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Health Care Financing Reform in Ethiopia: Improving Quality and Equity

Ethiopia endorsed a health care financing strategy in 1998 that envisioned a wide range of reform initiatives. The implementation of these reform initiatives was legalized through regional legislations and operationalized in line with prototype implementation frameworks that were modified and aligned within specific regional contexts.

In 2004, actual implementation was initiated in Amhara, Oromia, and Southern Nations, Nationalities, and People (SNNP) Regional States following ratification and endorsement of regional proclamations, regulations, and directives by the respective regional councils (Parliaments), regional executive Councils (Cabinets), and Regional Health Bureaus (RHBs). Currently, the reforms have expanded to the remaining regions, with the exception of Afar and Somali, which are still in the process of endorsing legal and operational frameworks. All other regions (Tigray, Benshangul- Gumuz, Gambella, Harari, Addis Ababa, and Dire Dawa) have already begun implementation.

The strategy recognized that health care should be financed through multiple financing mechanisms to ensure long-range sustainability. The reforms introduced include implementing revenue retention and use at health facility level, systematizing a fee-waiver system for the poor, standardizing exemption services, setting and revising user fees, introducing a private wing in public hospitals, outsourcing nonclinical services, and promoting health facility autonomy through the introduction of a governance system.

The purpose of this background paper is to provide a glimpse of these reforms, the major progress and achievements made through their implementation, and the role of USAID’s continued technical and financial support in implementation of these reforms and related results.
Author: Hailu Zelelew
Published: Mar 1 2012