Did the Healthcard Program Ensure Access to Medical Care for the Poor During Indonesia's Economic Crisis?

Abstract

The Indonesian Social Safety Net (SSN) health card program was implemented in response to the economic crisis that hit Indonesia in 1997 to preserve access to health care services for the poor. Under the program health cards were allocated to poor households, entitling them with subsidised care at public health care providers, while the providers themselves received budgetary support to compensate for the extra demand. This papers looks at the impact of the program on outpatient care utilisation, and, in particular, endeavours to disentangle the direct effect of the allocation of health cards from the indirect effect of the transfer of funds to health care facilities. It finds that the program resulted in a net increase in utilisation for the poor health card owners while for non-poor health card owners the program resulted mainly in a substitution from private to public providers. However, the largest effect of the program seems to have come from a general increase in the supply of public services resulting from the budgetary support received through the SSN program. These benefits seem to have been captured mainly by the non-poor. As a result, most of the benefits of the health card program went to the non-poor, even though the healthcards itself were distributed pro-poor. The results suggest that in addition to the need for targeting the poor, a closer linkage between provision of services to the target groups and funding would have resulted in a better-targeted program. It also points to potential impact that such programs can have on the public/private mix if the design does not take those factors into account.

Keywords: health insurance, program evaluation, targeted price subsidies, Indonesia