Weakening Rupiah Exchange Rate Impacts Hospital Finances

Indonesian Private Hospitals Association (ARSSI) General Chairperson Iing Ichsan Hanafi stated that the weakening of the rupiah exchange rate against the US dollar is having a severe impact. “We in hospitals are very heavily impacted because the prices of medicines and disposable medical materials are increasing,” Iing said on Tuesday (9/6). Furthermore, the current economic climate means hospital cash flows are not in good shape. “Especially coupled with poor hospital cash flow due to several pending BPJS claims,” he added. It is known that the decline in the rupiah exchange rate can cause drug prices to rise, mainly because most pharmaceutical raw materials in Indonesia are still imported. The government is attempting to control potential drug price increases by relaxing procurement rules, which provides flexibility for the pharmaceutical industry to seek and divert supplies of raw materials to other countries offering more affordable prices. A second impact is the rising price of reagents, cartridges, test strips and other materials for various diagnostic examinations. Like pharmaceutical raw materials, many of these reagents and materials are still imported and will be affected by the currently high USD value.