Health Financing Management Patterns Influence in Making Health
Policy Decisions
Kurnia Rizqi Wardani
Faculty of Public Health, Universitas Airlangga, Mulyorejo, Surabaya, Indonesia
Keywords: System financing, Health policy, Health care.
Abstract: Current health reforms regarding financing systems and health management patterns are still at issue and
socioeconomic imbalances in access to healthcare continue to grow throughout the region. These uneven
development are characterized by the difficulty of local government in providing medical services in sectors
of the wider community, which causes the community also difficulties in accessing optimal health services.
This report is based on an in-depth analysis of healthcare-related funds in public institutions. Respondents
were asked to answer a series of questions related to health financing which enables the achievement of
legislative developments in policy making. The literature study is also used to reinforce this report. Cost
awareness is slowly evolving. A narrative and synthesis review is conducted, including providing an
accurate and comprehensive description of the current extent and legislative framework. Policymakers will
benefit substantially from health-based economic decision-making to address increasing difficulties in
funding and provide the best medical care on the market with the increasing demand for health services.
1 INTRODUCTION
Almost all countries of the world are facing difficult
challenges and choices in financing their health
systems. Simultaneously, macroeconomics,
demographics and fiscal limitations limit the extent
to which governments can simply allocate more
public income for health. Combinations of upward
pressure on costs and the limited ability of the
government to increase purchasing power for
countries requires consideration of reforms to the
way their health systems are financed. This gives
direction whereby reforms should seek to encourage
the system. Thus, the proposed policy objective is
also a criterion for indicating how the impact of
reforms on the health financing system can be
assessed.
A conceptual framework for analysing national
health finance organizations system is used to
describe the function and policies associated with all
health financing system, regardless of the model or
label used to classify it. The use of such descriptive
frameworks is crucial to tailor analysis with specific
considerations of reform in the context of a
particular country, because of the method of health
financing. The system that is currently structured
provides the starting point from which any reforms
begin. The descriptive framework is also based on
the 2000 world health report, which identifies health
financing as one of the four functions of the health
system. Health financing refers to the “function of a
health system concerned with the mobilization,
accumulation and allocation of money to cover the
health needs of the people, individually and
collectively, in the health system. The health
financing system consists of several sub functions
and policy – income collection, pooling, service
purchases and benefits policies and the obligations
of patient cost sharing. One of the important
concepts described here is health. The financing
system does not act on its own in affecting the
intermediate and final goals.
Coordinated policies and implementations
throughout the health system function are essential
to achieve the desired result. Effective decision-
making at various levels is a prerequisite for high
performance in healthcare and it is, therefore,
important to understand the factors that shape these
decisions so that implementation of the policy will
produce the best results and with policies related to
the health system can provide funds and provide
148
Wardani, K.
Health Financing Management Patterns Influence in Making Health Policy Decisions.
In Proceedings of the 4th Annual Meeting of the Indonesian Health Economics Association (INAHEA 2017), pages 148-151
ISBN: 978-989-758-335-3
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved

appropriate financial incentives to service providers
to ensure that individuals can have access to
effective public health and personal healthcare.
2 METHOD
This research uses a study of supporting literature. A
total of 15 articles from international journals are
systematically reviewed to determine the factors that
determine system financing and health policy
decisions. By reviewing the results of international
journals, it is expected to provide an overview of the
issues of health financing system and policy
decisions that impact on the equitable distribution of
health services in the community.
3 RESULT
One of the priorities of health reform is improving
and distributing quality services to communities in
remote and island areas through their various action
plans. The formulation of this action plan is
expected to meet the basic health services needs so
that people in remote areas and islands will be
guaranteed health. Health policy in Boundary and
Disadvantaged Areas (DTPK) is an integral part of
Indonesia's health development plan policy on
public health. Currently, the cost of funding and
health in Indonesia is still far behind compared with
neighboring countries, although adjusted for per
capita income level. This report provides an
overview of health finance management patterns that
influence policy decision-making in the progress to
achieve health services across the areas. The pattern
of health financing management is the management
of health financing which not only pools sufficient
funds for health, but also considers how people use
the necessary health service without the risk of
severe financial difficulties so as to meet the
individual and collective health needs of the health
system.
Based on literature studies, the WHO outlines
that the reforms implemented should focus on their
impact on the population and the system as a whole.
With the first principle, all health financing systems
(other than pure out-of-pocket payments) are
insurance systems, and operate in accordance to
according to requirements (i.e. financial capital,
access equity, etc.). If someone requires healthcare,
they should not have to go through long and difficult
requirements. Reforms should be policy-oriented
and the descriptive framework is used as a
"checklist" to ensure that the reform instruments are
aligned with the stated objectives. Therefore,
promoting efficiency does not imply a narrow focus
on budget cuts.
In addition to other literature, which states that,
in ensuring financial protection for balanced health,
no households contribute to or cause health costs
that go down and cannot cope with poverty (ILO /
STEP, 2002). Achieving adequate levels of financial
protection and promoting equity in the health
financing system requires maximized upfront
payments for "insurable" health risks (risks
associated with large and unpredictable costs);
achieving the greatest possible pooling of health
risks in a population, thus facilitating the
redistribution between high- and low-risk
individuals and ensuring equity in healthcare
systems and developing purchasing arrangements
that promote the delivery of quality services
efficiently and evenly so that all regions can
experience services that meet their needs.
Ensuring financial protection and promoting
equality requires specific government action. The
focus of health policy makers states that minimizing
health service inequalities is the goal of health
policy itself, but the Government's commitment to
that goal is lacking; therefore, there needs to be a
clearer action so that the Government can strengthen
its commitment to health improvement services.
Based on several health studies dealing with
inequalities indicating that large disparities in health
and health care use among the poorest and most
vulnerable and wealthy citizens living in urban areas
are caused by one of the factors that health cost are
not reached by the poor, have difficulty accessing
health services. It’s therefore necessary to ensure
that a financing policy ensures access to the required
services can simultaneously protect people from
severe financial consequences for paying.
4 DISCUSSION
Based on the above, results indicate that financing
factors play an important role in shaping decisions
and even policy interventions for health services for
cost-ridden communities. Health financing is
defined as an increase of revenue collection to pay
for the operation of the health system. It has three
functions: collection of revenues from various
sources, fundraising and risk dissemination to all of
the larger population groups, and the allocation or
use of funds to purchase services from public and
private healthcare providers. The purpose of health
Health Financing Management Patterns Influence in Making Health Policy Decisions
149

financing is to maintain and improve human welfare.
At the extreme, without the necessary funds, no
health workers would be employed and no health
promotion or prevention would take place. However,
financing is much more than simply generating
funds. To understand the nature of the indicators that
can be used to monitor and evaluate health system
financing requires explicit assessment of what it is
expected to achieve. Instead, it suggests a broad
approach to ensuring that whatever is issued for
health results in the greatest returns, in terms of
policy progress, so as to improve treatment
performance.
The health financing policy here is a guide for
decision-makers in which service providers can
respond appropriately to signals generated by the
financing system. While health services justice is
something whereby health services and resources
should be distributed according to their needs and
not because of the community's ability to pay for
health services, it has been argued that recent
healthcare reforms regarding financing systems and
health management patterns are still a problem.
Socioeconomic imbalances in access to healthcare
continue to expand throughout the region, especially
for remote areas. There is a significant gap between
treatments that touch the poor and remote and those
for people in urban areas and there needs to be the
existence of financial protection from the cost of
disease provided by the community through a
mechanism of private insurance that cannot be
reached by remote communities in particular. This
means that the capacity of the paying poor must be
no higher than the rich because it is related to
solidarity aimed at justice. These factors not only
affect the proportion of the poor, but also increase
the cost of healthcare and hamper productivity and
economic growth in the region.
Health policy here is needed because, with the
existence of a strong health policy, the health service
gap between rural and urban will not have a too
significant difference. In addition, financing policy
must grapple with questions of how to raise funds
equitably, which usually implies a degree of
progressiveness (whereby the rich contribute a
higher proportion of their income than the poor).
Based on several studies it’s found that each
country needs to develop a clear and pro-poor health
financing policy and a comprehensive health
financing strategic plan with a clear road map. The
strategic plan should contain policy interventions
aimed at strengthening the health financing function.
The key policy challenge is to ensure that health
financing instruments are aligned with one another
with the goals to be achieved.
Governments have an important role in health
policy decisions, so the Government should be able
to realize policies that look at the actual situation to
avoid differences and be fair in providing health
services in both urban and remote areas. As we
know, local people actually need health services that
are more adequate and not complicated in their
financing system and this may be the main factor
people do not choose the existing health services.
Moreover, with a World Bank study finding
substantial inequalities in the use of healthcare
proving to play a role in health policy, it remains
inaccessible to reach all urban populations from
urban to remote villages. Citizens now need and
apply more health services.
This suggests that policymakers should be able to
respond systematically and comprehensively,
including some changes in health financing systems
and strategies to reform health service delivery and
to strengthen coordination between health and social
care so that there will be no significant returning
gaps. Therefore, the impact of Indonesia's health
financing system on the use of services should be
addressed with financial objectives. The contribution
of health financing policies should be more about
how financing is used for health systems. Therefore,
there must be justice in the use or utilization of
health services as an objective call for justice in
distribution.
5 CONCLUSIONS
Today's society tends to need and demand more
health services, while the current funding and health
costs in Indonesia are still far behind compared with
neighbouring countries. The financing factor or
health funding plays an important role in shaping
decisions and even policy interventions, so that
health services can be reached by people in remote
areas. This report uses the literature review method
so as to get a clear picture of the health financing
management pattern that influences policy making
which can represent Indonesia in improving the
health of its people. Each country needs to develop
clear and pro-poor health financing policies and
comprehensive health financing strategic plans as
well as Indonesia.
Government has an important role in health
policy decision-making so that it should be able to
objectively make policies that look at the actual
situation and also consider the financing system
INAHEA 2017 - 4th Annual Meeting of the Indonesian Health Economics Association
150

balance, so that there is no difference and it can be
fair in providing health services in both urban and
remote areas. As another suggestion, several
approaches can be used: firstly, using policy
objectives to guide the direction of health of
financing reforms; secondly, to understand the
existing system in terms of functions and policies to
establish the starting point from which reforms
should begin; and, finally, to understand the fiscal
and other contextual factors for set realistic limits in
order that achievement of policy objectives is
sustainable and reachable by policy.
This suggests that policymakers should be able
to respond systematically and comprehensively
including in some changes in the health financing
system and strategies to reform the provision of
health services and to strengthen coordination
between health and social care so that there will be
no significant gap in the utilization of health
services.
REFERENCES
Ciumara, T. 2014. Factors Influencing Individual
Financial Decisions: A Literature Review. Economy
and Management, pp.420-427.
Davis, S. L. 2015. Measuring the Impact of Human Right
on Health in Global Health Financing. Health and
Himan Right Jounal, 97-110.
Economou, C., Kaitelidou, D., Kentikelenis, A., Sissouras,
A. and Maresso, A. 2014. The Impact Of The
Financial Crisis On The Health System And Health in
Greece. Denmark: The European Observatory on
Health Systems and Policies.
Gilson, L. 2012. Introduction to Health Policy And System
Research. United Kingdom: University of Cape Town,
South Africa and London School of Hygiene and
Tropical Medicine.
Gottret, P. and Schieber, G. 2006. Health Financing
Revisited. Washington DC: The World Bank.
Kutzin, J. 2008. Health Financing Policy : A Guide For
Decision-Makers. Europe: The Regional Office for
Europe of the World Health Organization.
Kuziemsky, C. 2015. Decision-making in Healthcare As a
Complex Adaptive System. SAGE journals.
Maeda, A., Harrit, M., Mabuchi, S., Siadat, B., & Nagpal,
S. 2012. Creating Evidence for Better Health
Financing Decisions : A Strategic Guide for the
Institutionalization of National Health Accounts.
Washington, D.C.: The World Bank.
Mossialos, E. and Wenzl, M. (eds.), 2015. International
Profiles Of Health Care Systems. London.
Naidu, A. 2014. Factors Affecting Patient Satisfaction
And Healthcare Quality. International Journal of
Health Care Quality Assurance, 22(1), pp.8-31.
Santilli, J., & Vogenberg, F. 2015. Key Strategic Trends
that Impact Healthcare Decision-Making and
Stakeholder Roles in the New Marketplace. American
Health&Drug Benefits, 15-20.
Souliotis, K., Agapidaki, E., Peppou, L. E., Tzavara, C.,
Samoutis, G., & Theodorou, M. (2015). Assessing
Patient Participation in Health Policy Decision-
Making in Cyprus. International Journal of Health
Policy and Management, 461-466.
WHO. 2008. Health System Financing. Toolkit on
monitoring health systems strengthening, pp.1-14.
WHO. 2010. Analysing Health Financing And
Expenditure. Analysing Disrupted Health Sectors, 6,
pp.154-88.
Williams, L. and Brown, H. 2014. Factors Influencing
Decisions Of Value In Health Care : A Review Of The
Literature. University of Birmingham: Health Services
Management Centre.
Health Financing Management Patterns Influence in Making Health Policy Decisions
151