Budget Policy and Revenue in Indonesian Community Healthcare Centers

Abstract

The primary sources of revenue of community healthcare centers (CHCs, puskesmas) are capitation fees and public funds; only a minority are able to generate other revenues. Several factors contribute to this issue, chiefly ineffective management and inadequate budget policy. Consequently, CHCs provide poor quality of care, pushing patients away and lowering revenue. This study examined the effect of budget policy on the revenue of CHCs across Aceh, Indonesia. Quantitative data were collected from 375 managers in 102 inpatient CHCs in Aceh, Indonesia, using questionnaires, while qualitative data were gathered through interviews with 21 managers from 21 CHCs. Quantitative data were analyzed using linear regression, while qualitative data using thematic analysis. Budget policy was found to have a significant positive effect on revenue of inpatient CHCs, B = 0.567, t = 5.776, p < 0.001. The qualitative findings showed that CHCs were unable to generate sufficient revenue due to the convoluted process for imbursement of non-capitation fees, costs outweighing fees, gap between accreditation and practice, lack of entrepreneurial mindset, inadequate equipment and facilities, dependence on the Social Security Agency (BPJS), and insufficient human resources. These issues were driven in part by a non-participative budgeting process, rigid allocation and use of budget, and incoherent budget policy. Coherent budget policy at the policymaker and managerial levels is therefore necessary to promote revenue generation in inpatient CHCs. Budget policy must consider services, program, and activities that can satisfy the needs of society implemented by the management of CHCs. Patients and society should be involved in budget formulation and allocation (i.e., participatory budgeting). Internal budgets should be allocated by technocratic management and oriented towards revenue generation within the limits permitted by relevant regulations. Management must also become more entrepreneurial to “make do” with budget shortcomings and improve revenue.