Regulator and Payor Relation: Institutional Challenges in Achieving Universal Health Coverage in Indonesia

Abstract

Indonesia is currently struggling towards Universal Health Coverage (UHC) by the year 2019, but policy actors have difficulty in adjusting centralized health insurance management policies at the central level through Law No. 24/2011 on Social Security Provider (BPJS) and Presidential Regulation No. 12/2013 on Health Insurance, with a health service management policy whose authority more decentralized instead through Law No. 23/2014 on Local Governments and Government Regulation No. 18/2016 on Local Apparatuses. Objective: To determine the pattern of institutional relations relating to policies and regulations between the central and the local governments in the implementation of the health insurance program in Indonesia, which has been decentralized at the local level. Method: This study was an exploratory case study. Data were collected in-depth interviews and focus group discussions with 67 policymakers at the central and local levels. The data analyzed using transcripts and an open code matrix. Result: The role of the principal in the pattern of the relation of JKN policy implementation at the central and local levels tends to be weak and does not have complete control of the agent. Weak principal control requires stronger hierarchical control of the principal at the central level (central government) and greater incentives for the principal at the local level (BPJS Health). Meanwhile, principals and agents in terms of policy interpretation, share common interests. Principal control toward the agent is weak and causes asymmetrical information. Finally, in terms of policy application, the agent has more information so that the principal has a dependency on the agent. Conclusion: Implementation of JKN policy at the central level has a conflict of interest between the government as the principal and BPJS Health as the agent. The government has the goal to fulfill the quality of health services (quality control), while BPJS Health has the goal of optimizing health financing (cost control).