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Box 1. Economic Growth and Health Outcomes
The recent UK Lancet Commission on Investing in
Health Jamison, et al., 2013 estimates that:
Up to 24 of economic growth in low- and middle-
income countries was due to better health outcomes.
Increasing life expectancy by one year can increase gross
domestic product GDP by 4 per cent.
Reductions in mortality account for about 11 per cent
of recent economic growth in low-income and middle-
income countries.
Investing in health yields a 9 to 20-fold return on
investment.
2 Relevance of AIPHSS
It is recognised that investment in health outcomes contributes to thriving stable and economically productive communities. For example increasing life expectancy by one year can increase gross
domestic product GDP by 4 per cent. Reductions in mortality account for about 11 per cent of recent economic growth in low-income and middle-income countries as measured in their national income
accounts
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. Australia’s investment in health will contribute to building economically productive communities in Indonesia. This leads to growing markets and trade within the region where Indonesia
is a key market and trading partner. Indonesia is approaching a middle class of 100 million by 2020. The World Health Report 2000 demonstrated the importance of investing in health systems
strengthening as an essential aspect of improving health outcomes for communities. Without sustained investments in
health systems strengthening the investments in vertical programs such as MNCH; Malaria, Tuberculosis and HIV
cannot be sustained if the backbone of the health system is not strengthened and maintained.
AIPHSS has reached a point where it is at its most relevant. This is evidenced by the alignment through the Reform
Agenda with national policy priorities and a close interaction with senior policy making levels in the MoH which ensures
the program has the potential to influence policy and adapt to policy change. The focus on revitalisation of primary
health care models, technical support for the national insurance scheme, changes to health legislation under
decentralisation, and the implementation of a new minimum services standards are key reform issues for the government
partners placing the AIPHSS at the centre of the health policy environment.
The program is also strongly aligned with DFAT’s new Health for Development Strategy 2015-2020 with
investment in strengthened, resilient public health systems being the highest priority. The AIPHSS program achieves
this through providing the GoI with access to flexible small scale funding which can be used for innovation and catalytic
activities which GoI systems cannot deliver quickly. The program is also valued for delivering rapid technical assistance and the provision of information and
evidence to inform the implementation of priority areas.
Currently the AIPHSS program is leading the way in how other development partners now want to address health systems strengthening to improve delivery of essential services. This is evidenced by
the senior staff from the USAID and the Global Fund for AIDS, TB and Malaria regularly consulting AIPHSS senior management on how to invest in and implement health systems strengthening at the
national level.
2.1 Contextual Analysis
A number of recent changes at the political and partnership level have occurred which affects the future of the AIPHSS program.
7 Lancet Commission for Investing in Health, 2013
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The most important development is the 40 per cent budget cut to the Australian Aid budget in Indonesia
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. At this stage it is uncertain which health programs will
be affected but it is clear there will be a substantial reduction in resources. This creates high levels of
uncertainty amongst the partners and AIPHSS staff about the future of the program. AIPHSS senior
managers have commenced the preparation for an exit strategy.
There has been only one major announcement in the health policy environment. The newly appointed
Minister of Health has announced a policy priority titled “Nusantara Sehat” which is a healthy Indonesia
initiative. There are no major implications for the AIPHSS program as it is already supporting health
systems strengthening at a national level as well as having a provincial focus in NTT and East Java.
A number of AIPHSS activities are high on the policy agenda for the MoH. These are capacity building for
the provider payment system for the national health insurance scheme; the accreditation of the primary
health care centres; the next stages of implementing the Minimum Service Standards including costing.
The program has also commenced the implementation of the policy dialogue series led by the Technical
Director TD and the Secretary General of the MoH. The first of these took place in May 2015 focusing on
Pharmaceutical Policy in the era of JKN. The initial feedback from participants and MoH is that this was a
successful event which has led to cross sectoral follow up on specific recommendations on pharmaceutical
policy. Consequently there is now a further demand for policy dialogue from the MoH in areas such as
strengthening the roles and functions of Puskesmas; improving the quality and distribution of health workers; and synchronising MoH regulations.
The partnership remains strong with the MoH and AIPHSS continues to be a highly valued program. The most important factor which may affect this relationship is the differing priorities between the
Australian and Indonesian governments in terms of health sector investment. A message emerging from the Secretary General’s office is that if the health programs are to be cut then there is a
preference for the continuation of AIPHSS over introducing new initiatives.
Another emerging factor which may affect the partnership is the extension of the program to 2017. The current subsidiary agreement has been amended to extend the AIPHSS program to 2017,
however, if budget cuts result in AIPHSS ending in June 2016 there is the potential that the partnership will be negatively affected with a possible impact on the acceptance of the PERMATA and
Papua programs. This will require careful management in the next reporting period.
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This is the overall budget cut to the aid program. The specific budget cut to AIPHSS is currently under negotiation.
Box 2. A Growing Market: Changing Demand
Indonesia is a rapidly growing market for health services. Demand for health
care is expected to rise significantly in the next few years due to a combination
of factors:
A population growing at a rate of 5 million per year. The middle class is
estimated to reach 100 million by 2020.
An ageing population: The majority of the population growth is expected
in the over 45 age group. By 2025, the elderly population will almost
double to 23 million
The changing burden of disease. Non-communicable chronic
diseases are rising significantly and, unless detected early, are
expensive to treat.
New and expensive treatments becoming available and a growing
middle class with higher expectations.
Greater insurance coverage and use of health services as the
current inequity in access and utilisation is addressed.
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3 Progress towards End of Program Outcomes
EOPOs
General progress against each of the new EOPOs is adequate. The greatest progress is being made in achieving the equitable allocation of resources, followed by governance and supervision. This is
associated to the higher level of activity investment being allocated to these EOPOs.
All activities under accreditation will be completed in the next reporting period and will mean that a high level of progress against this EOPO will be accomplished. All other EOPOs require sustained
implementation and investment in order to be successfully accomplished.
Progress at the national level is slow and behind schedule for the majority of activities. This is especially the case for the Bureau of Budgeting and Planning Roren
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and Bappenas. This is due to the technical complexity of many activities and time taken to develop and agree terms of reference
ToRs and the varying availability of IU staff to lead implementation. At the sub national level East Java is on track with implementation while NTT is behind schedule by several months due to a
complete revision of the work plans following inputs from the PTS in the second quarter of this reporting period. These delays may inevitably result in the roll-over of activities to 2016, however, in
order to accelerate technical aspects, the ISP is facilitating regular meetings on TA coordination to ensure local staff manage AIPHSS activities and local budgets are allocated to meet future
requirements.
3.1 An Effective National Health Insurance System
