• Spending overview
• Policy overview
• Diseases overview

Spending overview

Indonesia spends less on healthcare than its neighbours. Healthcare spending accounted for 2.8% of GDP in 2009, compared with 3.3% in Thailand and 3.9% in the Philippines, according to a UK-based market-research firm, Espicom.

Given strong economic growth, this will result in a rapid rise in spending in both local currency and US dollar terms. A large proportion of healthcare provision is accounted for by private, mainly out-of-pocket spending, and individuals' access to healthcare is closely linked to wealth. The high reliance on private healthcare among the middle classes means that pressure on the government to improve its healthcare provision is weak. The healthcare system, both public and private, has suffered from years of underinvestment and is struggling to meet growing demand.

Even at state-owned hospitals patients pay user fees, although public health clinics and family planning posts are free at the point of delivery. The government has developed several health insurance plans for workers and their families, including a scheme for civil servants (ASKES) and one for the private sector (JAMSOSTEK); the latter has seen low uptake. The military has another such scheme, known as ASABRI. According to the International Labour Organisation, only around 18.7m Indonesians, or 8% of the population, were covered by these formal health-insurance schemes in 2007. This partly reflects the low proportion of the employed labour force (around 37%) that works in the formal sector. However, the number of people with health coverage rises to 95.1m when those covered by the National Social Security System are included. This system, which was launched by the government in 2005, provides poor families with access to free outpatient primary care in local health centres and free treatment at hospitals.

Policy overview

The health system is characterised by marked regional inequalities. Around 55% of Indonesia’s 240m people live in rural areas, and the population is spread across around 6,000 islands. Healthcare is most developed on the main island of Java, which is home to around 50% of the population. The capital, Jakarta, enjoys comparatively high levels of primary care, whereas healthcare in remote areas, such as the western province of Aceh, is inadequate. Budgetary pressures mean that the government concentrates on providing primary care and basic hospital services. The amounts spent on community outreach, health education and immunisation programmes have come under pressure since the 1997-98 Asian financial crisis.

Radical administrative decentralisation, which began in 2001, has compounded problems in public-sector healthcare, as management of health services has been devolved to regional governments that lack the necessary experience and adequate funding.

The central government is actively promoting the growth of private healthcare, particularly at secondary and tertiary levels, with the aim of compensating for the more serious shortcomings of the public system. For-profit hospitals are permitted, and the hospital sector is open to foreign investment. The growing role of the private sector in healthcare raises questions about access, although private facilities have to provide subsidised services to the poor. Indonesia is coming under increasing international pressure to open up its healthcare services to international competition.

Diseases overview

Indonesia's pensioners do not represent the same potential strain on public resources as in many other parts of Asia: people aged 65 or over accounted for just 6% of the population in 2008 and will make up only 6.4% in 2014. Nevertheless, the rise in average life expectancy from 62.8 years in 1990 to an estimate of almost 71 years in 2009 has led to an increase in the prevalence of degenerative diseases. Life expectancy in Indonesia remains low compared with that in developed nations, and is also below that in neighbouring countries.

The country has recently faced outbreaks of polio and measles among children, and is battling an increase in the incidence of HIV/AIDS, as well as of malnutrition in some parts of the country. A UN report on the incidence of HIV/AIDS in Asia published in early 2008 identified Indonesia as the country with the fastest-growing rate of infection. Indonesia has also recorded 134 human deaths from avian influenza (bird flu), which is more than any other country. Other diseases, such as chikungunya, have also posed challenges. Lifestyle diseases associated with rising incomes, which are becoming more prevalent in other parts of Asia, remain a secondary concern. Smoking-related diseases are a problem, as an estimated 30% of the adult population are habitual smokers, according to World Health Organisation (WHO) data for 2005.