Social risk management options for medical care in Indonesia.
This paper investigates the extent to which price subsidies for medical care are a suitable instrument to reduce household's exposure to catastrophic financial risks associated with ill-health in Indonesia. Using the 1995 SUSENAS household survey, the observed distribution of user fees and health expenditures is used to derive a distribution of 'needed' medical expenditures. The trade-off between the tax burden and effectiveness in reducing the exposure to catastrophic risk is analyzed for two existing price regimes along with a number of hypothetical regimes. We find that the existing regimes significantly reduce the exposure to catastrophic shocks but do not eliminate them. Simulations suggest that further reductions could be achieved if a larger proportion of government subsidies were directed to inpatient care. Subsidizing outpatient treatment is a cost effective policy to reduce exposure to catastrophic risks only for the very poor.
Pradhan
Menno
M
Economic and Social Institute, Free University, Amsterdam, The Netherlands. mpradhan@feweb.vu.nl
Prescott
Nicholas
N
D000328:Adult; D000553:Ambulatory Care / Q000191:economics; D002388:Catastrophic Illness / Q000191:economics*; D005191:Family Characteristics; D005382:Financing, Personal / Q000706:statistics & numerical data*; D005102:Health Expenditures / Q000706:statistics & numerical data; D006297:Health Services Accessibility / Q000191:economics*; D006302:Health Services Research; D006760:Hospitalization / Q000191:economics; D006801:Humans; D007182:Income / Q000706:statistics & numerical data; D007214:Indonesia; D015271:Insurance Pools / Q000191:economics; D008297:Male; D008875:Middle Aged; D017059:Models, Econometric; D009313:National Health Programs / Q000191:economics*; D010342:Patient Acceptance of Health Care / Q000706:statistics & numerical data*; D011320:Primary Health Care / Q000191:economics; D012307:Risk Factors; D012308:Risk Management / Q000191:economics* / Q000379:methods; D012946:Social Welfare / Q000191:economics*; D011795:Surveys and Questionnaires