Universal Health Insurance in Indonesia
Is the 2019 Target Still in Sight?
In 2014, the Indonesian government set out on a journey towards an ambitious destination: mandatory universal healthcare coverage for a projected 250 million citizens by 2019. If successful, Indonesia’s Jaminan Kesehatan Nasional (JKN – National Health Insurance) would become the world’s largest single-payer health insurance system. After a delay of almost a decade, the launch of JKN was seen as an achievement in and of itself.
Three years later, the World Health Organization’s Asia Pacific Observatory on Health Systems and Policies’ reports that only 172 million members had been registered under JKN by the end of 2016. Despite a considerable coverage expansion since the JKN was launched, the healthcare system in the archipelago remains predominantly out of pocket. This disparity between ambition and action can be tracked to a combination of opaque policies, inadequate funding, and the challenge of implementation on such a large scale.
The JKN encompasses and expands upon the country’s earlier patchwork of targeted social insurance schemes and relies on a series of tiered premiums tied to enrollees’ employment status. Managed by the Social Security Administrator for Health (BPJS Kesehatan), JKN aims at comprehensive healthcare coverage, including treatment of common ailments as well as rare diseases and cancers. Structural and systemic challenges are expected along the way as the world’s fourth most populous country strives to unite its citizens under a universal umbrella. Funding, infrastructure and easy access to healthcare professionals would be among the few creases that would need straightening.
Funding for the universal coverage program remains a sizeable concern for the government as well as stakeholders. With low reimbursement rates and unviable premium levels, the JKN scheme does not look to have a sound foundation. As health service coverage and awareness grows, so too will utilization and costs. Premiums currently assigned to workers in various sectors are looking to be insufficient to sustain the scheme, and have indeed already seen increases in 2016. Government subsidy rates per individual enrollee under the JKN’s poor or near poor category have already increased more than three-fold compared to under the previous Jamkesmas scheme for the poor. Yet there is no clear indication where additional funding will come from. Despite increases in recent years, healthcare spending as a percentage of gross domestic product (GDP) remains below average at around 3 percent. A lack of skilled healthcare professionals and underdeveloped infrastructure are further constraining JKN’s progress. An inequitable distribution of physicians across the country is particularly inhibiting access for those located in the country’s many remote areas.
With Indonesians struggling to afford high-quality health products and services and healthcare expenses growing, the government has indicated that cost containment will be a priority going forward. While progress on this front has been minimal so far, memorandums of understanding have been signed with developed markets such as Denmark and Singapore to work towards a more sustainable healthcare system. International health co-operation and knowledge sharing gives Indonesia a platform to learn best practices and begin to ameliorate the current situation. Nevertheless, further concrete investment in infrastructure and human resources will remain the essential ingredient to expanding coverage and determining the success of JKN.
The promise of widespread patient access through greatly expanded coverage gives the industry a reason to look at Indonesia as a market with potential. Universal coverage would have significant implications for life sciences industry stakeholders by increasing both access and affordability of healthcare in the country. That said, the JKN’s reliance on a generics-dominated national formulary will limit opportunities for branded drugs and amplify the need for solid cost-effectiveness arguments. Ultimately, in order to reach the government’s ambitious goal, the JKN scheme would need to make major strides over the next two years. Current trends suggest that this target remains out of reach.
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