11/07/2012

1

The National Health Insurance ofIndonesia and CBG Payment System

Hasbullah ThabranyUniversitas Indonesia

Hasbullah.thabrany@ui.edu

Prepared and Presented for the Premiere Hospital Meeting , Phuket, 15 July 2012

11/07/2012

2

10/03/2012 Hasbullah Thabrany 4

11/07/2012

3

The Design of the Indonesian National HealthInsurance (INA-Medicare) – Single Payer System

Income Tax/PPhVAT/PPN

Free at the point ofservices

Mandatory Contributuion% salary (5-6%)(Pay when healthy)

Gov’tBudget

Subsidyfor lowincome Other Gov’t

programsBPJS/NHIC

AllPopulation

Clinic/GateKeeper/DrU

Public/PrivateHospitalsReferral

10/03/2012 Hasbullah Thabrany 6

11/07/2012

4

The NHI Means:New Competition and New “Fight”

10/03/2012 Hasbullah Thabrany 7

BPJS/NHIC has to calculate, evaluate,and predict Revenue and costs (CBGClaims)

Association of Hospitals has tocalculate market costs per Casemix(CBG Claims)

No profitobjective for

BPJS.Balance

budget overtime

The Laws (Social Security and BPJS)1. SJSN Article 24

1) The Level of payments to health care providers for eachregion are determined based on agreement betweenNHIC and and association of health care providers in theregion.

2) The NHIC pay health care providers for services deliveredto the members no later than 15 days after submission ofclaims (net) to the NHIC

2. BPJS1. Art 10 f. BPJS pay health services according to the

benefits stipulated under the social security programs(SJSN)

2. Art 11d. Negotiate peyement with health care providersbased on standard prices set by the government (afternegotiation)

10/03/2012 Hasbullah Thabrany 8

11/07/2012

5

CBG Payment?Elucidation of article 24—SJSN Law

– point (2) this stipulation aims at NHIC should payproviders on the most efficient and effective way.NHIC may provide global budget or capitation(accordingly CBG). The payments include medicalfees/salaries, nursing, room and boards, diagnosticprocedures, and drugs which the detail costs aremanaged by the hospital director. Therefore, ahospital have autonomous power to use the revenuesto the most cost effective treatments.

• The law indicates that a hospital will be a pricetaker based on a prospective payment system.

10/03/2012 Hasbullah Thabrany 9

What is CBG?

1. CBG (Casemix-Based Group) is a bulk payment (bayarborongan) that has been practiced in Indonesia since2009. It is a modification of DRG payment

2. Initial concept of DRG (Diagnosis related groups) isdeveloped in the US in 1983, to pay hospital perdiagnosis as opposed of per fee for services

3. In Indonesia it is named as INA-CBG. Initially usedINA-CBG, but some body wrongly registered acopyright of INA-DRG, then the name of INA-CBG isused, for the same principle. Prospective, risk-basedpayment.

10/03/2012 Hasbullah Thabrany 10

11/07/2012

6

Some Problems of the Current INA-CBG. It is Being Corrected

1. Payment levels (prices of each CBG) are based on‘public hospital charges” and it is paid to publichospitals. It is not consistent with the market conceptand the impacts on quality and costs would beminimal

2. Payment levels are differentiated based on hospitaltypes. It should be based on case conditions

3. Payment levels are the same at the national level. Itdoes not recognize differences in costs of living andcosts of productions accross regions

4. Re-admissions within two weeks are paid. It should beinclusive with the first payment

10/03/2012 Hasbullah Thabrany 11

10/03/2012 Hasbullah Thabrany 12

The Concept of DRG/CBG

MeanEg. IDR 3 Mill

Most efficient least efficient

Mean of hospital losers>> avg market costseg: IDR 3.5 mill. Defisit

Mean costs of a hospital<< average market costsEg IDR 2.5 million. Surplus

Eg. NonCompliated

Typhoid Fever

It is a market concept where hospitals are at risks (risk-based payment) ifa hospital is not efficient or providing poor quality of services, the hospital

will suffer from defisit

11/07/2012

7

How Do We Know the Average Market Costs?

1. The difficult ways are conducting cost-analyses(simple, double, multiple distributions or ABCCosting). It is often bias due to no standardremuneration and standard output volume

2. The easy ways are surveying current dischargepayments and their clinical outcomes. It may be biastoo, but the discharge prices are easier to collect

3. Some comparative exercises based on current INA-CBG by private hospitals may be used to evaluateappropriateness of the revised CBG levels

4. How reliable the cost distributions are? It is ourhomework!!

10/03/2012 Hasbullah Thabrany 13

Example of Askes Claims

10/03/2012 Hasbullah Thabrany 14Do not quote. It is temporary results for an unfinished Dissertation of Ratna

Stroke, non-hemoragic

Hypertensive HeartDiseases

Eg. Fat Distribution of Claim Costs. Need Regrouped

11/07/2012

8

10/03/2012 Hasbullah Thabrany 15

Example of Askes Claims

Do not quote. It is temporary results for an unfinished Dissertation of Ratna

Typhoid Fever

Eg. Slim Distribution of Claim Costs. It can be used to pay CBG

Primary Hypertension

As a Price Taker...a Hospital needs

1. to restructure costs of services to the mostefficient /cost-effective treatments. How...?

2. to ensure high quality of services (patientsare discharged with full recovery) beprovided

3. to evaluate production function of eachdoctor, to ensure hospital efficiencies.

4. to build a good team work in managing apatient

10/03/2012 Hasbullah Thabrany 16

11/07/2012

9

General Thoughts for Cost-Restructuring

10/03/2012 Hasbullah Thabrany 17

Hospital CostsHospital Volumes

Production Unit Supporting Unit

- FFS/Salaried Doctor- No/Quality of nurses-Selection of most-CE diagnostics- Selection of most-CE drugs

- Quality/remuneration/- Perks/Bonus of Directors- Quality and salary of supp staffs- Lower utilities/supplies

What we can do:-- examine how feasible if doctros are hired full time and pay salary plus bonueses-- examine how many repeated (unnessessary repeats) of diagnostic tests-- what kind of drugs that can be subtituted to save money (how do we impose thisto doctors who often believe irrationally on certain drugs?

10/03/2012 Hasbullah Thabrany 18

Key for Successful Surpluses

1. Built a solid team work. No longer individualdoctors’ patients

2. Build cost- conscious among doctors. Used the mostcost-effective drugs. Eg, use ciprofloxasin (IDR336/tab) instead of Ciproxin (IDR 28.000/tab).

3. Reduce unnesessary labs, radiologies, visits, supplies4. Reduce errors in nurses’ practices5. Pay doctors, nurses, pharmacysts, with fixed

payment plus bonues for good financal perfomances

11/07/2012

10

The NHI design isto balance professional services for the

best of the people.Doctors/Hospitals must competeprofessionally and they deserve

professional payments to deliver thebest care for the people.

10/03/2012 Hasbullah Thabrany 19

But.... Keep in Mindthat changes will take place in stages

It is expected that by the end of 2019,all citizens in Indonesia, including

expatriates, will be insured under theINA-Medicare

We have enough time to adjust

10/03/2012 Hasbullah Thabrany 20