Prof. Dr. Zubairi Djoerban, Sp.PD, FINASIM, Consultant Hematology Medical Oncology

The ASEAN Economic Community

Opportunities for Progress - Part 1

It has been two years since the end of 2015 when the ASEAN Economic Community (AEC) was launched. As I have written earlier, the AEC not only opens the trading channels of goods and services, but also the professional human resource market, including physicians, lawyers, accountants and many others. On one hand, this means that AEC will expand the investment and capital flow, which is exactly what Indonesia expects to gain in this time of development.

One sector affected by AEC is health. AEC may be considered as the second challenge for the health system development in Indonesia, after the national health insurance scheme (Badan Penyelenggara Jaminan Sosial Kesehatan or BPJS Kesehatan) became fully functioning on 1 January 2014. BPJS Kesehatan (and the BPJS Ketenagakeerjaan or Manpower Insurance as of 1 July 2014) are state-owned enterprises which provides health care insurance for all Indonesians. With the functioning of BPJS, it is no longer only government employees, military personal, veterans and independence fighters and their families who can receive the benefits, but all Indonesians. With the beginning of AEC, health insurance also applies to foreign workers in Indonesia.

This two-part article (part 1 and 2) will discuss the connection between AEC and social welfare insurance system in Indonesia and its impact to health care service consumers and providers.

Challenges for the Achievement of Universal Health Coverage

By collecting public fees for operational costs, the BPJS Kesehatan provides health care insurance with the aims to ensure that all citizens have access to good and comprehensive quality health care services regardless of income level, social status or residential area.

What is meant by comprehensive services is a complete health care which includes promotive, preventive, curative, rehabilitative, midwifery, emergency and other supporting services. The government has also launched the aims of reaching universal health coverage by 1 January 2019. We can all hope and pray that this can be achieved. The government has developed a road map to achieve those targets, but we still have lots of homework to do, because as of October 2016, there has only been a number of 170.213.981 registered persons, which is equivalent to 70% of the population of Indonesia.

The mechanism initiated by the government since 2004, through Law 40/2004 on the National Social Security System, is based on the mutual help (gotong royong) system. This means that those who can afford the fees will cross-subsidize those who cannot afford to pay the fees. However, with all good intentions that people make with this system. I think there are some challenges, both internally and externally.

The internal challenge is politically-based. We know that for a long time the governmental budget allocated for health has been very low. Within the period 2013-2015, it was only around 2%. The good news is that there has been annual increases in the past years, although it is still far from ideal. If we look at our National Gross Income, percentage-wise our health budget is the lowest compared to the Philippines, Lao PDR, and Cambodia. Indonesia is also much below China and Cuba, and even lower than the relatively new country, Timor Leste.

Comparisons with income per capita is even more striking. With a health budget equal to 2.5% of the national gross income, this means that the health budget per capita in Indonesia is USD 100.This is slightly less than Timor Leste (11,9%, USD 103 ).  We are far behind Singapore (4,1%,  USD 2.111), Malaysia (4,6%, USD 629), Thailand (4,2%, USD 327), China (5,1%, USD 347), and Cuba (12,1%, USD 478). On a global level, Indonesia is ranked 158, just below Timor Leste which is ranked 157. The other countries already mentioned above would certainly be above Indonesia. The Lao PDR has a lower health budget per capita compared to Indonesia, which is USD 92, but the percentage compared to their national gross income is 4,3%.[1]

This indicates that there are still many challenges pertaining to the the political will of the government of Indonesia to improve the health sector, even though we all understand that health development achievements can always be the showcase  of any governmental regime. During the election campaign periods like the present, health and education has always been the champion for promises made by political leader candidates.

This problem becomes more complicated when it is linked to the politics of decentralization. In relation with BPJS Kesehatan, there are still agreements that need to be made pertaining to the distribution of authority between the central and regional government. What may be a national priority does not necessarily mean it will be the priority of the region, and vice versa. This to a certain extent is also caused by disparities among regions in the provision, access, and quality of health care.

Second, the internal political condition is also less supportive because of huge-scale riots, terrorism, and other horizontal conflicts (among others, conflicts caused by gubernatorial and presidential elections) which absorbs too much energy and governmental spending. As soon as conflicts and riots arise, governmental budget would immediately be allocated to security and legal matters, whereas health care social security become less prioritized.

It is understandable that health care becomes less prioritized, because in the AEC era there are more opportunities to receive foreign capital investments and to build more capital-intensive infrastructure projects. Security thus should be given high priority. This can be dilemmatic as it is not wholly under the control of the health sector.

Social Security for Foreign Workers

Third, still related to governmental political will, as a consequence of AEC, Indonesia needs to open its doors for hundreds of thousands, if not millions, of foreign workers who want to work here. Indonesia is seen as a dynamically, developing country. The entry of foreign workers would definitely require the signing of many memoranda of understanding among ASEAN member countries, concerning systems, management, participation and social security fees.

The participation of foreign workers in the BPJS scheme, particularly for those working in Indonesia for more than six months, are all regulated by Law 40/2004 on National Social Security, Law 24/2011 on BPJS, and the Minister of Manpower Ministerial Regulations no 16/2015 and no 35/2015 on the Employment Ethics of Foreign Workers. Another Memorandum of Understanding has been signed between the Minister of Manpower, BPJS Kesehatan and BPJS Ketenagakerjaan, which will be implemented by the Provincial and District Manpower Offices, The coordination mechanism between BPJS Kesehatan and BPJS Ketenagakerjaan will be centralized.

Participation of foreign workers in the social security scheme is mutually beneficial to all parties, particularly because it means protection towards each individual worker. However, in reality as of May 2016, the number of foreign workers registered at BPJS Ketenagakerjaan has only reached a number of 22.000 workers, which is equivalent to 32,40%. The remaining 67,60% have not been registered[2], even though it is mandatory, similar to how Indonesian workers are required to participate in social security schemes in the country where they work.

To increase the coverage of foreign workers into BPJS is still a huge work which needs to be done by the government and BPJS itself. On one hand, increasing the coverage means that there will be an income increase to implement this social security scheme, while on the other hand health care providers, both governmental and private, are in demand to provide their best services. The stigma that private hospitals are more expensive than governmental ones can be removed through more inclusion of foreign workers into the BPJS program.

But there is one more important thing to note. We all have to admit the importance of the private sectors role in providing services, as governmental services are not sufficient to serve the whole country. But on the other hand recently we have also seen the closing of several private hospitals due to the imbalance between income from the BPJS scheme and the number of patients that need to be treated. This is not a good precedent, because to be able to attract more investors, health insurance and security for foreign workers should be seen as an attractive incentive for them.

Article translated by Danny Yatim, Angsamerah Networking Expert



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