JAKARTA - The health sector is undergoing a significant transformation, with changes to the scheme and tariffs of the Social Security Administration for Health (BPJS) and private health services.

The transformation, according to a report by PT Ina Sekuritas Indonesia, has also been supported by the Omnibus Health Law passed in July 2023. Through this regulation, the government aims to increase the availability of doctors and access to health services.

Amidst the transformation of the health sector, BPJS is still recording a monthly deficit. However, Ina Sekuritas estimates that this deficit can still be overcome by the cumulative surplus until the middle of this year, following changes in the BPJS contribution scheme.

In addition, the INA-CBG (Indonesian Case Base Groups) tariff adjustment made by the government is predicted to support the sustainability of BPJS Kesehatan. This adjustment is even considered to provide support to hospitals to expand BPJS services.

Hospital management companies such as PT Mitra Keluarga Karyasehat Tbk (MIKA) have recently increased their inpatient capacity. MIKA has also prepared the groundbreaking of 2 new hospitals that will open in 2025.

Meanwhile, PT Medikaloka Hermina Tbk (HEAL) is expected to outperform MIKA, with higher BPJS Health contributions. As of September 2024, HEAL estimates that more than 70% of patients use BPJS Health services.

‘The outlook for the hospital sector in fiscal year 2025 remains positive, supported by continued expansion and focus on the main advantages of each issuer,’ said Ina Sekuritas, in its research report.

With these considerations and prospects, Ina Sekuritas recommends Buy for MIKA shares, with a target price of IDR 2,760. Meanwhile, HEAL shares received a Neutral recommendation due to its attractive valuation. (KR/LM)

Check out the full report here!