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Cablegate: 2008 Health Public Expenditure Review:

VZCZCXYZ0001
PP RUEHWEB

DE RUEHJA #1498/01 2200233
ZNR UUUUU ZZH
P 070233Z AUG 08
FM AMEMBASSY JAKARTA
TO RUEHC/SECSTATE WASDC PRIORITY 9722
INFO RUEAUSA/DEPT OF HHS WASHINTON DCQ

UNCLAS JAKARTA 001498

SIPDIS
SENSITIVE

USAID FOR KHILL/GH, JBORRAZZO/GHIDN, SSOLAT/ASIA/EAA
FA FOR DDIJKERMAN, GAC FOR MDYBUL
SENSITIVE BUT UNCLASSIFIED

E.O. 12958: N/A
TAGS: SENVCASCEAIDID
SUBJECT: 2008 HEALTH PUBLIC EXPENDITURE REVIEW:
POOR PERFORMANCE

1. (SBU) Summary. The World Bank has completed a Health
Public Expenditure Review (HPER) for Indonesia.

The review confirms preliminary 2007 DHS results: no
improvement in child death rates over the past five years,
compared to a 53% decline from 1994 to 2002; a drastic
erosion of breastfeeding best practices; effective
treatment for diarrhea diminishing; the highest maternal
mortality rate in East Asia, fertility rates remaining
unchanged; slight increases in immunization and skilled
birth attendance, and a continued high maternal mortality
ratio with 420 maternal deaths per 100,000 live births.
These findings corroborate the poor performance of the
GOIQs recently-decentralized health system. End Summary.

- Challenges

2. The HPER highlights the challenges of overall adequacy
of funding, the roles of public versus private expenditures
in the health sector, the roles of central and regional
budgets, appropriate mechanisms for mobilizing resources
and purchasing services, and the proportion of public
expenditure that should be devoted to public health as
opposed to individual medical care.

- Looking forward

3. Close collaboration with the Ministry of Health and
National Bureau of Planning is important to ensure optimal
use of limited resources available for health and to
improve health outcomes and financial protection for the
poor by increasing the coverage of health insurance for the
poor (ASKESKIN). This is particularly essential in a time
of escalating fuel and food prices.

- Some better ideas

4. The report provides nine ideas for making the health
sector more efficient:

1) make better use of the existing resources available for
health, while also making more resources available in the
medium term.

2) in particular, make more resources available for
reproductive health and allocate resources for referral and
institutional deliveries.

3) improve the allocation of resources for preventive care
and allow sufficient resources for operations and
maintenance to ensure quality of basic care.

4) devote additional resources and attention to all major
public goods that determine health outcomes.

5) adjust the general allocation fund (DAU) to provide
incentives for local civil service reform and allow
operational use of deconcentrated funding.

6) improved health outcomes and financial protection for
the poor may be possible by increasing the coverage of the
GOIQs health insurance for the poor program (ASKESKIN).

7) ensure better financial sustainability of ASKESKIN by
introducing cost-containment options.

8) increase efficiency of service provision for publicly
insured enrollees by allowing program beneficiaries to also
use private providers.

9) improve reporting systems and data availability.

- Preliminary DHS data

5. (SBU) Summary HPER findings complement the preliminary
2007 Demographic Health Survey (DHS) results which provided
evidence of poor performance of the recently Decentralized
Health System in Indonesia and slowed progress toward
Millennium Development Goals (MDGs).

1) Indonesia has the highest maternal mortality ratios in
East Asia, at 420 maternal deaths per 100,000 live births,
about double the Philippines, three times that of Viet Nam,
and four times that of Thailand.

2) Child malnutrition rates have stagnated since 2000 and
are increasing in some provinces such as Maluku and Papua

(eastern Indonesia).

3) Female literacy and access to clean water and sanitation
are low among the poorest population.

4) Geographical disparities and inequities persist for
health-related MDGs. Health indicators perform better in
Java and Bali, while eastern Indonesia lags behind.

6. Medium Term Concerns:

1) Indonesia still has considerable demographic momentum,
with total population expected to hit 271 million by 2025,
and to increase to almost 300 million by 2050. This will
substantially increase need and demand for health services.

2) Migration and urbanization are accelerating.
Urbanization will be accompanied by greater demand for
health care.

3) Substantial efforts are needed to address the continuing
high maternal mortality ratio, this will represent a large
cost item for the health sector.

4) Emerging diseases, such as Avian Influenza and HIV/AIDS,
have placed additional burdens on the health budget.

5) Major changes in the method of financing health care,
such as the expansion of effective health insurance
coverage, will increase demand for services.

7. Comment (SBU). One unfortunate consequence of
decentralization appears to be poor performance by the
health sector with worrying outcomes, especially for
IndonesiaQs poor, about 120 million people. Recently, this
disturbing trend has been aggravated by incompetent
political leadership at the Ministry of Health and the
knock on effect of budget subsidies for fuel and food which
have disadvantaged investments in people. Despite these
challenges the Mission continues to actively engage with
key players to work to turn the situation around, a task
helped by recent steps that promise new resources for AI
and HIV/AIDS, but hurt by cuts in funding for other health
issues. End comment

HUME

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