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Christian Suharlim
Christian Suharlim Mohon Tunggu... pelajar/mahasiswa -

Christian is a medical doctor from Universitas Indonesia, worked for the Indonesian Ministry of Health (2011-2013), and is now an MPH student in Harvard University (Health Policy).\r\n\r\nHe has specific interest in comparative health systems, especially those implemented in major developed country - and analyze their applicability for Indonesia. He is a HUGE BPJS supporter, and he wishes for an Indonesia where everyone have access to affordable and quality health care.

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Cost Containment Strategies and Quality Improvement for Indonesian Primary Care System

5 Januari 2014   19:20 Diperbarui: 24 Juni 2015   03:07 623 0 0
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Indonesia finances its healthcare system using fragmented public and private entities. While around half of the population is covered by Indonesian government’s equivalent of a Medicaid program (108 million, 46%), the remaining 13% of population (30 million) is covered by Askes, Taspen, and Jamsostek, government-run health insurance programs for government employee and formal sector workers; and 3.7% (9 million) is covered by private health insurance. This leaves 86 million (37%) Indonesians uninsured with serious financial risk of catastrophic health expenditure.1

Acting as the largest health purchaser, the government needs to pay attention to its cost containment strategy. Jamkesmas and Jamkesda, Indonesian government’s equivalent of a Medicaid program, has proven unable to keep up with the growing healthcare expenditure.

Jamkesmas, Indonesia’s equivalent of federally-funded Medicaid program, covers 33% of Indonesia’s population. Established in 2005, this program covers the poor and near poor by providing free care in public primary health center (PHC) and hospitals; and reimburses hospital providers using a predefined prospective diagnosis-related group (DRG) schedule. Although late reimbursement and delays have been reported ever since the implementation of this program, it is only recently that the Ministry of Health (MOH) officially announced their fiscal deficit in provider reimbursement. In a recent open letter dated November 25th 2013, the MOH announced its inability to directly reimburse hospital expenditures from September to December 2013, which will later be reimbursed using 2014 fiscal budget. In this letter, the MOH also encouraged hospitals to find external sources of funding to keep a positive cash flow, and to neither decline nor reduce services to Jamkesmas patients due to this delay.2 This attitude creates problem to hospitals as they need to provide ‘usual care’ in a negative balance for 5 months. Further, this short-term resolution will also create negative impact to the following fiscal budget. One can predict that similar deficit will happen in 2014 unless there are strong means to increase funding or contain expenditures.

To supplement the Jamkesmas program, state governments create a Jamkesda program to additionally enroll a number of poor and near-poor population. Being state-funded, the coverage largely varies across regions depending on the state government’s fiscal capabilities and political will. In total, Jamkesda program covers 31.6 million beneficiaries (13%). It has been heavily reported that Jamkesda’s ability to reimburse is greatest in the beginning of fiscal year and least in the end, leaving people practically uninsured.3 Not only that this practice financially unsustainable, it also creates problems in terms of continuity of care and financial risk protection.

Adding to these financial unsustainability challenges, Indonesia merged these fragmented government-owned health insurance systems and safety net into Badan Penyelenggara Jaminan Sosial (BPJS), a new national social health insurance entity that ensures universal health coverage (UHC). Upon implementation on January 1st 2014, BPJS has started covering 121.6 million (52%) population, and will gradually increase enrollment to 100% in 2019. As financial barriers to healthcare are reduced, this will potentially cause an explosion of volume of admissions under the new UHC program as individuals and families feel empowered and will more aggressively seek care. This increase of utilization is already seen in BPJS pilot state-wide UHC program initiated in 2013 in Jakarta under the Kartu Jakarta Sehat (KJS) scheme. This will further worsen Indonesia’s unsustainable healthcare expenditure. In order to tackle this problem, Indonesia needs to either improve its cost-containment strategy or increase financing source to fund its healthcare system.

Increasing funds is an obvious way to cover the high expenditure. Indonesia is currently using only 2.1% of its federal budget for health expenditure, comparing to around 11% in other developing countries. Although it is understandable that an increase of funding is detrimental for sustaining healthcare expenditure, we can easily predict that strong political resistance will be met when the government tries to reallocate funds from other sectors. These fund reallocation movements include withdrawing fuel subsidy and earmarking “sin-taxes” from tobacco and alcohol, which have yet to yield any response. Moreover, the fact that the MOH is the most inefficient and the fourth most corrupt government agency in Indonesia invites another approach to control cost: improving efficiency and accountability.

The highest health expenditure in Indonesia is hospital expenditure. The government has been unable to fully contain hospital costs in its current status, let alone after coverage expansion which will take effect 2014-2019. In order to prepare for this expansion, Indonesia needs strong cost containment strategies which include (a) strengthening primary care system to reduce hospital admission, (b) controlling hospital expenditure, and (c) rationing services covered in hospitals. Studies in OECD countries show that stronger gatekeeping in primary care can better contain the rising healthcare cost.4,5 This paper will specifically address primary care strengthening as a mean to contain healthcare cost in Indonesia.

Sustainably Strengthening Indonesian Primary Care System

Pre-BPJS, people covered in Jamkesmas and Jamkesda go to primary health centers (PHC) as a gatekeeping mechanism. PHCs are publicly funded, and provide free services to Jamkesmas and Jamkesda patients (everyone else pays ~$0.2 per visit). As government employees, providers in PHC are paid a fixed amount of salary based on longevity (not performance) and are practically impossible to fire. As a result, instead of operating for 8 hours (7 am – 3 pm), most PHCs close at noon and the providers conduct private practice afterwards. In order to be able to do this, providers ration their service by severity. In 4 hours, a physician can examine and prescribe to 75-100 patients, which are supposed to include history taking, diagnosing, writing prescription, and educating the patient. With on average 2 minutes of examination per patient, the current quality of care in PHCs is very poor. This creates community distrust towards PHCs, and motivates people to seek care in private clinics or alternative medicine – paying out of pocket.

With the new UHC scheme, the number of the insured will greatly increase. Considering that existing PHCs and staffs are inadequate to meet with the increased demand, the government will need to open primary care services to both government PHCs and private entities. Exercising its market power as a big purchaser, the government (BPJS) reformed healthcare financing and payment system for its beneficiaries. Starting in 2014, BPJS will start expanding government coverage under a social health insurance financing scheme, which is expected to cover all Indonesians in 2019. As for payment system, the government is currently trying to finalize its capitation payment model for primary care centers and DRGs for hospitals who take part in BPJS UHC program.

To finance this new program, formal workers pay 5% of their salary as BPJS premium. While workers in the informal sector Rp 25.500 (~$2.5) for BPJS premium per month. Jamkesmas and Jamkesda patients’ contribution is paid by the government. Arguably, a social health insurance system might not be the best fit for Indonesia as informal workers in Indonesia make up the vast majority of the working population (60%, 66.6 million). The most common problems in a social health insurance system are low enrollment rates, difficulties with payment collection, and adverse selection, all of which primarily happen in informal sector workers. The transaction cost associated with continuous enrollee recruitment and payment collection is highly inefficient as these administrative costs could better be allocated towards health expenditure. Adverse selection also causes problems in risk-pooling and redistributive fund pooling. Given that around half the population is already covered with a Medicaid-equivalent program, it is probably more efficient to simply raise taxes and expand health coverage to the rest of the population.

Considering the low PHC capacity to meet with the increasing number of enrollees, the MOH needs to create a scalable payment system that can sustain expenditure in PHC level, but provide adequate standard of care to both government PHC and private clinics in order to retain enrollees down in primary care. In order to do this, the government has decided to use a prospective payment mechanism. The two ideas presented was fee for service with cap, and capitation.

Many lobbyists coming from provider side of the arena favor fee for service with cap. They proposed to create a prospective fee for service schedule, adjusted to meet with the cap – which is a historic expenditure for the provider / PHC in the previous year. Providers favor this alternative for the assurance that they will receive at least the same amount they did last year. However, this system ‘punishes’ providers that have been operating efficiently in the previous years, does not incentivize people to practice in a more efficient manner, and is hard to scale up as the cap and schedule may not easily fit other health centers.

Although serious lobbying from the FFS + cap is still ongoing, public health experts in the ministry of health has convinced the government to use a capitation system. Research indicates this method of a global budgeting can result in lower costs without affecting quality or access. For this, the government has decided upon Rp 8.000-10.000 (~$0.8 - $1) per month as the base capitation rate for primary care physicians (PCPs/GPs), 32-40% of the total amount for delivery of the entire service package of primary, secondary, and tertiary services.6 This high percentage for primary care rate will hopefully retain patients in the primary care level and not ascending to the more expensive care.

Capitation payment method is arguably a great way to contain cost in the primary care level. In this system, providers are paid a fixed amount of rate per enrollee per specified amount of time to cover a set of services. Given this fixed amount of financial input, providers are now financially incentivized to minimize expenditure to further increase their income level (profit). This specific tenet of capitation system heavily differs from fee for service system, which encourages providers to over utilize health services and procedures to increase their income.

Avg capitation rate * #enrollee  =  (Avg expenditure * #sick) + inefficiency + profit

Under the capitation system, to seek more profit providers will reduce cost/expenditure by (a) lowering average expenditure of treatment by using cost-effective procedures, best practices, and less expensive generic drugs; (b) reducing the number of sick people by aggressively conducting health education campaign, screenings, and vaccination; and (c) innovating in a more efficient management system to reduce overhead costs. Additionally, providers can also increase their financial input by taking more enrollees. In order to increase PCPs’ capacity, primary care practices need to establish a more efficient practice model. This include collaborating with non-physician clinicians in an integrated interprofessional practice model.

There are several models for a capitation system. One model is to shift all the financial risk to providers, as was seen in a GP Fundholding system. In this system, GPs hold most of the capitation premium and do the purchasing/contracting for secondary and tertiary care. As GPs control the flow of the funds, they have financial incentives to prevent their patients from receiving secondary and tertiary care. However, one biggest shortcoming of this system is its inability to protect GPs’ finance if a major outbreak happens. Despite this shortcoming, GP Fundholding system is arguably better in improving quality in secondary and tertiary care as MDs have better knowledge on how a specialist / hospital performs.

Other model, one that is being used in Indonesia, shifts only limited financial risk to the physicians. This system divides the pooled funds into two parts: physicians and hospitals/specialists. PCPs receive a percentage of the funds to cover primary care and have little financial risk if their patients fail treatment and receive secondary/tertiary care. This may cause providers to: (1) under-provide health services which will cause quality deterioration, and (2) select their enrollees based on their health risk.7 Indonesia has yet to devise adequate strategies to tackle these problems.

Financial Incentive to Prevent Under Provision of Services

Under provision is one of the main shortcomings of the capitation system. Physicians may be motivated to give substandard care, work less hours, withhold important treatment or increase referral in order to maximize their income. Pay for performance (P4P) system is designed to tackle this problem.8 This system provides financial incentive if provider conducts certain procedures (process oriented) such as checking blood pressure, or if provider achieves certain result (outcome oriented) such as lowering blood pressure by 10mmHg. Ideally, these quality measures should be easily obtainable, discriminate between high- and low-quality Providers, be adjusted for the severity of case mix, and correlate with important external measures such as mortality and complication rates.9 For these reason, it is inherently difficult to implement quality measures for P4P system.

Process outcome metrics are easier to design, but inadequate to measure quality.9,10 Further, there is little evidence on the effect of these processes, such as antibiotic administration within 24 hours or conduct certain test, to the final outcome which both providers and patients goal for.11,12 In addition, providers feel reluctant to follow long process checklist for P4P; they also perceive these checklist as a risk of conflict of interest and breaching professional ethics.13

On the other hand, outcome metrics are hard to be implemented as there are many forces outside of a providers’ control that contribute to a patient’s failure of treatment. Providers may feel that their capacity is limited in educating the patient on these external factors thus should not be held responsible for these external forces such as smoking, family support, drug adherence, physical activity, or eating behavior. However, the use of outcome metrics aligns the interest of the patient and the provider. This allows providers to innovate means to achieve that outcome. Past examples include the use of food recall instrument and a nutritionist home visit to help examine and educate the patient (and family) about the importance of a good diet in controlling blood sugar level. Other example include the creation of a weekly group meeting of consenting cardiovascular patients to engage in a mutual peer support group in leading a healthier life to prevent future complication.

It is important to remember that P4P system is used to prevent under provision and to improve quality, not to contain cost. Research has shown that P4P system successfully increases the use of underused cost-effective services, but has little evidence on cost savings. This is mainly due to the high administrative expenses associated with implementing the metrics which may offset any savings from reductions in preventable complications and unnecessary services.8

Financial Incentive to Prevent Risk Selection

Health plans paid by capitation have an incentive to distort the quality of services they offer to attract profitable and to deter unprofitable enrollees. Financially motivated to increase their income, physicians start to select their patients based on their risks: accepting healthy young patients and rejecting the sick and elderly.14 This will introduce disparity of access to care between healthy and sick individuals. Several methods has been used to tackle this problem, including non-financial means (regulation or creating an independent patient enrollment agency) and financial means such as adjusting base capitation rate to reflect patient risk.

Risk adjustment is an important factor in ensuring capitation rate is high enough to manage the level of risk assumed by providers. However, it is still unknown how this method actually affects provider behavior. Current adjustment, calculated by age, gender, and underlying chronic illnesses, may not be enough to encourage physicians to be more equitable in taking new enrollees. This may or may not remove provider’s incentive to select against the terminally ill or the poor, who are expected to have high health cost.

One may suggest that provider behavior in risk selection heavily differs from one place to another, due to a different culture and professional ethics. A multi national study shows that without substantial improvements in the risk adjustment formula, risk selection will increase in Belgium, Germany, Israel, the Netherlands and Switzerland. However, it is unknown why risk selection issue is particularly serious in Germany and Switzerland.15,16 This brings us to examine external factors other than financial incentives that have strong effect to provider behavior.

Non-financial means to improve capitation system

Regulation is a very strong paternalistic approach to handle the shortcomings of capitation system, especially upon risk selection. External regulation means the behaviors are regulated by outside agents, this include a government legislation that outlaws risk selection – a strategy practiced in Sweden.17 Although legislative efforts on standard insurance operating practices was ‘dead on arrival’ upon introduction in the United States in 1993, this external regulation method might still be applicable for Indonesia.

Regulation is a good way to ensure order in the system. However, several big obstacles are normally met with this approach, including the need of a massive data gathering on who does what, an enforceable set of rules and regulations with clear administrative / legal punishment, and constant monitoring and evaluation. Indonesia has not performed well in terms of law enforcement. The high number of people breaking the law, cheating taxes, and the high level of corruption even among the law enforcement force are few of the solid obstacles in using an external regulation method.

Other types of regulation is internal regulation, in which the professional organization or union regulate their members themselves. Germany uses this system to regulate general practitioners. Using a fee for service system, GPs in Germany are internally financially incentivized to over-provide health services to increase their individual profit. However, having a global budget shared between competing fee for service GPs, if overutilization happens in the first quarter of the fiscal year, the reimbursement rate for the next quarter will be reduced to match the fixed federal budget for GPs, reducing the income of all other GPs. To tackle this problem, the GP union needs to internally regulate providers who abuse the system. This method might also be applicable for Indonesia as physician unions are politically strong, and have strong influence and power over physicians (they issue practicing permit, and provide legal protection to physicians).

Persuasion and education can also be used as a mean to improve capitation system. Under-provision practice in capitation system may not be adequately tackled by a P4P system, which in itself is expensive and hard to implement. Instead, professional groups can persuade physicians to follow certain guideline for disease management. This practice has not received much support from the providers in Indonesia. They perceive guidelines are made without taking into consideration a patient’s unique biological, social and emotional condition. The practice of “doctors know best” overthrows most evidence-based medical guideline that has been continuously issued by the MOH and professional groups. This actually creates substandard care in the population, especially in the rural area, as physicians are reluctant to continuously update their knowledge and often treat people using outdated knowledge they learn during medical school.

Educating the patient might also be one way to ensure a standard quality of care. A free maternal/neonatal program “Jampersal” in Indonesia, launched in 2011, heavily put emphasis on education the patient on what services they are entitled to.18,19 Most expecting mothers in Indonesia know that they are entitled to 4 visits of antenatal care, including maternal ultrasonography, a free delivery program (even for c section with indication), and free family planning services. Although utilization for antenatal care and free delivery is high, many mothers still do not exercise their right for family planning services, mainly because of cultural problems. This is especially true in rural areas, where the husband decides what kind of contraceptive agents a mother should use – or whether she should use one at all.

Similarly, the MOH has been trying to educate the population on what services they are entitled under BPJS. However, the practice these last 3 days show that most people are still unclear on what they are entitled to. In addition, it is still unclear if the beneficiaries of BPJS will exercise their full rights to healthcare (including preventative services) to prevent under provision.

Managed Internal Competition to Improve Primary Care

A more strategic approach is needed to improve primary care in terms of financial sustainability and quality of care. Indonesian government has yet to exercise its power in regulating healthcare; professional unions have yet to fully establish a solid ground on the usage of healthcare guidelines; while BPJS education campaigns has proven to be ineffective. As paternalistic efforts are less successful, new strategies should put more emphasis of market forces and competition.

Other strategy to improve capitation system is by detaching providers from the process of selecting patient. Risk selection happens because providers can choose their enrollees based on their health status. Further, under provision happens because healthcare quality rarely appraisable before the service is experienced, and patients have no power for voicing their disappointment or exiting the chain of poor quality services. To overcome this problem, an independent third party agency should transparently list providers who are open to new enrollees, and assign or move patients to their provider of choice. Not only does this system remove risk selection, it will also introduce managed competition between providers and allow market forces to improve quality of care. This is the route planned by the MOH in Indonesia.

Currently, the MOH acts as the agency, and assigns the BPJS enrollees to providers based on residential location. Further expansion of this model, starting in March 2014, will allow enrollees to freely switch to their provider of choice. This switching period is planned to occur every 3 months, which will create a competitive market of GPs within BPJS. Competition is a means not an end. It is a mechanism which, by engendering rivalry between alterative public and private providers, may drive down costs and / or improves the quality of goods and services delivered to patients.20 In order to survive in this market, providers are internally motivated to improve quality of care to attract more enrollees but at the same time practice in a cost-efficient manner to sustain their income. This managed competition model, first established in the United Kingdom, shows an improvement in mortality rate, but has mixed result in terms of access, quality, cost, efficiency, and provider behavior.21

Managed internal competition model planned for Indonesia, if working smoothly, is perhaps a highly efficient method to ensure quality in primary care practice. This method does not require paternalistic law, regulation, and punishment; and is also not expensive to implement - unlike P4P system that needs complicated formula, continuous data collection and large dataset.

Conclusion

In order to face Indonesia’s continuously rising healthcare cost. Indonesia needs to (1) increase funding for healthcare by using sin-taxes from alcohol and tobacco and reallocating fuel subsidy for health, (2) strengthen primary care to retain the population in the primary level and not ascending to hospital care. However this primary care strengthening have to be done in a sustainable manner to keep costs down.

Capitation payment system used for primary care has been a good start. However, the MOH needs to also prevent risk selection and under provision, as these can rapidly deteriorate access and quality, and withdraw people’s support for the program. In order to do that, the MOH need to maintain its status as a third party agency that regulates enrollment (to prevent risk selection), and manage internal competition (to improve quality) while still analyzing the need to use other tools to improve primary care such as regulation, risk adjusted capitation rate, medical care guidelines, P4P, and mass education.

Sources

1. UHC Forward. Indonesia | UHC Forward: Towards Universal Health Coverage. Results Dev. 2012. Available at: http://uhcforward.org/content/indonesia#TB_inline?&inlineId=modal_field_country_reforms_9.

2. PPJK. Kekurangan Anggaran Jamkesmas 2013. Minist. Heal. Repub. Indones. 2013. Available at: http://www.ppjk.depkes.go.id/images/stories/000001_se_kekurangan_anggaran_jamkesmas_2013.jpg.

3. Maclaren L, Representative DC, Foundation TA, et al. How Civil Society Organizations Work Politically to Promote Pro-Poor Policies in Decentralized Indonesian Cities. Asia Found. Occas. Pap. no 6. 2011;6(June 2011).

4. Delnoij D, Van Merode G, Paulus A, Groenewegen P. Does general practitioner gatekeeping curb health care expenditure? J. Health Serv. Res. Policy. 2000;5(1):22–6. Available at: http://www.ncbi.nlm.nih.gov/pubmed/10787583. Accessed January 3, 2014.

5. Schwenkglenks M, Preiswerk G, Lehner R, Weber F, Szucs TD. Economic efficiency of gate-keeping compared with fee for service plans: a Swiss example. J. Epidemiol. Community Health. 2006;60(1):24–30. Available at: http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=2465536&tool=pmcentrez&rendertype=abstract. Accessed January 3, 2014.

6. Indonesian Ministry of Health. Permenkes 69. 2013. Available at: http://www.depkes.go.id/downloads/Permenkes/PMK No. 69 ttg Tarif Pelayanan Kesehatan Program JKN.pdf.

7. Cave DG. Incentives and cost containment in primary care physician reimbursement. Benefits Q. 1993;9(3):70–7. Available at: http://www.ncbi.nlm.nih.gov/pubmed/10127204. Accessed January 3, 2014.

8. NCSL Briefs for State Legislators. Health Cost Containment and Efficiencies. May. 2011. Available at: http://www.ncsl.org/documents/health/IntroandBriefsCC-16.pdf.

9. Bhattacharyya T, Freiberg AA, Mehta P, Katz JN, Ferris T. Measuring the report card: the validity of pay-for-performance metrics in orthopedic surgery. Health Aff. (Millwood). 28(2):526–32. Available at: http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=3004748&tool=pmcentrez&rendertype=abstract. Accessed January 3, 2014.

10. Rosenthal MB, Landon BE, Normand S-LT, Frank RG, Epstein AM. Pay for performance in commercial HMOs. N. Engl. J. Med. 2006;355(18):1895–902. Available at: http://www.ncbi.nlm.nih.gov/pubmed/17079763. Accessed January 3, 2014.

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