HOSPITAL REFORM IN INDONESIA Shita Dewi 1

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 2

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 Hospital Public hospital 3

The Number of Hospitals ( ) 4

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 SYSTEM INTEGRATED POST 5

Hospital Reform Bureaucratic (Pre-1991) Semi Autonomous (Swadana) (1991) Public Service Agency (BLU/BLUD) (2007) BureaucraticCorporation Not for profit Non- privatization 6

Reform Modalities and The Environment Core public sector Broader public sector Market/private sector B A C P 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 RightVertical Hierarchy Management Autonomy Residual Claimant Public Purse Private Owner Market ExposureDirect Budget Non Budgetary Revenue Allocation AccountabilityDirect Hierarchical Rules, Regulation, & Contract Control Social FunctionUnspecified Specified, Funded, & and Regulated unfunded mandate

Conditions for BLU Substantive Goods and service delivery Specific regional management Specific funding management Technical Performance based Healthy accounting practices ADMINISTRATIVE Signed statement to improve performance Corporate Governance and Clinical Governance Strategic Planning Minimum Standard of Performance Financial Statement Audited

Features Budgetary UnitBLU RevenueGeneral accountBLU 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 SpendingLine budgetFlexible budget LoansNot allowedFunding through loan is allowed Hospital Supervisory Board NoneYes

Features (continued) Budgetary UnitBLU InvestmentNot allowedAllowed PartnershipNot allowedAllowed ProcurementAccording to Keppres 80/2003 (regulated bidding) Keppres 80/03 is not compulsory for items purchased by non government budget revenues HRCivil servant, paid according to civil servant standard Civil servant and contract staff, paid based on performance Financial reportBalance sheetIncome Statement, Cash Flow Statement, Financial Statement, etc

Reform (needs) within the Organization Environment Hospital Management RegulatorPayerPatientSupplier Supervision Empowerment Enforcement Costing Payment mechanism Quality improvement Patient Safety Pricing Procurement Partnership 12

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)

THANK YOU 14