Sustainability of Financing to Increase Drug Access and Distribution

during National Health Insurance (JKN)

Andi Leny Susyanty

, Yuyun Yuniar

and Selma A. Siahaan

Centre for Health Resources and Services Research and Development, National Institute of Health and Development,

Ministry of Health, Jl. Percetakan Negara No. 29, Jakarta 10560, Indonesia

Centre for Health Humaniora and Health Management Research and Development, National Institute of Health and

Development, Ministry of Health, Jl. Percetakan Negara No. 29, Jakarta 10560, Indonesia

Keywords: Drug, Medicine, Cost, Distribution, Funding.

Abstract: Drug access for the public is largely influenced by four main factors, namely rational drug use, affordable

prices, sustainable funding, and a health system and a reliable drug supply system. The study carried out

qualitative and quantitative mixed methods with cross-sectional designs. Data collection is done through in-

depth interviews and secondary data collection. The study was conducted in February-December 2017. The

research sites in 11 provinces were selected purposively and divided into five regions were in accordance

with the Indonesian Case-Based Groups (INA-CBGs) System. The results of the study show that the costs

of purchasing drugs are sourced from the APBN and APBD, as well as capitation in several regions. For

medicine, there is generally no problem with the cost of drug distribution. The problem of additional

distribution costs occurs for the supply of medical devices. The anticipation of drug vacancies due to a

shortage of APBN and DAK funds can be overcome by optimizing JKN capitation funds by imitating

existing funding models. The supply of e-catalog drugs needed to be continuously evaluated by taking into

account the certainty of the prices and availability of goods.

1 INTRODUCTION

Since decentralization, there was a shift in the

management of Government funds, a significant

increase in Regional Government in line with

decentralization. Health financing comes from

various sources, namely: Central Government,

Regional Government, private sector, community

organizations, and the community itself. The

availability of adequate funding will also support the

implementation of subsystems for pharmaceutical

preparations, medical devices, and food (Presidential

Regulation, 2012).

One of the aimed pharmaceuticals, medical

devices, and food subsystems is to ensure the

availability, equity, and affordability of medicines,

especially essential medicines. Sufficient funding

from the Government and Local Governments is

needed to guarantee the availability and affordability

of drugs, especially drugs and essential medical

devices for the poor (Presidential Regulation, 2012).

Drug access for the public is largely influenced

by four main factors, namely rational use of drugs,

affordable prices, sustainable funding, and a reliable

health system and drug supply system. Availability,

equity, and affordability of drugs are achieved,

among others, through sustainable drug financing

system strategies, both the public sector and the

private sector (Ministry of Health, 2006).

One of the objectives from Distribution

Availability, And Drug and Vaccine Service In

Facing The 2019 Universal Health Coverage

Research study is to identify and assess the

distribution and availability of drugs and vaccines in

five regions of Indonesia where one of the specific

objectives is to calculate the financing components

of drug and vaccine distribution (Yuniar, 2017).

2 METHOD

The study carried out qualitative and quantitative

mixed methods with cross-sectional designs. Data

collection is done through in-depth interviews and

secondary data collection. The study was conducted

in February-December 2017.

Susyanty, A., Yuniar, Y. and Siahaan, S.

Sustainability of Financing to Increase Dr ug Access and Distribution during National Health Insurance (JKN).

DOI: 10.5220/0009567501210126

In Proceedings of the 1st International Conference on Health (ICOH 2019), pages 121-126

ISBN: 978-989-758-454-1

121

The research sites in five regions in Indonesia

were in accordance with the Minister of Health

Regulation No. 27 of 2014 concerning Technical

Guidelines for the Indonesian Case-Based Groups

(INA-CBGs) System. This provision was made to

accommodate differences in the cost of distributing

drugs and medical devices in Indonesia.

The selection of provinces is done purposively

based on the regionalization system, namely the

provinces of Jawa Barat, Jawa Timur, Sumatera

Selatan, NTB, Aceh, Sulawesi Utara, Sulawesi

Selatan, Kalsel, Kalteng, Maluku Utara, and Papua.

The selection of Districts/Cities is done purposively

based on urban criteria in provincial capitals,

urban/rural rather than provincial capitals and

underdeveloped / border districts.

Data triangulation is done through the

triangulation of methods and sources of information.

Analysis of RTD results from data and interviews

conducted using the content analysis method and

secondary data analyzed descriptively.

3 RESULT AND DISCUSSION

3.1 Provincial and District/City

Funding Sources for Drugs and

Vaccines

The results of research in 11 provinces show that

2016 drug expenditure uses Regional budget

(APBD) and state budget (APBN) budget sources.

The provinces of Aceh and Kalimantan Tengah

only use the APBN, the provinces of Jawa Timur

and Sulawesi Selatan mostly come from the APBN.

Meanwhile, Kalimantan Selatan, Maluku Utara,

Nusa Tenggara Barat (NTB), Sulawesi Utara, and

Sumatra Selatan Provinces only use the APBD. Jawa

Barat Province has no drug procurement and does not

budget for drug expenditure, the provincial buffer is

obtained from the central government. Drug financing

in provincial and district health offices is sourced

from funds including the state budget, namely the

DAK from Ministry of Health (Directorate General of

Pharmaceutical and Medical Devices), the regional

budget and capitation or other funds.

The variety of health financing budget sources in

Indonesia must be managed properly so that the

funding can complement the needs of each Province.

The central government remains responsible for

fulfilling drug needs in each province, even though

in the JKN system there is a financing model

through capitation and the INA CBGs package.

Obermann in 2018 described financing in the

Philippines during the universal health insurance

period for its citizens. Funding is from a

Government full subsidy program that comes from

the central government budget and sin tax.

(Obermann, 2018).

At the District/City level, spending sources on

medicines in the year 0f 2016 vary, from the State

Budget (APBN), Regional Budget (APBD),

capitation and others. Specifically, in Trenggalek

District, there are spending drug sources that

originate from Tobacco Tax. The composition of

drug expenditure sources in Regencies/Cities can be

seen in figure 2.

Figure 1: Provincial funding sources for drugs and

vaccines.

Figure 2: District/City spending sources in the year of

2016.

The health budget through a tobacco tax as has

been done in the Tranggalek district actually has

been submitted by National Team for the

Acceleration of Poverty Reduction (TNP2K) in 2015

and the same thing also happened in other countries

such as the Philippines. TNP2K states that this is

something that needs to be done as a form of sin tax.

Considering smoking and alcohol is a form of

activity that damages health and can cause illness

ICOH 2019 - 1st International Conference on Health

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and cause death in the future, it is necessary to do

several strategies including increasing taxes and

using it for health costs as a consequence as well as

efforts to reduce its users, especially among young

people. (National Team for the Acceleration of

Poverty Reduction, 2015).

Capitation funds use policies in several regions, in

general, have already allowed the use of capitation

funds with various special provisions in the region.

3.2 District/City Distribution Cost

Component

The allocation of non-physical DAK in the health

sector in the form of BOK aims to support local

governments in ensuring the availability of quality,

equitable and affordable medicines, vaccines and

medical consumables in government basic health

services. One goal, in particular, is to support the

District/City Health Office in ensuring the

availability of drugs, vaccines and medical

consumables at puskesmas through the provision of

drug and vaccine distribution costs to puskesmas and

the operation of electronic drug and vaccine logistics

information systems at the District/City Pharmacy

Installation. (Ministry of Health, 2016)

The operational policy of the Health Operational

cost (BOK) fund is for the distribution costs of

drugs, vaccines, and medical consumables to be used

to help ensure sufficient quantities of drugs,

vaccines, and medical consumables are available at

the puskesmas. (Ministry of Health, 2016).

Distribution Cost Components in 11 Provinces of

the study locations indicate that most of the

distribution costs are located in the vehicle cost

component which includes rental costs and/or fuel

costs, or auctions for distribution by third parties.

Figure 3: Province distribution cost component.

The provinces of East Java, Aceh, South

Sumatra, and South Kalimantan use the tendered

system with third parties, including PT POS

Indonesia to distribute to Regencies/Cities, auction

agreements with third parties including packing of

goods (figure 3).

All distribution costs in Papua Province are for the

expedition fee, District/City which is close to the

provincial capital making their own take to the

Provincial pharmaceutical warehouse. Jawa Barat

Province does not have a distribution allocation,

distribution is done by providing an Official Travel

Order (SPPD) for transportation of officers (figure 3).

Since the decentralization system in Indonesia, the

most important thing to do is effective coordination

from the national to the city/district level. Effective

coordination, especially in the effort to manage

budget resources from the central government, the

government and others will support the achievement

of the main objectives of the health system, one of

which is ensuring the availability of medicines for the

community. (Agustina et al., 2018).

The cost component of the District/City

distribution is mainly for the transportation costs of

officers. In Bogor Regency, Surabaya City and

Morotai Regency, Puskesmas take their medicines

themselves to the District/City health office (figure 4).

Figure 4: District/City distribution cost component.

Distribution is one of the important efforts to

ensure the availability of drugs. The amount of

distribution costs required varies greatly, depending

on distance, travel time, regional characteristics,

facilities and types of transportation availability and

transportation to be used. this needs to be taken into

account in the distribution budget preparation. In

addition, there are other budgets that need to be

taken into account, among others, the need for an

insurance budget, both for officers and for collateral

due to loss of goods due to robbery or hijacking

during the trip (Jérôme Dumoulin, Miloud Kaddar &

Germán Velásquez, 1998).

The percentage of distribution costs in 11

provinces is mostly less than 10%, except in South

Kalimantan Province, distribution costs are up to

51.3% compared to provincial health service

Sustainability of Financing to Increase Drug Access and Distribution during National Health Insurance (JKN)

123

expenditure in 2016. There is no data on the amount

of distribution budget in West Java, Papua, and

South Sumatra Provinces (figure 5).

Figure 5: Percentage of drug distribution costs compared

to provincial health office expenditure in 2016.

The percentage of distribution costs in the

Districts/Cities is also largely less than 10%, except

for Mimika Regency, the comparison of distribution

costs versus drug expenditure is 14.7% (figure 6).

Figure 6: Percentage of distribution costs compared to

District/City health office drug expenditure in 2016.

In Bogor Regency and Surabaya City, there is no

distribution cost data because puskesmas take their

own medicines to the District/City office. The

districts of Banda Aceh, Garut, Trenggalek,

Bondowoso, Banjarmasin, Hulu Sungai Utara,

Seruyan, Mataram, Lombok Timur, and Jayapura

City stated that distribution costs were sufficient,

even though the percentage was less than 10%.

While in Mimika Regency, although more than 10%

is still not sufficient (figure 6).

The amount of distribution cost components

required by each region, especially in Indonesia,

varies greatly and cannot be determined in general,

for example, 10% of drug expenditure. It really

depends on the geographical conditions,

infrastructure and transportation facilities available

and the amount of drug expenditure incurred. 14.7%

of the distribution costs in Mimika, Papua is not

enough to fulfill drug distribution services, while in

other Districts/Cities, they have been able to meet

the needs, although they do not meet 10% of drug

expenditure. This happens because of differences in

the amount of drug expenditure, differences in the

area, differences in the number of health facilities

and differences in geographical conditions.

Geographical conditions, especially in eastern

Indonesia, is one of the challenges in the distribution

process, plus the lack of infrastructure and facilities,

so a good drug distribution system is needed. (Id et

al., 2019).

The mechanism of drug procurement, in general,

is greater with e-purchasing, the rest is by tendered

or direct purchase if the amount is small.

Table 1: Drug purchasing system.

Region

District

Jawa Barat

e-purchasing (80%)

tendered (20%)

Jawa Timur

e-purchasing 80-90%,

direct purchasing 10-20%

Nusa

Tenggara

Barat

e-purchasing 60% - 80%,

tendered 20% direct purchasing

0-20%

Sumatera

Selatan

e-purchasing

direct purchasing < 5%

tendered < 10%

III

Aceh

e-purchasing 75% -100%

tendered and direct purchasing

<25%

Sulawesi

Utara

e-purchasing 75-80%

tendered ≤ 25%

Sulawesi

Selatan

e-purchasing 70% - 80%

direct purchasing 20% - 30%

Kalimantan

Selatan

e-purchasing 50%-80%

tendered and direct purchasing

20% -50%

Kalimantan

Tengah

e-purchasing 50% -100%

tendered and direct purchasing

0 – 50%

Maluku Utara

e-purchasing 90%-100%

tendered and direct purchasing

≤ 10%

Papua

e-purchasing 75%,

direct purchasing 25%

In the era of national health insurance, the cost of

drug distribution is included in the cost of drugs in

the e-catalog system. This needs to be considered

well because if the cost of drug distribution becomes

one component with the cost of the drug, it will

indirectly affect the quality of the drug, if the

distribution costs needed are exceeding the

production costs of drugs ordered. To anticipate this,

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it is necessary to calculate the price of e-catalog

drugs accurately and strengthen the implementation

of the good manufacturer practices (GMP)

monitoring in the pharmaceutical industry which has

won the e-catalog auction. (Id et al., 2019).

The e-purchasing process is an effort to reduce

the drug price in Indonesia, the same thing is done in

India. With the e-purchasing system, the negotiation

process is carried out nationally so it can reduce the

effort and negotiation time in health facilities, and

provide certainty for the pharmaceutical industry in

the production process, as well as large purchases

can increase national drug costs efficiency.

(Ashigbie, Azameti, and Wirtz, 2016).

The health insurance system will increase the

role of pharmaceuticals in the effort to provide

quality services that have proven to be cost-

effective. At present, the central and regional

governments still finance the procurement of drugs

for the public sector in first-level health facilities

and drug drugs programs, in the future the

availability of drugs in health facilities will be the

responsibility of BPJS and health facilities in

collaboration with BPJS as holders of health

insurance programs in Indonesia, while the central

and regional governments are responsible for public

health programs (National Team for the

Acceleration of Poverty Reduction, 2015).

To improve budget efficiency and use of health

resources as needed, the health system needs to be

implemented policies that support the use of

medicines and other health resources that are

appropriate and clinically proven that involve

various sectors of drug management, ranging from

the pharmaceutical industry to patients, for example

by providing an incentive or reward and punishment

system for the parties involved in it (Wagner, Quick,

and Ross-degnan, 2014).

4 CONCLUSIONS

In several provinces still rely on the state budget

(APBN) as the main source of funding for drug

distribution. Costs for purchasing drugs are sourced

from the state budget and regional budget, as well as

capitation in several regions. For drugs, because they

are included in the price of the e-catalog to the

health office, there is generally no problem in the

distribution costs of drugs. Most of the costs incurred

by the DHO are for repacking and transporting the

sending staff as well as increasing endurance costs.

The endurance enhancement costs are allocated

especially for regions that do not specifically have

distribution costs because they are not allowed in the

budget system. Distribution work is considered to be

a task so no additional costs can be given.

ACKNOWLEDGMENTS

The authors thank the Head of Centre for Health

Resources and Services Research and Development

along with the management team for conducting

research activities ranging from providing budgets to

administration and licensing processes so that they

can produce information that can be useful for

policymakers.

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