The Implications of National Health Insurance on District Public Hospitals Performance: Financial Analysis

The 2014 implementation of National Health Insurance (NHI) in Indonesia transformed most hospital payment systems from fee-for-service into prospective payment systems based on Indonesian Case Base Groups (INA-CBG's) Due to this change, hospital management groups should focus on integrated strategies to minimize cost, eliminate waste, and improve business process efficiency which referred to clinical pathways as the standard of professional services. The purpose of this study is to determine the effect of NHI on financial performance and hospital base rate (HBR) of district public hospitals. In order to conduct financial analysis, this study utilizes financial reports from2012-2015 in two type C public hospitals in Sukabumi. From 2012-2015, there was an increase in both total and current assets, primarily in cash and cash equivalents, which increased significantly after NHI implementation in 2014. Liabilities also increased during this period. Hospital revenues increased while revenues from the regional government budget or “Anggaran Pendapatan dan Belanja Daerah (APBD)� decreased following NHI implementation. Expenses increased also, but at a lower rate than other increases. Given financial ratios, overall hospital performance improved following NHI implementation.