Health sector under APEC free trade

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.