Health Insurance

and National Social

Security System (SJSN)

I Nyoman Sutarsa
Email: sutarsa_71@yahoo.com
0878 6038 0028
Insurance
Reducing risk of
financial loss
Vs.
Security
Promoting ‘wealth’
through systematic
approach

What is the difference between these two?

Basic Concept of Health Insurance
1. Individual health risk  group risk (RISK
SHARING)
2. The law of large numbers
3. Making ‘uncertain’ individual risk  ‘certain’
group risk (group risk easier to calculate using
actuarial analysis)
4. Paying small amount of premium, get high
benefit
5. Protecting members from economic risk due to
health problem(s)

PROFIT SHARING???
 Types and Models
Types of Health Model of Health
Insurance Insurance

1. Tripartite Relationship
1. Social Health Model (Insurance
Insurance Providers – Health
2. Private Voluntary Providers – Members)
Health Insurance 2. Bipartite Relationship
3. Regulated Model (Health
Insurance Providers
Voluntary Health
with HMO –
Insurance Members)
Tripartite Relationship Model
Insurance
Providers
Premium Pay
Claim Claim
Ex. USA

Health
Members
Pay Providers
Services

Increase health expenditure and high

administrative cost!!!  WHY increase COST?
Why increase cost?
1. Lower risk  increase service
utilisation
2. Increase service utilisation  increase
desired quality of service(s)
3. Increase healthcare facilities and skills
to meet these desired quality  COST!

1. Shifting from reimbursement into

COST health maintenance
CONTAINTMENT 2. Shifting from tripartite model into
bipartite model
Tripartite Relationship Model

Pay
Health
premium Insurance
Members
Providers
Services
with HMO

Cost efficiency and standard practice/drugs

 Types and Models
Types of Health Model of Health
Insurance Insurance

1. Tripartite Relationship
1. Social Health Model (Insurance
Insurance Providers – Health
2. Private Voluntary Providers – Members)
Health Insurance 2. Bipartite Relationship
3. Regulated Model (Health
Insurance Providers
Voluntary Health
with HMO –
Insurance Members)
Social Health Insurance (ex. Germany)

Principles Issues
1. Voluntary 1. Health is viewed as ‘social’
service  universal
2. Premium based on 2. History: from industrial
income sectors
3. Comprehensive 3. Pool of funding  improved
services services and facilities
4. Health compensation 4. Group rating (similar needs
and risks)
provided (for workers) 5. Gradual (ex. Types of risk
5. Government’ roles (Japan, Germany) or numbers
dominant of workers (South Korea)
Private Voluntary Health Insurance (ex. USA)

Principles Issues
1. Voluntary 1. Actuarial analysis based on
2. Premium is absolute individual risks
number based on 2. Highly competitive  lots of
provider resulting in lower
contract
members
3. Not comprehensive 3. Risk rating  ‘benefit
services (based on package’ (reimbursement or
contract) health benefit package)
4. Government’ roles 4. Adverse/bias selection often
5. Orientation is profit
limited
Regulated Private Voluntary Health Insurance

Principles Issues
1. Voluntary 1. Community rating to prevent
2. Premium is absolute the increase of healthcare
number based on cost
2. Primary purpose is to
contract
complement Social Health
3. Not comprehensive Insurance
services (based on 3. Preventing adverse/bias
contract) selection
4. Government’ roles 4. Primary target is middle to
high income people
dominant
Component SHI PVHI RPVHI

Membership Compulsory/group Voluntary/individual Voluntary/group

or group

Premium count Group/community rating Rating by class, sex, Group/community

age etc rating

Benefit package Comprehensive Contract Contract

Sharing Rich-Poor; Young-Old; Sick- Sick – Healthy Young-Old; Sick-

Healthy; high risk-low risk Healthy; high risk-low
risk

Premium % income Absolute value Absolute value

Cost raising + +++ ++

Government +++ + ++
roles
 Social Health Insurance
complemented by Regulated Private
Voluntary Health Insurance with
adjustment based on local context

What is the best option?

SOCIAL HEALTH
INSURANCE
vs.
NATIONAL HEALTH
SERVICE
Same or different??
 Story in Indonesia
Prior then ….
1. 1968  Social Health
Insurance for government
employee (Presidential
Regulation No. 230/1968)
2. 1985  Health Insurance for SJSN 2004
Workers (Capitation Model) UU No. 30/2004
3. 1992  Commercial Health
Insurance, Social Health (National Social
Insurance for Workers Security System)
(Jamsostek), Regulated
Private Voluntary Health
Insurance (Jaminan
Pemeliharaan Kesehatan
Masy)
Story in Indonesia Prior SJSN
Health Status and
Performance
• Infant mortality rate (1998)
was 48 per 1000 live birth
(higher than Thailand/29,
Malaysia/11, Srilanka/18,
Philippine/36)
• Health System Performance
in Indonesia was ranked no
92 (2000) (Malaysia/49,
Thailand/47, Philippine/60)
• Health financing in Indonesia
(1997) was only USD 18 per
capita per year
(Malaysia/110,
Philippine/40, Thailand/133)
Health Status and
Performance (cont)
• Government investment in
health is still limited, just
about 20 – 30%, and OOP is
about 60 – 70% 
REGRESSIVE
• This lead to INEQUALITY 
10% richest population have
access for in patient about
12 times higher than 10%
poorest community
• Solution is increasing public
health financing via health
insurance, BUT it is still very
low in Indonesia (less than
20%)
Vision of Equity in Indonesia

National Health
System

Get healthcare National Health

services they need, Insurance
pay what they are
able to pay
SJSN 2004
UU No. 30/2004
(National Social
Security System)
 Story in Indonesia Prior SJSN
Human Right Indonesian Constitution
Declaration Amendment (2002)
Health is a fundamental 34 (2)  “State
human right (Indonesian Government)
developing social security
program for all
Indonesian Constitution Indonesian citizen”
Amendment (2000)

28 H  “it is the right of 34 (3)  “State is

all citizen to get access to responsible for providing
health care services” access to healthcare
services”
 Story in Indonesia

Health Security Program

(Jaminan Kesehatan)
SJSN 2004 Occupational Security Program
UU No. 30/2004 (Jaminan Kecelakaan Kerja)
(National Social Elderly Security Program
Security System) (Jaminan Hari Tua)

Achieving population Pension Security Program

(Jaminan Pensium)
wealth through
systematic approach Death Security Program
(Jaminan Kematian)
 SJSN and its Impact
Membership of SJSN Mobilisation funds
increase from communities
Fund accumulation
• Low interest rates
• Currency stability
• Increase investment 
improve job opportunity
• Improving salary and
Wealth and Job capacity to buy
• Standard of services, drugs
Opportunity and tariff at healthcare
facilities
• Stabile inflation rates
• Economic Growth
 Health Security
1. Conducted based on
principles of equity,
social health insurance
and managed care
2. Nationally
Health Security implemented
3. Preventing over
Program under SJSN services
2004 4. Standard practice will
be regulated by
government regulation
5. Funding assistance
(particularly for poor
population) will be
paid by government
1. Low administration cost 5-7% (vs.
20% for commercial health insurance)
premium
2. Minimise risk (as members are huge)
3. Premium for poor people could be
covered by government

Why Social Health Insurance?

1. To be able to implement ‘health
security program’, other security
programs should be in place
2. Health insurance program potentially
increase health service cost?
3. Quality of service vs. over utilisation?

Any problems for implementation?

Strategies to be taken?
1. Standard practices
2. Professional standard review organisation
3. Certificate of need (related to purchase of
healthcare technology)
4. Efficient service strategy
5. Managed healthcare
• Capitation?
• Budget system?
• DRG?
• Deductible?
• Package tariff?