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Services | Diagnosing Deficiencies in Indonesia’s Medical Services Sector

Indonesia’s medical and healthcare sector has long been in need of urgent treatment. In a region still suffering from a shortage of medical personnel relative to the rest of the world, Indonesia stands as the poster child for said inadequacy, with only 0.2 doctors per 1,000 people according to data from the World Health Organization (WHO). This dearth of qualified medical practitioners compounds the country’s oft-cited struggle with a lack of hospital beds, with only 0.6 per 1,000 people – a figure quoted by Deloitte’s '2015 Health Care Outlook' as evidence of the substantial gap facing Indonesia in its pursuit to catch up to the global average of 3 beds per 1,000 people.

Diagnosing Deficiencies in Indonesia’s Medical Services Sector
Among the courses of action most likely to remedy the current shortage of qualified medical practitioners in Indonesia is a relaxation of the plethora of requirements that must be met by medical professionals.
 

Having initiated the launch of a universal healthcare programme to provide coverage to the entirety of the population by 2019 (See Health Insurance in Indonesia: Public Coverage No Threat to Private Sector) the Indonesian government is not blind to the current unpreparedness of its healthcare sector to cope with the ongoing uptick in demand for medical services. Certainly, the $1.4 billion USD spent by Indonesian citizens on medical tourism abroad on a yearly basis should provide plenty of incentive to take corrective action. Indeed, public expenditure on the healthcare sector has risen in recent years – albeit starting from a low base – and increased attention has been paid to the need to spur the development of new medical facilities across the country. Private sector involvement in the opening of new hospitals has proven to be particularly integral in this regard, with developers increasingly looking to set up in underserved secondary cities across the archipelago.

Number of Private and Public Hospitals in Indonesia

Source: Ministry of Health, DBS Vickers

The issue, however, is that raising the number of medical facilities in Indonesia only serves to address half the problem. Without sufficient skilled human resources in this field – itself a function of overly restrictive regulations and the present undesirability of practicing medicine in the country – Indonesia will continue to be hamstrung in its attempts to bring about meaningful progress in its healthcare sector.

The doctor is not in

Even with the opening of new hospitals, Indonesia faces the uphill battle of finding qualified medical practitioners to staff them. As reported in Ernst & Young’s 2015 analysis on the Indonesian healthcare industry after the introduction of universal health coverage, several of the country’s major hospital players openly assert that the biggest impediment to their continued expansion is the availability of skilled personnel. This shortage is particularly acute within specialist fields, in which Indonesia only produces 600 graduates per year due to the steep costs associated with pursuing this type of academic programme as well as the comparative lack of financial rewards for those who wish to apply their specialist knowledge as medical practitioners in Indonesia. For individuals that complete specialised medical studies, the lure of better-compensated employment at pharmaceutical companies and insurance firms can be too great to resist.

While the government may have been able to rely on the private sector to pick up some of the slack in improving upon the healthcare sector’s infrastructural inadequacies, it will need to be much more proactive if similar progress is to be made in tackling its lack of human resources. Beyond providing modern equipment and seeking to match pay offered to medical professionals abroad – according to the Indonesian Doctor’s Association, entry-level doctors in Indonesia earn between 2 to 3 million IDR per month while entry-level doctors in Singapore typically earn approximately ten times that amount – private sector players in healthcare are limited in their ability to bring about a significant increase in the number of qualified doctors, nurses and hospital management staff.

The onus therefore falls on the government to provide tangible solutions, and while steps such as the recent introduction of state-sponsored scholarships for specialist doctors should eventually bear fruit, a more immediate plan of action is drastically needed as Indonesia is expected to enter an era in which chronic lifestyle-related illnesses such as cancer and cardiovascular disease proliferate across the country. It is projected that by 2030, lifestyle-related diseases will account for 87% of deaths in Indonesia (WHO, Ernst & Young).

Requirements in the way keeping the doctors away

Among the government-led courses of action most likely to remedy the current shortage of qualified medical practitioners in Indonesia is a relaxation of the plethora of requirements that must be met by medical professionals seeking to practice in Indonesia. These requirements, which simultaneously serve to discourage local students from pursuing this profession and act as a non-tariff barrier to entry for international medical practitioners, are detailed in eight different regulations, each with its own specifications and necessary documentation such as the RPTKA and IMTA recommendation from the Ministry of Health. Other prospectively prohibitive barriers include proficiency in Bahasa Indonesia, though this requirement is understandable given the nature of the need to communicate with patients.

Taken individually, the processes needed for foreign doctors to practice in Indonesia are not overly challenging, nor do they differ dramatically from countries such as Australia which similarly mandate that international medical graduates pass a series of examinations prior to receiving a license to practice. Instead, the impediment exists in the sheer volume of requirements and agencies involved, coupled with the lack of incentives to practice in Indonesia in the form of competitive compensation and state-of-the-art facilities. These factors effectively combine to preclude foreign medical professionals from practicing in Indonesia – a reality made evident by the Ministry of Health’s statement in January 2016 that any foreign medical professionals currently working in Indonesia are doing so illegally, and the Jakarta Health Office’s confirmation that it had yet to issue a permit to foreign doctors to practice in the city. These statements were made in the aftermath of a string of recent controversies related to medical malpractice allegations against expatriates deemed to have violated their status as medical consultants (for which there are far less requirements and thus far more foreigners in this role) by actively practicing in the country.

ASEAN integration – a shot in the arm?

It is clear that Indonesia would benefit from an inflow of qualified medical practitioners, given the present shortage of local human resources in this domain as well as rapidly rising demand for healthcare services (See Indonesia’s Healthcare Industry; Showing Strong Vital Signs). With public attention keenly attuned to legislation regarding the legitimacy of international medical professionals in Indonesia following on from the aforementioned controversies, however, the government finds itself needing to tip-toe around the concept of opening the door to expatriate doctors and nurses. This hesitation is furthered by the outsized influence of local doctor organisations that actively lobby against the idea of international medical practitioners entering the market.

As is often the case in Indonesia when the government finds itself teetering precariously between progress and protectionism; stasis has ensued. Mercifully, the country may find that its hand is forced by the ongoing implementation of the ASEAN Economic Community (AEC). Through the AEC, Indonesia and its Southeast Asian counterparts have laid the groundwork for the movement of skilled labour across the region. Medicine, nursing and dentistry have been identified as three of the eight priority professions for which a Mutual Recognition Arrangement (MRA) will establish mutual licensing and certifications (See Indonesia and the ASEAN Economic Community – Ready for Regional Integration?). Though the Minister of Health in January 2016 publicly announced that the AEC would not result in foreign doctors practicing in Indonesia and would instead involve knowledge exchange and standardisation; it is hoped that the inevitability of skyrocketing demand for medical services brought about by universal health coverage and an increasingly affluent middle-class should eventually lead to a change in this mindset, much to the benefit of the quality and availability of local healthcare.      

Moving beyond the removal of barriers to the entry of international medical practitioners as the quickest fix to a serious problem; Indonesia needs to also seek out more sustainable solutions for the long-term. This means doubling-down on its initial efforts to introduce more comprehensive scholarships for medical students entering specialist fields and providing greater government support for those specifically driven to practice in remote areas. The development of a student loan system could also serve to lessen some of the financial burden on Indonesians hoping to enroll in medical school. In striving to educate the next generation of doctors and nurses, Indonesian universities should also be encouraged to collaborate with international counterparts, with the ultimate objective of raising the quality of education locally and making Indonesia an attractive place to study specialist medicine – as opposed to a fall-back option for budding doctors unable to continue their education overseas.

Global Business Guide Indonesia - 2016

Indonesia Services Snapshot

Contribution to GDP: 42% (2016)
Sector Growth: ICT 17%, Hospitality 4.53% (yoy, 2016)
Number Employed in the Sector: 54.9 million (February 2015)
Main Areas: Retail, Transportation, Media, Telecommunications, Finance, Hospitality, Tourism.
Government Bodies: Ministry of Trade, Ministry of Tourism, Ministry of Transportation, Ministry of Manpower.