Journal of International Oral Health

: 2021  |  Volume : 13  |  Issue : 3  |  Page : 274--280

Adequacy of dental capitation payment at community health centers in the implementation of Indonesian National Health Insurance

Iwan Dewanto1, Sittichai Koontongkaew2, Niken Widyanti1,  
1 School of Dentistry, Faculty of Medical and Health Science, University Muhammadiyah Yogyakarta, Bantul, Indonesia
2 Faculty Dentistry, Thammasat University Thailand, Bangkok, Thailand

Correspondence Address:
Dr. Iwan Dewanto
School of Dentistry, Faculty of Medical and Health Science, University Muhammadiyah Yogyakarta


Aim: Managed care is considered a cost-control measure to prevent skyrocketing health-care expenditure. The Indonesian government launched National Health Insurance (NHI) at the beginning of 2014, with financial management for dental services that differs based on whether a fee-for-service or capitation scheme is used. This difference in financial schemes may financially affect community health centers (CHCs) that implement NHI. The aim was to compare the adequacy of funds for CHCs based on fee-for-service and capitation revenue in the implementation of Indonesian NHI for dental services. Materials and Methods: This is an observational study with a retrospective research design. Fee-for-service and capitation revenue data were obtained from NHI participants’ dental records at selected CHCs in Yogyakarta Province. The unit analysis included dental services data from January 2014 until December 2014 collected from 30 CHCs selected from rural, suburban, and urban areas. Purposive sampling was used to define the CHC included in the research. Results: The utilization rate and the number of participants affected the adequacy of financial revenue at each CHC sampled. Rural and urban areas had statistically significant differences (independent t-test, P < 0.05) between their fee-for-service and capitation revenues. Only the CHCs in suburban areas exhibited no significant difference in their fee-for-service and capitation revenues (P > 0.05). Conclusions: The capitation funding scheme for dental treatments in the Indonesian NHI can sufficiently provide a benefit package of eight dental treatments in rural and suburban areas, but not in urban areas.

How to cite this article:
Dewanto I, Koontongkaew S, Widyanti N. Adequacy of dental capitation payment at community health centers in the implementation of Indonesian National Health Insurance.J Int Oral Health 2021;13:274-280

How to cite this URL:
Dewanto I, Koontongkaew S, Widyanti N. Adequacy of dental capitation payment at community health centers in the implementation of Indonesian National Health Insurance. J Int Oral Health [serial online] 2021 [cited 2021 Dec 3 ];13:274-280
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CHCs across the country are benefiting from state-led value-based payment models. The CHCs had embraced activities that moved away from the traditional fee-for-service payment system. This payment system rewarded the volume of services provided to models that provided high-quality, cost-effective care. The CHC has faced the risk of a financial deficit, changes in the health insurance reimbursement system, and the increasing number of patients to be served by health centers; it is expected to provide better health outcomes for CHC service users and health insurance participants.[1] The World Health Organization (WHO) has called on governments to move toward a universal health coverage and a managed care policy system.[2] Such commitment requires that everyone receives the health services they need, without exposure to financial hardship. In China, a study shows that out-of-pocket payments for dental care may place a considerable and unnecessary burden on household finances.[3]

The NHI program was implemented in Indonesia on 1 January 2014. The NHI planned that by the year 2019, universal coverage would reach all Indonesians.[4] The Indonesian public sector is financed by a mixture of public funds and user fees, which are kept affordable for all people.[5] The Indonesian CHCs are the place for implementing, monitoring, and reporting government programs; this also includes an obligation for dentists as public service providers.[6] The Indonesian government provides dental equipment and materials at CHC, but availability depends on the budget allocated by the local government. Therefore, there are variations between the equipment available in urban, suburban, and rural areas.[7]

Before the Indonesian NHI scheme was launched, the system of financing oral health services was based on fee-for-service or out-of-pocket[8],[9]; thus, patients paid for dental and oral health services when they received treatment from a dentist. The Indonesian NHI implements a managed care capitation. Managed care is considered a cost-control measure to prevent skyrocketing health-care expenditure in Indonesia. The CHC as primary care providers, in particular, are placed in the position of gatekeepers whose responsibilities include cost containment as well as patient care.[10] It is hoped that, under the capitation scheme, primary dentists at CHCs will reduce the use of costly curative procedures (services that need the largest resources).[11] The geographical condition in Indonesia and the budget for dental services might lead to financial problems at CHCs in the implementation of the NHI.

The capitation for oral health determined by the Indonesian government following the Minister of Health Decree No. 69 of 2013 was 2,000 rupiahs or $0.13 per person per month.[12] The government policy stipulates that the oral health care capitation covers eight dental treatments: consultation, premedication, extraction of primary teeth, extraction of permanent teeth, filling with glass ionomer cement, filling with resin composite, emergency dental care, and scaling once per year. The Indonesian Dental Association (IDA) mandates each provider, including CHCs, to have a total membership of 10,000 in a region, to allow a cross-subsidization process for the financing of dental and oral health.[13] Primary dentists at CHC receive some of the money that is raised from capitation, which will be as much as $0.13 (in dollar currency) multiplied by 10,000 for the covered population per participant. The CHC revenues from this capitation scheme are used for dental services for the participants who need dental treatments. The participant’s visitation is recorded as utilization rate. The utilization rate is a percentage that describes the occurrence of visits to the dentist by participants for a particular type of dental care treatment at the visit presented as a monthly average.[14] The capitation system in primary dentistry at CHCs is based on risk and profit-sharing, which means that the healthier the community’s participants, the higher the income for the dentist.[15] Financial management for dental services differs according to whether there is a fee for the service or a capitation. The capitation system provides money upfront (a prospective payment system); thus, it requires a detailed budget that can be created from a budgeting plan tailored to the concept of primary care. The capitation budgeting pattern requires a conceptual framework adapted to the particular region.[16]

In Indonesia, the local health districts have a particular policy for the pricing of dental treatments that should be implemented in each CHC. A local health district subsidizes health and dental costs for the CHCs. The policy for health subsidies is different in each local health district, depending on the district’s economy and health budget. The prices determined by the local health districts in suburban areas are higher than those in other areas. The pricing of dental treatments in each type of area, as defined by the local health districts, is shown in [Table 1].{Table 1}

Based on the local health district’s particular policy, a portion of the income for a CHC is received by the dental clinic of the CHC every month from the fee-for-service/ out-of-pocket funding scheme. This income model was implemented before the NHI, and it will be managed by the CHC and local health districts to maintain health services. Perhaps, this CHC income from fee-for-service/ out-of-pocket should be compared with capitation income during NHI implementation. The difference in financial schemes in the implementation of NHI can affect the financial condition of a CHC. Precise calculations are needed for an overview of the financial risks of the CHC based on capitation or fee-for-service financial schemes. This will provide a clear picture of the advantages and disadvantages of implementing capitation financing in the NHI compared with fee-for-service. Therefore, this study aims at comparing the adequacy of CHC funds based on fee-for-service revenue and capitation revenue in the administration of the Indonesian NHI for dental care. Insights from this study can provide policyholders an overview of Indonesia’s health financing system in implementing the NHI.

 Materials and Methods

This is an observational study with a retrospective research design. The data analyzed were quantitative. Fee-for-service and capitation revenue data were obtained from NHI participants’ dental records at selected CHCs in Yogyakarta Province. The study population included 121 dental clinics of CHCs in Yogyakarta Province. The study was divided into a rural area (Gunung Kidul district) with 30 CHCs, a suburban area (Bantul district or Kulonprogo district) with 48 CHCs, and urban areas (Yogyakarta Municipality and Sleman district) with 43 CHCs.

A total of 30 CHC was determined as a sub-subject in this study which was obtained from 25% of the total number of CHC (121 CHC). The selection of CHCs in each area was proportional for rural, suburban, and urban areas. Proportional sampling was used to select the CHCs in each area, as follows:




Therefore, the study included seven CHCs for rural areas, 13 CHCs for suburban areas, and 10 CHCs for urban areas. Purposive sampling was used to define the specifics required in CHCs to conduct this research. The inclusion criteria were having a cooperation agreement with the NHI body Badan Pelaksana JaminanSosial (BPJS) for at least one year, having obvious territorial authority in the implementation of NHI based on a cooperation agreement, having complete dental equipment in accordance with the benefit package, and willingness to cooperate. The CHC`s dental clinics that did not have the criteria just cited were excluded.

Observations were made by collecting data from dental records to describe the performance of dental services performed since the beginning of Indonesian NHI, from January 2014 until December 2014, in selected CHCs. The study obtained ethical clearance from the Medical Board of Ethics of the Muhammadiyah University of Yogyakarta. This clearance is given for research in Indonesia that is beneficial, nonmaleficent, just, and autonomous. All CHCs selected in this study obtained permission from the licensing agency according to the bureaucracy in the research area.

Study setup

The fee-for-service revenue data were collected from dental records, and they were defined as the utilization of eight dental treatments multiplied by the price determined by the local health district in each area [Table 1]. The capitation revenue was defined as the total number of the participants of NHI in each CHC multiplied by $0.13 (determined by the Minister of Health Decree No. 69 of 2013). The total number of the participants in the NHI system in the selected CHCs was obtained from the Social Security Implementation Body (the BPJS) data in the year 2014 (secondary data).

Dental records were observed to determine the dental treatments for the eight-benefit package of NHI. The dental treatments in the benefits package are derived from general dentist practice guidelines that are regulated by the Regulation of the Minister of Health of the Republic of Indonesia. The dental treatments as a benefits package are consultation, premedication, extraction for primary teeth, extraction for permanent teeth, filling with glass Ionomer cement, filling with resin composite, emergency dental care, and scaling for one time in a year (once per year); these were coded by specific numbers. The software tools for the medical record observations to be used by the surveyor were set up. Microsoft Excel software was used for easier data collection and minimum errors.

Statistical analysis

The fee-for-service revenue from each CHC was compared with the capitation revenue in each CHC. Fee-for-service revenue was also compared with capitation revenue among rural, suburban, and urban areas. SPSS 25 was used for statistical analysis, and the data collected were analyzed by using an independent t-test. The data analysis process is presented in [Table 2].{Table 2}


The analysis of the capitation revenue for each CHC in the Yogyakarta Province in this study showed that the average income in a year was $24847 for rural areas (7 CHCs), $27216 for suburban areas (13 CHCs), and $15042 for urban areas (10 CHCs). This shows that CHCs in urban areas have less income in a year than other areas, indicating that the number of participants in the CHC was not similar in each area. The number of participants in the suburban area and rural area was higher than in the urban area. The average number of participants in a year was 191132 people in rural areas, 209350 people in suburban areas, and 115712 people in urban areas.

The number of dental visits was 5829 visits in rural areas, 12327 visits in suburban areas, and 8939 visits in urban areas. The utilization of the eight dental treatments (benefit package) is presented in [Table 3]. Although the number of premedication treatments was the highest, the study found different results for dental treatments in rural areas compared with those in the suburban and urban areas, in terms of consultations, extractions of primary teeth, fillings, and emergency dental care. In rural areas, the numbers of consultations (1139) and extractions of primary teeth (1074) were lower than the numbers of those treatments in suburban areas (1929 and 1402, respectively) and they were higher than the numbers in urban areas (1065 and 1041, respectively) [Table 3].{Table 3}

Dental revenue from fee-for-service/ out-of-pocket scheme for each area (urban, suburban, or rural areas), according to the local district policy for fees for each dental treatment, was derived from the number of visits for the eight dental treatments in the benefit package in each area multiplied by the price of each of these dental treatments in that area [Table 1].

In the rural areas, the number of visits to the dentist was the lowest among the three areas. The suburban areas, however, had the highest number of visits to the dentist and utilization rate. This circumstance seemed to have an impact on the dental revenue based on fee-for-service/out-of-pocket funding scheme in suburban areas, rendering it the area with the highest revenue. In the urban areas, the number of dental visits was 8939. The area had the lowest number of participants. This circumstance seemed to increase the revenue of fee-for-service/ out-of-pocket scheme in urban areas; thus, in these areas, capitation revenue may not be a suitable scheme to implement the NHI.

In both the rural and urban areas, there were statistically significant differences between the fee-for-service and capitation revenues (P < 0.05). No significant difference between fee-for-service and capitation revenue was found in the suburban areas (P > 0.05) [Table 4]. In the rural areas, income from dental care in 2014 under a fee-for-service/out-of-pocket scheme was $6141 and income under the capitation scheme was $24,847. Based on these calculations, it can be assumed that rural CHCs received sufficient funds through the capitation financing scheme compared with the fee-for-service income scheme. Using the capitation financing scheme, the CHCs in the rural areas had an income of $18,706 more than with the fee-for-service scheme [Table 5].{Table 4} {Table 5}

In the suburban area, the dental revenue calculation from fee-for-service/ out-of-pocket scheme on dental treatments in the suburban areas was $23430, whereas the capitation revenue was $27,216. Based on this result, it can be assumed that the CHCs in suburban areas had an excess income difference of $3786 with the capitation scheme. The suburban areas revenue was not as high as the rural areas, but the suburban areas still had sufficient funding to implement the NHI system. In the urban areas, the dental revenue from fee-for-service/out-of-pocket scheme on dental treatments was $22,336, whereas the capitation revenue was $15,042. This indicates that CHCs in urban areas will have less revenue if they implement the capitation funding scheme.


This study found that participants in CHCs in the urban areas were more proactive in seeking treatment and more aware of the benefits of the NHI program. This finding is in line with evidence from other countries demonstrating that health insurance participants in urban areas are more likely to use health services than those in rural areas.[17] A large number of visits by health insurance participants in urban areas has the impact of increasing health costs; this is a loss if health financing uses a capitation financing scheme. This study showed that capitation revenue is not sufficient to cover the expenditure in the urban areas. Expressed in terms of health-care access and utilization, cost, and the geographic distribution of providers and services, there is usually a difference between urban and rural health care.[18]

In rural areas, the number of visits to dental services was the lowest compared with the other two areas. Further, the rural areas had more health insurance participants than the other areas, resulting in higher income than expenditure for CHCs in the rural areas. Fewer visits to dental services in rural CHCs were due to rural individuals having to travel long distances to obtain dental services than their urban counterparts.[19] This is compounded by the fact that rural people visit the dentist only if they feel pain or discomfort in their teeth. Overall, Indonesian Basic Health Research reported that the perception of the need for dental services and the utilization of dental care in the Indonesian society is still low, whereas the level of unmet dental needs is relatively high.[20] Although the suburban areas had the highest number of visits to dental services among the three regions, however, due to a large number of health insurance participants, this region had sufficient funds from the capitation scheme. This scenario was different in the urban areas, where there were also more dental visits but fewer health insurance participants. The high number of visits in the urban areas appears to be due to easy access to dental services, a wide choice of dental services, and better awareness of oral health. This condition dictated the revenue of the CHCs in the urban areas with the implementation of the capitation scheme. These findings indicate that the number of participants and visits in each region have an effect on revenue under the capitation scheme. We speculate that the capitation revenue was not sufficient to cover the expenditure in the urban areas, which may indicate the inadequacy of the capitation funding to deliver dental services through the implementation of the NHI system in urban areas of Yogyakarta Province. Thus, CHCs in the urban areas could be at some financial risk regarding funding.

Changes to health-care systems, such as a new payment scheme for dentistry, may have consequences at various levels: for patients, health-care providers (CHCs), and the society. The potential impact may concern different areas, such as the economy, care content, and further health-care development. It is of general interest to evaluate such changes to health-care systems from different perspectives.[21] Dental care financing ought to consider viewpoints such as patient payment and insurance remuneration. Hence, no binding conclusions can be drawn regarding the relationship between financial systems and health. It seems essential that this conceptual unclarity be improved in future studies.[9] The capitation funding is strongly influenced by the utilization (visit rate) of dental care and the type of benefit package offered by the health insurance, as well as the unit cost of each dental service. The pricing for dental care cannot be separated from local financial aspects, including the dental care costs prevailing in the region and the level of competitors’ prices in the area. Dental care costs vary among regions, and therefore the determination of the capitation amount might not produce an “equal” amount for each region. In calculating the capitation, accurate data on the utilization rate of the population covered by the dental health insurance will be needed. The utilization rate is influenced by the following: the characteristics of the population, the characteristics of the oral health care system, the benefit package that is offered, and the insurance policy.[15] This utilization will affect the expenditures of CHCs. Although spending for disease treatments included in the payment model remained unchanged after the reform implementation, costs of other treatments significantly increased, suggesting that unintended cost-shifting occurred.[22]

In fact, these financial conditions do not have significant implications for Indonesian CHCs, given that CHCs are a part of the public health services, and the capitation funding is not paid directly to the primary dentists at the CHC itself. The Indonesian government also provides the major dental equipment and material required by CHC, from its operational health budget (a separate budget), and not from capitation revenue. Therefore, primary dentists in CHCs are not at financial risk because of the capitation funding and expenditure: they are paid every month by salary. They have sufficient equipment and material, even if the capitation funding is limited. The government, instead, pays these dentists by using the same salary scheme as for civil servants. Pearce and colleagues studied whether medical staff at a CHC were familiar with the financing system involving fees-for-services and aware of the impending change to a capitation funding scheme.[23] The study found that the medical staff surveyed lack an understanding of the overall financing systems. It seems that many primary dentists do not yet understand the pattern of income capitation as an inhibiting factor. This raises concerns about the workload of primary dentists in CHCs in the urban areas; they seemed unconcerned about a shortage of capitation revenue, perhaps because their income is based on wages as government employees. Another survey showed that dentists were more concerned about potential increase in their workload with an increase in patients visiting the CHC.[7]

The utilization rate of dental treatments and the number of participants in each CHC affected the NHI financial funding scheme. A high dental visits rate and low number of participants pose a financial risk for NHI providers. The utilization rate and the number of participants affect the adequacy of financial revenue at each CHC. Based on the capitation revenue and the fee-for-service revenue on dental treatments, it can be concluded that the capitation funding scheme for dental treatments is sufficient to provide the eight dental treatments as the benefit package in the rural and suburban areas, but not in the urban areas.

One limitation of this study is the extent of the calculations employed to derive the conclusions: A more detailed calculation of financial adequacy in each region is needed. Thus, the expenditure data in each CHC needs to be determined in future studies. The findings from this study provide an overview of the financial strength of CHCs in Indonesia, indicating the need for a capitation financing scheme in the implementation of the Indonesian NHI.


The utilization rate and the number of participants in each CHC affect the capitation financial funding for the implementation of NHI. If the rate of dental visits is high and the number of participants is low, this will cause a financial risk for NHI providers. The capitation funding scheme for dental treatments in the Indonesian NHI can sufficiently provide a benefit package of eight dental treatments in rural and suburban areas, but not in urban areas.


The author would like to express great appreciation to Professor Sittichai and Profesor Niken for his valuable and constructive suggestions during the planning and development of this research work. Gratitude is also expressed to various people for their contribution to this publication, for the valuable technical support on this project rendered by the staff members at the Faculty of Dentistry, Thammasat University, the staff of the School of Dentistry, Medical Faculty and Health Science University Muhammadiyah Yogyakarta, and the local health district and CHCs at Yogyakarta Province.

Financial support and sponsorship

Granted by University Muhammadiyah Yogyakarta.

Conflict of interest

The author has declared that there are no competing interests.

Author contributions

SK guided the constructive suggestions for the design and criticism. NW provided an analysis of the findings. ID did the data collecting, analyzing, and writing the publication.

Ethical policy and institutional review board statement

The Ethics board from Medical Faculty and Health Science of Muhammadiyah University Yogyakarta has approved this research.

Patient declaration of consent

Not applicable.

Data availability statement

Raw data in this study were generated from the dental records at CHCs and are not publicly available. Restrictions apply to the availability of these data. The data that support the findings of this study are available from the corresponding author, on reasonable request.


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