Indonesia: Purchasing & Payment Systems

In 2014, Indonesia launched Jaminan Kesehatan Nasional (JKN), a new national health insurance system that merged different existing public insurance schemes and expanded coverage to the informal sector.  To promote efficiency, Indonesia implemented a new capitated payment system for PHC providers under the scheme.  Capitation is intended to cover a basic package of primary care services, including 144 services that all community health centers are expected to provide. 1 The base rate for this capitated payment is determined by facility characteristics (such as availability of doctors, dentists, and 24-hour services) and adjusted for geographic location.

Capitation payments are also linked to three indicators: higher contact rate (proportion of enrolled patients who visit the facility in a month), lower referral rate (the proportion of referrals to specialists for primary care diagnoses – meant to be as low as possible), and chronic disease management program measures (proportion of individuals with hypertension or diabetes who participate in a facility’s fitness and wellness club). If PHC facilities fail to meet specified benchmarks, their financial allotment is lowered by a maximum of 10%. 2

Certain challenges have emerged during early phases of implementation of the capitation payment method.  Payments for providers in remote areas are considered inadequate given high fixed and transportation costs in those areas.  In addition, many remote facilities are not able to provide the full set of 144 services because of lack of critical supplies and challenges with health worker availability.  The PHC information system is weak, making it difficult for policy makers to continuously monitor provider performance. 2  Addressing these wider system constraints -- strengthening supply chains, rural infrastructure, health worker retention, and information systems -- will be necessary for the “performance-based capitation” payment method to achieve its full potential. The full impact of the payment reforms on patient care seeking behavior, provider referral patterns, and overall population health in Indonesia remains to be seen.  


  1. Cashin C, Charchi C, Pervin A.  JLN/GIZ Case Studies on Payment Innovation for Primary Health Care: Indonesian Capitation Payment for Primary Health Care with Performance Benchmarks.  Washington, DC: Joint Learning Network. 2017.
  2. Rajan V.  Disclosable version of the ISR—Indonesia: supporting primary health care reform.  Washington, DC: World Bank Group.  2018