Indonesia is the world’s fourth most populous country, with 258 million inhabitants. More than half of the population lives in urban areas. Approximately 27% are below the age of 15, whereas nearly 5% are older than 65. However, due to improvements in the quality of life and healthcare, in 2050 the population over 60 years old is estimated to be over 25%, having a big impact in the healthcare sector.
In 2014, the Indonesia’s Social Security Administrators (BPJS) started implementing a National Health Insurance System (JKN), with the aim of covering all Indonesian citizens and foreigners residing in Indonesia by 2019. With this, the government aims to make healthcare accessible to all almost 260 million Indonesians and has, for the first time in the country’s history, made universal medical assistance a possibility.
Despite the government’s difficulties in fulfilling the minimum healthcare functions due to a lack of infrastructure and human resources, in 2017 Indonesia allocated nearly US$ 7 billion for healthcare sector spending, 5% of its total budget and a staggering 43% y-p-y increase. In line with this, Indonesia’s private healthcare sector is booming as well, growing more rapidly than the public healthcare sector.
Since the roll-out of JKN in 2014, the number of health facilities that have collaborated with BPJS Health reached 7,754 Puskesmas (community health clinics for population on sub-district level), 2,014 hospitals, 192 main clinics, 1,160 dentists, 5,409 small clinics, 385 laboratories, 2,300 pharmacies, and 1,003 optics. This trend will continue as the private area tries to supplement the BPJS health system by offering premium medicinal services for employers and individuals.
On a different note, as of August 2017, 60% of the healthcare centers in Indonesia are run by the government, basically Puskesmas, while the remaining 40% are run by the private sector. They are organized as showed above.
Classification for Public Hospitals:
1. Hospital Level A: provides extensive specialist medical services and extensive sub-specialists.
2. Hospital Level B: provides extensive specialist medical services and limited sub-specialists.
3. Hospital Level C: provides at least a minimum of four basic specialist medical services (surgical, internal, child and maternity).
4. Hospital Level D: provides at least basic medical facilities.
Classification for Private Hospitals:
1. Private General Hospital at Priority level: provides general medical services as well as specialist and sub-specialist care.
2. Private General Hospital at Madya level: provides general services and a minimum of four specialist care services.
3. Private General Hospital at Pratama level: provides only general medical services.
As the middle-class is expected to rise until 120 million in the next few years, the expenditure in the private sector is going to grow exponentially, as they seek better facilities and doctors, and with the Indonesian economy expected to continue growing at rates of more than 5% and a minimum threshold of 5% of the State Budget spent on healthcare, plenty of opportunities will await European healthcare companies.