World Bank Approves Support to Strengthen Health Insurance, Improve Quality of Health Care in Indonesia

Washington  – The World Bank today approved a US$400 million loan to strengthen the quality and efficiency of Indonesia’s National Health Insurance program, Jaminan Kesehatan Nasional (JKN), as part of efforts to improve health care delivery, expand coverage, and invest in Indonesia’s human capital.

The financing, the “National Health Insurance (JKN) Reforms and Results Program,” is aimed at strengthening the quality of health care, improving the efficiency of JKN spending, and supporting JKN policy formulation and implementation. The program will bring together four key JKN stakeholders — the Ministry of Health, the Social Health Insurance Agency or Badan Penyelenggara Jaminan Sosial Kesehatan (BPJS-K), the National Social Security Council or Dewan Jaminan Sosial Nasional (DJSN), and the Ministry of Finance – to facilitate the coordination and sequencing of needed reforms.

“In addition to enhancing the quality of care and efficiency of JKN spending, this financing will also support the improvement of Indonesia’s health information system so it can be more integrated for better targeted and better informed JKN policies,” said Kunta Wibawa Dasa Nugraha, Secretary-General of the Ministry of Health of the Republic of Indonesia.

Indonesia has made significant progress towards achieving Universal Health Care (UHC) through the JKN program. Between 2014 and 2019, JKN coverage expanded to reach 83 percent of the population and reduced individual out-of-pocket expenditures from 47 percent to 32 percent of their spending on health care.

However, despite these achievements, shortcomings in the quality of care have left Indonesia with high maternal mortality, tuberculosis and stunting rates. Limited screening and diagnosis have also hindered the effective management of a growing burden of chronic diseases.

“Synchronized work among the stakeholders is crucial to ensure that the Program will achieve its intended objectives and benefit the Indonesian people as the main users of JKN. The Ministry of Finance will coordinate the implementation and provide the secretariat support throughtout the life of the Program,” said Made Arya Wijaya, Expert Staff for State Expenditure of the Ministry of Finance of the Republic of Indonesia.

The COVID-19 pandemic also disrupted access to essential health services, with potentially long lasting effects on human capital accumulation. Nearly 3.5 million Indonesians lost access to affordable health care as a result of job losses, while reduced mobility, facility closures, and caution in the context of the pandemic contributed to a decrease in the demand for health care, especially preventive care. Delayed and foregone health care could not only lead to greater health care needs in the future, but could add to financial burdens for JKN’s implementing agency, BPJS-K.

“The long-lasting impacts of COVID-19 and the possible transition from pandemic to endemic will further challenge JKN’s sustainability. In this context, while JKN’s fund and administration cost of BPJS Kesehatan continue to be sourced from members’ premium, this Program for Results (PforR) supports the government’s capacity to keep JKN sustainable through improved quality, efficiency and claims management. We look forward to this collaborative effort for better quality services to our members,” said Mahlil Ruby, Director of Planning, Development and Risk Management of BPJS-K.

The loan will be made through the World Bank’s Program for Results instrument, which links disbursement of funds to the achievement of specific program results, and is designed for a five-year period. The program will use indicators including improvements in processes for delivering care at first-level health care facilities and hospitals, strengthening claims management and prevention of unneccessary claims, and in enhanced use of data in decision-making and support. All of JKN’s approximately 220 million beneficiaries, of whom 60 percent are poor or near-poor, will benefit from these improvements.

“Through this support, the World Bank remains committed to working with the Government of Indonesia in ensuring households’ continued access to quality, essential health services,” said Satu Kahkonen, World Bank Country Director for Indonesia and Timor-Leste. “Such accessibility is crucial for Indonesia’s post-COVID-19 recovery efforts and will enable a healthier and more productive Indonesian workforce in the future.”

In addition to the support from the World Bank, the Bill and Melinda Gates Foundation will contribute a grant of US$2.33 million through the World Bank’s Indonesia Human Capital Acceleration multi-donor trust fund to strengthen JKN’s capacity to implement and coordinate this initiative.

 

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