WHO in Indonesia

The general decentralization process implemented in 2001 has had many impacts on the health system, even though it was not designed specifically with the health sector in mind. In particular, health financing, health information system, human resources for health and service provision have been affected. Under decentralization, responsibility for health care provision is largely in the hands of regional governments.

Human Resources

The human resource situation in health has major deficiencies in numbers and quality of the health workforce.

Decentralization is one of many factors exacerbating long-standing problems with mal distribution and reportedly low productivity and quality  of health workers.  This in turn impacts on the quality, efficiency and equity of health care provision. Limited number of health workers  affected health service in Indonesia. In 2006,  ratio  of general practitioners  was 19.9  per 100,000 population  while  ratio of  midwife per 100,000 population was 35.4.

Most  general practitioners and midwifes are working in urban area, and limited number  in remote area. In 2001, the Ministry of Health reorganized its human resource functions by establishing A new Institute for Empowerment and Development of Health Manpower  to link and coordinate the previously separate centres in the development of an overall integrated strategic plan for health workforce development & a corresponding integrated information system.

Decentralization resulted in a partial breakdown of health information systems and led to an unclear division of reporting responsibilities.

Health Information System

As a result, no comprehensive data exist that cover the entire nation. The disruption of the information flow makes it difficult to develop strategies and monitor health programmes in provinces and districts. Exceptions do exist in some vertical programmes (tuberculosis, malaria or HIV-AIDS) where the Central Government retains the responsibility as the principal recipient of GFATM grants to the country.

Health Financing

Indonesia spends relatively little on health services. Estimated total expenditure on health (per capita, in 2003) was $ 33 in Indonesia .

Within that, public sector spending on health (per capita, in 2003) was estimated at $ 11 in Indonesia. The overall health financing situation in Indonesia is complex and incompletely documented. In 2003, around 34% of total health expenditure is undertaken by public sector agencies, while 66% is private. By far the largest single source of private expenditure is direct out-of-pocket payments by households, accounting for nearly half of the total expenditure.

Privately provided services are largely financed by out-of-pocket payments, with some insurance and employer-financed expenditure benefiting a minority of formal sector employees. Publicly provided services are financed by a mix of public budgets and user fees, in turn financed by a combination of households, employers and insurers. Until the advent of the new social insurance scheme for the poor, insurance coverage of the population was low, at well under 10%.

	At primary health care level, Indonesia is generally regarded as having relatively adequate levels of provision,  one public health centre for every 30 000 people on average.	Health Services
If sub-centres are included, there is one public facility per 10 000 people.  However, these averages conceal large variations in geographic accessibility, with people in remote interior or small island locations having particularly poor access. In addition to public facilities, private practices are operated by doctors, nurses and midwives, in many cases by the same personnel as are employed in public facilities. At the hospital level, Indonesia has low levels of bed provision at 62,5 beds per 100,000 population. Paradoxically, the utilization is also low, with bed occupancy rates in the vicinity of 56.2 % in both public and private facilities.
The private sector is increasingly important in the provision of health care in Indonesia, especially in big cities, with wide variations in quality of care. Furthermore, since there is no regulation of pricing or quality of service in place, users are vulnerable to excessive treatment and expenses. The role of nongovernmental organizations (NGOs) in Indonesia has been growing during the last two decades but the exact number of NGOs providing health care services remains unknown. While medicines to treat the vast majority of tuberculosis, malaria and HIV-AIDS cases exist, drugs are not reaching everyone due to limited affordability and availability as well as other factors. Despite the presence of a strong Drug Regulatory Authority, responsible for the registration of medicines as well as quality control and inspection, counterfeit drugs remain a big problem. The fight against counterfeit drugs is resource intensive and requires substantial cooperation of other sectors. At the same time, the use of traditional medicines (such as ‘jamu’) is popular and widespread in Indonesia. Yet procedures for quality control of traditional medicines are limited in scope, and difficult to implement, also because large numbers of small-scale manufacturers exist.

A Survival Guide To Health Care In Indonesia

Whether you come from an American like system of high quality private health care or the Canadian and European public health model you will find the Health care system in Indonesia very different from what you are used to. Having worked for a number of years in Indonesia providing health insurance for expats I have some unique local knowledge based on firsthand experience as well as problems I have seen my clients deal with. I hope that you will find this guide informative and that your stay is a happy and healthy one. But if you fall ill or are injured this guide should help you avoid a lot of misery and may even save your life.

Make Sure You Have Adequate Health Insurance.

If you find yourself needing treatment for a serious illness or injury you will need adequate health insurance. Be sure that your policy allows for Emergency Medical Evacuation.  You do not want to bet you or your family’s life on the vagaries of local health care providers. When you purchase your cover make sure it is from a reputable Financial Adviser or Insurance Broker who has specific local knowledge about which insurance companies will be more likely to evacuate you to somewhere you can receive adequate medical treatment. If you purchase Medical Insurance in your home country your adviser is unlikely to know this.

If It's an Emergency Don't Wait For An Ambulance.

Anyone who has driven for sometime in Indonesia will notice that local people do not make way for ambulances even if they are using their lights and sirens. In Indonesia ambulances are primarily for transporting dead people, so unless you are already dead, you would be better off making your way on your own to the nearest hospital rather than waiting for an ambulance. The so called "Golden Hour" that emergency medical people talk about would be better spent in a clinic or hospital rather than in an ambulance stuck in a traffic jam.

Just Because The Doctor Has A Diploma Does Not Mean He Is Competent.

Like many other facets of Indonesian life, the education system is rife with corrupt practices. Many people have been granted advanced degrees based more on the kind of bribes they where willing to pay and not their exam results. While there are a number of very competent local doctors there are also a number very dangerous quacks practicing medicine. You need to be sure that the Doctor who is treating you or your family knows what he is doing. The only way to ensure this is by always seeking treatment at a reputable institution that makes sure its staff are competent. At the bottom of this Guide you will find a list of the Health Care providers I would recommend.

Treatment Quality Depends on The Cost.

Health Care quality does not just vary from Hospital to Hospital, but also varies by the class of treatment sought. It ranges from category 3 in which the staff will change IV's and administer basic medicine, but not change sheets or assist patients to the toilet all the way to VVIP where your surroundings and service will be more akin to a five star hotel than what you would expect in a Hospital. So it is important to make sure that your Insurance will provide the level of cover you would expect.

Be Careful About Complaining About Poor Treatment.

In a recent highly publicized case a patient is being tried for Defamation because she complained that the Hospital Staff where incompetent and her illness was misdiagnosed. It is far better to make sure you only deal with competent Medical Providers rather than deal with the health and legal ramifications of dealing with some of the less reputable institutions.

Summary

It is important that you have adequate Medical Insurance, the only people who have the unique local knowledge about which Health Insurance plan among the hundreds available will meet your needs and expectation are local Financial Advisers and Insurance Brokers. Make sure that your policy will cover Emergency Medical Evacuation, if it doesn't it may cost you or a family member their life.

Medical Insurance In Indonesia

Companies operating in Indonesia, whether they are local or multinational, realize the importance of a comprehensive medical plan to cover sickness and accidents of the staff that they hire. This is a moral and often a legal obligation.

Find out before you come

The company that you are with, or are going to work for, should provide medical insurance for expatriate staff and their family members, as well as their permanent Indonesian staff. Ask for details from your employer to ensure that your policy will adequate cover your family members for sickness or accident emergency, whether in Indonesia or when you are returning home on leave or when you are visiting other countries in the course of your work or on vacation.

If you are joining a new company, you must remember that they may never love you more than when you first join. Do not rely on promises that medical insurance coverage will be sorted out when you arrive in Indonesia. It may in fact be taken care of to your satisfaction, but it could be the case that what the company considers ideal coverage may not meet your expectations. Be sure, before you come, that you understand what medical coverage your company will provide for regular medical concerns, and major medical situations such as surgery or deliveries, as well as medical evacuation to another country or from a remote site to a big city in Indonesia.

Medical Evacuations from Indonesia

Medical evacuations are a big factor in medical coverage as the quality of medical service will be quite poor in outlying areas in Indonesia. Emergency medical evacuation (medivac) to a large city or even to a neighboring country is considered essential in most medical emergencies. Learn more about medical evacuations from Indonesia.

Group Practice Medical Clinics

Some multinational firms enroll their employees in one of the Group Practice Medical Clinics which provide for all the minor medical outpatient needs for an annual membership fee or a pay-by-visit basis. Often these member-based plans include medical evacuation as well. These local clinic schemes with medivac coverage that cater to expatriates provide good service and overall you will get good advice from their doctors.

Note: There have been cases when a member of one of these local group practice schemes was evacuated to Singapore for an operation. While the evacuation was covered by the scheme, the patient found that there was no medical insurance coverage once they get overseas and they had to pay for their own medical expenses. For these instances, it is necessary to buy health insurance for hospitalization to add to the local clinic plan and this can prove to be very expensive.

Some of these local schemes have an alliance with the local office of an international insurance company so that hospitalization or serious outpatient treatment will be paid for. But covering the whole span from mild outpatient service to a major operation is not as cost effective as if the complete plan is engineered from square one to include everything you need.

Options in Medical insurance coverage

International Medical Insurance plans from the U.K. for instance, include emergency medical evacuation and there is the possibility to add outpatient services to cover everything but minor outpatient items. The reason for excluding minor outpatient claims is to keep the costs down as the paperwork involved in claims could well exceed the claim itself. The outpatient claims therefore have a deductible.

The deductible is related to the illness - not the claim - so the patient may have several doctor and specialist visits plus the prescribed medicine for one particular bout of sickness and there would only be one deductible. A point worth noting is that a person could be undergoing outpatient treatment with a very serious illness, which would not be covered under a local clinic scheme.

There are many foreign joint venture insurance companies with offices in Jakarta selling medical, hospitalization and other general insurance products for group and individual medical insurance policies, so you do have a large choice of companies and products. You could also purchase a medical insurance or travel plan from a company based in your home country which provides some medical cover while you are traveling overseas, however, you must be very sure about the restrictions on such plans as it may not cover you completely while residing overseas.

Finding the best plan for your particular requirements can be very time consuming with the many options. Any local or group venture health insurance company representative will tell you how good the product is from his company. That's what he's paid to do, and it could in fact be the best plan available for you. The representative is not paid to explain that another company does the same thing (or better) at a cheaper cost, and he's not paid to promote his competitors' products.

Consider Costs

Good, comprehensive medical insurance is not cheap, nor is emergency medical evacuation, so most people will take cost into account when making their decision on medical insurance coverage. It is important to find out all your options from an unbiased source, which could be an agency or broker, who can assist you to make the choice based upon your individual or company requirements

Indonesia Insurance Information

ndonesia is a vast archipelago that contains the fourth most populous country in the world and the largest range of biodiversity on the planet. Rife with natural resources, investment opportunity, and fascinating culture, Indonesia's 17,508 islands have been attracting expatriates since its economy began to boom in the early 1980s. Located in Southeast Asia and bordering Malaysia, Papua New Guinea and East Timor, Indonesia is advantageously situated for travel and trade. With both a fascinating contemporary culture and a history that extends back 500,000 years to the time of “Java Man,” Indonesia is one of the most exciting places to visit today.

Some of the oldest Homo erectus fossils were unearthed in Indonesia and named the “Java Man”. The more recent peoples of Indonesia originated from an Austronesian race that likely migrated to the islands of Indonesia from Taiwan Around two millennia ago, Indonesia began to partake in the circuitous trade routes of Southeast Asia. First doing business with China and then with Indian and Middle Eastern merchants, Indonesia embraced outside cultural influences and therefore developed a fascinating culture that enlisted new ideas from all over the world.

Indonesia experienced a “golden age” between the 10th and the 13th centuries. Under a Buddhist and then Hindu leader, Indonesian culture and economy thrived. With Islamist roots that date back to the 13 th century, Indonesia is now the largest Muslim-majority country in the world. While the government emphasizes Indonesian national unity, the multitude of diverse native ethnic groups still maintain their traditions and languages.

European influence in Indonesia dates back to the 17th century, when Portuguese captain Francisco Serrao arrived in the “Spice Islands” seeking cloves and pepper. After the departure of the Portuguese, the Dutch were able to establish a very strong influence in the area, first as a territory of the Dutch East India Company and then as a Dutch colony. Dutch powers remained in Indonesia until World War II, at which point Japan occupied the islands from 1942-1945. After the Japanese surrendered, Sukarno, who had been the primary leader of the Indonesian nationalist movement, installed himself as president and declared independence from the Dutch. The Dutch did not officially cede rule until the end of 1949, after which Indonesia entered into the United Nations as an independent country.

Indonesia's history as an independent entity has been somewhat unstable. Sukarno suffered opposition from a number of political parties, barely surviving a failed coup in 1965. Finally, his main opponent, Suharto, pushed out the president in 1968 and asserted his rule. Since the establishment of Suharto's presidency and his “New Order” national rehabilitation plan, Indonesia has seen an almost uninterrupted period of growth and development.

A main component of Suharto's “New Order” plan has been to encourage international investment in Indonesian industry. Even though it is a Muslim-majority country, Indonesian cities are open and welcoming to Westerners. However, while many parts of Indonesia are accessible, keep in mind that there are still many ways in which Indonesia needs to develop.

In 2006, 17% of Indonesia's population was below the poverty line, and almost 50% lived on less than US$2 per day. The country's public services must vastly develop in order to live up to foreigners' expectations of care. If you are planning to relocate to Indonesia, it is important that you get international insurance coverage so you will be covered in the case of emergency. To receive care from an international medical facility can get expensive, but this is the safest option because some Indonesian hospitals are unable to provide up-to-par medical treatment. Having the security of global insurance will help you adjust to your life in Indonesia, giving you the freedom to explore everything there is to discover.

Moving to Southeast Asia may be daunting, and, for some international families, finding reliable healthcare facilities is the first concern. An international medical insurance plan from Pacific Prime will allow you to have Western-style healthcare that you can afford. The hospitals available for expatriates in Indonesia will provide you with just the type of treatment that you need.

We can give expatriates in Indonesia health insurance plans that will provide total cover in Southeast Asia and the entire globe. Most of our plans have a range of benefits that can be tailored to fit your international requirements. With options such as dental, maternity, out-patient services, and emergency evacuation, you know that you will receive high-quality care all over the world.

Healthcare Costs and U.S. Competitiveness

Introduction

The United States spends an estimated $2 trillion annually on healthcare expenses, more than any other industrialized country. According to data from the Organization for Economic Cooperation and Development (OECD), the United States spends two-and-a-half times more than the OECD average, and yet ranks with Turkey and Mexico as the only OECD countries without universal health coverage. Some analysts say an increasing number of U.S. businesses are less competitive globally because of ballooning healthcare costs. U.S. economic woes have heightened the burden of healthcare costs both on individuals and businesses. The U.S. healthcare reform law signed by President Barack Obama on March 23, 2010, includes measures aimed at making healthcare less expensive and more accessible, including upgrades to government-run Medicare and Medicaid. Still, reforming healthcare has proved politically divisive, especially over the option to expand social medicine, as well as new mandates on employers and individuals. Whether these reforms will reduce the healthcare-cost burden on U.S. industry remains under debate.

Competitive Disadvantage

The United States spent more than 17 percent of its GDP in 2009 on healthcare, higher than any other developed nation. The nonpartisan Congressional Budget Office (CBO) estimates that number will rise to 25 percent by 2025 without changes to federal law (PDF). Employer-funded coverage is the structural mainstay of the U.S. health insurance system. According to the U.S. Bureau of Labor Statistics, about 71 percent of private employees in the United States had access to employer-sponsored health plans in 2006. A November 2008 Kaiser Foundation report says access to employer-sponsored health insurance has been on the decline (PDF) among low-income workers, and health premiums for workers have risen 114 percent in the last decade (PDF). A March 2010 report by Thomson Reuters, a business intelligence service, found that employers' healthcare costs rose 7.3 percent in 2009 (PDF) compared with 4.8 percent in overall U.S. health spending that year. Small businesses are less likely than large employers to be able to provide health insurance as a benefit. At 12 percent, healthcare is the most expensive benefit paid by U.S. employers, according to the U.S. Chamber of Commerce.
Some economists say these ballooning dollar figures place a heavy burden on companies doing business in the United States and can put them at a substantial competitive disadvantage in the international marketplace. For large multinational corporations, footing healthcare costs presents an enormous expense. General Motors, for instance, covers more than 1.1 million employees and former employees, and the company says it spends roughly $5 billion on healthcare expenses annually. GM says healthcare costs add between $1,500 and $2,000 to the sticker price of every automobile it makes. Health benefits for unionized auto workers became a central issue derailing the 2008 congressional push to provide a financial bailout to GM and its ailing Detroit rival, Chrysler.

Some economists say these ballooning dollar figures place a heavy burden on companies doing business in the United States and can put them at a substantial competitive disadvantage in the international marketplace.

Still, other experts debate the degree to which healthcare affects U.S. industries. "Health benefits are largely substitutes for other forms of labor compensation," says American Enterprise Institute Fellow Thomas Miller in a CFR.org roundup. "Hence U.S. firms have performed well [in the past], despite rising levels of healthcare costs, because high levels of productivity and a favorable investment climate were (and remain) much more important factors in determining competitiveness."
Healthcare is one of several factors--entrenched union contracts are another--that make doing business in the United States expensive, and it's difficult to parse the effects of each factor. Moreover, economists disagree on the number of U.S. jobs that have been lost to offshoring--the transfer of business operations across national boundaries to friendlier operating environments. A RAND June 2009 study published in the Health Services Research Journal found that industries with the highest level of employer-sponsored healthcare (such as manufacturing, telecommunications, education, and finance) showed the slowest amounts of growth between 1987 and 2005 compared to industries with the smallest level of employer-provided insurance in the United States and compared to their industry competitors in Canada, where insurance is provided by the state. U.S. News and World Report Money blogger Rick Newman uses some of the RAND data to project the decrease in industry growth and potential job losses for fifteen sectors should healthcare costs rise to 20 percent of U.S. GDP.
Some analysts say the healthcare situation affects the ability of startup companies to find the best workers, impeding U.S. innovation. "In the cradle of American innovation, workers are making career choices based on co-payments, preexisting conditions, and other minutiae of health insurance," writes David Leonhardt in the New York Times." They are not necessarily making decisions based on what would be best for their careers and, in turn, for the American economy."

Health Reform's Impact on Business and the Economy

The healthcare reform legislation passed by Congress largely focuses on decreasing the number of uninsured--projections estimate reducing these numbers by about 60 percent, but it is less clear how much these reforms would affect the U.S. economy. Overall, the new law would produce close to $1 trillion in new government spending. Although the CBO found that the final law would reduce the federal deficit (PDF) by as much $138 billion by 2019, the Centers for Medicare and Medicaid Services, a U.S. government agency, also found that the legislation would do little to stem the rise in healthcare expenditures--expected to increase to more than 20 percent of GDP in the next decade.
The Senate Finance Committee's Democratic majority says its reforms will add an additional thirty million people with less than a 1 percent rise in overall expenditures (PDF). Democratic lawmakers say the law is paid for by new taxes and lower Medicare payments, but critics cast doubt on whether those lower payments--roughly half of the spending offsets (WSJ)--would ever come about. According to former CBO head Douglas Holtz-Eakin, if "unrealistic accounting" for Medicare, along with a number of other "gimmicks and budgetary games," is removed, the new law would actually cost $562 billion in new government spending by 2019 (NYT).
The law mandates that employers either provide insurance for their employees or pay a penalty that would go toward government subsidies so employees could buy their own insurance. In a December report (PDF), the Lewin Group, a private consulting firm, found that employers currently providing insurance will see a reduction of $223 per employee in healthcare spending under the Senate's version of the bill, which became the basis for the new reform law--"primarily because the employer penalty is low enough that employers can afford to discontinue their plans." Non-insuring companies will pay $316 per worker in new health spending, according the Lewin report.

The 'Triple Tax'

Many company officials say a wasteful public-private system is pushing costs much higher than they should be. Jeffrey Rideout, a medical doctor and former head of the Internet Business Solutions Group at Cisco Systems' Healthcare Practice, says the amount businesses pay for employee insurance is just one element of their total healthcare costs. Rideout says businesses incur a "triple tax." First, they pay for insurance programs through health benefits. Second, businesses indirectly subsidize Medicare and Medicaid, the federally supported programs for primarily poor and elderly Americans.

[T]he Centers for Medicare and Medicaid Services, a U.S. government agency, found that the legislation would do little to stem the rise in healthcare expenditures-–expected to increase to more than 20 percent of GDP in the next decade.

Businesses pay higher insurance premiums to make up for the fact that Medicare and Medicaid reimbursements often do not match the total costs hospitals incur treating these patients, a "hidden tax" confronted in a healthcare proposal (PDF) laid out by California Governor Arnold Schwarzenegger. Third, Rideout says, businesses also subsidize the strain on the system wrought by the cost of treating America's uninsured, again through higher insurance premiums.
It is unclear to what extent these concerns would be alleviated under the reform plan. The new reform law expands access to Medicaid and the children's health program SCHIP. It also creates a new health exchange program that would allow small businesses and workers without employer-provided health insurance to purchase subsidized private insurance. In total, the plan is expected to cover more than thirty million people, but roughly another twenty million are expected to remain uninsured (one-third of whom are expected to be undocumented workers). One of the numerous ways the lawmakers hope to control costs is through reforms to Medicare, particularly by lowering payments to private insurers participating in Medicare Advantage and some health service providers. Whether such measures will simply transfer higher costs to private plans (Crain's), as some critics suggest, remains up for debate. A 2010 annual survey released in March by the National Business Group on Health, a coalition of big employers, found that more than two-thirds of large employers surveyed expected their health costs to increase (WashPost) as an impact of reform, and more than a quarter were considering reducing benefits to employees to control costs internally.

Improving Value

Healthcare experts agree the people with the most control over what drugs get prescribed and what procedures get done have little incentive to lower these costs (indeed, to the extent that they get paid by the procedure, their incentives are often quite the opposite). Likewise, patients often feel little need to control the costs of their own medical care if it is covered by insurance. The system bears the brunt of the excess, and employers make up the difference in the rates they pay.
While there is competition in the U.S. healthcare system, it operates at the wrong level, argue Harvard Business School Professor Michael E. Porter and Elizabeth Olmstead Teisberg, a professor at the University of Virginia's Darden School of Business, the authors of the book Redefining Health Care: Creating Value-Based Competition on Results. "Competition is both too broad and too narrow," Porter and Teisberg write. "Competition is too broad because much of the competition now takes place at the level of health plans, networks, hospital groups, physician groups, and clinics. It should occur in addressing particular medical conditions. Competition is too narrow because it now takes place at the level of discrete interventions or services. It should take place for addressing medical conditions over the full cycle of care, including monitoring and prevention, diagnosis, treatment, and the ongoing management of the condition."
The law tries to improve competition through the creation of a "health insurance exchange" (PDF) for small businesses and individual buyers. But new competition in the marketplace may be limited. The CBO found that premiums for individual plans on these insurances exchanges would increase by 10 percent to 13 percent by 2016.
Investment analyst Julia Coranado (PDF) argues, "Most people covered by employer-sponsored plans will not see many changes or benefits from increased competition, so there is little expected impact from the [Senate bill] on healthcare inflation, although lower Medicare reimbursements will apply some downward pressure."
Some experts say companies should do more than focus their attentions strictly on direct costs of providing healthcare and look at the benefits of reducing poor health. Some health analysts argue there are "spin-off" benefits to supporting healthy employees such as productivity, intellectual capacity, and reduced absenteeism. Meanwhile, reviews have been mixed on whether the costly U.S. health system leads to health outcomes as good as developed countries with lower health costs. The law contains some measures that would monitor the quality of health outcomes of the insured.

Tapping Technology

Technology, too, can play an important role in minimizing overall health costs by improving efficiency and reducing mistakes. Rideout points out that the U.S. healthcare industry lags in information technology (IT) spending behind not only its competitors internationally, but also other industries domestically. Rideout says the average company outside the health industry spends seven times as much as U.S. healthcare companies on information technology, and companies in some wealthier industries like banking spend up to twenty times as much. U.S. competitors abroad have also consistently outspent the U.S. government on healthcare IT investment.

One of the most commonly cited goals that could be spurred by increased investment is the shift to electronic medical records. Though critics worry about privacy, digitizing patient records achieves a number of ends at once: It cuts paper costs and also reduces the likelihood of errors in prescriptions and in the transfer of data between hospitals--flaws that can cause medical errors and prompt the need for expensive ongoing care. The new law aims to improve coordination among health providers electronically, including requiring all medical

DEVELOPMENT OF THE HEALTH SYSTEM In Indonesia

 Health policies and strategies

The creation of “Healthy Indonesia 2010” forces the Ministry of Health and Social Welfare to forge collaborative relationships with others. As health is a shared responsibility, the Ministry of Health and Social Welfare must involve all strata of the community, all related government departments and agencies, and the private sector.  In the effort to achieve “Healthy Indonesia 2010,”the Ministry of Health and Social Welfare must also be proactive and forward-thinking.

The ‘Healthy Indonesia 2010’ goals are:

      To initiate and lead a health orientation of the national development

      To maintain and enhance individual, family, and public health along with improving the environment

      To maintain and enhance quality, accessible, and affordable health services

      To promote public self-reliance in achieving government health

While the Ministry of Health and Social Welfare was redefining the new Vision and Mission, two new fundamental Acts were enacted, namely Act No. 22/1999 on Local Governance and Act No. 25/1999 on Financial Balance Between Central Government and Local Governments.  The two Acts are a reference for the implementation of decentralization policy in Indonesia, which give provinces and districts a large autonomy to manage their own home affairs except defence, monetary and fiscal, foreign affairs, justice, and religion.

Based on the new Vision and Mission of National Health Development and in line with the decentralization policy, it is agreed that there are four paramount issues to serve as the pillars in formulating a Strategy for National Health Development. These are:

      Initiating health-oriented national development

      Professionalism

      Community Managed Healthcare Programme (JPKM)

      Decentralization

The identification of these four elements as pillars of the Strategy for National Health Development does not mean that other programmes should not be supported.  All programmes and plans of potential assistance to the Ministry of Health and Social Welfare in achieving the new Vision and Mission should be continued, even though these four pillars have the highest priority.

Related Links

Program and Policies

Community Health

Millennium Development Goals (MDGs)

The progress made towards achievement of health related MDGs is given at Annex-2.

Organization of the health system

Structure of the Health System

There are 33 provinces and each province is sub-divided into districts and each district into sub-districts. As decentralization had been already implemented, the 349 regencies and 91 municipalities are now the key of administrative units.

Each sub-district in Indonesia has at least one health centre headed by a doctor, usually supported by two or three sub-centres, the majority of which are headed by nurses. Health centres mainly provide eight programs. Most of the health centres are equipped with four-wheel drive vehicles or motorboats to serve as mobile health centres and provide services to underserved populations in urban and remote rural areas.

At the village level, the integrated Family Health Post provides preventive and promotive services. These health posts are established and managed by the community with the assistance of health canter staff. To improve maternal and child health, midwives are being deployed to the villages.

The Decentralization Policy has been implemented in Indonesia, with the implementation of Act No. 22/1999 regarding Regional Governance and Act No. 25/1999 regarding the financial equality between Central and Regional government. With the implementation of the aforementioned Acts, the government system in Indonesia has been changed from Centralized to Decentralized type of government, which provide regional autonomy.  In the Act No. 22/1999, there have been three levels of regional autonomy, i.e., Province, District, and City regional autonomy.

Paragraph 4, sub-paragraph 2 stated that there is no hierarchical links between these three regional autonomy regimes. However, in the explanation of paragraph 4, it is stated that Governor (as Head of Province Regional Autonomy and Head of Administrative area) will have to perform links in guidance, monitoring and supervision to the District and City areas.  This is in relation to the delegation of responsibility to Province which has been stated as having limited autonomy; but it has been also given broader de-concentration as representative of Central government.  The rule of Guidance and Supervision has been clearly stated in the Government Act No. 20/2001 regarding Guidance and Supervision of Governance implementation applied to local government.

Organizational Structure of Health System

In line with Province government responsibility, Broader Decentralization has been given to District and City levels.  Regional government has also been given the authority of “support = perbantuan” or “medebewind”.  This has an implication that regional development has to be performed by District/City, while the development at Province level is limited only to those, which have not been covered by District/City, and Inter-district/Inter-city.  Meanwhile, the Central government has to perform the role of policy formulation, standards and providing guidance to Province and District/City government levels.

Government Act on Health No. 23/1992 has stated that Health Systems should be implemented by the community with government as facilitator.  Private sectors will perform an active role, so that government will act in the provision of guidance and supervision.

Health Information System

A.         NATIONAL HEALTH INFORMATION SYSTEMS (NHIS)

National health information systems reforms has been indicated by the development of a new NHIS policy and strategy included in the Ministry of Health decree No. 468/MENKES-KESOS/SK/V/2001, dated 25 May 2001, which has been amended by decree No. 511/MENKES/SK/V/2002, dated 24 May 2002.

Although the NHIS Policy and Strategy has been developed in support of Decentralization on health to achieve Healthy Indonesia by the year 2010, current condition shows that constraints and classical problems have been chronically identified.

Below are the elaboration of vision and mission of NHIS, strength and opportunity, and constraints or challenges (SWOT analysis) of the current NHIS.]

Related Links

Information for Policy – WHO/INO

A.1       Vision and Mission of NHIS

The vision of NHIS is to support the achievement of Healthy Indonesia by the year 2010. Healthy Indonesia achievement will be accelerated with the provision of accurate, updated and timely presentation of information. Reliable and valid information in other word is a prerequisite for the achievement of Healthy Indonesia 2010. Motto of NHIS VISION is RELIABLE HEALTH INFORMATION 2010.

To support the above vision, the following MISSION of NHIS has been formulated:

      The development of data management, which includes data collection, storage and retrieval, and analysis

      The development of Data Bank, Health Profiles, and presentations of information for different purposes

      The development of networking/sharing information among different data and information users

      The development of methods for the use of data and information for action purposes

A.2       Strength and opportunity

The strength and opportunity that will contribute to the development of NHIS are:

Firstly, the strength to support the development of a comprehensive NHIS includes the provision of adequate health infrastructures have been provided by government from national down to sub-district level, different HIS for different purposes have been developed, the initiatives of HIS developed by the unit for local purposes, and the rapid development of Information Technology.

Secondly, there are opportunities which consider will accelerate the development of HIS, which includes Regional Autonomy Implementation which will consider HIS as an important support for the health provider in convincing other health related sectors of its usefulness for decision makers.  Structural streamlining organization and empowering professional/functional health personnel, will allow the maximum utilization of HIS personnel. Independency policy of regional health unit with the obligation to provide the quality health services to the community will have to use evidence-based information for decision making purposes.

Considering the aforementioned strengths and opportunities, the development strategy of NHIS consists of the following:

      The integration of existing HIS

      The streamlining of current procedure and mechanism of reporting and recording systems

      The empowerment of regional capacity relating to HIS

      The development of HIS human resources, taken into consideration the rapid advance of Information Technology and maintenance of equipment

      The provision of adequate information for decision makers and community

For example, at the peripheral level of health management i.e. Health Centre level, apart from illustrating current health problem or situation, information should perform its usefulness as action oriented, which also involve situation analysis for the implementation of programme activity or prompt action to recover the health problems within the area of responsibility.

 At the District/Municipality health level, apart from health services delivery monitoring, HIS will also include resources mobilization or relocation, as well as local health system planning and health management improvement

In line with the development of HIS, the improvement of data management should also include integrating data collection, reporting, and use of the information for improving health services effectiveness and efficiency through better management at District/Municipality under decentralized settings.

A.3       Constraints and challenge  

Some constraints identified regarding the development of NHIS includes fragmented HIS i.e. different HIS for different programme purposes, lack of regional capacity, minimum use of information for management purposes, minimum use of information by community, minimum usage of Information Technology.  These constraints have been more burden to the fact that financial support for the implementation and maintenance of HIS facility and equipment are considered as the least priority in the budgetary line items and provision of an adequate and dedicated HIS personnel is in fact not an evidence in most units either at the point of services or health management level.

B.         DISTRICT/CITY HEALTH INFORMATION SYSTEMS

The objective of HIS is to co-ordinate and provide planning and management support to the service delivery levels (Design and Implementation of HIS, WHO 2000)

The most important issue in which the Central Health Systems level can be situated are whether the system in the country is “Centralized” or “Decentralized”; government or private sector-managed systems’ horizontally and vertically managed health services systems.  For example: budgeting and decisions on financial allocation will be made at the national level in a centralized system, while it will be delegated to the district/city level in decentralized systems.  In a country with a predominantly private sector managed health systems, most of listed health functions are perform by private institutions, while the government only has a regulatory role, setting policies, and making legislation.  In a health systems managed mainly through vertically organized health programmes, the manager has taken over responsibilities in resource management and supervision of the line managers.

Health Information Systems, in which District Health Report is one of its important elements, have to be developed in line with decentralization policy on health.

(Technical Guidelines, District/City Health Report under Decentralised Health Systems Implementation, Jakarta, June 2004)

Emergency preparedness

Indonesia is located in an area of the world that experiences regular natural disasters, such as earthquakes, tsunamis, floods, severe droughts and volcanic eruptions.  Since the Indonesian archipelago forms a part of the Pacific Ring of Fire, it is prone to earthquakes and volcanic eruptions. The government has since last year been putting 10 of its 129 active volcanoes on “alert” status. In recent years, political, economic, religious and social crises have led to complex emergency situations in several provinces, notably Maluku, North Maluku, NTT (West Timor), Aceh, Sulawesi, Papua and Kalimantan.  These civil disturbances have contributed to an increasing number of emergencies in Indonesia in recent years. Both, natural and man-made disasters have resulted in increased mortality and morbidity, as well as a growing population of displaced people.

ASEAN Foundation and Royal Philips conduct forum on healthcare affordability in Rural Indonesia

The ASEAN Foundation and Royal Philips Electronics have held a roundtable discussion on “Healthcare Affordability: Delivering high-quality, affordable healthcare to rural communities” on 26 July 2011 in Surabaya, East Java, Indonesia. The event attended by academics, government officials and professionals from the healthcare industry in East Java, is part of a programme by Philips and the ASEAN Foundation to understand the healthcare needs of rural Indonesia.

Dr. Untung Suseno, Advisor to the Minister of Health of Indonesia on Finance and Community Empowerment, Dr. Makarim Wibisono, Executive Director of the ASEAN Foundation, Mr. Wayne Spittle, Senior Vice-President and Commercial Leader for Philips Healthcare Asia Pacific, Mr. Teguh Purwanto, General Manager for Healthcare, PT Philips Indonesia and Dr. Pranawa, Chairman of the Indonesia Medical Doctors Association, East Java graced the forum.

“Philips is deeply committed to delivering affordable solutions to support the sustainability of primary and secondary healthcare needs in Indonesia.  Our partnership with the ASEAN Foundation is designed to bring expert collaborators together to engage on the role that innovation and medical technology can facilitate access to healthcare in a cost-effective way,” said Mr Wayne Spittle, Senior Vice-President and Commercial Leader Philips Healthcare Asia Pacific.

Participants at the forum discussed the current situation of healthcare in non-urban Indonesia, focusing on identifying the meaning of affordability and value to healthcare providers in the front-line.

Dr. Pranawa SpPD, K-GH, Chairman of Indonesia Medical Doctors Association, East Java, stated, “Poverty and unprecedented progress in health technologies are identified to have strained our health systems. In entering the new 21st century, our healthcare system should be able to provide a range of services that cover the full continuum of care, keep pace with technological progress and provide health care services to the entire population.” 

The Surabaya event is one of a series of roundtable discussions under a joint collaboration between the ASEAN Foundation and Philips. The goal of the events is to build a platform for the private sector to assist in the delivering of affordable healthcare in the region.

“Amidst the intrinsic diversity between countries in this region, there is a growing effort to learn that people is the center of healthcare development. Collaborative efforts between private, government and public sectors to implement new technology and strong advocacy of the patient-physician will lead the battle to obtain affordable and better access to healthcare for Indonesian people.” said Dr. Makarim Wibisono, Executive Director of ASEAN Foundation.

Succeeding roundtable will be held in Vietnam and the Philippines. The forum in Surabaya is also supported by the Indonesia Medical Doctors Association (Ikatan Dokter Indonesia – IDI).

 

Indonesia: Supplying Universal Health Insurance to a Large Population

Analyst Insight by Monica Feldman.

Indonesia, the fourth most populous country in the world, holds big ambitions in the improvement of health for its citizens. Robust public health initiatives based on universal health insurance coverage can highly influence the future development of the consumer health industry in Indonesia. Euromonitor International takes a look at current events shaping a renewed “healthy” country.

The goal is public health

The Indonesian government aims to provide universal health coverage to all population of its 237.6 million according to the 2010 Indonesia Census. To achieve this goal, in 2008 the government introduced “Jamkesmas”, a new health insurance plan that is an extension of the previous plan known as “Askeskin”, established under the National Social Security System Law of 2004 (SJSN Law). Other health insurance plans include “Jamsostek” for employees working for private companies, “Askes” for government workers, and “Asabri” for military personnel.

According to the government the main priorities of health developments for the 2010-2014 period include the improvement of maternal and paediatric health, the control of communicable and non-communicable diseases, the development of self-care initiatives via the assignment of healthcare practitioners to underserved regions (health manpower), the creation of affordable and safe medicines, the further development of Jamkesmas universal health coverage, and the implementation of additional health services.

The problem with previous health insurance plans was a limited number of health centres (puskesmas), poor quality treatments, and limited coverage leading people to pay a large sum for out-of-pocket expenses. Public health expenditure as a percentage of total health expenditure was 62% in 2010 according to Euromonitor International.

In the quest for affordable health

The particular geography of Indonesia, formed by many islands, makes it difficult to achieve large-scale consistent universal healthcare coverage across the population. Self-care is one of the pivotal initiatives to help people in remote and rural areas to manage minor ailments, yet access to formal clinics and health practitioners remain as a challenge.

The government is actively training and giving incentives to health workers to attend to these areas and educate people on health and wellbeing. Mobile telemedicine systems (mHealth) are filling the gap for medical attention involving remote consultation, telediagnosis and a collection of patients' information in remote areas. The geographic landscape and a fragile telecommunications structure still represent important obstacles.

Big urban areas in the islands of Java and Sumatra provide the best options to consumers in terms of medicine accessibility and healthcare centres (puskesmas). Local pharmacies, “apotik”, are usually small independent operators. Only a few chains exist such as Kimia Farma (Persero) Tbk PT, Guardian (Dairy Farm International Holdings Ltd), K-24 Indonesia PT, and Century Healthcare (Perintis Pelayanan Paripurna PT) in the largest urban areas. Apotik Melawai is a popular private local chain in Jakarta, while other pharmacies are owned by the government.

New opportunities ahead

The need for affordable medicines to promote self-care will be supported as long as the Indonesian government continues to make an important push on universal health benefits for its people. One of the pending challenges to address is how the government will pay for future healthcare costs under the universal health insurance plan. Self-care initiatives via consumer education can become a solution in the treatment of minor ailments, while leaving serious or more complicated conditions to the attention of healthcare providers.

Many benefits can be expected if the government fosters comprehensive self-care initiatives and supports both local and international companies in the approval and launch of new affordable medicines. International companies wishing to expand their operations in Indonesia can find good opportunities via the establishment of partnerships and joint ventures with local firms.

Local expertise, good relationships with the government, and a clear understanding of the Indonesian culture can become an asset to expand sales in the fourth most populous country in the world.

THE ORGANIZATION OF MEDICAL CARE IN JAPAN

From ^^

Hospitals

    Despite Japan's relatively high hospital bed-to-population ratio (Appendix 1, Table 3), the number of hospital beds is not decreasing Between 1970 and 1988, in fact, it increased by 25.8 percent.¹ This reflects at least five characteristics of Japan's broader health system First, until the late 1980s, few barriers were placed on entry into the hospital market in Japan's rapidly growing postwar economy. Second the organization of medical care in Japan is heavily centered around hospitals. Third, 81 percent of hospitals are privately owned, and the) have had few restrictions on their capital investments. Fourth because hospitals have competed fiercely with one another, expansion has served as a key strategy to gain a competitive edge. Finally, al least until the mid 1980s, the Ministry of Health and Welfare has not played an active role in containing the total number of hospital beds.

    Close to 90 percent of hospital facilities with 20 or more beds are classified as "general hospitals." The remainder are mental health facilities or tuberculosis and leprosy centers. General hospitals are dominated by small, privately owned and operated "nonprofit" facilities. The average number of beds in a Japanese hospital is 163 -slightly fewer than the 190 in an average American hospital - and half have fewer than 100 beds.² Although the last few years have witnessed a proliferation of national hospital chains, the majority of small hospitals continue to be privately owned and managed by physicians As in public hospitals, physicians in private hospitals are salaried.

    With 283 beds, the average public hospital is larger than its private counterpart. Although 19 percent of hospitals are public, they account for 33 percent of all beds. About 75 percent of public hospitals are under the jurisdiction of municipal and prefectural governments the remainder are national institutions. About 1 percent of hospitals are owned and operated by quasi-public agencies and organizations such as the Red Cross, social insurance agencies and employment related groups.

    Despite these distinctions, all hospitals in Japan tend to be viewed as recuperative centers rather than as merely therapeutic institutions, Even large teaching hospitals do not limit themselves to providing acute-care services. Hospitals have traditionally functioned, in part, as long-term care facilities. Of the nearly 400 hospitals that have more than 500 beds, only about 60 percent have adult intensive care units, and only 30 percent of them have neonatal intensive care units, the majority of which have only five to seven beds.

    As a result of this orientation, patients in Japanese hospitals have the longest average length of stay in the world.³ Even accounting for the lengthy stays of psychiatric patients, the average patient's stay in a Japanese hospital far exceeds that of most other OECD countries both in the aggregate and by specific disease categories (Appendix 1, Table 5). In addition to the nursing home functions played by hospitals, other factors accounting for the lengthy stays are probably the large number of beds, the low admission rates, the per diem form of hospital reimbursement, and the emphasis on recuperation over invasive medical and surgical interventions.

    As is the case with intensive care units, there are far fewer emergency rooms in Japan than in the United States. But while Japan has roughly half the population of the United States, it has only 7 percent of the murders, 2 percent of the reported rapes, and 0.3 percent of the armed robberies, so there would seem to be less of a need for extensive trauma facilities.⁴ In addition, unimpeded access to health care through the clinic system has the effect of steering non-urgent care away from emergency rooms. An integrated system of primary, secondary and tertiary-level emergency facilities appears to meet the need for emergency and trauma care.⁵

    As in the United States, university hospitals in Japan are centers for research, teaching and the delivery of tertiary-level "cutting edge" medical care. In contrast to America's 129 academic medical centers with an average size of 664 beds, Japan has 131 university hospitals (half of them public) with an average size of 735 beds.⁶ Despite their larger average size, Japanese teaching hospitals have far fewer inpatient admissions, less than 30 percent of the American rate. And the 36.2 day average length of stay in these hospitals far exceeds the 7.9 days in American teaching hospitals.⁷

    Although Japanese university hospitals generally incur higher costs, they also have shorter lengths of stay and higher staffing ratios than other Japanese hospitals. Increasingly, the public perceives these facilities as preferred sites for receiving medical care.

    A recent innovation for the delivery of high-tech medical care has been the establishment of officially designated centers for such procedures as open-heart surgery. This "Highly Advanced Medical Technology System" provides a mechanism by which new medical devices can receive broader use and evaluation despite their ineligibility for reimbursement under the normal benefits plan of Japan's health insurance program. Most often, highly advanced medical procedures are performed at teaching facilities.⁸ For third-party reimbursement to be awarded, these procedures must now be performed at these centers, which are required to have appropriate equipment and personnel.

Clinics and Ambulatory Care

    Japanese physicians have traditionally operated on a small scale, working out of their homes to provide health care services to their community. Although these clinics have typically provided a low-level intensity of care, many have recently acquired a wide range of sophisticated medical equipment including ultrasonic testing and gastrointestinal fiberscopes.⁹

    Small, privately owned clinics provided most outpatient services until the 1970s. In addition, roughly 25,000 physicians' offices, equipped with up to 19 beds and also referred to as "clinics," function as small hospitals. They add 276,000 beds to Japan's already high number (15.8 per 1,000 persons), thus increasing the total number of hospital beds by 17 percent.¹⁰

    Since the 1970s, clinic physicians have become concerned about losing their share of primary-care services to hospitals. Although the number of clinics has increased from about 50,000 in 1955 to more than 80,800 in 1990, the number of clinics with beds decreased by almost 20 percent during the 1970s and 1980s.¹¹ Likewise, although the number of physicians has increased by 113 percent since 1960, the proportion of physicians running clinics has dropped from 44.8 percent in 1960 to only 27.5 percent in 1990.¹² This decrease in the number of clinics with beds and the proportion of physicians running clinics is due largely to direct competition with larger hospitals in outpatient services and high land prices that prohibit the establishment of new clinic facilities. Larger hospitals are attracting both young doctors and outpatients with their sophisticated technology and services.¹³

    Despite the competition between clinics and hospitals, two structural aspects of Japan's health care system appear to constrain the trend toward specialization and high-tech care and to promote primary-care services. First, clinic physicians do not have admitting privileges to hospitals. Second, once referred to the hospital, many patients do not return to a clinic but continue to be treated by the hospital's outpatient department. These barriers give clinic physicians an incentive to put off hospitalization.¹⁴

    Beyond the barriers to referring patients to hospitals, two financial incentives also appear to support primary-care services. First, clinic physicians are remunerated under the fee schedule each time they write a prescription for a dispensing pharmacist. Second, they make an average profit of 26 percent of the reimbursement rate every time they prescribe - and sell - a drug to their patients.¹⁵ Because pharmaceutical manufacturers and wholesalers routinely sell drugs to physicians at prices well below the fee schedule's reimbursement rates, drug sales have become an important source of profits for clinics.¹⁶

    The average net monthly income for clinic physicians was $22,900 in 1990, while specialists based in private hospitals earned only $6,300.¹⁷ A 1985 study indicated that revenues and net profits of clinic physicians vary with the quantity of drugs prescribed and sold by physicians, the age of the physicians and the size of the clinic. This finding supports the contention that clinic physicians maximize their income by prescribing and selling more drugs.¹⁸

    Despite clinic physicians' practice of selling the drugs they prescribe, which strikes most Americans as a blatant financial conflict of interest, the doctor-patient relationship presumably is based on trust. Patients are typically told little about their diagnoses, and doctors explain away problems in "soothing terms without necessarily providing precise information about what exactly the problem is."¹⁹ Pills frequently go unlabeled, and patients are not always told when they are part of an experiment. Such practices were recently supported by a court decision that doctors need not share the full details of a diagnosis with a cancer patient.²⁰

    The clinic physician, however, does not provide the kind of primary health care so often extolled by family physicians in the United States. Most clinic physicians operate in solo practices without hospital privileges, thus making it difficult to collaborate with specialists as well as with peers. Standards of practice, professional competence and patient care are neither monitored nor evaluated in any formal way. In addition, as in the United States, Japanese physicians do not typically subscribe to the idea of "comprehensive primary health care and often fail to respect the person as a whole person operating in a complex social and economic environment."²¹

Services for the elderly

    Since the early 1970s, the elderly enjoyed a privileged status in the Japanese welfare state. With the economic growth of the 1960s came demands for the expansion of social benefits that could not be ignored. In 1973, the government responded to social pressures by creating an almost free medical care system for the elderly, the national insurance plan administered by local governments. In 1982, in response to rising health care costs, the Health and Medical Service Law for the Aged established the national pooi to subsidize medical care.²² The government sought to increase equity in financing by taxing all health insurance plans based on a formula related to each plan's number of beneficiaries and past medical expenditures on the elderly.²³

    Despite universal coverage under national health insurance, the range of services designed to meet the needs of the elderly is limited. In general wards, no distinction is made between acute and long-term care facilities.²⁴ A significant fraction of hospital beds are routinely occupied by elderly people requiring long-term care. Seventy-five percent of the institutionalized elderly are in hospitals and clinics, for example, and survey data indicate that 45 percent of elderly inpatients are hospitalized for more than six months.²⁵ Due to the shortage of rehabilitation services, roughly 4.6 percent of the elderly population is bedridden.²⁶ In 1987, 34 percent of patients in Japan's long-term care facilities were bedridden, a striking contrast to America's 6.5 percent.²⁷

    There are now a growing number of hospitals specializing in treating and caring for the elderly. There are also three other types of facilities that serve the elderly in Japan: a small number of nursing homes (10 beds per 1,000 elderly persons in 1988, in contrast to 46.2 in the United States in 1985), welfare institutions for those who need constant care, and facilities providing rehabilitation services.²⁸ But the relatively limited number of home health aides leads to an absence of reliable support services.²⁹ Compared to the United States, Japan has a far more severe shortage of long-term care services. There are long waiting lists for admission to nursing homes-applicants commonly wait for more than a year.³⁰

   In addition to the lack of appropriate institutions and support services, at least three other factors contribute to Japan's high rate of "social admissions" to hospitals. First, medical practice generally tends to emphasize passive care and bed rest. Second, a lack of space at home to accommodate elderly relatives pushes more of the frail elderly into hospitals and clinics. Finally, women, the traditional care givers for the elderly, are entering the work force in increasing numbers. Thus, although some 62 percent of the elderly live with their children or other relatives, in contrast to less than 33 percent in the United States, Japan's institutionalization rate (6.2 percent) is comparable to America's.³¹ Where Japan diverges from the United States and other OECD countries is in its rapidly graying population. In 2020, 26 percent of Japanese will be over 65, compared to 17.3 percent of Americans.³² Because there are already about 700,000 Japanese aged 65 and over (4.6 percent of the elderly population) who are so severely disabled that they are bedridden or require constant supervision, these projections impelled government policy-makers to publish the "Golden Plan" and make a commitment to solve this anticipated crisis.

    The Golden Plan is a 10-year national health care and welfare plan for the elderly agreed upon by the Ministries of Health and Welfare, Finance and Home Affairs in 1989.³³ At the Japan Society conference, Ministry of Health and Welfare Director-General Nobuharu Okamitsu described it as an attempt to integrate welfare services, medical care and insurance in a comprehensive manner. The plan outlines an ambitious set of goals at a projected cost of $40 billion during the 1990s. This is in contrast to the $11.3 billion spent in the 1980s.

    The plan relies on four principal strategies to build the infrastructure necessary to accommodate the growing needs of the elderly:

1. Expansion of existing services by increasing the number of home helpers from 40,900 in 1991 to 100,000 in 1999 and the number of nursing home beds from just over 144,600 to 240,000;³⁴
2. Creation of a more diverse range of services by defining the respective roles of corporations and of the national, prefectural and municipal governments;
3. Decentralization through an increased role for municipalities in the design of programs;
4. Reduction of fragmentation by developing government entities to provide services, support research, disseminate information and coordinate the regional administration of model projects.

    In addition to expanding infrastructure for the elderly, the Golden Plan seeks to rationalize services. It aims to reduce the geriatric population of hospitals and to increase capacity in skilled nursing homes and particularly in new institutions known as geriatric rehabilitation centers. In addition, it calls for a three-fold increase in government-employed visiting homemakers, a 10-fold growth in adult day centers, and a 12-fold increase in respite care centers. If the plan is implemented, the bedridden elderly will be shifted over the next decade away from hospitals toward home care support services, informal support services and nursing homes.

    The government has recently adjusted the fee schedule's reimbursement rates to encourage those general hospitals that provide mostly long-term care for the elderly to become approved geriatric hospitals. The fee schedule's per diem rates for long-term care in general hospitals have been reduced to provide an incentive for many private, medium-sized hospitals to become chronic and geriatric care facilities that would be reimbursed on the basis of a more favorable geriatric fee schedule.³⁵

Another major change in the reimbursement of medical care for the elderly was the reinstatement of copayments. When the elderly were first covered under national health insurance in 1961, their copayments were set at 50 percent of the allowed fees. Free medical care for the elderly was established in 1973 and lasted until 1983. When reinstated, the copayment was kept at a low level, far lower than the pre-1970 levels of patient contribution.³⁶ But cost-sharing for care of the elderly has continued to rise. Moreover, the government is now emphasizing programs that draw on family resources. In contrast to inpatient services, local governments now ask the children of residents in nursing homes and geriatric hospitals to contribute toward the cost of care