Indonesian Health Care Needs Investment: Kadin
Ivan Dasa Saputra | November 24, 2011
The private sector in Indonesia needs to play a greater role in providing health care and help the government catch up with the increasing demand for services as the economy grows, a senior executive at the Indonesian Chamber of Commerce said on Wednesday.
James Riady, deputy chairman for manpower, education and health at the chamber known as Kadin, said the private sector accounted for just 10 percent of the country’s health care providers .
“There needs to be a stronger development of public-private partnerships here,” said Riady, who is also the chief executive of Lippo Group, with which the Jakarta Globe is affiliated.
He predicted the nation’s gross domestic product could grow from the current $700 billion to $8 trillion in the next 30 years.
Currently, government and private spending in the health sector stands at 2 percent of GDP. Riady predicted that in the next 30 years, it would need to rise to 8 percent, totaling about $1 billion in investment, to meet demand.
Poor health and education standards were identified in the latest Human Development Index of the United Nations Development Program, released earlier this month. Indonesia fell to 124th in the rankings this year, down from 108th last year. A total of 187 countries were covered in this year’s report.
“There is no other way [to increase growth] than letting investment from the private sector pour in,” Riady said, adding that he expected the private sector could constitute to 60 percent of public health spending within 30 years.
Health Minister Endang Rahayu Sedyaningsih said she welcomed Kadin’s view, adding that the private sector was expected to support the new National Social Security Law (BPJS), which was recently passed into law.
Endang said the new scheme was part of an effort to ensure that all Indonesians had access to decent health care. “For that, I expect private hospitals to increase their third-class wards for those who are unfortunate,” she said.
The Lippo Group is planning to build six international-standard hospitals in five regions within the next year.
“Every hospital should be built according to international principles, using international standards, equipment and services,” Riady said.
The six hospitals will be built in Makassar, Manado, Bali, Palembang and Jakarta, with an investment of Rp 300 billion to Rp 500 billion ($33 million to $56 million) each.
Siloam Hospital, owned by the Lippo Group, is also increasing space for a third-class ward.
“We will keep on building hospitals because we’re hoping to be the main player in the health industry,” Riady said.
