The impact of the 1997–98 East Asian economic crisis on health and health care in Indonesia

Abstract

This article identifies the effects of the 1997–98 East Asian economic crisis on health care use and health status in Indonesia. The article places the findings in the context of a framework showing the complex cause and effect relationships underlying the effects of economic downturns on health and health care. The results are based on primary analysis of Indonesian household survey data and review of a wide range of sources from the Indonesian government and international organizations. Comparisons are drawn with the effects of the crisis in Thailand.
The devaluation of the Indonesian currency, the Rupiah, led to inflation and reduced real public expenditures on health. Households’ expenditures on health also decreased, both in absolute terms and as a percentage of overall spending. Self-reported morbidity increased sharply from 1997 to 1998 in both rural and urban areas of Indonesia. The crisis led to a substantial reduction in health service utilization during the same time period, as the proportion of household survey respondents reporting an illness or injury that sought care from a modern health care provider declined by 25%.
In contrast to Indonesia, health care utilization in Thailand actually increased during the crisis, corresponding to expansion in health insurance coverage. The results suggest that social protection programmes play a critical role in protecting populations against the adverse effects of economic downturns on health and health care.