Aceh Partnerships in Health (APiH)
Provincial Health Office, Province of Nanggroe Aceh Darussalam
Summary report of Health Finance Study (Phase 1 and 2)
November 2008
- Background
Lack of adequate budget allocation for primary health care services from provincial and district local governments was identified as a key constraint to health service development in the Strategic Plan for Health Development for the Province of NAD (2006-2010). One of the main problems with advocating to local governments for additional budget was the lack of information or clarity on the amount of funding required to provide an adequate level of services. The Strategic Plan recommended that a study be undertaken to calculate the minimal amount of funding needed to provide health services at a primary health care level. - Aim
The aim of the study was - Methodology
The study used a fairly standard approach to the calculation of costs: identify the outputs; the activities required to achieve the outputs; the inputs required for those activities; and then to cost the inputs. - Results
The outputs of phase II were a revised spreadsheet model, and estimates of costs for the 12 Puskesmas of the pilot test, more information on the workforce availability and capacity at Puskesmas level, and recommendations for the further simplification and application of the model for dissemination to all districts in Aceh. - Discussion
The studies have confirmed the need for a mechanism that enables preparation of budgets that are linked to the SPM. This is a requirement of Indonesian law and regulations, and the lack of a reliable process for preparing health sector budgets based on the SPM increases the risk the local governments will reduce the allocation to health without realizing the implications for achievement of the SPM.
The study also found that the approach of the model and the calculation of unit costs per SPM target was well received by Puskesmas and DHO managers, and they were keen to adopt and apply the model to preparation of budgets. Although a further revision of the national SPM is anticipated, it is likely that indicators for the six priority programs will not be revised very much, and the model will still be relevant.
The studies have also demonstrated that the key need is for calculation of variable budgets (program and operational), rather than salaries. Salaries are funded separately from local government budgets, and, in effect, are treated as fixed costs.
However, this approach does have limitations. The activities and inputs have been developed from an ?ideal? basis ie these are the activities and inputs that will be needed to achieve the SPM outputs, rather than from current levels of activities. They are based on current activities and inputs, but assume increased levels based on increased funding. There may be other constraints to increasing activities, such as the availability or skills of the workforce, or other resource or geographical constraints. It will be necessary to monitor performance of activities and achievement of outputs to identify other constraints, if the constraint of insufficient operational funding is addressed.
The Provincial Health Office in Aceh approached the Aceh Partnerships in Health program for assistance in conducting a study to calculate the minimum costs for provision of primary health care services at the level of the national SPM. Aceh Partnerships in Health, a joint program of the Burnet Institute, Australian International Health Institute (now the Nossal Institute), and World Vision Australia, agreed to the request, and the study commenced in April 2006.
During Phase 1 (HFS-I), a model for calculating the costs of provision of PHC services was developed (January - June 2007). The model was further revised and pilot tested during Phase 2 (HFS-II) between April - November 2008. A full report has been prepared in bahasa Indonesia.
(1) To estimate the costs of the provision of essential primary health care services from community health centres (Puskesmas) in Aceh at the level required to achieve the national minimum service standards (SPM).
(2) To develop a model and the capacity within provincial and district health offices to use this model to calculate costs specific to each city and district as a basis for preparing annual budget submissions to local government.
Note that the aim of the study was not to measure current actual costs, but the costs of the minimum level of activities and services that would be needed to achieve the national SPM.
(a) Outputs: The outputs were defined as the services required to achieve the SPM. The Minister for Health has nominated six programs as essential primary health care programs which must be delivered by every Puskesmas (UKW). The study used these six programs and the associated SPM as the basis for selection of outputs.
(b) Activities: The activities were defined as the component activities required in each of the UKW to achieve the nominated level of outputs. These included activities such as mapping / identifying target populations; provision of outreach services at the community; provision of services at the Puskesmas; referral of high risk or complicated cases to the district hospital.
(c) Inputs: The inputs required were defined as those inputs provided or managed by the Puskesmas. These included medicines and supplies, personnel, travel of personnel to communities for community level activities or to accompany referral, laboratory testing etc. Inputs do not include management or supervisory activities provided by the district health office, but do include supervisory activities to community level staff and village volunteers.
(d) Costs: Costs were defined as the costs to various levels of government for the provision of the inputs. Costs to the community were excluded.
The model developed consisted of a series of spreadsheets which linked together the costs, inputs, activities and outputs. The particular innovation of the model was to link these together in such a way as to calculate the costs per SPM target unit. Each SPM specifies the level of coverage of a particular program output in a target population eg the proportion of pregnant women receiving 4 antenatal care visits; or the proportion of villages with public places satisfying hygiene standards. The model enables the calculation of the cost of provision of services to achieve that standard per target unit ie per pregnant woman, or per village. This facilitates the preparation of budgets based on the model unit costs and the proposed number of target units to be covered.
The model enabled the calculation of average unit costs per UKW program target, and average costs for staff (based on national standard number of personnel) and Puskesmas operations. The total per capita costs ranged from Rp 60,000 (AUD $ 8) up to Rp 156,000 (AUD $21) with higher costs for Puskesmas serving smaller populations and in remote areas. Excluding remote areas, the costs in the 4 sample Puskesmas ranged from AUD $8 to $12. These estimates seemed consistent with estimates from other studies conducted in Indonesia.
However it was difficult to compare with budget allocations, which arise from national, provincial and district levels of government, and include the provision of supplies and medicines (eg vaccines) directly, so that the costs are not known..
The qualitative study collected data on the process of planning and budgeting through interviews and questionnaires of the Heads of the DHO, the heads of the Planning and Supervision departments of the DHO, and from the heads of the Puskesmas in the six sample areas. The reference for the planning and budgeting process used was the Permendagri 13/2006 and the Law of Public Finance 17/2003, which set out the schedule and process.
In calculation of unit costs per program, it was found that the main variation was between districts, with less variation within districts, even across Puskesmas with different locations. For this reason results are provided as average unit costs per district, although the districts consisted of different combinations of Puskesmas types and locations.
Table 4: Average Annual Total Inputs & Costs (per capita) Rp per Puskesmas in 3 districts
| Input / Costs description | Bireuen | Aceh Tengah | Aceh Barat |
| Puskesmas sample | 2 IP - urban 2 OP - rural | 1 IP - remote 2 OP - urban 1 OP - rural | 1 IP - remote 1 IP - urban 1 OP - urban 1 OP - remote |
| Puskemas population range | 13,500 - 44,700 | 8,900 - 18,900 | 3,500 - 18,700 |
| Staff per 1000 population * | 4.7 | 3.6 | 4.0 |
| Operational costs per staff member * | 3,739,000 | 1,505,000 | 3,799,000 |
| Annual total program costs per capita | 39,207 | 53,514 | 42,460 |
| Annual operational costs per capita | 19,611 | 5,672 | 14,396 |
| Total variable costs per capita | 58,818 | 59,187 | 56,855 |
Note: IP = Puskesmas with beds (Inpatient)
OP = Puskesmas without beds (Outpatient)
* Excluding Kota Juang: Staff 0.8 / 1000 population, OC Rp 28,630,000 per staff