Indonesia’s Health Sector Omnibus Law

There have been a lot of discussions around how to best move forward on the government’s intentions to improve Indonesia’s health sector and tap into the lucrative medical tourism market. D-Insights have published an in-depth look into the latest Omnibus Law (the fourth Omnibus Law so far), which addresses Indonesia’s health sector and the possibility of revising dozens of currently restricting laws.

D-Insights suggest that the Omnibus Law is part of the Indonesian government’s strategy to reform the health system and is a cornerstone of the government’s strategy to develop advanced health services through foreign-local investment collaboration. Several indices show that the quality of health services in Indonesia lags behind that of neighbouring countries. This situation is a “disaster”, especially for the poor, and causes “economic losses” for the country because many residents seek treatment abroad, say D-Insights.

The health sector Omnibus Law is on the list of the 2023 National Legislation Programme as an initiative of the parliament. Although, information circulated that the initiative came from the government. This is because a draft is circulating publicly before the drafting process in parliament begins. The draft contains significant changes, among others, in the mechanism for registration and licensing of doctors, including foreign doctors, as well as the education programme for specialist doctors, report D-Insights.

The plan to issue an Omnibus Law for the health sector immediately sparked a polemic. Professional organizations opposed the plan saying it will castrate the role of professional organizations such as the Indonesian Doctors Association (IDI) and promote the liberalization and capitalization of the health sector.

This is considered dangerous for health services in the country, report D-Insights who also say that the government does not deny or confirm that it was the maker of the draft that was circulated. However, the contents represent the government’s intentions that have been conveyed to the public.

In a hearing with the parliament some time ago, Budi Gunadi Sadikin, Indonesia’s Minister of Health, expressed the importance of strengthening the government’s role in health workers’ management, which means the need to reduce the role of professional organizations.

“We can do nothing right now. If there is an issue of a shortage in the production or distribution of doctors, can the government intervene? Cannot. If there are [problems] regarding doctor licenses, can we solve them? If there is a conflict between radiology doctors? We can’t intervene. The right to govern should be in the government,” Budi stated.

One of the main problems in the Indonesian health system, according to the Minister of Health Budi Gunadi Sadikin, is the availability of doctors, especially specialist doctors.

Minister Budi even said that Indonesia is in a crisis of specialists. This is due to the lack of specialist graduates and their uneven distribution across regions. According to D-Insights, who cite the Ministry of Health, Indonesia has a shortage of around 130,000-doctors, including 18,000-specialists, report D-Insights.

Minister Budi highlighted this condition in a forum held by IDI last November. He linked this problem to the high number of child deaths from heart disease. He revealed 50,000-children were born with congenital heart defects, and 20,000-cases needed surgery. However, due to the lack of heart specialists and health facilities in Indonesia, only 6,000-children undergo surgery. “There are 14,000-babies die every year because we do not have enough specialists,” he said.

In 2017, President Joko Widodo issued a Presidential Regulation stipulating that specialist doctors must be willing to be placed in remote areas. However, it was annulled by the Supreme Court because it was considered forced labour, which violated human rights. As a result, the rules were revised so that placement in remote areas was voluntary.

Currently, according to the Ministry of Health, several efforts have been made to achieve the ideal minimum number of doctors, including increasing the ratio of the number of students one lecturer can handle for special education programmes, increasing the number of lecturers, and establishing clear procedures and incentives for doctors from Indonesia who have graduated abroad and want to serve domestically. However, the government considers that these efforts have not been enough to solve the problem.

Minister Budi has planned several other policies, but before they can be implemented the law must first change. For example, the Academic-Based Health System programme enables hospitals to organize specialist medical education and then revise procedures for the registration and licensing of doctors, including for doctors from Indonesia who graduated abroad and foreign doctors.

President Joko Widodo said that foreign exchange outflows for health services reached more than IDR 110-trillion (approx. USD 7.3-billion) every year. This is because many Indonesians choose to seek treatment abroad.

D-Insights understands that the policy plan is inseparable from the government’s plan to attract foreign investment in the health sector, which anticipates the collaboration of foreign and local investors in the Special Economic Zones (SEZ) for the health sector. Last year, the government launched a health and tourism SEZ in Sanur, Bali. A similar SEZ is also being prepared in Batam.

The ratio of doctors to Indonesia’s population is still below the standard set by the World Health Organization (WHO.) According to World Bank data, Indonesia has a ratio of just 0.4-doctors per 1,000-population, while the minimum standard is 1 per 1,000. This ranks Indonesia as the second lowest in Southeast Asia.

The ratio of specialist doctors to the Indonesian population is even lower. According to the Ministry of Health, there are a total of 54,190-specialists in Indonesia. This means there are only 0.2-medical specialists per 1,000-residents. The government targets a minimum ratio of 0.28-medical specialists per 1,000-residents, which means there is a shortage of 18,752-specialist doctors.

The most significant shortage was for obstetricians, gynaecologists, paediatricians, and internists. Specifically, there is a shortage of 3,941-obstetricians, 3,662-paediatricians, and 2,581-internists.

If analysed per region, Jakarta has 10,137-specialist doctors, the most compared to other provinces. This makes the ratio of specialist doctors in Jakarta 0.78 specialists per 1,000-population, say D-Insights.

Outside Jakarta, the ratio is less than half. Several provinces recorded a ratio of fewer than 0.1 specialists per 1,000-population, for example in East Nusa Tenggara, West Nusa Tenggara, Papua, West Papua, Maluku, North Maluku, Southeast Sulawesi, Central Sulawesi, West Sulawesi, West Kalimantan, and Bengkulu.

D-Insights suggest this is the root of the problem. According to the Ministry of Health, only 20 out of 92 medical faculties have specialist medical education programmes in Indonesia. Nearly 70-percent of the total specialist graduates come from universities in Java, and many of them are reluctant to work outside Java. Meanwhile, according to IDI, specialists are reluctant to work outside Jakarta because of limited facilities and infrastructure, limited medical devices and medicines, uncertainty about incentives, limited facilities and jobs for their families, and uncertainty about career paths.

Without changing the mechanism and regulations, the Ministry of Health estimates it will take anywhere from seven to 36-years to reach the target number of specialist doctors.

D-Insights go on to provide some deeper understanding of the politics of the issue that need to be addressed by looking at three key areas.

1. The Power of Professional Organizations

Minister Budi stated that he had no authority in health workers’ management. The power of the Minister of Health is very limited in medical practice. Medical Practice Law gives professional organizations; the Indonesian Doctors’ Association (IDI) and the Indonesian Dentists’ Association (PDGI), a significant role.

In Indonesia, the function of managing, assigning, and mentoring doctors and dentists is in the hands of the Medical Council. The council is in charge of registering doctors, setting standards for medical education, and coaching/ mentoring doctors. The council is directly responsible to the president, write D-Insights.

The council consists of 17-representatives from professional organizations of doctors and dentists, medical colleges (medical specialization bodies formed by professional organizations), educational institutions, hospital associations, community leaders, the Ministry of Health, and the Ministry of Education.

The major role of professional organizations can be seen in the council members’ selection process. The list of candidate members is proposed by the minister to be appointed by the president. However, the candidate must come from organizations and associations. However, there are only two professional organizations according to the Medical Practice Law, i.e. IDI and PDGI.

The Medical Council coordinates with professional organizations on various matters. For example, every doctor must attend medical education and training organized by professional organizations and institutions accredited by professional organizations. Then, for a doctor to obtain a license to practice, a recommendation from a professional organization is required in addition to a registration certificate and the detail about the health facility where they will serve.

Professional organizations also have an important role in the Indonesian Medical Discipline Honorary Council, an autonomous body from the Medical Council, which takes care of disciplinary enforcement. Of the nine members, six of them are doctors from professional organizations, (two of which are doctors representing hospital associations,) and three are law graduates. Again, members of the Honorary Council were appointed by the minister at the suggestion of a professional organization.

The major role of professional organizations in medical affairs in Indonesia is questionable; “they are the ones who run it, the ones who regulate it, and the ones who supervise it,” report D-Insights.

Referring to the statements of Minister Budi and his deputy, Dante Saksono Harbuwono, the plan is to strengthen the role of the government, especially the Ministry of Health, and significantly reduce the role of professional organizations.

In the circulating document, which is said to be a draft law on health and is suspected of having been drafted by the government, the council will be responsible to the Minister of Health, no longer directly to the President. Council members cannot come from professional organizations and doctors are encouraged to form various professional organizations. No doubt, in its protest against the bill in the health sector, IDI alluded to the issue of IDI’s marginalization and disintegration.

2. Becoming a Specialist Doctor 

D-Insights say that becoming a specialist takes a long time and a lot of money. Medical education starts from the undergraduate level, which takes anywhere from 6 to 7-years. Meanwhile, the title of a doctor can only be obtained after someone has passed a competency test. A doctor can join the Specialist Medical Education Programme (PPDS) after practicing for at least a year, which means the process of becoming a specialist doctor takes more than ten years.

In Indonesia, medical studies are notoriously expensive. Hundreds of millions of rupiah are needed from the beginning of college to graduating from a specialist programme.

Competition to get into a specialist programme is also challenging because the quota for programmes is very limited. In a report by, a specialist who practices in East Java tells how doctors need extra effort to get this opportunity.

According to her, to have a high chance of being accepted into a specialist programme, doctors need to have a letter of recommendation, whether it’s from a high official at a hospital, a university lecturer, or a regional official because this letter of recommendation is often the final determining factor. “If the score is the same, then the one who passes is the one with a letter of recommendation. Sometimes, mediocre doctors can get seats, thanks to the letter of recommendation,” she said.

When undergoing a specialist programme, the doctor must spend time in the hospital or be a resident doctor for between 4 to 6-years. Resident doctors can spend anywhere from 60 to 80-unpaid hours a week in the hospital.

A specialist in heart disease, Erta Priadi Wirawijaya, said that the high cost of education and the non-payment of resident doctors make specialist programmes unaffordable for most Indonesians. “Many doctors are smart but are reluctant to register as specialists because they are financially incapable,” Erta told

The challenge of becoming a specialist can be tougher for some doctors. According to Minister Budi, there were reports of bullying by senior doctors at the hospital and failure to obtain a license to practice because senior doctors refused to provide recommendation letters without clear reasons, say D-Insights. For Minister Budi, this report adds reasons for the government to overhaul the existing related regulations. Responding to these reports, IDI stated that ethical sanctions exist for these problems.

3. More Special Economic Zones (KEK) Coming

The government wants to attract investment in the health sector by opening related Special Economic Zones (SEZ.) There is already an SEZ in the health and tourism sector in Sanur, Bali, with a planned land area of 41-hectares managed by the state-owned hotel company PT Hotel Indonesia Natour.

This land is intended for health business facilities (hospitals and clinics), hotels and MICE, Ethnomedicinal Botanic Gardens, and Commercial Centers. Currently, there is an investment commitment from PT Pertamina Bina Medika (IHC) for the construction of an international hospital in collaboration with the Mayo Clinic, a non-profit medical center in the United States, say D-Insights.

Meanwhile, the Batam Free Trade and Port Zone Concession Agency (BP Batam) is preparing an SEZ in the health sector on a 44.5-hectare land in Sekupang, Batam. The investment value for developing this SEZ is estimated at USD 215-million (approx. IDR 3.3-trillion.) This SEZ will be developed in collaboration between Singaporean and local investors and will be used as a center for health facilities, fitness tourism, health research facilities, pharmaceutical and medical device business representative offices, and others.

D-Insights understands that to support the opening of SEZs in the health sector, the government needs to relax doctor registration and licensing to meet the demand for doctors, including foreign doctors. Management at a health investment company told D-Insights, currently, it is almost impossible for foreign doctors to work in Indonesia. The widely anticipated Omnibus Law in the Health Sector is expected to address this issue.

Based on other information obtained by D-Insights, investors in the health sector are also looking for opportunities to develop health services in big cities across Indonesia because that is where the demand for health services is greatest.

Source: D-Insights

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