Presentation on Strategic Purchasing given at the iHEA World Congress in Milan, July 2015

1. A Critical Analysis of Purchasing
Arrangements under BPJS in Indonesia
Yulita Hendrartini, University of Gadjah Mada , Indonesia
iHEA, Milan; Tuesday 14 July, 2015
Gadjah Mada
University

2. Introduction: Roadmap to UHC in
Indonesia
Transformation from 4 existing
schemes to BPJS Kesehatan (JPK
Jamsostek, Jamkesmas, Askes PNS,
army)
Coverage of various existing
schemes 148,2mio
121,6 M covered
by BPJS
Keesehatan
50,07 M covered by
other schemes
257,5 M (all
Indonesian
people)
covered by
BPJS
Kesehatan
Activities:
Transformation, Integration, Expansion
86,4 M poor
2
Consumer satisfaction measurement every
6 month
Benefit package and sevices review
annually

3. Key actors in SHI
National Social
SecurityCouncil
Financial Autority
Agencycontrol control

4. KEY ACTOR
Social Health Insurance
National government
agencies
(MoH, MoF, MoS,
Provincial
and district
governments
Providers
of care
Insurer
(BPJS)
Oversight of scheme X
Financing scheme x X
Setting parameters (benefits package,
definitions of poor, etc.)
X X
Accreditation/Empanelment of providers X X
Enrollment x X X X
Financial management/planning X X
Actuarial analysis / premium setting X
Setting rate schedules for
services/reimbursement rates
X X
Claims processing and payment X
X (District
level)
Service delivery X X
Developing clinical information system for
monitoring/eval
X x x
Monitoring local-level utilization and other
patient information
X x
Monitoring national aggregate information X
Customer service x X X
ROLE OF KEY ACTORS

5. Health Financing in SHI
Resource collection Pooling Purchasing
Government contribution for poor and
near poor:
Rp. 19.225 (USD 1.5) PMPM
BPJS as
single purchaser
PHC public & private
providers: capitation
Public and private
Hospitals : DRGs (INA-CBG)
based payments vary
according to region
3 rd class IP for poor
2 nd class IP for non poor
1st class for non poor
(depends on premium)
Civil servant and military: 5% of monthly
wages
2% from employee
3% from employer
Laborers: 5% of monthly wages
1% from employee
4% from employer
Self funded / informal sector:
From Rp 25.500 – 59.500 PMPM
(2.0 USD – 4.5 USD)

6. Summary: Mechanism for strategic
purchasing
Principle agent
relationship on going proccess Key Challenge
Purchaser -
government
• Organizational structure
• Capacity building for DHO
• Negotiated budget
• Unclear role of stakeholder
• Lack of data for monitoring
• Updating
• Lack of health facilities
investment
Purchaser - citizen • Review benefit package
annually
• Patient satisfaction review
• Lack of citizen voice
• Limitation of Customer rights
Purchaser - provider • Prospective Payment
• Selection and
credentialing
• Setting indicator
• Capitation not effective
• DRG tariff inadequate
• Inequity provider distribution
• Lack of quality control
• Lack of fraud prevention

7. Gaps in government actions to
promote strategic purchasing
• Unclear organizational roles
• Accountability lines between BPJS / purchaser and the
Ministry of Health (and District Health Office)
• Inadequte monitoring activities
• Data limitation and lack of DHO capacity to monitor the
program
• Problems in reducing the inequity of services.
• Limited budget to developing new health service
infrastructure and deploy strategic human resources

8. Gaps in relation to role of citizens
and population in strategic
purchasing
• The needs, preferences and priorities of citizens in determining
service entitlements is not clear in the policy design and
implementation.
 Many regions where community needs are not met 
indicates that there is no mechanism to ensure beneficiaries
can access available services, especially the marginalized
groups
 Lack of evidence on health needs  no evidence that citizens
can participate in the process of determining health needs
and priorities
 No representation in purchasing boards
 Limitation of patients’ rights legislation

9. Gaps in relation to providers in
strategic purchasing
• Purchaser (BPJS) has inadequate credentials and
capacity to contract  especially in government
providers
• Poor monitoring mechanisms to control health
services moral hazard (potential fraud)
• No fraud regulation
• Provider response to prospective payment system
(capitation and DRG payment)  problems:
 Provider ability/capacity to respond to incentives 
accept limitation
Lines of accountability  detection potential Fraud

10. Factors affecting first year of SHI
implementation in Indonesia
 The SHI system is quite new, so actors will need time to
settle into new relationships and respond to incentives
 BPJS is a new office to managed huge membership 
need more staff, developt IT system to monitor provider
performance and governance stewardship
 Strengthened and developed PHC role as gatekeeper and
capacity building DHO to supervised
 New Drug formulary for PHC
 Skill Training and refreshing course  to promote
primary doctor competencies

11. Strategic purchasing: Conclusion
SUPPORTING FACTORS
•Strong political support for BPJS
•The benefit package under the
scheme will be clearly defined and
includes full spectrum of health
concerns.
• Autonomy for purchaser in day-
to-day management decision-
making and operations
•BPJS capacity to claim audit
timely payments to providers (max
14 days)
CONSTRAINING FACTORS
•Limited BPJS resources  regular
operation of the BPJS offices
•Limited of BPJS capacity to
purchase stragically  pricing
policy regulated by MOH 
capitation payment too high for
PHC govrnment
•Limited capacity of BPJS to
monitor provider performance,
service utilization & quality, and
publicly report on provider &
purchaser performance

12. Recommendations
• Strategic purchasing alone cannot deal with the problems of underlying
inequity in distribution of infrastructure  need the collaboration
between central and district government to built infrastructure
• Ensure structural or functional integration of public health programs into
purchasing
• Enforce purchaser accountability by making data accessible to the public
and relevant stakeholders
• Strengthen the quality control of health service and fraud prevention,
detection and prosecution.
• Indicators related to strategic purchasing need to be added in to the SHI
and BPJS monitoring system
• Change the management culture of command and control

13. www.wpro.who.int/asia_pacific_observatory
http://resyst.lshtm.ac.uk
@RESYSTresearch
The research is a collaboration between RESYST and the Asia
Pacific Observatory on Health Systems and Policies.
RESYST is funded by UK aid from the UK Department
for International Development (DFID). However, the
views expressed do not necessarily reflect the
Department’s official policies.
More information: http://resyst.lshtm.ac.uk/research-projects/
multi-country-purchasing-study