Healthcare spending in Indonesia to reach US$60.6B by 2018
Indonesia’s healthcare expenditure is predicted to reach US$60.6 billion in 2018 with a growth of 14.9 per cent over the 2012-2018 period on account of faster growth in age groups above 35 years, urbanisation and an increase of lifestyle-related diseases such as cancer and diabetes, says research and consulting firm Frost & Sullivan.
Hannah Nawi, Frost & Sullivan’s Healthcare Practice Associate Director for Asia Pacific, said Indonesia’s median age was 28 years and that age groups beyond 35 years were projected to grow faster than the average from 2010 to 2014.
“Urbanisation and a slowly ageing population will the drive demand for healthcare in Indonesia,” Hannah said recently.
She added that increasing chronic and lifestyle-related diseases, including cancer and diabetes, especially in big cities in the country, would also play a large role in the increasing public demand for healthcare services in the next few years.
“In terms of the healthcare burden, once you are a cancer patient, you’ll be in treatment for life. The same goes for diabetes,” Hannah said, adding that it could put a strain on healthcare institutions.
Separately, the head of the Indonesian Hospital Association (PERSI), Sutoto said that the national healthcare system under the Social Security Providers (BPJS) Law would also play a significant role in increasing the country’s total healthcare expenditure.
The health insurance, which will cover 121.6 million people as of January 1, 2014, will be made available in stages for all eligible Indonesians through 2019.
“Many hospitals questioned their readiness ahead of the implementation of the BPJS next year, when in fact it actually opens more opportunities for the healthcare industry, especially for private hospitals,” Sutoto said. “Around 86 million low-income people who have no access to healthcare services, will be able to receive hospital services by the time it is implemented, and the government will pay their premiums,” he added.
The country, however, still faced a lot of challenges in fulfilling the increasing demand for healthcare services, Nitin Dixit, Frost & Sullivan’s healthcare senior industry analyst, said.
“The first challenge is the uneven distribution of resources. The hospital, the doctors, the entire healthcare infrastructure is unevenly distributed,” Nitin said.
Sutoto said that the country’s doctor-to-people ratio was only three doctors per 10,000 people, much less than Malaysia, which has nine doctors for every 10,000 people and Cuba, which has 64 doctors for 10,000 people.
“We have a total of 73 medical faculties across the country, but yet we are still lacking doctors, especially specialist doctors,” he said.
He also said that hospitals should start recalculating their service costs and make it more efficient ahead of the BPJS, as the government would apply an equal healthcare tariff across all healthcare institutions to ease insurance claims.
“We urge all hospitals to reduce their costs and make it more efficient ahead of the BPJS,” Sutoto said. “At the same time, we hope the government assists us and lowers taxes, as well as electricity and water tariffs for hospitals, as we will have to provide more third class rooms for low-income people,” he said.