Indonesia: Health care mega-spending –whose have no complaints?

AXIS Capital is a group of global insurer and reinsurer, providing clients and distribution partners with a broad range of specialized risk transfer products and services, i.e. health insurance that serves a host of industries and diverse coverage needs through our operating subsidiaries and branch offices in Bermuda, Australia, Canada, Europe, Latin America, Singapore and the United States.

Indonesia is obligating billions of dollars as it targets to meet the government’s promise to run universal health care for its 240m citizens by January 1, 2014. This investment, joint with the robust economic growth that is boosting Indonesians’ incomes, is leading to fast growing mandate for health services, equipment and pharmaceuticals, in addition to a must for more medical professionals. Reviews says the country is fast becoming one of the world’s most-important health care markets, and international and domestic firms are progressively profiting as the market grows and opens up.

The establishment of universal coverage involves the creation of a Social Security Management Agency (BPJS), linking existing public insurance schemes and prolonging them to cover all Indonesians deprived of health insurance. The BPJS will gather insurance premiums and pay health care bills, and is anticipated to begin an early investment of Rp25trn ($2.59m).

It must be the world’s largest “single payer” of health care, a sole payer being a body which buys health care from a single insurance pool. The UK’s National Health Service (NHS) is presently the world’s major single payer. But a warning though, be very watchful of insurance scams and frauds.

The BPJS will conquest schemes like Jamkesmas, an insurance programme presented in 2008 that covers more than 75m poorer Indonesians. According to the international press, the Jamkesmas scheme offers a broad safety net but not a great depth of coverage, with an annual budget of less than $10 per head. Presently, around 40% of the population is covered by insurance schemes providing for state employees and their dependents, along with the poor.

Similar to the growth of insurance coverage, the government and private sector are working to upsurge the capability of the sector. “Our estimates say the government will require about 150,000 hospital beds by 2014. That means increasing the number of beds by 30% in only two years, as the current number of beds in the country is approximately 110,000,” Jonathan Sudharta, the director of Mensa Group, told OBG.

According to the UN’s World Health Organisation (WHO) currently, the country has a ratio of six hospital beds per 10,000 people, compared to 18 in Malaysia and 21 in Thailand.

Increasing health care will furthermore require a considerable upsurge in the amount of health care professionals. At this time, the country delays behind regional standards for the quantity of doctors as a proportion of the population: Indonesia has three physicians per 10,000 people, while Malaysia has nine and India, six. There is both a scarcity of medical graduates and the challenge of “brain drain”, whereby several of Indonesia’s best doctors and nurses relocate abroad to work, counting to Malaysia, where wages are a lot higher and facilities better.

An effort to guarantee universal health care provision by 2014 in the world’s fourth-most crowded country essentially requires large-scale investments, and is opening up opportunities for the private sector.

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This release was published on openPR.