26
Jan

A successful demographic shift is one where a rising share of working-age individuals relative to dependents offers a “demographic dividend”, leading to a potential boost in economic productivity and the accumulation of human capital. However, this potential is contingent on investments and policy choices made in education, health, and employment. The half-day Side Meeting offers a unique insight into two critical, complementary areas of strategic reform pursued by three large nations in their demographic transition, India, Nigeria, and Indonesia (the "three giants"), followed by a deep-dive on how the latter tackles both the rapidly changing demographics and complex geographies posing barriers to equitable and sustainable health service delivery:

• (1) supply-side readiness, and
• (2) health financing

The 180-minute session on these topics therefore paint a comprehensive picture of how to address demographic shifts in a geographically diverse region through replicable, scalable solutions that can be of great value to regional peers.

Sub-session 1: Lessons from the Three Giants in Facing Demographic Shifts

Indonesia has experienced a sharp decline in fertility, with TFR hovering above replacement, at about 2.6 children per woman during 2002–2012, however recent studies indicate that Indonesia may have been at replacement level of fertility, with TFR at about 2.1 in 2022. India on its part is believed to have reached the replacement level fertility (TFR 2.1) in 2020 (IIPS and ICF 2021), which in turn generates the opportunity to reap the maximum bonus from the youth population in the country’s demographic history. Nigeria unlike the other two is in a pre-demographic dividend phase, characterized by high fertility rates and a youthful population, with a gradually declining dependency ratio. This sub-session examines the state of the art of the three different countries in their demographic journeys. It explores needed actions to accelerate their respective demographic transition and capitalize on their demographic dividend potential.  

Sub-session 2: Going the Extra Mile: Indonesia’s Ambitious Journey to Provide Access to Equitable Care Across 6,500 Islands

With a rapidly growing population of 281 million people scattered across 6,500 inhabited islands, Indonesia – the World’s fourth-most populous nation – faces unique challenges in ensuring equitable access to high-quality care across its complex geography. Communicable and non-communicable diseases (NCDs) have been compounded by major gaps in the capacity of health providers to diagnose and manage patients, resulting in a 15% increase in deaths caused by NCDs. Each year, one in every 1,000 Indonesians suffer a heart attack, and over 70% of cancers are diagnosed at a late stage. Moreover, Indonesia’s maternal mortality rate remains about twice as high as that of its economic peers, at 173 deaths per 100,000 live births.

Across both the life course and its diverse geographies, Indonesia thus faces a formidable task to improve population health. This is further compounded by a shifting demographic landscape. Currently in its demographic dividend phase with 26% of the population aged 15-19, Indonesia’s old-age dependency ratio is projected to increase from 15 to 20 within 11 years. Indonesia is simultaneously undergoing a demographic transformation. By 2050, one in four Indonesians will be aged 60 or older—about 74 million people. A considerable anticipated burden of rising NCDs is already straining the health system and prompting major reforms, as this brings increasing pressure on the country’s economy, which risks ‘growing old before becoming rich’. Indonesia is therefore a demographic “laboratory” for the global South: managing a still-young population while preparing for rapid aging, while facing urbanization and epidemiological transition at the same time. This makes its experience highly relevant for both lower-income countries facing youth bulges and middle-income countries that must prepare for long-term care and healthy aging.

Aware of these challenges, the Indonesian government has launched an ambitious initiative to build a better-resourced, more resilient public health system that reaches people through more than 100,000 primary health centres, 500 hospitals, and 230 laboratories. This unprecedented effort—the ‘Indonesia Health Systems Strengthening (IHSS)’ Project—is supported by a partnership of multilateral development banks, coordinated by the World Bank. Led by the Ministry of Health since 2023, the project equips facilities, trains staff and ensures sustainable service delivery across every public health facility in the country by 2029. It is further reinforced by significant regulatory reforms to support the development of human resources for health, thereby ensuring that they are adequately equipped to meet the country’s rapidly evolving health needs. The program centres around NCDs for a rapidly aging population, while ensuring maternal and child health for a growing population. As such, the program explicitly adopts a life-course approach: strengthening maternal and child health for a growing population, ensuring productivity in working-age cohorts, and preparing long-term care and NCD management systems for an aging society.

If successful, the project will dramatically increase the availability of high-quality, affordable health services for Indonesia’s changing population, particularly those located in remote and hard to reach parts of the country. In doing so, it sets a global example on how to future-proof health systems in the face of complex, compounding challenges, while Indonesia can learn from global experience particularly from neighbouring Asian countries which invest in preventive care and effective NCD management to reduce financial NCD burdens and for healthy aging.  

Sub-session 3: Sustaining Health Financing through Strategic Reforms in Indonesia’s National Health Insurance

Faced with the demographic challenges outlined in sub-session 1, the Indonesian Ministry of Health is committed to ensuring that its objective of a healthy working-age population is rooted in sustainable health financing systems. This entails ambitious reforms, whose goals are to improve health financing mechanisms and progressively increase universal health coverage to ensure access to quality care, efficiency, and improve transparency. However, with an increasing dependency ratio, and increasing healthcare spending, challenges remain in sustaining Indonesia’s fiscal capacity to fund for health.

The National Health Insurance (Jaminan Kesehatan Nasional; JKN) serves as an important platform to support financing intervention. Having covered 98 percent of the population and contracted the majority of public and private health facilities, JKN is the world's largest single-payer health scheme. Since its inception in 2014, out-of-pocket expenditure declined from 43.7% to 28.6% of total health spending in 2023, antenatal care visits and facility-based deliveries increased, and more people are accessing care. However, JKN’s spending more than tripled since its inception, therefore improving efficiency of the scheme is important to maintain fiscal capacity while ensuring a healthier population.

In the last 3 years, The World Bank has been supporting the Ministry of Health, BPJSK -the administrator of JKN – , Ministry of Finance, and the National Social Security Council with technical assistance to improve JKN efficiency through the establishment of health technology assessment guideline to ensure more cost-effective treatments are recommended to JKN, and the development of Indonesia’s own Diagnostic-related Group (iDRG) to ensure more accurate JKN hospital tariff that reflects disease complexities and follows national standards for disease grouping, thereby maintaining a balance between service quality and the sustainability of health financing.  The iDRG reform is coupled with a global budget mechanism, in which the Ministry of Health has established a task force together with the hospital association, and the World Bank. The global budget is important to curb cost growth at the hospital by incentivizing hospitals to treat conditions in line with their competencies. Lastly, efficiency is further optimized by the development of standardized treatment protocols and tracer indicators linked to provider payment for monitoring compliance at primary and hospital levels

This sub-session will highlight the progress of those ambitious reforms, their challenges, as well as lessons for other countries embarking on similar reforms. Coupled with Indonesia Health Systems Strengthening session which focuses on building a better-resourced public health system to tackle a growing need for non-communicable disease (NCD) care, the audience will have an opportunity to engage and learn from Indonesia’s approach to managing both the demographic and epidemiological transition challenges in healthcare.