MEASURING URBAN SELF-PAYERS’ WTP FOR THE JKN-KIS HEALTH INSURANCE: A CHOICE-BASED CONJOINT APPROACH
PRATIKTO, FRANSISCUS RIAN
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In this research, we estimate the willingness to pay (WTP) of urban self-payers for the Indonesian JKN-KIS health insurance plans. Unlike the employer-supported and the government-supported members, self-payers choose their insurance plan based on their preferences because they pay for it out of their pocket. Instead of using the popular contingent valuation method, we use the choice-based conjoint which is considered the best method for measuring preferences. An online survey was conducted to collect choice data using randomly generated questionnaires that are designed such that the options available to each respondent are balanced, orthogonal, and have minimal overlap. Individual preferences, which are represented by individual utility values, are estimated using the Bayesian method assuming a mixed multinomial logit model with the multivariate normal distribution. Individual choices are then predicted based on individual utilities using the randomized first choice simulation. The continuous and differentiable demand function for each plan is obtained by aggregating the choices across all respondents and interpolating the result using cubic splines. Based on the demand functions derived from the data of 228 respondents, it is estimated that under the current premium scheme, more than 95% of the urban self-payers will choose the first-class and the second-class plans with preference shares of 62.17% and 34.03%, respectively. We also found that respondents with chronic disease prefer the first-class plan and are willing to pay for it Rp8,483 per month higher, on average, than those without one. Another finding is that even by increasing the monthly premiums up to Rp250,000 for the first-class and Rp200,000 for the second class, the combined share of preference is still greater than 95%.