How are health budgets allocated and dispersed, across levels of the health system? Do health budgets get dispersed through geographical areas? | Indonesia How are health budgets allocated and dispersed, across levels of the health system? Do health budgets get dispersed through geographical areas? | Indonesia

13 Apr 2022

As outlined above, most health care spending is allocated to hospital care, with only 20 per cent of funds allocated at primary care level. This creates considerable inequity in access to health. Treatment for complex illnesses, such as diabetes, hypertension, or cancer are covered by the health budget; however, many adult vaccinations and screening tests needed to establish the prevalence of these illnesses at primary care level are not (Claramita et al., 2017, p.21). In addition, limited availability of data causes difficulties in detailed understanding of budget allocation in primary and secondary care settings (Claramita et al., 2017, p.21).

The combination of central government and district level financing leads to a complex and fragmented system. By Law (law number 26/2009), local governments (province, district, and city) have to allocate at least 10 per cent of their regional budget to health. According to the Ministry of Health, regions slightly underspend, allocating on average 9.37 per cent (2012). However, according to 2012 data, some provinces have spent up to 16 per cent of their budget on health. At district/city levels almost half (42.2%) allocated more than 10 per cent of their budget for health (Ministry of Health Republic of Indonesia, 2015b, pp.29-30). This leads to considerable variation in health expenditure between districts causing considerable inequities (World Bank, 2016b, p.5). We are unable to identify how local governments allocate their spending on health.

Despite the considerable share of out-of-pocket expenditure, voluntary health insurance uptake has been relatively consistent between 2010 and 2017, at 3-4% of current health expenditure. Meanwhile, the proportion of household out-of-pocket expenditure has been declining, amounting to 34% of current health expenditure in 2017. This may be an indicator that government schemes including the National Health Insurance introduced in 2014 are starting to reduce out-of-pocket expenditure.


Claramita, M., Syah, N. A., Ekawati, F. M., Hilman, O., & Kusnanto, H. (2017). Primary Health Care Systems (PRIMASYS): Comprehensive case study from Indonesia. World Health Organization. https://www.who.int/alliance-hpsr/projects/AHPSR-PRIMASYS-Indonesia-comprehensive.pdf

Mahendradhata, Y., Trisnantoro, L., Listyadewi, S., Soewondo, P., MArthias, T., Harimurti, P., & Prawira, J. (2017). The Republic of Indonesia Health System Review (Vol. 7, Issue 1). https://apps.who.int/iris/bitstream/handle/10665/254716/9789290225164-eng.pdf

Ministry of Health Republic of Indonesia. (2015b). National Strategy: Management of Alzheimer and Other Dementia Diseases: Towards Healthy and Productive Older Persons. Ministry of Health Republic of Indonesia.

World Bank. (2016b). Indonesia Health Financing System assessment: spend more, spend right & spend better. http://documents.worldbank.org/curated/en/453091479269158106/pdf/110298-REVISED-PUBLIC-HFSA-Nov17-LowRes.pdf