1

HOSPITAL REFORM IN INDONESIA

Shita Dewi

2

Context Background

The history of hospital development in Indonesia

The growth of health care industry

Missionary

The international market of health care industry

Health system development

Hospital management

Globalization

3

The Players

Corporation Hospital Mainly for profit

Foundation Hospital Faith-based & Non

faith based Not-for-profit

Association hospital NGO’s Not for profit

National hospital Teaching state-

owned hospital Province hospital District hospital

Private HospitalPublic

hospital

4

The Number of Hospitals (1998-2008)

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080

100

200

300

400

500

600

700

800

491511 518

550580

606 617 621 626 638 653589 591 593 595 598 609 617 625 642 655 667

Pemerintah Swasta

Num

ber

of h

ospi

tals

PRIVATEPUBLIC

5 CENTRAL

PROVINCE

DIST RICT

SUB-DISTRICT

VILL AGE

MINISTRY OF HEALTH

PROVINCE HEALTH OFFICE

DISCTRICT HEALTH OFFICE

NAT. HOSPT

PROV. HOSP

DIST. HOSP

HEALTH CENTERS

VILLAGE MIDWIVES

SUB HEALTH CENTERS

MINISTRY OF HOME AFFAIRS

GOVERNOR

MAYOR/BUPATI

CAMAT

HEALTH CARE SYSTEMHEALTH CARE SYSTEM

INTEGRATED POST

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Hospital Reform

Bureaucratic(Pre-1991)

Semi Autonomous (Swadana)

(1991)

Public Service Agency

(BLU/BLUD)(2007)

Bureaucratic

CorporationNot for

profitNon-

privatization

Reform Modalities and The Environment

Core public sector

Broader public sector

Market/private sectorB

ACP Budgetary Unit

Autonomized Unit Corporatized Unit Privatized Unit Harding-Prekker,

2000

The Reform Modalities and Dimension(Harding-Prekker, 2000)

Budgetary Unit

(SKPD)

Autonomized Unit

(Swanada)

Corporatized Unit(BLU)

Privatized Unit

Decision Right

Vertical Hierarchy Management Autonomy

Residual Claimant

Public Purse Private Owner

Market Exposure

Direct Budget Non Budgetary Revenue Allocation

Accountability

Direct Hierarchical Rules, Regulation, & Contract Control

Social Function

Unspecified Specified, Funded, & and Regulatedunfunded mandate

Conditions for BLU

Su

bsta

nti

ve Goods and

service deliverySpecific regional managementSpecificfunding management

Tech

nic

al Performanc

e basedHealthy accounting practices

AD

MIN

ISTR

ATIV

E Signed statement to improve performanceCorporate Governance and Clinical GovernanceStrategic PlanningMinimum Standard of PerformanceFinancial StatementAudited

Features

Budgetary Unit BLU

Revenue General account BLU account

Has to submit application to use revenue

Revenue can be used directly

Government funding isn’t calculated as revenue

Government funding is calculated as revenue

Spending Line budget Flexible budget

Loans Not allowed Funding through loan is allowed

Hospital Supervisory Board

None Yes

Features (continued)

Budgetary Unit BLU

Investment Not allowed Allowed

Partnership Not allowed Allowed

Procurement According to Keppres 80/2003 (regulated bidding)

Keppres 80/03 is not compulsory for items purchased by non government budget revenues

HR Civil servant, paid according to civil servant standard

Civil servant and contract staff, paid based on performance

Financial report

Balance sheet Income Statement, Cash Flow Statement, Financial Statement, etc

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Reform (needs) within the Organization Environment

Hospital Management

Regulator

Payer

Patient

Supplier

SupervisionEmpowermentEnforcement

CostingPayment mechanismQuality improvementPatient Safety

Pricing

ProcurementPartnership

Key Messages

Reform is also a political issue: pay attention to political-economy context

Clarify (and agreed on) the meaning and concept of what is the reform about and what it is not

Manage the “human” side of reform because reform is painful

The importance of timing and enabling environment: hospital doesn’t exist in vacuum

Pay attention to different interests of at different level of government (Central and Local)

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THANK YOU