Health Policy and Planning, 2020, 1–8

doi: 10.1093/heapol/czz165
Original Article

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Understanding the impacts of NPM and
proposed solutions to the healthcare system
reforms in Indonesia: the case of BPJS
Erniaty Erniaty1 and Harun Harun2,*
1
Faculty of Health Science, University of Canberra, Kirinari Street, Bruce, ACT 2617, Australia, 2Faculty of
Business, Government & Law, University of Canberra, Kirinari Street, Bruce, ACT 2617, Australia
*Corresponding author. Faculty of Business, Government & Law, University of Canberra, Kirinari Street, Bruce, ACT 2617,
Australia, E-mail: harun.harun@canberra.edu.au
Accepted on 23 November 2019

Abstract
This study critically evaluates the adoption of a universal healthcare system recently introduced by
the Indonesian government in 2014. Our study is driven by the lack of critical analysis of social and
political factors and unintended consequences of New Public Management, which is evident in the
healthcare sector reforms in emerging economies. This study not only examines the impact of eco-
nomic and political forces surrounding the introduction of a universal health insurance programme
in the country but also offers insights into the critical challenges and undesirable outcomes of a
fundamental reform of the healthcare sector in Indonesia. Through a systematic and detailed re-
view of prior studies, legal sources and reports from government and media organizations about
the implementation and progress of an UHC health insurance programme in Indonesia, the authors
find that a more democratic political system that emerged in 1998 created the opportunity for politi-
cians and international financial aid agencies to introduce a universal social security administration
agency called Badan Penyelenggara Jaminan Sosial (BPJS). Despite the introduction of BPJS to ex-
pand the health services’ coverage, this effort faces critical challenges and unintended outcomes
including: (1) increased financial deficits, (2) resistance from medical professionals and (3) politi-
cians’ tendency to blame BPJS’s management for failing to pay healthcare services costs. We
argue that the adoption of the insurance system was primarily motivated by politicians’ own inter-
ests and those of international agencies at the expense of a sustainable national healthcare system.
This study contributes to the healthcare industry policy literature by showing that a poorly
designed UHC system could and will undermine the core values of healthcare services. It will also
threaten the sustainability of the medical profession in Indonesia. The authors offer several sugges-
tions for devising better policies in this sector in the developing nations.

Keywords: Healthcare system reforms, Indonesia, New Public Management, policy, UHC

Introduction
Since 1990s, the rise of neoliberalism has greatly affected policy-
making and outcomes of healthcare reforms worldwide, where the
objective is to implement private sector business theory and practi-
ces through the so-called New Public Management (NPM) (Saltman
and Duran, 2015; Lindlbauer et al., 2016; Mei and Kirkpatrick,
2019). Despite its popularity, the institutionalization of NPM in the
health sector has produced unintended outcomes, which include
more unequal access to health care where people with higher
incomes have better outcomes than poor people (Rotarou and
Sakellariou, 2017) and the lack of improvement in the quality of
care, equity and efficiency (Homedes and Ugalde, 2005).
Furthermore, the introduction of NPM in this sector has increased
anxiety experienced by healthcare professionals, triggered conflict
between clinical and non-clinical staff and driven the resistance
from doctors and social activists (Pushkar, 2019). It is widely

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2 Health Policy and Planning, 2020, Vol. 0, No. 0

Key Messages

• The launce of an UHC insurance programme in Indonesia in 2014 was a milestone aimed to provide a national compre-

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hensive healthcare system.
• There is a lack of deep understanding about real problems faced by Badan Penyelenggara Jaminan Sosial (BPJS) that
will threaten its sustainability. The implementation of the UHC programme is purely driven by political motives and
managed by New Public Management principles.
• The Indonesian government’s approach to implement the UHC health insurance programme should ensure efficiency in
care provision and primarily focus on achieving a minimum basic set of treatments for all patients.
• Five solutions are offered including the need to transform the primary role of BPJS, automatic memberships for all citi-
zens, simplification and refocus of BPJS’s coverage, the use the Tax Office to collect BPJS levies and allocation of more
public budgets for BPJS operation.

criticized that the main beneficiaries of NPM reforms in the health-
care sector are not the citizens of these nations but transnational cor-
porations, consultant firms, and the World Bank’s staff at the
expense of taxpayers (Homedes and Ugalde, 2005). For this reason,
a fundamental reorientation of international financial institutions
such as the IMF and World Bank in reforming the health sector in
developing nations is essential (Stubbs and Kentikelenis, 2017). As
Xu and Mills (2019, p. 4) suggest that the effectiveness of financial
and service-delivery policy arrangements is facilitated or enabled by
their institutional framework. Therefore, understanding the aspira-
tions from different groups of stakeholders is important in under-
standing the process and impacts of a policy-making process in the
health sector (Razavi et al., 2019).
In Indonesia, following the collapse of the Suharto regime in
1998, successive administrations implemented a more democratic
political system and structural reforms in the public sector.1 In the
health sector, NPM reforms have been realized into several features
(Maharani et al., 2015). These features including the adoption of de-
centralization in the management of public hospitals in Indonesia
since 2001 and greater roles have been granted to local authorities
to manage and fund local public hospital. Under decentralization,
public hospitals have been encouraged to adopt corporatization to
allow these hospitals to gain revenues from patient fee section. Since
2014, a more significant reform has been undertaken with the
launch of a universal social security administration agency called
Badan Penyelenggara Jaminan Sosial (henceforth BPJS) in 2014
(Suryanto and Boyle, 2017). However, there is a limited body of lit-
erature published on this topic. An early major study that explored
the key challenges of healthcare reform in Indonesia was undertaken
by Aspinall (2014). He argues that a democratic political system in a
country always provides an opportunity for politicians to use UHC
as an attractive political strategy to obtain public support. Given the
nature of Indonesian’s democracy in that oligarchs still rule, there
are predatory politics and authoritarianism; these realities seriously
compromise the state’s capacity to implement these reforms success-
fully (Aspinall, 2014). Another study by Mboi (2015) found that
despite post-Suharto governments showing a strong political
1 As the result of its economic and political transformation fol-
lowing the collapse of Suharto’s regime in 1998, Indonesia’s
position as a new democracy is improving. In the last 10 years,
the economy’s growth per year has been 5% cent, which has ef-
fectively tripled the economy. Since 1999, Indonesia has been a
member of G20, giving it a permanent and very visible role on
the world stage.
commitment to developing better health services, these efforts have
not been supported by an effective and efficient system put in place.
Further studies by Rakmawati et al. (2019) find that after decentral-
ization, the Indonesian health system at the district level still func-
tions well below expectations.
Reflecting on the above studies, despite the impacts of NPM on
the reforms on a nation’s healthcare system having been extensively
identified, these analyses mainly focused on developed economies
(Mei and Kirkpatrick, 2019). In addition, most prior studies on the
health sector in Indonesia fail to consider the roles of international
players in the policy-making and the implementation of reforms. In
fact, the role of international agencies, such as the World Bank,
IMF, and US International and Development Agency (USAID), and
their ideologies is to influence policy-making and level of national-
ized healthcare sector reforms in developing economies (Homedes
and Ugalde, 2005; George, 2017). Under neoliberalism, people’s
payment of debts to these institutions must be prioritized at the ex-
pense of education and healthcare services in developing nations.
This situation has led to major problems in many African and South
American countries and in Greece recently (Ramli, 2000; Marsa,
2009; Karanikolos and Kentikelenis, 2016; Stuckler et al., 2017;
Pavolini et al., 2018). Walt (1994, p. 366) stated earlier that histor-
ically much healthcare policy has only been really interested in the
technical features of policy content, rather than the processes of put-
ting policy into effect. Thus, this study contributes to the healthcare
policy literature by identifying the impacts of economic and political
narratives concerning a universal health insurance programme in an
emerging economy in the Southeast Asia, Indonesia.
Drawing from the discussion above this study raises the follow-
ing research questions:
• How does NPM affect the nature and impacts of a new universal
health coverage insurance system through BPJS in Indonesia?
• What are the structural problems that emerge in Indonesia
through the institutionalization of BPJS?
• What strategic solutions can be offered to establish a better and
more sustainable national healthcare system so that BPJS can
achieve its objectives?
This study contributes to the academic literature on policy-mak-
ing in the health sector at the global level by empirically showing the
nature and institutional challenges of a fundamental reform of the
health sector in Indonesia. Beyond this, this article has important
insights for government policy-makers and academics particularly in
developing and emerging economies.
Health Policy and Planning, 2020, Vol. 0, No. 0
Methods
To answer the research questions, this study employed a qualitative
research approach to identify and analyse the experience of
Indonesian government and people, by analysing at what the imple-
mentation of BPJS has produced. To enhance the credibility and reli-
ability of the validity of its findings, we follow that any qualitative
study requires triangulation of data by examining information more
than one source of information and utilizing it to build a coherent
explanation of an observation. In addition, to enhance the quality of
document sources used in this study, we adopted key principles as
suggested that include (1) the authenticity of a primary or secondary
document; (2) the credibility—about the accuracy of information
contained in a document; and (3) the reliability of the producer of a
document source. These principles were used to undertake a system-
atic and detailed review of prior studies, legal sources and govern-
ment reports/documents, media reports and other relevant
information on the implementation and progress of an UHC health
insurance programme. This approach is common to prior studies
examining the impacts of NPM on the health sector in many nations
(Walt et al., 1999; George, 2017).
To collect and analyse the data, we carried out several proce-
dures based on the suggestion as discussed above. First, we used
document analysis to explore information around the political back-
grounds, nature and impact of healthcare sector reforms in
Indonesia with respect to the implementation of BPJS. Such informa-
tion has already been published in medical, economic, public health,
management and public administration journals, research reports
and publicly available Indonesian government reports. Our search
strategy involved searching the PubMed database and other resour-
ces at the University of Canberra, e.g. ISI Web of Knowledge,
Google Scholar and ProQuest. To scope the major issues, we used
several keywords including ‘health sector reforms’, ‘health financing
and insurance’, ‘universal health coverage systems’ and ‘Indonesia’.
A total of 362 document sources were initially selected from pub-
lished research papers, government laws, government reports and
media reports. After we carefully analysed how a source is relevant
to the research questions, then we finally used 57 documentary sour-
ces. The decision to use the reports issued by media was based on
the reputation of a media organization, and in this case, all these
organizations had been operating >20 years when this study was
carried out. In addition, the reports from these media organizations
have been used by prior studies relating to public sector reforms in
Indonesia including the heath sector and higher education (Pisani
et al., 2016).
Results and discussion
Country context and key drivers of healthcare policy
changes
For Indonesia, post-Suharto governments led by Megawati
Sukarnoputri (2001–04), Susilo Bambang Yudhoyono (2004–04)
and Joko Widodo (2014 to now) altogether mobilized UHC princi-
ples as part of their political campaigns to gain political support and
stay in power. However, as Aspinall reminds us, given that
Indonesian’s democracy is still dominated by oligarchs, political
allies and families who ruled with Suharto, the logic of political
power is predation and authoritarianism (Aspinall, 2014). In add-
ition, given public sector reforms undertaken in emerging economies
(e.g. Indonesia and Greece) were the primary consequences of finan-
cial and economic crisis, the roles of international agencies in shap-
ing these reforms cannot be ignored. However, transnational
3
Table 1 Membership of BPJS
Year Member
2014 133.40 million
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2015 156.80 million
2016 171.90 million
2017 187.90 million
2018 200.30 million
2019 222.20 million
Source: BPJS (2018, 2019a,b).
organizations, such as the World Bank, IMF, ADB, Inter-American
Development Bank and USAID, in facilitating policy-making and
the implementation of public sector reforms in developing countries
also potentially bring unintended consequences (Pavolini et al.,
2018).
Because their operation is primally motivated by neoliberalism
and making a profit, it reduced government spending on education
and health throughout Africa, South America, Indonesia and Greece
(Ramli, 2002; Marsa, 2009; Karanikolos and Kentikelenis, 2016;
Pavolini et al., 2018). In our view, both oligarchic politics and neo-
liberalism as promoted by international agencies should be subjected
to intense examination to understand the nature and consequences
of how BPJS operates in Indonesia. This is discussed in the next sec-
tions of this paper.
The launch of BPJS: an NPM-based health insurance
system2
With the launch of BPJS in 2014, Indonesia made steady progress in
which 165 million people became members of the BPJS; the total
number of members increased to 220 million in 2019 as Table 1
depicts. Commentators believe that BPJS is the world’s biggest
single-payer health system (Wiseman et al., 2018). BPJS is a social
security agency for health, and its purpose is to manage citizens’
health insurance and other eligible residents in Indonesia. According
to Article 2 of Law 21 (2011) about BPJS, the operation of the
agency must uphold three principles: humanity, public benefits and
social justice for all Indonesian citizens. These principles are also
reflected in its missions (BPJS, 2017) as follows:
1. increasing the quality of fair services,
2. expanding insurance memberships to cover all the people of
Indonesia,
3. maintaining the sustainability of the insurance programme,
4. strengthening the policies and implementation of the BPJS pro-
gramme, and
5. strengthening the capacity and the organization governance of
BJJS.
2 UHC means that all members of the public have the right to re-
ceive health services without financial difficulties. This includes
basic and quality health services. This includes disease preven-
tion, care, rehabilitation and palliative care programmes.
Progress towards UHC is important for achieving the overall
welfare target of the community in line with the UN
Millennium Goals. Good health is a prerequisite for children to
learn and adults to work. UHS is also important to help people
get out of poverty and provide a basis for long-term economic
development.
4 Health Policy and Planning, 2020, Vol. 0, No. 0
Beyond these missions, the agency also manages the payments of
healthcare services, such as hospitals and other healthcare services
providers, collecting premiums from its members and managing
contracts with healthcare providers. Nonetheless, some operational
features seem to be very different from other countries, which ultim-
ately affect how BJPS operates. Agustina et al. (2019, p. 76) state
that the Ministry of Health determines the standard of care, treat-
ment and referral to ensure that primary care providers’ services are
standardized.
However, it is important to note that policy-making and the im-
plementation process of a national health policy is a complicated
process, multidimensional, including a fair amount of uncertainty
(Pavolini et al., 2018). Thus, despite establishing BPJS to deliver
UHC principles and in effect consolidate the power of the govern-
ment, a strong influence wielded by NPM appears in BPJS (Antara
News, 2011; BPJS, 2018). The first concerns the overuse of financial
measures in planning and managing BPJS. It is argued that BPJS’s
model is heavily influenced by neoliberal policies and practices. A
leading social activist has asserted that the government has ceded its
obligations and responsibilities to the people and given them to a
private sector company. The state has in effect entrusted the fate of
working people to third parties and market forces (RMOL, 2011).
The leader of state-owned companies’ workers, Abdul Latief Algaff,
stated in 2011 that the neoliberal agenda was put forward by the
Ministry of Finance, the World Bank, IMF, ADB and the ILO in
instituting the BPJS (Antara News, 2011).
Second, despite the BPJS five missions reflect UHC principles,
the operation of the BPJS is dominated by NPM principles and even
worse (BPJS, 2018). For example, Government Regulation No 86
(2013) stipulates that those who fail to pay their BPJS premiums will
not have the right to access public services such as obtaining a driv-
er’s licence, passport and school enrolment for their children.
Despite this policy may enforce people to pay their BPJS premiums,
it is against other human rights of a citizen as stated by a national
parliamentary member.
The government must understand the constitutional mandate
that education and health are the basic rights of the people. I
think since Indonesia’s independence, this is the first time there
have been sanctions banning such rights (Satu, 2019).
Third, based on its organizational structures, BPJS reflects pri-
vate sector model in its operations. These include the delegation of
powers and great influence of the management teams. Furthermore,
the compositions of the board directors, operational performance,
budgets and financial reports and audit practices of BPJS are in line
with the financial reporting standards used in the private sector
(BPJS, 2018). Finally, other key features of BPJS operations are in
line with private sector healthcare providers’ practice of business-
style reporting systems, such as balance sheets, cashflows, assets and
liabilities information and deficit reports (BPJS, 2017).
The increase in the number of services provided
There is no doubt that the launch of BPJS increased the number of
patients in the system dramatically. For example, there were 233
million services provided in 2018 compared with 223 million in
2017. Table 2 also indicates an increase from 92.3 million services
in 2014 and 230 million services delivered in 2018. A study by
Vidyattama et al. (2014) supports the contention that a universal
health insurance system in Indonesia encouraged the public to use
health services. Numbers rose by 8% when they were sick, and
country-wide, the rise was by 5% (Vidyattama et al., 2014).
Table 2 BPJS services
Year Services provided
2014 92.30 million
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2015 144.70 million
2016 178.80 million
2017 223.40 million
2018 233.90 million
Source: BPJS (2017) and Detik (2019).
The Financial Times (2017) dramatically reported the government’s
initiative:
Douglas Ramage, who runs the Jakarta office of Bower Group
Asia, a US investment advisory company, says the Indonesian
government deserves praise for dramatically expanding access to
healthcare.
However, the increase in the number of patients and services
provided was not followed by better quality services. In fact, the
BPJS services do not cover healthcare service costs that are pursued
outside the BPJS structure. Nor does it apply to care being obtained
abroad, cosmetic procedures, infertility treatments, orthodontics,
medical issues from drug or alcohol abuse, self-inflicted injuries or
due to dangerous activities, alternative medicine, experimental
medicine, contraception, cosmetics, baby food and milk. Further to
this, BPJS does to apply to medical care required for natural disas-
ters, epidemics, special occurrences or state of emergency-type situa-
tions (BPJS, 2017).
Structural challenges and unintended outcomes
Despite BPJS having significantly increased the quantity of health
services, real challenges remain and these challenges hamper the fi-
nancial sustainability and viability of the nation’s healthcare system
in the long term. We observe that the root of these challenges indi-
cates the dominant role of politics and political forces, which fail to
consider the technical operations of BPJS from both medical and
economic or financial perspectives. This also shows that the estab-
lishment of BPJS did not lead to the government being prepared to
increase public spending on the resources required for the rising
number of patients, or the availability of healthcare professionals.
This situation is indicated by several phenomena, which are
explained in more detail below.
The rising deficit and not enough government budget support
The BPJS (2016) states that it has the responsibility to create and
maintain a high-quality and sustainable health insurance pro-
gramme. In fact, coupled with poor government spending in the
healthcare sector, BPJS has experienced rising deficits every year.
For example, the deficit in 2015 was Rp 5.7 trillion ($400 million).
This figure jumped to Rp 9.7 trillion ($692 million) and Rp 9.8 tril-
lion ($700 million) in 2016 and 2017, respectively. Table 3 summa-
rizes the financial deficits of BPJS from 2014 to 2018.
Many commentators believe that the deficits are due to the lack
of government support to spend on public health. It is important to
note that the portion of health costs in the Indonesian government’s
budget lags very much compared with other similarly developing
countries. For example, 22 of the 36 countries categorized as low in-
come (GDP per capita less than US$1025) allocated 11% of their
annual budget to the healthcare sector (Eko, 2013). Even African
Health Policy and Planning, 2020, Vol. 0, No. 0 5

Table 3 The BPJS deficits Table 4 Indonesian health budget to GDP

a
Year Deficit (Rp) Year Percentage to GDP

2014 3.30 trillion 2016 3.10

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2015 5.70 trillion 2015 3.00
2016 9.70 trillion 2014 3.10
2017 9.80 trillion 2013 3.00
2018 8.20 trillion 2012 2.90
2011 3.00
a
Rp 1 trillion is equal to US$71 million (Bank Indonesia, 2019). 2010 3.00
Source: Depkes (2017) . 2009 2.70
2008 2.60
countries, such as Rwanda, Tanzania and Liberia, have allocated up 2007 2.90
to 15% of their national budget to health. In contrast, in 2016, 2006 2.70
Indonesia only spent 3.90% of its GDP for public health (Table 4). Source: Knoema (2017).
On the other hand, Chile is able to allocate 16% of its budget to
health care (Eko, 2013). This fact is ironic, given the lack of govern-
ment support to back up BPJS is not primarily caused by the lack of Table 5 Annual Indonesian government spending (Rp)
resources. In fact, the debt of BPJS is comparatively small compared Year Payment for loan Total spending A/B (%)
with other government debts, which are the consequence of neo- (interests þ principles) (A) (B)
liberal policies taken up by the government in the past decade
(Ramli, 2000). This fact supports what has been voiced by some crit- 2015 254.80 trillion 2039.50 trillion 12
2016 499.30 trillion 2095.70 trillion 24
ical scholars (see Marsa, 2009; Karanikolos and Kentikelenis, 2016;
2017 500.00 trillion 2080.50 trillion 24
Pavolini et al., 2018) that under the logic of neoliberalism, the prior-
2018 398.00 trillion 1894.70 trillion 21
ity of government budgets is not to serve the basic needs of citizens; 2019 396.54 trillion 2461.10 trilliona 16
instead, it is to the pay what is owed to international creditors and
bankers. This explains why the Indonesian government only spent Source: BPJS (2017, 2019a,b).
Rp 6.8 trillion ($4853 million) and Rp 4 trillion ($285 million) in a
Predicted figure.
2016 and 2017, respectively, to bail out the deficit incurred by BPJS.
These figures were only 0.32 and 0.19% of total government spend- They demanded that the government reform the BPJS system by
ing in 2016 and 2017, respectively (Table 5). setting more appropriate fees paid to healthcare and other medical
As Table 5 presents, the allocation of Indonesian national budg- professionals. One of the doctors’ banners read ‘BPJS Must Satisfy
ets to pay its debts to international financial institutions is signifi- Patients and Doctors, Not Only Officials’, ‘We Are Doctors
cant small compared with the annual government budgets to Fighting People’s Servants Not Servants of BPJS’ (RMOL, 2016). In
international creditors. This is not a specific phenomenon uniquely addition, Liputan6 (2019) reported that 35 000 dentists throughout
for Indonesia, a low level of government funding to the public health Indonesia who were members of the Indonesian Dental Association
also occurs in Greek and Latin America nations (Ramli, 2000; (PDGI) threatened to withdraw from their partnership with BPJS.
Marsa, 2009; Karanikolos and Kentikelenis, 2016; Pavolini et al., The report stated that dentists claimed that they were being harmed
2018). by regulation number 59 issued by the Minister of Health. This con-
cerned the standard rates for health services in the implementation
Resistance from doctors of national health insurance programmes. They said if the govern-
As prior studies found in other countries, the adoption of neoliberal- ment indeed did not know how to improve outcomes for dentists,
ism that encourages the use of business principles in funding and then they would break our contracts with BPJS (Liputan6, 2019).
operating public healthcare systems has created untended outcomes.
These include resistance from medical professionals, for instance Politicians’ tendency to engage in a ‘blame game’ strategy against
doctors, dentists and medical specialists. For Indonesia, there has BPJS management
been continued resistance from medical professionals since 2015 As discussed earlier, the nature and impacts of NPM-based UHC
against BPJS policies. For example, in 2015, CNN Indonesia (2015) principles are generally influenced and formed by the political con-
reported that doctors, who serve patients of the Social Security text and what certain political parties want a national health policy
Organizing Agency (BPJS), often complain about the rates being system to do. For Indonesia, the establishment of the BPJS, in many
paid cheaply by the government for each participant. The director of ways, reflects the popular policies taken up by SBY (2004–14).
the United Indonesia Doctors Movement, Muhammad Yadi Beyond this, we also believe the response from those in power to
Permana, said that the problem was one of the triggers that led to any problems associated with implementation of the BPJS also reso-
poor services. He also stressed that, under the BPJS model, doctors nates with this argument. Therefore, the Jokowi government’s re-
are paid Rp 2000 (UD$10 cent4) per patient, which was cheaper sponse to the BPJS deficits by blaming BPJS is an example of a
than parking. Such a frustration continued in 2016, as hundreds of strategy to reduce the political costs to the ruling party, by simply
doctors who were the members of the United Indonesia Doctor blaming BPJS for its inability to pay its debts. In fact, it highlights
(DIB) held a peaceful protest in front of the State Palace on 29 the failure of the government to provide a better policy and funding
February 2015 (RMOL, 2016). model to ensure that the comprehensive healthcare services work as
promised in Law 40 of BPJS, and in fact by President Jokowi’s polit-
3 Bank Indonesia (2019). ical campaign in 2014 (Kompas, 2014). The president’s blaming
4 Bank Indonesia (2019). strategy contrasts with the fact that the nature and operation of the
6 Health Policy and Planning, 2020, Vol. 0, No. 0
BPJS is the president’s responsibility, and monthly premiums are
decided by the government via the Ministry of Health. The presi-
dent’s statement has been criticized by a member of the House of
Representatives, Sumarjati Arjoso. He said that the president should
provide a solution, rather than stating that the BPJS deficit must be
solved by the Ministry of Health and BPJS. He also stressed that
BPJS is a public legal entity that is under the direct authority of the
president (Solopos, 2018).
Conclusions
Drawing from the research questions, several conclusions can be
made. We find that the policy-making of BPJS was primarily moti-
vated by the interests of the political elite and international agencies
without seriously considering key barriers to the effectiveness of the
long-term universal healthcare system. Thus, NPM has shaped the
nature of BPJS through its structure and the operation of BPJS.
Therefore, the institutionalization of BPJS faces several obstacles
that include a low premium setting, the raise of deficits, resistance
from medical professionals and politician tendency to blame the
government-initiated insurance company of its failure to pay the
costs of cares to hospitals and drug companies.
Our findings restrengthen prior studies in which the institution-
alization of NPM can produce unintended outcomes, which include
increasing: first, unequal access between people on high and low
incomes (Rotarou and Sakellariou, 2017) and resistance from doc-
tors and social activist in the UK (Pushkar, 2019). It also under-
standable, the difficulties inherent in institutionalizing of UHC
insurance system in such a large (over a quarter of a billion popula-
tion) and diverse (17,000 islands) country ranging from the dense
population of Jakarta to the sparse population of Papua. Therefore,
it is important for the government in achieving the BPJS objectives
to ensure both efficiency in care provision and a focus on achieving
a minimum basic set of treatments for all patients.
Finally, based on our analysis of the structural organizational
arrangements, the core role of BPJS as the state agent for UHC and
current problems it faces, we officer several suggestions to make the
BPJS’s operations more sustainable and effective. There is no doubt
that the BPJS is a potentially society-improving institution in the
post-Suharto era in Indonesia. Drawing from Andrews et al.’s
(2019) argument that countries adopting a comprehensive package
of healthcare reforms and displaying a strong NPM reform trajec-
tory do better than those adopting only a partial one; for Indonesia,
this is important to consider. Pursuing unrealistic goals will lead to
inevitable subsequent disillusionment and problems to what can be
achieved realistically with a more modest agenda. It can also lead to
a serious misallocation and wastage of resources (Cheng, 2015).
Drawing from recent challenges faced by BPJS and the experience of
other countries, such as Australia or the UK, to design a more sus-
tainable national healthcare system, we offer the following
recommendations.
Transforming the primary role of BPJS
The existing BPJS model shows that it is an institution that adminis-
ters the national health insurance programme, comprising the man-
agement of memberships, collecting premiums, administering
contracts with providers and paying providers. This is in contrast to
the role played by the Medicare in Australia, which is the publicly
funded universal healthcare system. Medicare is the primary funder
of health care, funding primary health care for Australian citizens
and permanent residents. Residents are entitled to a rebate for
treatment from medical practitioners, eligible midwives, nurse prac-
titioners and allied health professionals who have been issued a
Medicare provider number and can also obtain free treatment in
public hospitals. By transforming its role, this will reduce the current
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role of the BPJS as a public funded health system and its role as an
insurance company could be taken over by the private sector.
Automatic memberships for all citizens
Under the current model, the members of BPJS are those who are
formally enrolled in the system. This is a very complicated registra-
tion system, particularly for those with low literacy. We urge the
government to simplify the registration process, so that every
Indonesian citizen is automatically a member of the BPJS by register-
ing the number of a citizen’s national ID card (Kartu Tanda
Penduduk). There are some benefits of this model. BPJS can act as
the state agent to facilitate: first, the right of all citizens to access
health care easily in line with UCH principles and the BPJS and, se-
cond, all citizens and other related institutions can save time and
costs so that the current system runs better in relation to an individ-
ual BPJS registration system. Beyond this, with the support of an
integrated database system connected with the Tax Office and the
National Population Registration Center, it will enhance the ability
of BPJS to monitor its operations effectively. In addition, as a public
funded health system, we propose that there is only type of BPJS
membership. If someone wishes to be serviced by their own doctors/
specialist or private hospitals, they should be able to pay out of their
own pocket expenses or paid by their insurance company along with
some form of payment made by BPJS.
Simplification and refocus of BPJS’s coverage
Despite any UHC programme being politically popular, policy-mak-
ers should consider how the system can be sustainable long into the
future. It is important to reduce the likelihood of unintended out-
comes such as the failure of BPJS to pay hospitals and other care
providers due to the lack of proper funding. We believe if this prob-
lem continues it will undermine and basically wreck the healthcare
system. For Indonesia and other governments with similar economic
and demographic situations, the role of an institution, such as BPJS,
should be to focus on providing public funds to pay the hospital and
care-related costs on time and effectively. The basic idea of creating
an UHC system is actually to get sick people access to proper pri-
mary healthcare services and if they are too poor, set up a system so
that they do not have to pay for these services from their own pock-
ets. This opens more opportunities for the private sector to get
involved in health care without a state-dominated healthcare
system.
Using the tax office to collect BPJS levies
As explained earlier, the BPJS deficits are due to its inability to force
members to pay their premiums on time. We argue that this situ-
ation is partially caused by the fact that BPJS is a private sector com-
pany that legally cannot enforce people to pay BPJS levies. In 2018
alone, the levies of 40% of BPJS members were uncollected
(Prastyani, 2019). This is exacerbated by the low level of the peo-
ple’s financial literacy; therefore, most citizens are not involved with
banks and/or online business platforms. This fact makes it difficult
for BPJS to detect and force anyone to pay their insurance premiums
(Tempo, 2017). To reduce the existing complicated roles of BPJS as
an insurance company and a government health funder institution,
the key role of BPJS must be on better managing of public health
Health Policy and Planning, 2020, Vol. 0, No. 0
funds, while the collection of BPJS levies should be done by the Tax
Office.
In addition, given the allocation of public funds is relatively low
compared with what other emerging countries spend, the
Indonesian government should allocate more money to support
BPJS’s operations. There are three benefits in using the Indonesian
Tax Office to collect the BPJS levies and provide a larger and
financed budget. First, by appointing the Tax Office to collect BPJS,
potentially the collection of BPJS levies could be boosted given the
role of the Tax Office to enforce the payment of taxes and other
levies in Australia and elsewhere with a similar healthcare system.
Second, this will reduce the current deficits of BPJS and it can then
pay the appropriate fees to health professionals. Finally, this will
also maintain the quality of services and ensure that the healthcare
profession remains attractive and viable to doctors, nurses, dentists,
etc., and well into the future.
Finally, this study has limitations. One of these limitations is that
we did not classify the participants into different social or economic
groups. We suggest that future studies should analytically classify
the participant groups to identify whether, e.g. there are different
opinions with respect to the NPM reforms in the healthcare sector.
Another avenue for future research is to conduct a comparative
study about the progress and impacts of NPMR reforms in
Indonesia and other nations that have comprehensively undertaken
reforms in the healthcare sector.
Acknowledgement
The study was funded by the Faculty of Business, Government & Law at the
University of Canberra, Australia, in 2019, under ‘Funding Support of High-
Performance Academics’.
Conflict of interest statement. No conflict of interest declared.
Ethical approval. Not required as all data are publicly available and no report
of complaint against this type of research in Indonesia.
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