With four months to go before the yearend, the government has yet to reduce the deficit of the National Health Insurance (JKN) program. The plan to raise premiums and regulatory amendments are in the government’s pipeline with a focus on making more cash available to pay the bills.

By offering universal health care through the JKN, the government is actually improving the demand side, or purchasing power of citizens to afford quality care. Something that comes as a blessing amid the minimal and unequal health facilities, which are mainly concentrated in Java, where almost half the country’s population resides.

It is also a blessing for patients, not only the poor but also the middle classes, who have been reluctant to access costly health care.

More money poured into the country’s underdeveloped health system is, of course, necessary, not to say urgent. But the question is whether it is the right decision to only focus on allocating money on insurance.

Covering 112 million people at the beginning of its operation in January 2014, the Health and Social Security Agency (BPJS Kesehatan) recorded that the number soared by 30 percent to almost 150 million registered for insurance in July.

To keep up with the surge in demand from patients, health facilities have blossomed, mainly propelled by the private sector. The agency reported that clinic facilities grew 15 percent last year while the number of hospital rooms has increased by 51 percent.

About half of total health facilities in the country are operated privately.

The vigorous growth in coverage and facilities is a sign that not only is insurance needed by many, but the JKN, with its tariff system, is profitable enough to invite participation by the private sector.

Siloam, currently the country’s largest private hospital chain, has lauded its cooperation with BPJS Kesehatan and expressed an interest in expanding its network to support the insurance program.

It would be myopic, however, to rely on the private sector for the expansion of the country’s health system through providing competitive JKN tariffs.

There are several arguments for this. First, the private sector may be interested in expanding facilities, but these will be mainly targeted at densely populated areas already supported by basic infrastructure. This means it will be hard to expect health facilities to cover people outside of Java and rural areas. Given that health is a public good that requires heavy investment, it is rare for private health care providers to also build infrastructure or set up facilities in lightly populated areas.

Second, heavy reliance on the private sector will further erode the government’s bargaining position to control costs. In the current system, BPJS Kesehatan is already dependent on hospitals as it mostly pays for medicine and other medical treatments through a fee-for-diagnostic reimbursement system, the INA-CBG. Hospitals and clinics charge BPJS Kesehatan a fixed price for every treatment.

Overreliance on the JKN rate as a stimulus may not only drive costs rapidly in the future but also exacerbate the facility gap between the regions.

If the government is consistent in making BPJS Kesehatan a single payer for health care, it should take several comprehensive measures to resolve the JKN’s deficit problem.

Building state hospitals or public health centers (Puskesmas) are inevitable along with boosting efforts in preventive care. If an area is too remote for a hospital, it may be worth considering expanding the capacity of a Puskesmas so it can also run basic hospital functions.

The health-facilities expansion can be part of the government’s health spending next year, which for the first time will reach 5 percent of the state budget, as mandated by the Health Law.

It is also important for BPJS Kesehatan to draw a line between what it can and cannot afford.

In other countries that have run successful universal health care systems, a single payer tends to make their own deals with pharmaceutical companies and other health care providers, and control what can be used for treatment.

Canada, for example, is notorious for its long waiting times for specialists. France, which was once named as having the best health system in the world by the WHO, was known for providing generous benefits for citizens, but recently has fallen into cash troubles as the country faces recession and the persistent growth of chronic diseases.

With limited funding, Sri Lanka has run free health services only in state hospitals and health centers and provides free maternity care for citizens.

Drawing a line will also help to decide the mechanism for coordination of benefits with other insurance companies; and copayment, or the amount of extra money one has to pay for a medical service.

If BPJS Kesehatan has limits on what it cannot do, patients, especially those who have purchased private insurance, can merge their insurance to cover their bills. Copayment should be the last option, perhaps only for paying for the latest innovations in medical treatment or medicines.

Authorities are already discussing harsher sanctions for those who stop contributions and being more aggressive in managing the agency’s assets to improve income.

As a social insurance program, it should avoid trading a large part of its funds and assets in the capital markets due to market risks and the immediate nature of health insurance. An operator like BPJS Kesehatan must be able to sustain a good cash flow that should be able to cover people’s health bills at any time.

The 2013 Government Regulation on National Health Insurance Assets already provides enough options for investment by BPJS Kesehatan, from stocks and bonds to property.

Yet given the current economic downturn and volatility in the capital markets, the government should direct the assets to more conservative investment tools, with lower risks and fixed income such as government bonds or property.

Non-compliant members amounted to less than 2 percent of the total coverage in May, thus making extra an effort to target them less significant than reforming its tariff system.

The government and BPJS Kesehatan should devise a careful plan that will not only have an impact on the JKN within one year but also ensure its sustainability for many years to come.

Short-sighted plans may waste our limited resources and lead many more citizens to suffer during sickness. - See more at: http://www.thejakartapost.com/news/2015/08/31/to-raise-or-not-raise-health-insurance-premiums.html#sthash.OkIwvVTe.dpuf