Indonesia’s Road To Universal Health Coverage: A Political Journey

In 2013 Indonesia, the world’s fourth most populous country, declared that it would provide affordable health care for all its citizens within seven years. This crystallised an ambition first enshrined in law over five decades earlier, but never previously realised. This paper explores Indonesia’s journey towards universal health coverage (UHC) from independence to the launch of a comprehensive health insurance scheme in January 2014. We find that Indonesia’s path has been determined largely by domestic political concerns – different groups obtained access to healthcare as their socio-political importance grew.

A major inflection point occurred following the Asian financial crisis of 1997. To stave off social unrest, the government provided health coverage for the poor for the first time, creating a path dependency that influenced later policy choices. The end of this programme coincided with decentralisation, leading to experimentation with several different models of health provision at the local level. When direct elections for local leaders were introduced in 2005, popular health schemes led to success at the polls. UHC became an electoral asset, moving up the political agenda. It also became contested, with national policy-makers appropriating health insurance programmes that were first developed locally, and taking credit for them.

The Indonesian experience underlines the value of policy experimentation, and of a close understanding of the contextual and political factors that drive successful UHC models at the local level. Specific drivers of success and failure should be taken into account when scaling UHC to the national level. In the Indonesian example, UHC became possible when the interests of politically and economically influential groups were either satisfied or neutralised. While technical considerations took a back seat to political priorities in developing the structures for health coverage nationally, they will have to be addressed going forward to achieve sustainable UHC in Indonesia.

Over the last decade, >30 middle-income countries and a handful of low income countries have launched ambitious plans to ensure that all of their citizens can get the health care they need without undue financial pain. This push for what has become known as ‘universal health coverage’ is being promoted by development agencies such as the World Health Organisation (WHO) and the World Bank (Rodin and de Ferranti 2012). In most cases, the impetus for more inclusive health coverage has been domestic, and implementation has been nationally driven. However the international organisations that retrospectively imposed the umbrella label of ‘UHC’ on these efforts have now joined scholars in seeking common threads across the experience of different countries. Their papers focus largely on technical issues of implementation such as financing models, inclusion criteria, benefits provided and monitoring systems (Lagomarsino et al. 2012; Boerma et al. 2014; Cotlear et al. 2015). Other scholars underline the importance of local political and other institutional circumstances in determining how far individual countries get in realising their ambitions in attaining universal health coverage (Agyepong and Adjei 2008; Rosser et al. 2011; Savedoff et al. 2012; Harris 2015; Reich et al. 2015).

Of the nations now working to provide all their citizens with affordable health services, few are more ambitious than Indonesia. The geographic, human and economic diversity of the world’s fourth most populous nation present particular challenges. Some 150 million people are squeezed into Java – an island with the same land area as England1 – the other 100 million Indonesians are scattered across some 7,000 other inhabited islands over a distance equivalent to that from London to Tehran. In the capital Jakarta, 4% lived below the local poverty line in 2014. In Papua province, the figure was 28%. Official data show that income inequalities, measured by the GINI coefficient, increased in 30 out of 33 provinces with comparable data between 2007 and 2014 (Badan Pusat Statistik 2015). The nationally-determined poverty rate, 11%, understates the proportion who would be desperately hard hit by major health spending: at last count, some 43% of Indonesians were living on less than US$2.00 a day.2 Variation in income is reflected in health status: in Maluku, with a provincial GDP of US$170 per person per year, fully 52% of children under 5 were stunted in 2013, twice the fraction that suffered from stunting in Riau Islands province, where per capita GDP was US$870 a year. Access to services is also widely uneven. Just 27% of pregnant women in North Sumatra gave birth in a health facility in 2014, compared with 97% in Bali (Kementerian Kesehatan Republik Indonesia 2015). A 2008 analysis underlined the disparity in access to hospital services. The richest tenth of the population occupied four times as many hospital bed nights per capita compared with the poorest tenth (Thabrany 2008).

Since 1998, Indonesia has undergone cataclysmic political change. For the first five and a half decades of its existence, virtually all policy decisions were taken by the central government in Jakarta. Service delivery at provincial and district levels was often overseen by bureaucrats appointed by the centre. In 2001, just three years after General Suharto stepped down after 32 years in power, responsibility for health, education, infrastructural investment and much else was handed to district governments. At the time there were fewer than 300 districts. By 2014, there were 514. Since 2005, the leaders of these districts have been directly elected. This has led to changes in the relationship between citizen and state that have had profound implications for health financing and service provision (Pisani 2013; Aspinall 2014).

It was against this background that Indonesia in 2012 declared that it would achieve universal health coverage by 2019 (Republic of Indonesia 2012). Indonesia has a flair for setting politically ambitious targets, and working out the details later. The first example was the nation’s declaration of independence, which read: “We the people declare the independence of the Republic of Indonesia. Details of the transfer of power etc. will be worked out carefully and as soon as possible”. Many other grand ambitions were enshrined in the constitution that was adopted the day after independence was declared (Republic of Indonesia 1945).

Though the 1945 constitution did not mention health explicitly, the Basic Health Law of 1960 stated that all citizens had a right to be physically, mentally and spiritually healthy. In Article 8, the state assumed responsibility for ensuring that Indonesians had equal access to health services. It made special mention of civil servants and blue-collar workers, and referred without elaboration to the provision of “health funds”. Yet it was to take more than five decades for there to be any significant shift towards providing pooled health insurance that would allow a majority of Indonesians to access affordable health services.

The aim of this historically-rooted study is to trace the Indonesia’s progress towards universal health coverage, setting it in its political and economic context. We cover the period from independence in 1945 to the start of 2014, when a health insurance programme expected to encompass all citizens was formally launched. We believe a clear understanding of this evolution, and the forces that shaped it, may help to inform future policy choices both in Indonesia and in other countries journeying towards a similar goal.

Some of the technical decisions made along this journey have been described elsewhere (Rokx et al. 2009; Dwicaksono et al. 2012; Pigazzini et al. 2013; Simmonds and Hort 2013; Marzoeki et al. 2014; Mboi 2015). In this study of the social, political and economic events which shaped the path to affordable health services in Indonesia, we build on earlier analyses of the interaction between health policy and national governance, in particular two important and linked developments in Indonesia: democratisation and decentralisation (Rosser et al. 2011; Aspinall 2014).

To frame our analysis of developments in these two areas, we draw on two bodies of theory: historical institutionalism and experimentalist governance.

A core concept within historical institutionalism is path dependence, which asserts that the range of possible policy choices at any given moment is constrained (and in some cases is determined) by the institutions that have emerged in the past, and the choices those institutions have shaped (Steinmo 2008). In the democratic arena, promises made to the electorate and services delivered by previous governments both contribute to voter expectations, limiting policy choices in the present, and foreclosing different pathways in the future (Mahoney 2000).

Experimentalist governance is an approach to governance which capitalises on the differences that emerge in a decentralized system. Instead of trying to minimize diversity by imposing blue prints, a central authority provides local governments with the space to experiment and encourages systematic learning and the sharing of lessons from these experiments in developing optimal policies (Sabel and Zeitlin 2008).

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