Effects of decentralized health-care financing on maternal care in Indonesia

Abstract

We exploit variation in the design of subnational health-care financing initiatives in Indonesian districts to assess the effects of these local schemes on maternal care from 2004 to 2010. The analysis is based on a district pseudopanel, combining data from a unique survey among District Health Offices with the Indonesian Demographic and Health Surveys, the national socioeconomic household surveys, and the village census. Our results show that these district schemes contribute to an increase in antenatal care visits and the probability of receiving basic recommended antenatal care services for households that are not targeted by the national health insurance programs. We observe a decrease in home births. However, there is no effect on professional assistance at birth. We also observe variation in scheme design across districts as well as constraints to the effectiveness of local schemes. Including antenatal and delivery services explicitly in benefits packages and contracting local rather than national health-care providers increases the effects on maternal care. Increasing population coverage reduces effectiveness, delineating limitations to local funding and risk pooling. Furthermore, we do not find any effects for districts outside Java and Bali, where access to basic health care remains a key policy concern.