Why health and development economics?

Having studied economics as an undergraduate at the University of Indonesia, I learned how people respond to incentives in making their personal choices. That includes choices in fertility preference, health behavior and risky decision (ranging from dietary to sexual behaviors). Then, having a Master’s degree in Public Administration/International Development from Harvard, I learned further that privately optimal decisions may not be socially optimal. In the context of developing world, this situation is translated in underinvestment in human capital (too many children, lack of nutrition and education).

My professional experiences have facilitated me to understand more about public health problems in the developing countries through empirical works. Before coming to Harvard, I worked as an economic researcher in an Indonesian research institute. I focused on poverty, income distribution and social policy issues. After receiving my Master’s degree, I worked for the Poverty team in the Indonesian office of the World Bank. I have never specifically focused on health policy issues. But I found close relations between income poverty and poor health conditions. Poor people are lacking of access to basic health services, clean water and sanitation; and poor health results in low productivity which in the end leads to poverty.

Finally, being a parent of a one-year old baby girl means a real world application of the theories about health decisions: from immunization and nutrition decision to household decision making (how my wife and I bargain on who do the babysitting or how to raise her), and changing pattern of household spending (given the same level of income we should sacrifice our expenses for movies, coffees and dinner out). For the next few years, she will be my own ‘real world (but non-random) experiment.’

This particular question especially motivates me to do Ph.D. research in health and development economics: how to improve the quality and accessibility of health care for poor people in developing countries. It is a challenging as well as interesting issue, as it lies on the intersection of economics, health, demography and public policy in the context of economic development, particularly in Indonesia where I am most familiar with.

Quality and accessibility of health care is one big problem in a developing country like Indonesia. The country’s maternal mortality rate is three times that of Vietnam and six times of China and Malaysia, with 28 percent of births are accompanied by unskilled or traditional birth attendants. Malnutrition rates are also high. About a quarter of children under five are malnourished. On the other hand, although public health spending has been increasing, it is getting les pro-poor. Forty percent of health budget is allocated to subsidies for government hospitals (secondary care). However, most of the Indonesia poor do not use hospitals but go to primary care (community health care, midwives, immunization or village nutrition centers).

Reforming the country’s health care system should achieve two big goals: i) providing greater public investment for primary health care which are used mainly by the poor, and ii) increasing the utilization of secondary healthcare among the poor. To achieve the goals, three policy area should be prioritized. First, increase the budget for, as well as improve the quality and targeting of, primary healthcare provision. That includes also tackling the absenteeism problem among paramedics. Second, invest in demand-side activities that increase the access of the poor to secondary care, through schemes such as health card. And third, invest in the training of private paramedics and subsidize them through voucher schemes, especially in rural areas where the poor have little access to services.