Indonesia’s healthcare landscape is shifting to better suit its more vulnerable citizens, as insurance policies and infrastructure create tremors, according to findings made by healthcare intelligence provider GlobalData in a new report.
The overall healthcare system in Indonesia is still under development, with healthcare spending increasing gradually from only 1.7% of GDP in 2002 to 2.4% in 2010. Services and medicines provided by public hospitals are either subsidized or available free of charge, and, while Indonesia’s healthcare market currently lacks universal healthcare insurance and has poor access to facilities, the government is aiming to improve on these failings.
A significant change in Indonesia’s rate of urbanization means that more than half of the population is expected to live in urban areas by 2020. To take full advantage of these demographic shifts, the government is focusing on human capital development and education programs.
In 2001, the government announced a policy of decentralization, increasing the responsibility of provincial governments for the provision of healthcare facilities. Following this, in 2011, a prenatal and post natal insurance policy was also introduced to help meet set targets for maternal and infant mortality rates. Changes such as these show a steady improvement of the Indonesian healthcare landscape.
Indonesia’s large population and poor healthcare infrastructure have caused healthcare expenditure to increase, which in turn is leading insurance coverage to expand. Currently, the provincial government is responsible for filling the gap between the real cost of health insurance and the budget allocated to it by the central government.
In 2005, the Ministry of Health for the Republic of Indonesia (MoHRI) launched an insurance scheme known as Askeskin, which offers coverage to the poor population, while in 2008 MoHRI converted Askeskin into the Jamkesmas insurance program in order to expand the level of insurance coverage for the entire population. This is entirely funded by the central government, and covered approximately 76.4 million people as of 2010. However, only 46% of the population was insured during this year, meaning that the majority of the Indonesian population remained unsupported. Nevertheless, coverage is increasing over time due to the increase in purchasing power and government initiatives.
The main drivers of the Indonesian pharmaceutical market in the future will be an increasing level of access to medicines, increasing affordability and a higher compliance rate due to growing public awareness concerning common diseases. However, much remains to be done to realize the vision and potential of Indonesia’s healthcare sector.
A large percentage of the population is already vulnerable to poverty, and the periodical impact of natural calamities such as floods, earthquakes, wildfires, and tsunami remains the biggest challenge for Indonesia’s population. As past events have shown, the country’s medical industry may not yet be ready to support them fully.
The pharmaceutical market in Indonesia valued an approximate $3.8 billion in 2010 and it is projected to reach approximately $9.6 billion by 2020, following growth at a compound annual growth rate (CAGR) of 9.7%. In 2010, the Indonesian pharmaceutical market was the largest in the region of Southeast Asia.
NOTES TO EDITORS
*Healthcare, Regulatory and Reimbursement Landscape - Indonesia
This report is an essential source of information and analysis, and identifies the key trends in Indonesia’s healthcare market. It also provides an insight into the demographic, regulatory, and reimbursement landscape, and the overall healthcare infrastructure. Most importantly, the report provides valuable insights into the trends and segmentation in the pharmaceutical and medical devices market.
This report is built using data and information sourced from proprietary databases, primary and secondary research and in-house analysis by GlobalData’s team of industry experts.
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