What is the Impact of an Emerging Private Sector for Health Care Provision on Health Facility Utilization and Quality of Care? Evidence from Indonesia

Presenter: Elan Satriawan

Abstract

Dual practice and private sector employment opportunities for physicians, midwives and other health workers create opportunities that may have positive or negative effects on access to care. On the positive side, dual practice and private sector opportunities may lead to an increased supply of health service providers. On the negative side, the poor may have less access to care, or households with less ability to cover the fees of private doctors may have no alternative but to seek care from less qualified health care providers.

In this paper we make use of the 1997, 2000 and 2007 rounds of the Indonesian Family Life Survey (IFLS) to examine the effects of private sector provision on access to and utilization of the health care system and on the quality of care received in Indonesia. We first exploit diagnostic vignette data from community surveys of the 1997 and 2007 rounds of the IFLS to document changes in the differences in the quality of care received across public and private health facilities in both remote and non-remote regions of Indonesia. We next examine whether increases in private sector health care provision affect the type of provider and quality of care received from public health facilities. Identification of the effects of private sector growth are facilitated by exploiting the panel component of the IFLS, and by assuming that after controlling for socioeconomic characteristics of households and communities, changes in access to the private sector are not systematically related to changes in individual and household preferences.

The paper next examines how the emerging private sector interacts with an insurance program targeted toward the poor in influencing patterns of health service utilization. In most communities, Indonesia’s new health insurance system for the poor (Askeskin) only covers care provided at public health facilities, there is a significant likelihood that utilization by the poor will increase. Physicians who have private practices on the side, however, may substitute additional time toward patients who can pay higher fees to their private practices and leave less affluent patients to be treated by less qualified medical professionals. In order to avoid biases introduced due to selective take-up of Askeskin insurance, we use features of both the IFLS and program design. First, we exploit differences in timing of the availability of Askeskin insurance across communities in the IFLS, and second we exploit community-specific Askeskin eligibility criteria in a regression discontinuity design.

The results of our study inform a policy debate over the effects of private sector opportunities on access to and quality of health care. By further examining how insurance access affects utilization and access to care in an environment in which private sector provision of health care is becoming more common, we demonstrate how government interventions in insurance provision interact with incentives for medical professionals to provide quality care.