Growth and welfare in mixed health system financing with physician dual practice in a developing economy: a case of Indonesia

Alpaslan, B., Lim, K.Y. ORCID: 0000-0003-1978-176X and Song, Y., 2020. Growth and welfare in mixed health system financing with physician dual practice in a developing economy: a case of Indonesia. International Journal of Health Economics and Management. ISSN 2199-9023

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Abstract

Based on Indonesia’s hybrid BPJS Kesehatan health system, we analyze for welfare-optimal government financing strategy in an economy with a mixed health system using an endogenous growth framework with physician dual practice. We find the model solution to produce two vastly different regimes in terms of policy implications: a “high” public-sector congestion regime as in the benchmark case of Indonesia, and a “low” public-sector congestion, high capacity regime. In the former, welfare-optimal health financing strategy appears to be promoting private health service. In contrast, in the low-congestion, high capacity regime, a welfare-optimal strategy is to do the opposite of increasing government physician wage at the expense of private health subsidy. These results highlight the importance of developing a benchmarking system that measures the actual degree of congestion faced by the public health service in a developing economy, as it ultimately would influence the optimal health financing strategy to be pursued.

Item Type: Journal article
Publication Title: International Journal of Health Economics and Management
Creators: Alpaslan, B., Lim, K.Y. and Song, Y.
Publisher: Springer Science and Business Media LLC
Date: 7 November 2020
ISSN: 2199-9023
Identifiers:
NumberType
10.1007/s10754-020-09289-9DOI
1386826Other
Rights: © The Author(s) 2020. Open Access. This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Divisions: Schools > Nottingham Business School
Record created by: Linda Sullivan
Date Added: 09 Nov 2020 13:42
Last Modified: 09 Nov 2020 13:42
URI: http://irep.ntu.ac.uk/id/eprint/41575

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