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Indonesia's health system struggles to cope amidst economic and political ruin, geographical barriers
Plans for managed care and privatization have been paralyzed by a disintegrating economy and chaotic political landscape.
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One could have reasonably expected the resignation of President Suharto from his 32-year reign as leader of Indonesia this past May to quell the riots and the student-led protests that had come to characterize everyday life in the archipelago nation's capitol of Jakarta. And for a while, at least, his departure - only months after being appointed to his seventh 5-year term as president - seemed to bring some calm to the beleaguered nation. In September, however, student activists again took to the streets surrounding the parliament building, this time to demand the ouster of Mr. Suharto's hand-picked replacement, his long-time friend and political adviser B.J. Habibie. Despite his promise of democratic reforms - some of which have come to pass - many Indonesians see Mr. Habibie's administration as offering more of the same. Food shortages, looting and riots have again come to characterize once-thriving Jakarta.
Indonesia's current political crisis is the result of years of economic mismanagement. Ostensibly, Indonesia's economic strategy throughout the 1970s and 1980s was to develop an export-based industry that would serve as a major supplier of goods to its wealthier Asian neighbors Japan and Australia. In retrospect, however, it becomes apparent that most of Indonesia's economic policies seem to have been designed to increase the personal wealth of the Suharto family. The nation's banking, auto manufacturing, auto import, wood and spice industries - some of the most important businesses in Indonesia - are either wholly or partly controlled by Mr. Suharto, his immediate family or his close friends.
Questionable economic dealings on the part of the president, combined with an atrocious human rights record - one that includes the alleged murder of about 1 million Indonesians since the late 1960s - has left Indonesia much the way Mr. Suharto found it in 1966: unstable; socially, ethnically and religiously divided; and on the brink of collapse.
Social divisions
During Mr. Suharto's reign, Indonesian wealth became densely concentrated in the nation's five largest islands, while about 7,000 small, populated islands - in the archipelago of more than 13,000 islands - suffered tremendously. While Jakarta emerged as one of the most vibrant and prosperous cities of Southeast Asia, the inequalities that developed between Indonesia's urbanites and its indigenous islanders became pronounced. By many estimates, those who lived in the far reaches of the country's islands ceased to matter either economically or politically.
Now Mr. Habibie, for the first time since his ascension to the presidency in May, is facing harsh criticism not only in the capital and the larger cities, but also in the remote provinces. Though credited with repealing many of Mr. Suharto's more draconian policies, experts note that the military junta that brought Mr. Suharto to power in the 1960's still controls much of the government.
The economic fallout from Mr. Suharto's plunder of the economy, combined with low confidence in Mr. Habibie's ability to make necessary repairs, has been tremendous. A US $43 billion aid package from the International Monetary Fund (IMF) helped bolster the failing Indonesian rupiah slightly, as did late-in-the-game free market reforms of Mr. Suharto, but Indonesia's economy, even compared with other poorly performing tiger economies, has distinguished itself as being particularly diseased.
Poor performer
Since last year, the rupiah has lost 75% of its value against the U.S. dollar. Indonesian gross domestic product (GDP) has fallen 6.2% since last year, while consumer prices have risen 81.2%. (In South Korea, also hit hard by the Asian crisis, consumer prices have increased a modest and manageable 6.9% since last August, and in Malaysia inflation has been limited to 5.8%.) Worse is the fact that, according to the government, 89 million Indonesians, or about 40% of the population, can afford only one meal each day. Average per capita income has fallen to less than US $350 annually.
Indonesia's current hyperinflation - which, along with food shortages, is fueling the current civil unrest - came after the country's attempt to protect consumers from a currency shortage and a large-scale banking collapse. The government printed hundreds of millions of rupiahs, flooding currency markets with worthless money.
As a condition of its bail-out package, the IMF has demanded that Indonesia restructure its banking system, to disband the Suharto family monopolies, and shore up questionable monetary policies. Aside from liberalizing the media and attempting to convince the populace that real change is in store, little has been done by Mr. Habibie's administration to repair Indonesia. His countrymen accuse Mr. Habibie of protecting the interests of his friend Mr. Suharto, although Mr. Habibie claims his 40-year friendship with the former leader is over. Experts suggest that Mr. Habibie's days are numbered.
Trying despite fiscal handicaps
Although sound economic planning took a back seat to Mr. Suharto's personal agenda, Indonesia's Ministry of Health appears fairly capable of identifying problems and devising policies that earnestly attempt to better the health of average people.
Given that the government functions under severe fiscal handicaps, it may be difficult for some to imagine that Indonesia has much of a national health service, let alone one that anticipates increased need against the backdrop of diminished funding.
But it does. The seriously cash-strapped Indonesian Ministry of Health is charged with providing medical coverage to all 204 million Indonesians from conception to death. In 1995, the most recent data available, the government spent about US $1 billion on health care, 1.65% of its gross national product, or about US $5 per person.
During the 1980's when the nation's economy was experiencing an explosion, government officials said that in order for the country to remain productive it needed a healthy workforce. So in 1987 control of health services was moved from Jakarta to the capitals of each province and region.
Since then, a further evolution has taken place - one partially driven by the nation's recently introduced free-market reforms and partially by the need to save money. The health system is in the midst of a privatization plan that will sell off hospitals to private interests and introduce managed care. By the Ministry's own admission, the system and the reform plan could be better managed. Ministry of Health officials have criticized local leaders for failure to cooperate with one another in policymaking. The transition process, implemented before the political and economic crisis, is now crippled, but despite problems officials remain optimistic that once the crisis has subsided the transition will resume.
Health care infrastructure
At the top of the Indonesian medical hierarchy are tertiary care referral hospitals that combine state-of-the-art facilities with teaching centers. Beneath hospitals are health centers. Each district in Indonesia has at least one major health center, administered by physicians and usually supported by two or three subcenters, the majority of which are overseen by nurses.
A fourth tier of care is administered at mobile centers that are designed to serve remote areas using four-wheel drive vehicles or motorboats. At the village level, health posts provide basic services, including some preventive care. Health posts are managed by local community governments with the assistance of health center or subcenter staff.
Health centers are the workhorses of the Indonesian health system. Each is equipped to provide basic health services ranging from mother-and-child health plans to occupational safety and eye care. (Sophisticated eye care is available at large referral hospitals. For more see the accompanying article.)
Health centers also play a role in promoting community participation in health activities, such as the "Clean Friday" program in which people are encouraged to adopt healthier lifestyle habits 1 day each week.
There are about 96,000 hospital beds in Indonesia, or one bed for every nine people. There are 1,062 hospitals, 6,224 health centers, 16,264 subcenters and 4,561 mobile centers. There are 35,584 physicians in Indonesia and 125,675 nurses and midwives.
Poor distribution
Indonesia's formidable geographic barriers have proved difficult to surmount when distributing health care and sanitation services. Only 43% of the population has access to clean drinking water and the infant mortality rate, due to disproportionately high mortality in the remote island provinces, is about 65 per 1,000 nationally. Indonesian men on average live about 63 years; women, 67 years. These figures tend to be higher for urban areas and lower for rural.
As in other developing nations, Indonesia's main causes of mortality reflect the diversity of the population and economy. Cardiovascular disease - more common in industrialized societies - is responsible for 16.6% of annual deaths, while diseases common to developing countries, such as tuberculosis, diarrhea, digestive tract infection, malaria and tetanus, are responsible for 26.1% of annual deaths.
Fixing the system
To further develop health services and conserve money, Indonesian officials are considering plans that would privatize many primary care health centers. The Ministry of Health has encouraged the private sector to get involved in delivering services and opening private hospitals. All private hospitals are required to provide subsidized services to the poor to help eliminate inequities caused by the increased role of the private sector.
Access to health care remains a major problem. Although the advent of privatization is likely to reduce costs, Indonesian authorities predict it will worsen the problem of access. Because the government will be providing fewer health services and the public sector more, there is concern that poor patients will not receive care because they will not have private insurance or cash to pay for treatment.
Provisions have been made to guarantee that poor people receive care, but there appears to be little chance that hospitals vying for consumer dollars or insurance company reimbursement will be enthusiastic in administering free treatment. Waiting lists, already long, are a likely by-product of the coming system.
Managing the transition
For privatization to take place, a temporary increase in health spending is needed to guarantee that hospitals will treat poor patients. Eventually government subsidies will be decreased, and hospitals will be required to treat poor patients and absorb the costs. There is one major obstacle in this transition, however; as the public system is phased out and the private system introduced, there is no surplus revenue to cover the costs of treating the indigent. The government has earmarked money to underwrite these costs, but no one is sure how long it will last.
Because of the current economic crisis, the need for increased public spending could not have come at a worse time for the Ministry of Health. The Ministry cannot say for certain whether it has the money to manage increasing programs. Local hospital staff is expected to bear the brunt of the economic crunch, and problems are not expected to subside until fourth-tier subcenters, third-tier mobile centers and village posts are privatized. That process may take years.
Managed care
Managed care, although still in its infancy, is slowly beginning to change Indonesian health care, or at least the way officials think about care. In concert with their efforts to privatize, the Ministry of Health, through a combination of public and private funding, has endorsed a managed care plan designed to equalize distribution of health care and access to health services. The program is expected to be implemented soon.
When privatization and the implementation of managed care is complete, the Ministry sees itself in a supervisory and administrative role, focusing its efforts on policy analysis, research initiatives, control of nationwide diseases, program review and technical support. Once the health care transition is complete, local provinces will also devise their own budgets, but by all accounts it will be years before the Ministry realizes its macro-management goals.