DKI Jakarta Case

Shita DewiDKI Jakarta Case

Outline of SessionBackgroundThe creation of three private hospitalsHospital performance after conversionChallenges of converting public hospitals to private ownershipDiscussionBackgroundDKI Jakarta city owned 5 public hospitals (1 for each borough)Rp 400 billion per year for operational cost

Problemsinefficiency in hospital management poor services huge investment for quality and services improvement but no significant improvements

Source of ProblemsHospitals had no financial authority they got bulk budget from DKI Jakarta government, and all revenues went back to DKI Jakarta government revenue. Any changes in budget needed to be approved by DKI Jakarta Parliament.

Proposed solutionDKI Jakarta government wanted to give more financial authority to hospital and in turn expected improved quality and services. They also wanted to re-allocate subsidy to the demand-side (more money to cover the poor).The Creation of Three Private HospitalsCapital Proportions in PT Rumah Sakit Haji JakartaThe changesManaged privately and delivered services to private patients and public patientsIncreased effort in flexible planning management and operational efficiency measuresIntroduced performance based HR management

The resultRS Cengkareng was considered a success happy staff more disciplined health staff (e.g. doctors were available according to their work schedule) good/acceptable qualitystaff and clients satisfied

RS Haji continued to operate well shift in clientele to government supported (low-income) population has been successful staff and population satisfied

RS Pasar Rebo continued to serve the poor almost 80% of the patients are government-funded/subsidized

IssuesCurrent standingsPublic Service Agency Act (2005) enabled hospital to become Public Service Agency in order to give them more financial authority All public hospitals in DKI Jakarta are now Public Service Agencies

Hospital Act (2009) forbade government to convert government-owned hospital to private ownership

Public Service Act (2009)Allowed corporation, or any other legal institution, manage and operate a public service institution, or provide public services.

PT Rumah Sakit Pasar Rebo and PT Rumah Sakit Cengkareng still exist

PT Rumah Sakit Haji taken over by Ministry of Health (for the time being)

Questions for discussion: What went right? Why?What went wrong? Why?Do you anticipate that similar challenges might apply in your country/province/state/district as well? If so, how would you deal with them? What are the key lessons from the case that are most relevant to your country?

Key MessagesConsider innovative ways to provide publicly funded health service products.Pay attention to the required political process surrounding a policy.Be sensitive to the human side of change.A good policy/design of reform on paper might yield an unexpected outcome in the real world.