Is Indonesia’s National Health Insurance Associated with Greater Hospital Efficiency: Evidence from a Survey of Private Hospitals

Launched in 2014, the government of Indonesia’s national health insurance scheme, Jaminan Kesehatan Nasional, or JKN, aims to ensure access to healthcare, especially for the poor and the near-poor (defined as the bottom 40%). The growing private healthcare sector in Indonesia is well-positioned to respond to the increased demand that will ensue from the government’s ambitious plans to achieve universal coverage by 2019. The private hospital industry has grown significantly over the last seven years, increasing from 52 to 63 percent as a proportion of total hospitals in Indonesia (MOH, 2017).

The Indonesian government, through the national health insurance agency Badan Penyelenggara Jaminan Sosial-Kesehatan, or BPJS-K, has contracted with private clinics and hospitals. As of September 2017, over 60 percent of BPJS-K-contracted clinics and hospitals were part of the private sector (Idris, 2017). BPJS-K, a single-payer agency, pays private hospitals per admission, outpatient visit, and/or procedure through Indonesia Case-Based Groups (INACBGs).