1

Health care decommodification in decentralization context:

Reviewing ‘Classless Hospital Policy’ in Kulon Progo regency,
Indonesia

Tauchid Komara Yuda

Department of Social Development and Welfare, Universitas Gadjah Mada,
Yogyakarta, Indonesia.

Correspondence:
Socio Yusticia, Bulaksumur, Yogyakarta 55281. Email:
tauchid.komara.y@mail.ugm.ac.id

ABSTRACT
This article illustrates the particular dynamic of welfare decommodification in
decentralization context in Indonesia. To gain further understanding of this topic, it
is worth reviewing Kulon Progo regency experience that embarked on removing
classes stratification at any in-patient room in Kulon Progo Regional General
Hospital and in Nyi Ageng Serang Hospital through 'classless hospital policy'. With
regard to this case, the author will provide a research-based review about this policy
by using exploratory case study method. This method helps to understand the
values and ideational perspective that displayed on a feature offered on this policy.
It is concluded that classless hospital policy is a political response against the market
logic of national health care system that still loaded by income-based discrimination.
Furthermore, this policy has also became a 'battleground of discourse' between
central-local governments in managing health care system.

Keywords: Decommodification, Decentralization, Health, Social Policy, Indonesia

1. INTRODUCTION

After four years since it was first launched in 1999, decentralization policy in

Indonesia has remained a dilemmatic problem for health care configurations. In one

hand, it has encouraging local governments to play a pivotal role in establishing

health scheme based on local preferences. As ‘survey conducted by the SMERU

Research Institute in 2012 found that 245 of 262 districts that provided information

had some sort of local health financing scheme’ (Aspinall, 2014, p. 808), even in
 2

some cases, many local governments have a geneourus features on managing of

health schemes, compared to central government scheme (Mas'udi & Hanif, 2011).

Whereas in other hands, it is impedes an ambitious plan of central government to

extend universal health coverage (also known as Jaminan Kesehatan Nasional–JKN)

on a large scale, administered under Health Security Administrative Body (Badan

Penyelenggara Jaminan Sosial bidang Kesehatan–BPJS-Kesehatan). Many observers

(Aspinall, 2014; Harjanta, 2018; Yuda, 2018) contend that many local governments

perserve their program and reluctant to integrate to national health care program,

because it associated with the vested interest of incumbent to increased popular

support and shapes voter preference for the subsequent election.

With regard to this discussion, it is worth reviewing Kulon Progo regency

experience that embarked on removing classes stratification at any in-patient room

in Kulon Progo Regional General Hospital and in Nyi Ageng Serang Hospital. The

initiative is known as 'classless hospital policy' designated to reduce the social gap

in accessing health care services for everyone since 2015–one year after BPJS-

Kesehatan established. Nevertheless, this innitiative is contradict to the logic of

national health care system that emphasis on contribution package that paid fixed

monthly as a prerequisite to obtaining the ward facilities.

This article, therefore, seeks to reviewing that remarkable innitiative based

on empirical research using decommodification as a theoritical framework. Thus

eventually can provide insight to facilitates understanding of health dynamics with

different view.
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2. JOURNEY OF HEALTH CARE EXPANSION IN INDONESIA: AN INEQUALITY

CHANGE

2.1 Occupational status based inequality

The health care development in Indonesia was initiated piecemeal in the

span of president Soeharto reign. The first statutory health insurance namely

Agency for Health Care Funds (Badan Penyelenggara Dana Pemeliharaan Kesehatan

– BPDPK) for civil servants and military in 1968. The characteristic envisioned of

this scheme corresponds to the landscape of welfare configuration that exhibits a

strong characteristic of productivist features (Holiday, 2000; Goodin, 2001;

Goodman & Peng, 1996). At this phase, health inequallity manifested itself in

significant differences among the government's employee and 'outsiders', in terms

of their health coverage.

By 1984, when economic growth increased up to 7,7% per annum, the

benefit of this scheme was extended to retired military personnel, retired civil

servants and their family. In coincided with industrial improvements on export-led

manufacturing, by 1992, the government changed BPDPK into PT. AKSES (Health

Insurance–Asuransi Kesehatan). This institutional change aimed at extend the

formal health insurance feature for the low income citizens under the Public Health

Maintenance scheme (Jaminan Pemeliharaan Kesehatan Masyarakat–JPKM).

Surprisingly, a year after World Bank published a report that stated that Indonesia

was projected will reach an economic growth rate of 7.8 per cent until 2001

(Sumarto, 2017), suddenly, the wave of Asian financial crisis quickly hit Indonesia

in 1998, which ultimately brought down the Soeharto reign.

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Following to outbreak of economic crisis in 1998, population living in poor

condition increases double as a resulted of hit of economic crises. Responding this

situation, the Soeharto’s succecor, namely President Habibie launched the Social

Safety Nets (Jaring Pengaman Sosial–JPS) program, that were designed to improve

the well being of poor or vulnerable group during the economic transition priod at

1998-2000 (Ramesh, 2000; Ramesh, 2004; Joedadibrata, 2012). JPS program consist

of the following features: education scholarship, labour-intensive public work

programmes, subsidized rice for the poor and healthcare. The last one, was the

trajectory for the development of regional health insurance (Jamkesda) in all district

in Indonesia.

2.2 Income-based inequality: A new form inequality in universal health

coverage

In 2004, the government of Indonesia enacted the National Social Security System

(Sistem Jaminan Sosial Nasional–SJSN) law in which followed 10 years later with its

implementation through two administrative bodies of social security i.e BPJS-

Ketengakerjaan administered work-related accidents, retirement savings,

healthcare and death benefits for employee in wide range sectors and BPJS-

Kesehatan that deals with national health insurance. In health sector, it is the first

marked its commitment to universal health coverage.

This welfare reform has become main trajectories of shift Indonesian welfare

regime towards toward inclusive feature that appears to fits western corporatism

model. Should be noted, a major problem with this adaptation is the western

corporatism model is not fully applicable with Indonesia context, because almost 60
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percent of Indonesia residents are classified as informal workers (Wilmsen, Kaasch,

& Sumarto, 2016), and have no access to formal social protection programmes

through work-based social insurance schemes.

Besides, health care system configuration approach is also predominated by

market logic, where ‘ability to pay’ used to get service, rather than the needs itself.

It is most apparent on the health services system, which is it has still segmented to

social classes and limited to social citizenship. Actually, in the ratification of the UN

Convention, the health services has stipulated as a basic human right, so the State

should initiate a universal health system that conditioned on principles of

inclusivity, equality, and market independence.

At first glance, in the concept of Indonesian health care systems that administered

by BPJS-Kesehatan, appears to fits the Universal Health Coverage (UHC) model that

promoted by WHO, thus as if everyone deserves affordable health service based on

what peoples need, not what people pay for (Thabrany, 2014). But the fact is not so,

because ‘even though disease treatment was based on what the patient needs, the

ward facilities offered were adjusted to the contribution package that paid fixed

monthly rates of 80,000 IDR for a first-class room, 51,000 IDR for a middle-class

room and 25,500 IDR for a low-budget room’ (Yuda, 2018, p. 10). The last room is

designated for poor people and informal workers who have “low-income” and

fluctuating.

Ideally, the equity on health system can only be realized, in case of discrimination

both on facilities and handling of diseases are no longer found. Given equity on

health facilities and services are critical elements of the health care services, that
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should be realized through various health efforts in health development thoroughly

integrated and supported by a national development system. As stated in article 34

paragraph 3 of the Indonesia Constitution: "the State is responsible for the provision

of health care facilities and facilities decent public services". Furthermore, legal

protection of the right to healthcare is regulated by Act no. 36 of 2009, in which

stated that "everyone has the right to health". Discrimination, however, applies only

in terms of the financing or contribution, for those who have more resources to pay

or contribute more. This is can be done by prevails cross-subsidies or income

redistribution policies as have carried out by Scandinavian countries.

To sum up, the emergence of universal health coverage is no longer than

changing the origins of inequality in access to health from occupational status to

income. ‘It should be noted that the income-based inequalities [is a] great threat to

the realization of the social citizenship ideal’ (Yilmaz, 2013, p. 74)

3. THE CONCEPT OF DECOMMODIFICATION IN COMPARATIVE PERSPECTIVE

Decommodification is a term used to explain the degree of citizens in

accessing social welfare according to the standards prevailing in the society without

relying on market logic (Esping-Andersen, 1990; Esping-Andersen, 1999; Taylor-

Gooby, 1991). Market logic in health provision context is understood in two of

views: first, a situation wherein the ability to pay becomes a primary aspect that

determines to what extent a citizen could get health services. Secondly,

discrimination based on socio-economic status in order to access affordable

standard of healthcare service (Yilmaz, 2013).

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Esping-Andersen using this term to understands the character of the political

regime in order to controls market institution as a basis for developing a triad model

of welfare state regime that influencing many social policy scholars across the world

(Gough, 2013; Gough, 2004; Yuda, 2018). According to Esping-Andersen, welfare

state is a form of political commits to manage the social risk, through expanding

social protection and provide the public goods. Veil contends that '[social protection

and] public goods are central to a decommodification strategy [because] they

represent a unique form of social provisioning of activities that are essential to social

life [and] alleviate the harmful side effects generated by the complexity and

interdependence of modern life’ (2010, p. 324).

However, the term of decomodification that purposed by Esping-Andersen

suffers from certain ambiguities at the conceptual level to assesing developing

countries, in which landscape of livelihoods dominated by subsistence economic

and informal welfare arrangements. In Asia, particularly in South East Asia countries

(Indonesia, Malaysia, Brunei and Thailand) and East Asia countries (Japan, South

Korea, China) family and communities are supplement each other in

decommodification roles by providing ‘informal’ social care (Abrahamson, 2016;

Cook & Kwon, 2007; Croissant, 2004; Kühner, 2015; Mok & Hudson, 2014; Walker

& Wong, 2005; Yang, 2016). This can be illustrated briefly by looking at Gotong-

royong scheme that has became a fundamental tradition of the Indonesia heritage.

The term of gotong-royong form can be understood as ‘working together to achieve

a common goal’. (Joedadibrata, 2012, p. 16). Sumarto has presented his assessment

of the informal provision model by summarized several kinds of the classical

literature which have clearly captured gotong-royong. He argues that this institution
 8

has been helped 'the poor to cope with social risks [in multi-purposes]; sickness

insurance, death insurance, food security, gotong-royong for housing’ (2017, p. 946)

and so forth.

Gough (2004; 2013) in his accounts identified this welfare systems as the

mix-welfare. Mix-welfare refers to interconnection relations among state, kinship

relation, households in making people being less dependent on market.

Notwithstanding, it is imperative to highlight, Gough’s works fail to acknowledge the

pivotal roles of local government as critical parts of mix-welfare dynamic in

Indonesia, in decentralization period. Given the fact the decentralization has

contributed to the emergence of a local government in its role as a new vibrant actor

in promoting welfare, parallel to the central government, family, and community in

order to make people being less dependent on the market. There is no doubt that

this topic is important and warrant theoretical and empirical investigations in a mix-

welfare discussion, especially in Indonesia, as one of the Asian member countries

that experienced massive decentralization in wider aspects. This study, therefore,

becomes increasingly relevant for further explored in order to refine the exisiting

research gap.

4. RESEARCH METHODS

4.1 Research Design

This article is about the particular dynamic of welfare decommodification in

decentralization context, in Indonesia. The empirical case is displayed for this topic

derived from the experience of Kulon Progo government in removing social

discrimination on health access through ‘classless hospital policy’ initiatives.

 9

Decommodification theory is employed as a foundation of thinking within limits of

binding assumptions. In further, this article is designed as an exploratory research

in which is one kind of types of qualitative case study approach. This is in line with

the aims of this article that will review ‘classless hospital policy’ through the

interpretation of values and ideational perspective that displayed on a feature

offered on that policy.

3.2 Research Approach

This research employs exploratory approach. It is one of ‘types’ of qualitative case

studies that concern on 'debates the value of further research and suggesting

various hypotheses' (Atchan, Davis, & Foureur, 2016, p. 4) as its research outcome.

This approach useful to ‘seek out what is common and what is particular about the

case. [Given that in its operations] this involves careful and in-depth consideration

of the nature of the case’ (Hyett, Kenny, & Dickson-Swift, 2014, p. 2). An exploratory

case study is, therefore, chosen as it helps me to understand the values and

ideational perspective that displayed on a feature offered on classless hospital

policy.

4.2 Data Collection Method

Data for this research is collected by in-depth interviews with relevant stakeholders

consisted of Kulon Progo regent, scholar, bureaucrats, and people behind the scene

who were involved in or had knowledge in series of decisions making process on

classless hospital policy in comparative views. All the information obtained are

compiled as material analysis. It is conducted from March 2017 – July 2017. To help
 10

in constructing arguments in the discussion, I also using secondary data from

previous relevant research articles, theses, and reports as a comparison..

4.3 Data analysis tecniques

All information collected during the interview process is analyzed and interpreted

in accordance with the theoretical logic constructed to filter information that can be

narrated into a text. Once being filtered, the existing material is organized as the

basis for compiling the outline of the discussion. To facilitate interpretation in wider

understanding, the writing process on the discussion part also supported by some

perspectives and interpretations, derived from relevant kinds of literature.

5 DISCUSSION AND RESULT

5.1 Why Kulon Progo needs a new feature of health care?

There are three reasons that stimulate this classless hospital policy initiatives. First,

of course, it regarding income-based health care inequality access that still prevails

in the national health care system thus demanding a humanizing feature –as

explained clearly in part 2. Second, prior to Hasto Wardoyo seat to power, Kulon

Progo demonstrated highest poverty rate in 2010 – 2012, compared to other

regencies in the province of Yogyakarta (see graph 1). This circumstance makes

health care program –and other social assistance schemes– are being relevant to roll

out.

[GRAPH 1 HERE]

Thrid, cases of discriminatory treatment against to poor patients in the low-

budget room (third class) are occurred in almost all hospitals in Indonesia. Including
 11

in Kulon Progo prior to the hospital services reform that carried out by Hasto

Wardoyo regent. The last one issue has documented in policy brief that made by

Laksana and Kusumasari (2013) regarding an evaluation of the regional health

insurance (Jaminan Kesehatan Daerah–Jamkesda) program in Kulon Progo district

in two past years before the Classless Hospital Policy is launched. One interesting

finding is although the existence of this Jamkesda program is beneficial to the

beneficiaries, however, there are remains problems related to the non-satisfaction

of Jamkesda user service in the inpatient classroom, especially in the third

classroom. This report also revealed that the people who hospitalization in the third

class had received less favourable treatment from doctors, paramedics, drug service

personnel.

Learning from these cases then the Hasto Wardoyo administration decides to

stipulate a health reform agenda by introduced classless hospital policy in 2015.

This program is administered and financed by Jamkesda, to provide a guarantee of

social justice for citizens, despite having to against the national health care scheme

that implements the tiered class system. This remarkable initiative is Hasto's

political agenda for implementing his values and ideational perspective on equality

that should be obtained for everyone.

5.2 Health care decommodification in Kulon Progo: A battleground of

political discourse

As explained in the previous section, the state responsibility to provide its citizen's

health services is ensured by binding law. Nonetheless, the fact that healthcare has

always been a battleground for the interests of various actors, both political and

market interest in the midst of a capitalistic regime. Instead of trying to present the
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discourse of the welfare state idea, in fact, the presence of national health care

system is still oriented to the logic of the market, which excludes people who are

unable to access it.

Responding to this situation, many local governments eventually takes an

opportunity to create their own welfare schemes based on local political

preferences. The case of ‘classless hospital policy’ that purposed by Hasto Wardoyo

as Kulon Progo’s regent in 2014, can be regarded as an example of outstanding

health political innovation in Indonesia. And the question inevitably arises as to how

decommodification in this policy works?

There are two models that used to derived decommodification concept into

policy practice. First, in Kulon Progo Hospital Regional model. In this hospital, I

found the system of the class is still prevalent, but not in its implementation. If the

low-budget class rom is not available, the patient with thrid class insurance

automatically would get services on the middle, first class, even VIP class without

additional cost. Secondly, Nyi Ageng Serang Hospital model. In this hospital, did not

find any classes at all in-patien room. Thus, all the patients have equal facilities in

health treatment.

What has done by Kulon Progo Government reflect how market norms which

prevailed on the health facilities in Indonesia have been against by the Hasto

Wardoyo’s regime, through citizenship right based on needs, rather than financial

abilities. Then, there is no reason for the poor patients or patient with low classes

insurance rejected by hospital caused room availability for them are full, ‘even as
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the other class room is still available. It often makes a restriction for patients with

lower-class insurance to claim their rights’ (Yuda, 2018, p. 10)

Additionally, Kulon Progo Government that also responsible upon those have

not insurances, by giving them subsidies up to Rp. 5 million per citizens. All medical

expenses covered by Jamkesda funds. Surprisingly, the bureaucracy that applied

also makes it easy for everyone who needs. If they do not have a national health care

card, they just show their inhabitant card or family card, then they are guaranteed

to be serviced professionally. Such policy has made Kulon Progo Regional Hospital

(RSUD) currently becomes one of the United Nation recipient nominee Public

Service Award. An effort displayed by the Kulon Progo government under Hasto

Wardoyo regime to mainstreaming equality as posed at this case reflects how 'social

citizenship was organised [by] around negotiation and conflict of interest which

originated in the dualism between market and social sphere’ (Kanishka, 2006, p. 19)

for then subduing market logics under state power.

Focussing on political process of policy-making at executive and legislative

levels, a research work conducted by POLGOV (2016) found that this policy was part

of political populist of Hasto Wardoyo regent. Furthermore, it is encouraging to

compare this finding with that found by Harjanta (2018) in his recent work. He

found that ‘classless hospital policy’ together with Locally Owned Stores (Toko Milik

Rakyat–Tomira), Buy local product program (Bela-beli), and home rehabilitation

assistance in which classified as populist programmes ‘has significantly increased

popular support for the incumbent, Hasto, and his running mate Tedjo, in the 2017

regional election’ (2018, p. 86). With regard to this case, populism politics, however,

‘has [also] become an increasingly significant political phenomenon in Southeast

 14

Asia’ (Hadiz & Robison, 2017, p. 488). This is ‘reactions arise as a response to two

distinct but intertwined developments: frustration with the nature of political

representation and participation, and the emergence of new kinds of social

marginalisation, precarious existence and disenchantment with the broken

promises of liberal modernity’ (Hadiz & Chryssogelos, 2017, p. 400).

What surprising is that the Classless hospital policy in Kulonprogo then

became a 'battleground of discourse' on between local government authorities and

BPJS-Kesehatan that is a state-owned health insurance institution. The generous

feature of classless hospital policy became a reason for Hasto administration to limit

the role of BPJS-Kesehatan in Kulonprogo, while, by contrast, BPJS-Kesehatan also

seeks to control the health care system in Kulonprogo by entering at sub-district

levels in order to meet the '100% coverage on 2019' as central government's target.

This case represents what Esping-Andersen calls 'politics against market', in which

the Kulon Progo government attempt to “re-decommodification” of the JKN system

–that its arrangement based on market logic– toward the humanistic system. As

reported by Jakarta Post (2016, April 26) ‘The Kulon Progo administration’s health

policy is apparently a tacit criticism of the long and complicated mechanism widely

complained of by users of the BPJS-Kesehatan program’.

The phenomenon of contestation between central and local government in

controlling health system in Kulon Progo, in line with the findings of Sumarto (2017)

in his recent account that argues welfare institutional arrangement in Indonesia are

commonly fits with layering types, in which, the central government’s social policy

program is taken place on top of other established institution. This makes much of
 15

the social welfare programs that rolled out at many districts in Indonesia are suffer

from serious overlapping policy and resulted contestation and inharmonious

interaction between central and local government in managing welfare. Of course,

this circumstance is not beneficial in the further development of the Indonesian

health care system, which eventually potent to weakens the sustainability of each

other, both on national and local initiatives.

6. CONCLUSION

This study set out to reviews classless hospital policy by using decommodification

theory as a framework analysis. The results of this review show that health

decommodification on in-patient room facilities in Kulon Progo is a political

response against the market logic of national health care system that still loaded by

income-based discrimination, inhumanistic in which all of these are bandaged by a

rigid bureaucratic system.

Besides, the other interesting finding to emerge from this study is that the

appearance of the overlapping policy as a result of central-local governments

contestation in managing the health sector indicates the absence of synergy cross-

level government in health administration configurations. This situation ultimately

potentially impedes the objective of the decommodification of health care systems

that are expected to stand on the principle of social citizenship. As a policy

recommendation, the author suggests that the establishment of institutional set-ups

in order to facilitate jointly regulatory system between BPJS-Kesehatan and

Jamkesda Kulon Progo should be started immediately. Accordingly, the existing

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health policy innovations can continue to exist and beneficial to both on central and

local governments in strengthening their agenda respectively.

This article contributes to broadening the horizon of welfare

decommodification literature, in decentralization context. Given that

decentralization policy has unravelled hidden transcript about welfare provision

debates that uncaptured in current welfare regime studies, because, much of them

are predominantly by welfare modelling study in comparative of cross-countries,

and little attention is given to the individual state by particular cases. With regards

to that case, this study ultimately enables to paving the way for new debates on the

mix-welfare conception by considering the local government as a new vibrant actor

on welfare provision in recent times.

6. ACKNOWLEDGEMENT
This article is a revised version of my short paper that presented at East Asian Social

Policy (EASP) annual conference in Nagoya University, Japan 2017. I would like to

thanks to Hibah Riset FISIPOL UGM was support this project. My thanks also go to

my research mate, Pinto Buana Putra and Irwan Harjanto who has together initiated

the research project at Kulon Progo in 2017. That project then inspires me to write

this article.

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