The effect of a public health card program on the supply of health care

The supply-side responsiveness to public programs targeted to consumers is not widely studied. However, it is unlikely that supply variables remain constant, particularly when their link to the demand initiative is weak. The aim of this study is to provide such analysis, using the experience of the Indonesian health card program, which is a demand-sided program. Without an increase in staff or an appropriate salary revision, the salary payment system of the public sector may not adequately reward the existing health workers, lowering their incentives to maintain their public position. Using data from the Indonesian Family Life Surveys on public health centres, the leading providers of outpatient services in the public sector, this study found some evidence that the health card program resulted in a reduction in the number of full-time GPs working in these facilities. Other conditions not related to workers' compensation, such as infrastructure conditions and registration fees, were not adversely affected. Identification of this program's effect is achieved by variations in time and the intensity of health card distribution across communities. The findings highlight the importance of public policy management in general, and sheds light on physicians' behaviour in developing countries, about which we know very little.