With a portfolio of US$2.9 billion, leveraging a further US$2 billion from other partners (ADB, AIIB, IsDB, GFF, Gavi, Gates Foundation, Government of Australia), the World Bank Group (WBG) supports Indonesia’s health system transformation. Investments and technical assistance are successfully reducing tuberculosis cases and the stunting rate, strengthening national health insurance, upgrading health services, and benefitting the entire population while promoting equity and creating jobs.
Challenge
Indonesia faces a growing burden of non-communicable diseases (e.g., diabetes, heart disease, and cancer) that cause two-thirds of mortality. Additionally, infectious diseases (e.g., tuberculosis), maternal and child health conditions, under-five mortality (21 per 1,000 in 2023), and under-nutrition, continue to present challenges due partly to limited healthcare access.
The government has embarked on ambitious investments and reforms – including through free-of-charge annual health check-ups, intensified efforts to combat tuberculosis, and support to the private sector – to expand quality health services across the country’s over 6,000 inhabited islands, while reducing the financial burden on households through its national health insurance scheme, one of the world’s largest in terms of coverage.
Solution
The World Bank Group mobilizes technical assistance, knowledge partnerships, large-scale financing and private sector investments to help Indonesia achieve its health goals -- raising the Universal Health Coverage (UHC) Service Coverage Index from 55 in 2025 to 62 by 2030 and reducing household out-of-pocket spending. The $2.9 billion WBG financing has leveraged an additional $2 billion in co-financing from the Asian Development Bank, Asian Infrastructure Investment Bank, and Islamic Development Bank, along with grants from Australia, the Global Fund, Gavi the Vaccine Alliance, and the Global Financing Facility. Paired with IFC investments in private healthcare companies, these resources underpin reforms and investments that amplify the impact of Indonesia’s substantial domestic public funding, strengthening service delivery, supply chains, and financial protection across the health system.
The World Bank Group has deployed multiple financing instruments, notably Program-for-Results and Investment Project Financing, while IFC financing has been critical to private sector investment and job-creation. The program is grounded in advanced technical work supported by the co-financiers and partners, including Australia, the Gates Foundation, and Indonesia’s Tanoto Foundation.
Result
- The Program for Strengthening Tuberculosis (TB) Response achieved 78 percent treatment coverage and 84 percent treatment success by end-2024, exceeding national targets.
- The Investing in Nutrition and Early Years Program (phase I and phase II) helped cut under-five stunting from approximately 31 percent to 20 percent between 2018 and2024. Services now reach 9 million children and pregnant women.
- The Health Systems Strengthening (HSS) project is deploying 419 Catheterization laboratories to expand access to life-saving cardiac care nationwide; a reduction in MRI wait time in Malang, Central Java, from 6 months to under 3 months; and the delivering of 89 ultrasounds machines to rural Papua, enabling expectant mothers to see their developing babies for the first time. Over 6,700 pieces of equipment have been delivered to over 4,000 primary care centers, contributing to an 8 percent annual increase in outpatient consultations. The project is also delivering unprecedented cost savings, averaging 52% -- equivalent to US$550 million saved against historical pricing across first 20 signed contracts. By 2029, the HSS project is expected to upgrade care across 360,000 health facilities, 180 public laboratories, and 560 hospitals, benefiting Indonesia’s entire population of 284 million.
- By 2025, the Health Insurance Reforms and Results Program significantly expanded access and quality of care: health service utilization grew from 378 million visits (2020) to 686 million (2024), reaching over 99 million beneficiaries, while out-of-pocket spending dropped from 45 to 31 percent of total health spending, easing financial hardship for low-income households. Member satisfaction rose from 82 to 92 percent, supported by clinical decision support tools deployed in 80 percent of primary health facilities, and reformed payment mechanisms rolled out in 95 percent of hospitals.
- IFC’s portfolio companies support the strengthening of Indonesia’s healthcare system by supplying quality, affordable medicines and equipment to more than 90% of public and private hospitals and pharmacies across the country.
Contribution to WBG Targets and Jobs
The World Bank Group is investing in national priorities, including eradicating tuberculosis, reducing stunting, strengthening health service delivery, expanding access to pharmaceuticals and medical equipment, and reforming health financing. These efforts contribute to the World Bank Group’s global objective to provide quality health care and financial protection to 1.5 billion people. The program also advances the HealthWorks agenda by strengthening human capital and productivity, creating jobs in health and related sectors, and supporting domestic biomedical engineering and manufacturing. The World Bank Group is contributing to the health sector’s impact on economic growth and jobs, as each additional 1 rupiah of demand in the health sector generates 2 to 3.2 rupiah in output across the economy, underpinning approximately 5 million direct and indirect jobs.
Beneficiaries
Lessons Learned
A key lesson is the need to match the government’s ambitions with the scale and scope of World Bank support - both financial and technical. Given Indonesia’s complex geography and its status as the world’s fourth most populous country, the nation’s bold health agenda can only succeed with large-scale technical assistance, resource mobilization, and innovation (such as on multi-sectoral action to prevent stunting, engagement with the private sector and economies of scale on pooled procurement of medical devices, and on health service purchasing reforms to improve sustainability of social health insurance). Collaboration with partners and the private sector through investments, co-financing, technical work, knowledge sharing, and policy dialogue has been critical. Together, these efforts are driving systemic improvements to expand quality health services - without imposing financial burdens on households --for hundreds of millions of Indonesians.
Next Steps
The World Bank Group will continue supporting Indonesia’s ambitious health reform agenda as described in its 2025 National Health Compact, contributing to the Health Works campaign and the global goal of expanding quality health services to 1.5 billion people. Building on progress to date, the World Bank Group will sustain support for universal health coverage, the jobs agenda, and human capital development through innovative financing, scaled-up private sector engagement, and stronger service delivery systems.
Related Health Projects in Indonesia
- Indonesia Health Systems Strengthening (HSS) Project
- National Health Insurance (JKN) Reforms and Results Program
- Investing in Nutrition and Early Years (INEY) Phase 2
- Strengthening National Tuberculosis (TB) Response Program
- Indonesia Supporting Health Transformation (I-SEHAT) Project
- BBraun Indonesia Investment Project
- IDS Medical Systems Group Investment Project
- Brightgene Bio Medical Technology Investment Project
- Tawada Healthcare Investment Project
- Medela Potentia Investment Project