Indonesia, a middle-income country with a population of over 200 million, has undertaken social health insurance reforms with the aim of achieving universal coverage. The country is at a critical stage in the development and modernization of its health system. Although infant and child mortality outcomes have halved since 1991, the country’s performance in achieving many of the other Millennium Development Goals and addressing the growing incidence of non-communicable diseases remains weak. In this context, the National Development Planning Agency of the Government of Indonesia has requested a systematic assessment of health care financing options and analysis of constraints. This session presents the key elements of this analytical work, which attempt to bridge health economics research with the needs of policymakers.

Indonesia’s growing economy, political stability and decentralization prospects allow it to think expansively about health care. An assessment of fiscal space for health and a systematic costing and analysis of key health care financing options were carried out to gauge what types of health care reforms are feasible in the current context.

As insurance coverage increases, the system is likely to face supply side constraints in the public sector and the role of the private sector is likely to become critical. The impact of the emerging private sector on quality on health service use and quality was assessed.

Indonesia is characterized by large socioeconomic and regional inequalities in equity and financing of health care. In order to address inequalities through improvements in insurance coverage a good understanding is required of the barriers to access underlying these inequalities. Trends in equity and financial protection in health care over the past 8 years were analyzed to understand health system factors underlying inequalities in health care.

In addition, the first two papers highlight how the Government of Indonesia was engaged throughout the research process to ensure that the findings of the health economics and financing research are translated into policy. The other two papers show how building capacity to carry out applied health economics research at local research institutions further helped bridge health economics with policy by making the analysis more context specific.

Discussant: William Hsiao, K.T. Li Professor of Economics, Harvard University