This document discusses several strategic issues related to health financing in Indonesia that need to be considered when formulating policies. It identifies challenges such as increasing health costs due to an aging population and rising rates of non-communicable diseases. It also notes issues of underspending on health and argues that financing needs to be more comprehensive to cover treatment, prevention, and health system strengthening simultaneously rather than being fragmented. The document advocates for moving beyond a focus only on inpatient care financing and recognizing the government's important role in financing public health programs, outpatient care, and health system costs. It acknowledges regional governments have increasing financing responsibilities but limited fiscal capacity.

1. Current issue of health law: Health
policy administration profession
FIK UNNES

2.  There are several strategic issues of health financing that
are faced now and in the future. These strategic issues
need to be considered in formulating policies and strategies
to improve health financing

3.  1. Challenges of health development and escalation of the need for health
costs
 On the one hand, health development has succeeded in improving
several indicators of the degree health, on the other hand 3 challenges
are faced. The first is “unfinished agenda” like reducing maternal
mortality, overcoming stunting in toddlers, ineffective immunizations
(eg: diphtheria outbreaks). The second is the increase in PTM following
structural aging the age of the population, with the consequence of
ever-increasing financing. Third is revealing the important role of cross-
sector which has not been mobilized maximum. All of these challenges
lead to an increasing need for financing big.

4.  2. Issues underspending for health”
 There is an argument that Indonesia has not sufficiently mobilized its
economic potential to underspending for health. Even though the basis
of the argument weak (based on benchmarking with other countries),
which is clear in all countries there is always an increase in the need for
health costs from year to year. Then the issue is how to mobilize health
costs from various sources: government, non government and society.

5.  3. What needs to be financed?
 Often recommendations to increase health spending are formulated
without review in depth about what needs to be financed. Financing is
more “program specific” driven” which is vertical, or “input specific
driven” - limited for example to HR only, hospital only, medicine only,
etc. Such an approach encourages financing to be partial and
fragmented. Even though formal regulations and policies have
established health programs that need to be carried out, with specific
targets and raised from population health problems
.

6.  4. Financing bias on UKP
 Partialism and fragmentation as mentioned above have pushed the
UKP's dominance in health spending, while UKM and PSK are
marginalized. This causes a lot the health status indicator target was
not achieved, because most of the indicators and targets primarily
require public health interventions, such as eradicating TB, reduce the
rate of increase in HIV, overcome stunting in children under five, control
consumption cigarettes, ensuring access to clean water, and so on

7.  5. Comprehensive health financing
 Comprehensive financing is a must in the future. Financing
comprehensive is financing that is planned thoroughly and
synchronously to cover the costs of treatment, prevention, and system
strengthening needed in dealing with health problems. Treatment,
promotion and prevention efforts as well as strengthening the health
system are interrelated. The three areas are always needed
simultaneously and there should not be a dichotomy or fragmentation
between one and another

8.  6. UKP financing: misconceptions about UHC
 The concept of UHC (Universal Health Coverage), as defined by WHO, is
comprehensive concept with the aim that all residents have access to
promotive, preventive, curative and rehabilitative services, including access to
the environment proper health. So UHC means that all residents have access
to services UKP and SMEs at the same time. But in its implementation, the
concept is reduced be health insurance. This also happened with the
implementation of JKN in Indonesia, namely interpreting JKN as UHC

9.  7. Government responsibility in financing UKP, SME, and PSK
 Current pattern of health problems and their development in the future
demonstrates the growing importance of SME interventions and strengthening
health systems. By Therefore, the government's role in health financing cannot
be reduced the need will increase. In addition, the government will also
continue to responsible for financing premium subsidies for the poor under the
JKN scheme
 The current reality shows that the government's role is still dominant in
providing health facilities, human resource management and drug/medical
management. It means government will continue to bear the costs of these
elements of the health system

10.  8. Regional fiscal capacity
 After the enactment of Law-23/2014 (regarding the division of government affairs)
and its issuance PP-18/2016 (regarding regional apparatus organization
standards) and PP-2/2018 (regarding MSS),
 Regional responsibility is getting bigger in financing health. But fiscal analysis
regions revealed that the fiscal capacity of the regions was very limited. This
situation caused by the following:
a. The regional budget (APBD) mostly comes from transfers of funds from the center,
including physical DAK and non-physical DAK, the allocation of which is regulated by
the central government. Role PAD is small, which is about 10%
b. Employee Expenditure (BP) on average reaches 46% of the APBD. This means
fiscal capacity for non-salary spending is 54%
c. Regions must also allocate 20% of the APBD for education
d. In addition to health MSS, regions are also responsible for financing 5 MSS other.
In total there are 29 types of basic services in 6 SPM which are mandatory area
e. Regions also need to finance infrastructure development which is their
responsibility regional responsibility (eg construction and maintenance of district/city
roads)

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