Analyzing the impact of public health insurance claims and government health expenditure on Indonesia's economy

Abstract

This study contains various discussions related to the impact of government spending in the health sector, as well as the impact of public health insurance claim costs on economic growth in Indonesia during the period 2014 - 2023. Therefore, in conducting various analyses on short-term and long-term relationships related to these variables, an approach called Auto-Regressive Distributed Lag (ARDL) is needed. In addition, as a control variable applied to the urban population and the Consumer Price Index (CPI), this variable is used with the aim of separating the various influences of independent variables related to economic growth in Indonesia. The results show that public health insurance claims have a positive and significant impact on GDP per capita and Real GDP in the short and long run. This indicates that increased access to health services through BPJS Kesehatan contributes to increased labor productivity, which in turn boosts real economic growth. Government health expenditure does not show a significant effect on GDP per capita, either in the short or long run. This suggests that government health spending may not have been managed effectively to make a strong contribution to sustainable economic growth. This finding emphasizes the importance of improvements in the allocation and efficiency of health spending to support economic growth. Control variables such as urban population and CPI also play an important role in this analysis. Urbanization impact on GDP per capita is more variable, with potential negative impacts in the short term due to pressure on infrastructure and public services. Inflation, as measured by the CPI, has a significant impact in the short term on GDP per capita but the effect does not persist in the long term, highlighting the need for prudent inflation management to maintain economic stability. Overall, this study concludes that improving access and efficiency of health insurance claims through BPJS Kesehatan can be a key driver of economic growth in Indonesia, particularly through improving labor productivity and individual welfare. However, to achieve sustainable economic growth, more comprehensive policies are needed, including reforms in the management of government health spending, better management of urbanization, and effective inflation control. The findings provide important insights for policymakers in formulating more effective and sustainable economic strategies.