Promoting public health: Can fiscal policy play a role?
January-March 2015

In the Finance Ministry, we have a program called LPDP (the Scholarship Management Fund.) Every year we allocate Rp 16 trillion that we invest in government bonds with a return of around 7 to 8 percent, so every year we have Rp 1.2 to 1.5 trillion from the investment. And now, that is being allocated for scholarships for Indonesians who are accepted into the top 200 universities. We cover their tuition fees and living expenses. The requirement is that they have to return to Indonesia.

I am now starting to see young Indonesians studying at MIT, at Harvard, Cambridge, Oxford, through the LPDP fund. There have been 3,000 students. Only in this way can we catch up with Singapore and Malaysia.

The next is public health. We do not want to have people who are only brilliant but not healthy. We can argue about what is personal health, or what is public health. I fully agree. But there are two principles.

Let me talk first about BPJS. This is universal health coverage for individuals. What the government can cover is for poor people. When I was talking to the Health Minister, I asked her to find a program so BPJS will not create a moral hazard in which the patient is seen as an income source, and if they are sick they are treated over and over at the hospital. This would not be sustainable.

At that time, I thought the minister had a brilliant idea about the funding allocation for doctors in which if there are a lot of sick people in a place, the doctor’s share will be small. But if there are few sick people, the doctor has a big share. So the doctors will have an incentive to make people healthy. Why? Because if all the sick people come to the Puskesmas, they will not receive any income. This is more or less so. So the doctors have to cure people. Because if that sick person comes again, keeps asking for medicine, they will not have any income.

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