The Distribution of Subsidies through Public Health Services

Indonesia has made great progress during the past fifteen years in enhancing the com-mand of the poor over privately provided goods, such as food, clothing, and housing. Has similar progress been made in improving their access to publicly provided social services? The article looks at how the use of health services and the incidence of subsidies in the health sector varied across socioeconomic groups in Indonesia in 1987. It also examines how the distributions of utilization and subsidies altered between 1978 and 1987. The findings indicate that changes in utilization patterns and in the incidence of subsidies have been pro-poor. Disparities in access and utilization have diminished. However, public spending on health care is not yet well targeted. There is an emerging consensus that poverty reduction and human development call for the expansion of access to certain publicly provided social services, such as basic education and health care.1 Both privately and publicly provided goods and services matter for well-being. But increasing concern about this role of the public sector raises the issue of how the benefits of public spending are distributed. Many public services are publicly provided private goods, and for them, utilization is the key determinant of benefits derived. Measuring utilization clearly requires going beyond aggregate social indicators such as infant mortality rates. Household-level data sets reveal how the utilization of, for example, public health services varies with other aspects of living standards, such as consumption of private goods, and with other relevant household characteris-tics, such as urban or rural location and region of residence. Patterns of utilization incidence are the outcome of the interlinkage of public sector inputs and household behavioral responses. At the household level, deci