Health in Ethiopia - Health Care Financing

Health Care Financing

As it has been clearly indicated in the 4th National health Accounts (2010), health service in Ethiopia is primarily financed from 4 sources: the federal and regional governments; grants and loans from bilateral and multilateral donors; non-governmental organizations and private contributions. Although it has significantly improved over the years, health care financing remain a major challenge for the health care system of Ethiopia. Since HSDP III, a health care financing strategy was adopted by FMoH, mainly focusing on improving the efficiency of allocation and utilization of public health resources, mobilization of additional resources from international donors and health development partners, retention and utilization of user fee revenues at health facility level, introducing private wings in the public hospitals and, more importantly, an initiation in the development of risk sharing mechanisms in the form of public and community-based health insurances.

The objective of health care financing component of HSDPs center on the mobilization of increased resources to the health sector, promoting efficient allocation, effective expenditure for allocative equity and utilization of the available health resources, aimed at achieving a sustainable health care financing system. Since HSDP I, there have been a number of background studies on health care financing issues that have contributed to the introduction of reforms and strategies that were closely monitored and evaluated. Since the first HSDP, four National Health Accounts (NHA) have been conducted. A Proclamation on Health Service Delivery, Administration and Management including five regulations on all the components of the reform were drafted and endorsed. RHBs of Tigray, Amhara, Oromiya, Benishangul-Gumuz, SNNPR, and Addis Ababa translated most of the reforms into action. The reform components include: retention and utilization of revenue, administration of the fee waiver system and establishment of functioning facility governance bodies. Outsourcing of non-clinical services, establishment of private wing in health facilities and exemption of certain services have also been a part of the reform and on process of implementation at the national level.