Health sector under APEC free trade

By Sujudi

JAKARTA (JP): As Pacific Rim countries are preparing themselves for more liberated trade, a number of questions related to health affairs arise: What can Indonesia reap from this free market region; what can health development do to enhance our export competitiveness and what are the implications of APEC on our health development?

So far we have relied on our comparative advantage in our efforts to boost our economy and to attract foreign investors with the abundant supply of labor and natural resources. This is not going to be the case any longer as present market trends are becoming more competitive in terms of quality and price.

We have to move from comparative advantage to competitive advantage. If we are successful in increasing our competitive advantage, our goods should be able to compete either in APEC or in other regional markets.

To increase our competitive edge, one of the most important factors is the quality of our human resources.

It is obvious that one who is not healthy will have a lower productivity which ultimately slows economic growth. It is fully realized that health is not the only determinant.

Education, both formal and informal is another very important factor. The importance of these two factors is reflected in the Human Development Index, used by the United Nations Development Program to categorize each country's welfare as well as the quality of human resources.

The impact of the APEC accord will be most visible in our medical care, including health workers, health equipment and health insurance aspects.

It is very interesting to question whether APEC will have a big impact on our health system. This is because during the previous five-year development plan we issued several deregulations related to hospitals such as allowing the private sector and foreign investors to build new hospitals, and the incorporating of hospitals (Swadana unit).

The influx of foreign physicians, particularly specialists, necessitates special considerations either as solo practitioners or practicing in hospitals. It may happen that the existence of foreign specialists will create new forms of malpractice, besides its negative impact on the specialists market.

However, these have to be faced with an open mind. The existence of the General Agreement on Trade and Tariffs and the World Trade Organization should be taken more as opportunities rather than threats.

With well-thought legislations and improved specialists training, coupled with enhanced commitment of all medical profession associations towards higher quality of care, the existence of these foreign specialists actually will not be very harmful to our current health services delivery pattern.

We assume that people consulting foreign specialists are limited to those used to seeking treatment abroad.

Therefore, once the APEC accord is effective and foreign specialists are in practice here, the foreign exchange previously spent abroad could be partly retained in Indonesia. Besides, we have also hoped that the transfer of knowledge as well as transfer of technology in both technical and managerial aspects of health will occur.

Reciprocal actions should be taken; our health work force should utilize the open market as an opportunity to broaden their horizons and increase their incomes. This export opportunity has existed for a while. Demand for physicians and nurses from abroad is increasing.

In the future, the "export" of health care workers will hopefully be one of the mainstays in increasing non-oil foreign exchange. This in turn could be used to enhance the private sector's role in training the workers according to the foreign markets' needs.

The pharmaceutical industry will have a brighter future than medical care due to the fact that Good Manufacturing Practice (GMP) has been consistently enforced in Indonesia. Today, about half of the 242 pharmaceutical industries have been awarded GMP certificates. Enforcement of GMP has resulted in a better quality of drugs coupled with cheaper prices, enabling the industry to compete in the international market.

The improvement of drug quality is very important for further expansion of generic drug usage. The government has used the slogan "generic drugs are cheap drugs of high quality".

Export opportunities with regard to drugs are wide open. Requests have been received from developing countries such as Sudan, Myanmar, Vietnam and Cambodia.

Quality assurance adopted by the government in drug production has increased the trust of the layman towards generic drugs. The use of generic drugs, previously limited to government owned health institutions, is now used as well by private health institutions. The turnover of generic drugs clearly shows it.

Apart from drugs purchased under the Inpres presidential instruction and Askes health insurance scheme for civil servants, the selling of generic drugs increased from Rp 33 billion in 1990 to Rp 66 billion in 1993.

Similar to the expectation of the export of health workers, export of drugs (including traditional drugs) would increase our revenue for non-oil export. Care should be taken to prevent the importation of counterfeit drugs and sub-standard drugs. Special care is needed regarding the importation of traditional drugs due to their complex nature, their wide use and frequent irrational use. The trend of irrational use is predicted to increase in the future resulting from a larger proportion of the population practicing self-care in line with the Ministry of Health's policy.

In the field of health equipment, a larger irrational supply and use of sophisticated equipment will be noted, due to the increase of foreign suppliers. This phenomenon is known as supplier induced demands. To reduce this phenomenon, the Ministry of Health will issue various guidelines related to medical care and health equipment. Besides, the Ministry of Health will be more consistent in applying the concept of center of excellence.

The establishment of the center of excellence will yield a higher efficiency and a higher quality of health care.

It must be admitted that export opportunities for medical equipment at present has not been optimally utilized. We have high hopes that the opening of the APEC market will improve it.

The last issue deals with health insurance or JPKM community health maintenance insurance.

Experience suggests that with the improvement of educational levels of the people (this is what we are doing in education development), the demand for preventive services such as immunization and insurance will increase. Insurance services such as for car, house, accident and health will boom.

In Indonesia, Dana Sehat is the mainstay of JPKM. Dana sehat's target group is mainly the rural population. In big cities or urban industrial areas, private and foreign health insurance companies have operated for quite some time with middle and upper class clients.

This pattern will not change through APEC as foreign companies will stick to their previous lucrative target groups.

Dr. Sujudi is the minister of health in the current Sixth Development Cabinet.