patients at Cipto had jumped more than 25 percent since the pilot program was introduced, he added.

Health Minister Nafsiah Mboi said few patients were missing out on treatment.

“Not many patients have been turned away. More patients have received treatment and good treatment,” Mboi said.

Companies Want to Cater to the Wealthy Too

Indonesia has six hospital beds for every 10,000 people, according to the World Bank. That is four times below the global average and less than the 42 beds in China and nine in India.

Out of 100 countries, Indonesia ranked ninth from bottom despite its strong economic growth. GDP growth this year is forecast at 6.2 percent, steady from 6.23 percent in 2012.

Indonesia wants to increase its bed capacity to 10 per 10,000 people by next year. That translates into 96,000 more beds. To meet global standards, US business consultancy Frost & Sullivan estimated it would need to add 400,000 by 2015.

Private companies also have their eye on the 1.5 million Indonesians who seek medical treatment overseas each year, spending more than $11.5 billion, according to government and industry groups.

Indonesians were the biggest group of foreigners visiting Singapore hospitals, IHH Healthcare Berhad, Asia’s largest hospital operator, said recently.

PT Lippo Karawaci’s Siloam Hospitals, Indonesia’s biggest private hospital operator, plans to invest $500 million by 2015 to build 20 hospitals, more than double its current number of 13. It plans to raise at least $200 million by listing its hospital division this quarter.

Kalbe Farma, Indonesia’s largest listed pharmaceutical firm, plans to invest as much as 20 billion rupiah annually to build 20-25 clinics each year in Jakarta for the next five years.

For Darawati, it all comes too late.

Not long after Dera died, Cipto hospital admitted her twin sister Dara, who was also ill. She died a month later from a blood infection.

Additional reporting by Andjarsari Paramaditha and Kanupriya Kapoor in Jakarta and Eveline Danubrata in Singapore.