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Indonesia: Improving health outcomes through incentive programs

medical_students_training_flickr_world_bank.jpg

Medical students examine bones during a training in Yogyakarta, Indonesia, Oct. 2011.
Photo credit: 
Flickr/Nugroho Nurdikiawan Sunjoyo - World Bank

Improving health has been a focus of Indonesia as it strives to implement universal healthcare nationwide. Yet as the government tries to achieve that ambitious goal, it finds not unlike other developing countries that poorer patients are struggling to access care, due to a number of environmental and financial constraints.

A set of conditional cash transfer (CCT) programs—a system in which patients are incentivized to seek care upon the promise of a stipend—were introduced in 2007 as an approach to improve health among poor households in Java, Indonesia’s most populous island, and a few provinces outside of Java. The programs specifically sought to better maternal and child health outcomes.

Evaluating those pilot CCT programs is the focus of a newly published paper by former Asia Health Policy Program postdoctoral fellow Margaret Triyana: “Do Health Care Providers Respond to Demand-Side Incentives? Evidence from Indonesia,” an outcome of her research completed at Stanford’s Shorenstein Asia-Pacific Research Center from 2013-14.

Triyana found that the CCT programs increased demand for healthcare providers, and consequently, prices for healthcare services. While the programs led more patients to show up for services, they also may have limited access for some patients who were unable to afford services following an eventual bump up in cost.

Triyana concludes that policymakers should forecast effects on supply and demand before implementing CCT programs in order to plan and adjust the quantity of healthcare providers as needed. Such an approach could keep prices steady and in turn allow a greater pool of patients to access care, she writes.

The paper appears in the November edition of American Economic Journal: Economic Policy.

Triyana, now a professor at Nanyang Technological University in Singapore, shared in an earlier interview her research plans and initial findings. Read the Q&A here or tune in to a podcast from her research presentation here.