2008 HEALTH PUBLIC EXPENDITURE REVIEW: POOR PERFORMANCE

UNCLAS JAKARTA 001498 SIPDIS SENSITIVE USAID FOR KHILL/GH, JBORRAZZO/GHIDN, SSOLAT/ASIA/EAA FA FOR DDIJKERMAN, GAC FOR MDYBUL SENSITIVE BUT UNCLASSIFIED E.O. 12958: N/A TAGS: SENVCASCEAIDID SUBJECT: 2008 HEALTH PUBLIC EXPENDITURE REVIEW: POOR PERFORMANCE ¶1. (SBU) Summary. The World Bank has completed a Health Public Expenditure Review (HPER) for Indonesia. The review confirms preliminary 2007 DHS results: no improvement in child death rates over the past five years, compared to a 53% decline from 1994 to 2002; a drastic erosion of breastfeeding best practices; effective treatment for diarrhea diminishing; the highest maternal mortality rate in East Asia, fertility rates remaining unchanged; slight increases in immunization and skilled birth attendance, and a continued high maternal mortality ratio with 420 maternal deaths per 100,000 live births. These findings corroborate the poor performance of the GOIQs recently-decentralized health system. End Summary. - Challenges ¶2. The HPER highlights the challenges of overall adequacy of funding, the roles of public versus private expenditures in the health sector, the roles of central and regional budgets, appropriate mechanisms for mobilizing resources and purchasing services, and the proportion of public expenditure that should be devoted to public health as opposed to individual medical care. - Looking forward ¶3. Close collaboration with the Ministry of Health and National Bureau of Planning is important to ensure optimal use of limited resources available for health and to improve health outcomes and financial protection for the poor by increasing the coverage of health insurance for the poor (ASKESKIN). This is particularly essential in a time of escalating fuel and food prices. - Some better ideas ¶4. The report provides nine ideas for making the health sector more efficient: 1) make better use of the existing resources available for health, while also making more resources available in the medium term. 2) in particular, make more resources available for reproductive health and allocate resources for referral and institutional deliveries. 3) improve the allocation of resources for preventive care and allow sufficient resources for operations and maintenance to ensure quality of basic care. 4) devote additional resources and attention to all major public goods that determine health outcomes. 5) adjust the general allocation fund (DAU) to provide incentives for local civil service reform and allow operational use of deconcentrated funding. 6) improved health outcomes and financial protection for the poor may be possible by increasing the coverage of the GOIQs health insurance for the poor program (ASKESKIN). 7) ensure better financial sustainability of ASKESKIN by introducing cost-containment options. 8) increase efficiency of service provision for publicly insured enrollees by allowing program beneficiaries to also use private providers. 9) improve reporting systems and data availability. - Preliminary DHS data ¶5. (SBU) Summary HPER findings complement the preliminary 2007 Demographic Health Survey (DHS) results which provided evidence of poor performance of the recently Decentralized Health System in Indonesia and slowed progress toward Millennium Development Goals (MDGs). 1) Indonesia has the highest maternal mortality ratios in East Asia, at 420 maternal deaths per 100,000 live births, about double the Philippines, three times that of Viet Nam, and four times that of Thailand. 2) Child malnutrition rates have stagnated since 2000 and are increasing in some provinces such as Maluku and Papua (eastern Indonesia). 3) Female literacy and access to clean water and sanitation are low among the poorest population. 4) Geographical disparities and inequities persist for health-related MDGs. Health indicators perform better in Java and Bali, while eastern Indonesia lags behind. ¶6. Medium Term Concerns: 1) Indonesia still has considerable demographic momentum, with total population expected to hit 271 million by 2025, and to increase to almost 300 million by 2050. This will substantially increase need and demand for health services. 2) Migration and urbanization are accelerating. Urbanization will be accompanied by greater demand for health care. 3) Substantial efforts are needed to address the continuing high maternal mortality ratio, this will represent a large cost item for the health sector. 4) Emerging diseases, such as Avian Influenza and HIV/AIDS, have placed additional burdens on the health budget. 5) Major changes in the method of financing health care, such as the expansion of effective health insurance coverage, will increase demand for services. ¶7. Comment (SBU). One unfortunate consequence of decentralization appears to be poor performance by the health sector with worrying outcomes, especially for IndonesiaQs poor, about 120 million people. Recently, this disturbing trend has been aggravated by incompetent political leadership at the Ministry of Health and the knock on effect of budget subsidies for fuel and food which have disadvantaged investments in people. Despite these challenges the Mission continues to actively engage with key players to work to turn the situation around, a task helped by recent steps that promise new resources for AI and HIV/AIDS, but hurt by cuts in funding for other health issues. End comment HUME