Indonesia is working hard to improve its primary health care system. Even with more money being spent, outdated financial management systems make it hard to use resources effectively. This affects local health centers (puskesmas), limiting their ability to meet the needs of their communities.
Recent reforms, under Law No. 17 of 2023 and Minister of Health Regulation No. 19 of 2024, aim to fix these issues. However, funding often comes from various sources with different rules, complicating the way money can be used. Delays in transferring funds and a lack of flexibility mean health facilities struggle to respond quickly to local needs.
To address these challenges, the World Health Organization (WHO) joined forces with local authorities and experts to analyze the financial hurdles. Their findings highlighted several problems, such as fragmented funding, inconsistent budget rules, and weak connections between financial data and service delivery. These issues can lead to wasted resources and uneven performance across health centers.
One of the recommendations is to strengthen integrated budgeting. Better coordination can help ensure that money is available when needed. Increasing flexibility in how funds are used is also crucial. The research points out that health centers with badan layanan umum daerah (BLUD) status have shown improved efficiency. This status allows these centers more freedom in budgeting while maintaining accountability.
Prastuti Soewondo, a senior advisor to the Indonesian Minister of Health, emphasizes the importance of BLUD status:
“It gives puskesmas more space to make decisions based on local needs. This is vital for improving service quality.”
A closer look at global trends shows that countries that streamline their public financial management often see better health outcomes. According to a 2021 study by the WHO, efficient health funding can lead to a significant increase in service delivery efficiency by up to 35%.
Supporting these changes is key. WHO plans to help Indonesia translate these insights into action, promoting better ways to analyze health funding and facilitating learning from countries with similar challenges. Strengthening financial management will support Indonesia in providing fairer and more effective primary health care. By focusing on these reforms, the country hopes to achieve universal health coverage and improve health services for everyone.
For more in-depth insights, you can check out the full WHO report here.
Written by Feby Oldfisra, NPO Health Financing, WHO Indonesia.
