Elsevier

Health Policy

Volume 77, Issue 3, August 2006, Pages 247-259
Health Policy

Surviving decentralisation?: Impacts of regional autonomy on health service provision in Indonesia

https://doi.org/10.1016/j.healthpol.2005.07.013Get rights and content

Abstract

The paper aims to assess the impacts of decentralisation and privatisation reforms on access to and quality of health services in Indonesia. The research draws on qualitative and quantitative data from interviews, focus group discussions, and household surveys in four selected districts. The main conclusions are three-fold; the local administration of health care services is without transparency and accountability, health centres are turned into profit centres, and the increasing roles of private actors tend to reduce concerns over preventive health care and the conditions for poor people. Our policy recommendations include increased government spending to maintain public efforts in environmental and preventive health and in maintaining a minimum health service for the poor.

Introduction

Indonesia improved its health care system substantially under the authoritarian regime of President Suharto, especially in the 1970s and 1980s. District hospitals and sub-district health centres were established throughout the country, resulting in a remarkable impact on health indicators such as infant mortality and life expectancy. The system was highly centralised with the main financial and policy making responsibilities at central government level, in Jakarta. Administrative and operational functions were delegated to the second and third layer of the five-tier government hierarchy, i.e. to the 32 provinces and 440 districts. Below the districts (kabupaten/kota) are the sub-districts (kecamatan) and the villages (desa). In this country of 220 million people, the average population of a district is 500,000 and a typical village has 3000 people.

Since 2001, the administration of health services in Indonesia has changed dramatically. Managerial and financial responsibilities for public health care have been decentralised from the central government to the district level, and health care is increasingly privatised. The reform followed the severe economic crisis that began in 1997, the fall of the Suharto regime in 1998, and the introduction of free elections and democratic governance in 1999. The central government had an urgent need to reduce expenditure, and a new political ideology saw advantages in bringing power and responsibility closer to the people. Dominating international organisations such as the World Bank and the International Monetary Fund (IMF) strongly pushed for reforms in the direction of devolution and privatisation. Private insurance companies were eager to expand their markets, and deregulation was in tune with global free trade ideology and agreements. The promoters of the reform expected to see the combined results of quality improvement and cost reduction in public service delivery in general, including health. However, social and geographical disparities in access to and quality of health services have been high and now seem to be on the increase. A dramatic reduction in public health spending in most places leaves an increasing burden on families and it facilitates a return to traditional medicine and healers for the poor.

In this research, our main objective is to trace the impacts of the 2001 decentralisation reforms on access to and quality of health care in Indonesia. More specifically, we investigate the administrative impacts of the decentralisation, the change in quality of health care as perceived by users, and the costs of health care placed on households. In this paper, decentralisation is taken to mean a rather dramatic devolution, whereby responsibilities for funding, as well as quality control in the health sector are delegated from the central government to district authorities and private institutions. Four locations have been selected for study. They are districts characterised by different levels of per capita income and geographical centrality. The research methodology combines a qualitative approach based on in-depth interviews and focus group discussions with surveys and quantitative data from the household level in the four selected districts.

The paper is organised in six sections. After this introduction (Section 1), there is an overview of the development of health and health care systems in Indonesia since the withdrawal of the Dutch colonial power in 1949. Thereafter, we discuss decentralisation of public services in general and critically consider the expected benefits of deregulation and devolution of the health sector in a context characterised by poverty and weak civil society institutions. The research methodology is expounded in Section 4, followed by the presentation and discussion of empirical findings in Section 5. Our conclusion and a brief discussion of policy implications (Section 6) close the paper.

Section snippets

Conditions of health and systems of health care in Indonesia

At the dawn of independence in 1950, Indonesia had a population of 72 million and the country only had 1200 medical doctors. Infant mortality was 200 per thousand and life expectancy at birth was 48 years [1]. Regional health centres were still unknown and hospitals and clinics were only available in the larger cities. Most people used traditional medicines and healers (dukun) to treat their illnesses. During the 1950s, some improvements were made, especially in setting up maternal and child

Decentralisation and privatisation

Corruption was known to be extensive under the Suharto regime. The general lack of transparency in state affairs and the limited accountability of influent institutions facilitated rent-seeking and shady economic affairs. The economy was totally dominated by large-scale business conglomerates with ethnic Chinese and the Suharto family and their associates in crucial positions. The state government was authoritarian and highly centralised. The regional hierarchy was strictly ordered, with the

Methodology and study areas

The main objective of our empirical research is to uncover the impacts of the 2001 decentralisation reforms on access to and quality of health care in Indonesia. Four districts are selected for study: Bantul, Mataram, Kutai Kartanegara, and Ngda. They represent a wide variety of income per capita and level of urbanisation and centrality within the national context.

In three of the four districts (Bantul, Mataram, and Kutai Kartanegara) we conducted focus group discussions that consulted

Administrative impacts of decentralisation

In the four studied districts, the health budgets represent an average of US$ 5.3 per capita in 2003 (exchange rate 9000 rupiah per US$), or 7.2% of their total budgets (APBD). Budget figures are depicted in Table 1. Remarkably, no figures are available for the real district government expenditures on the health sector. This means that there is a total lack of financial transparency and accountability in the public health sector in all districts. In Kutai Kartanegara, for instance, the budget

Conclusion and policy recommendations

The central government in Indonesia has initiated a dramatic decentralisation and privatisation reform, which reduces its own powers and surrenders authority to district authorities and private actors. The main objectives are to decrease central government spending on public service delivery and to increase responsibilities and duties at lower levels of government and with households. Principles of universal access and solidarity in health services have yielded to a market-based ideology and an

Acknowledgements

The paper is based on research under the institutional collaboration between Agder University College, Norway, and Gadjah Mada University, Indonesia, funded by the Norwegian Ministry of Foreign Affairs and NORAD. Recently, this collaboration has set a focus on good governance and human rights. In addition to the authors, the following persons have contributed in data collection and methodology discussions: Pratikno, Cornelis Lay, Lambang Trijono, Abdul Gaffar Karim, Derajad Widhyarto, Nur

Stein Kristiansen is professor of development studies at Agder University College, Norway. He has been in charge of the institutional collaboration with Gadjah Mada University since 1997 and has conducted research in Indonesia on issues like entrepreneurship and small-scale business, youth violence, information asymmetry, and good governance. He has published several articles on these issues in international journals.

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    Stein Kristiansen is professor of development studies at Agder University College, Norway. He has been in charge of the institutional collaboration with Gadjah Mada University since 1997 and has conducted research in Indonesia on issues like entrepreneurship and small-scale business, youth violence, information asymmetry, and good governance. He has published several articles on these issues in international journals.

    Purwo Santoso is a senior lecturer and currently the vice dean for academic affairs at the Faculty of Social and Political Studies at Gadjah Mada University, Yogyakarta.

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