Strengthening&& spending&for&primary&care& delivery&in&ethiopia&

Transcription

1 HARVARDSCHOOLOFPUBLICHEALTH Strengthening spendingforprimarycare deliveryinethiopia RapidAssessmentReport Carlyn'Mann,'Abebe'Alebachew,'and'Peter'Berman' 8/3/2013' Thisreportpresentstheresultsfromarapidassessmentofhowresourcesforprimary caredeliverymobilized,allocatedandusedinethiopia.

2 Table'of'Contents' Acronyms...3 ExecutiveSummary Introduction PrimaryCareLandscape KeyFindingsfromtheAssessment AnalysisofCriticalChallengesandPotentialActions ProposedInterventionsfortheHSPHProposal...31 Citations...36 AnnexA:ListofInstitutionsInterviewedforAssessment...38 AnnexB:Ethiopia shealthcarelandscape...39 AnnexC:EssentialHealthPackageDeliveredbyHealthFacility...42 ETHIOPIA'RAPID'ASSESSMENT'REPORT' 2

3 Acronyms' AIDS AcquiredImmunodeficiencySyndrome ART AntiretroviralTreatment ARV Antiretroviral BIA BenefitIncidenceAnalysis BMGF BillMelindaGatesFoundation BOFED BureauofFinanceandEconomicDevelopment CBHI Community\BasedHealthInsurance CDC CenterforDiseaseControlandPrevention CHAI ClintonHealthAccessInitiative CHD CommunityHealthDays CMAM Community\BasedManagementofAcuteMalnutrition CNHDE CenterforNationalHealthDevelopmentinEthiopia CSO CivilSocietyOrganizations DHS DemographicHealthSurvey DFID UK'sDepartmentFundforInternationalDevelopment EHSP EssentialHealthServicePackage EFY EthiopianFiscalYear FMHACA FMOH GBS GeneralBudgetSupport GMU GrantsManagementUnit GoE GovernmentofEthiopia HCFR HealthCareFinanceReform HDA HealthDevelopmentArmy HEP HealthExtensionProgram HEW HealthExtensionWorkers HIV HumanImmunodeficiencyVirus HMIS HealthManagementInformationSystems HPF HealthPooledFund HRH HumanResourcesforHealth HRIS HumanResourceInformationSystem HSDP HealthSectorDevelopmentProgram HSPH HarvardSchoolofPublicHealth ICCM IntegratedCommunityCaseManagement IFMIS IntegratedFinancialManagementInformationSystem JRIS JointReviewandImplementationSupportMission JSI JohnSnow,Inc. L10K LastTenKilometers MDG MillenniumDevelopmentGoal MSH ManagementSciencesforHealth Food,MedicineandHealthCareAdministrationControlAuthorityofEthiopia FederalMinistryofHealth MOFED MinistryofFinanceandEconomicDevelopment NGO Non\GovernmentalOrganization NHA NationalHealthAccounts OOP Out\of\Pocket PBS PromotionofBasicServices(formerlyProtectionofBasicServices) ETHIOPIA'RAPID'ASSESSMENT'REPORT' 3

4 PC PrimaryCare PEPFAR President semergencyplanforaidsrelief PFSA PharmaceuticalFundandSupplyAgency PHCU PrimaryHealthCareUnit PMTCT PreventingMother\to\ChildTransmission RHB RegionalHealthBureau RTM ResourceTrackingandManagement SCM SupplyChainManagement SCMS SupplyChainManagementSystem SHI SocialHealthInsurance SIAPS SystemsforImprovedAccesstoPharmaceuticalsandServices SNNPR SouthernNations,Nationalities,andPeoples Region SOE StatementofExpenditures TB Tuberculosis THE TotalHealthExpenditure UHEP UrbanHealthExtensionProfessionals USAID UnitedStatesAgencyforInternationalDevelopment USD UnitedStatesDollar USG UnitedStatesGovernment UNICEF UnitedNationsInternalChildren semergencyfund VCT VolunteerCounselingandTesting WHO WorldHealthOrganization WOFED WoredaOfficeofFinanceandEconomicDevelopment WorHO WoredaHealthOffice ZHO ZonalHealthOffice ' ETHIOPIA'RAPID'ASSESSMENT'REPORT' 4

5 Executive'Summary' Securinggreaterresourcesforprimarycareandensuringtheefficientuseofthoseresourcesare both essential for improving primary care delivery in low and middle\income countries. The Harvard School of Public Health (HSPH) assessed conditions in India and Ethiopia as part of developingaprogramofworkonstrengtheninghealthresourcetrackingandmanagementfor governmentspendingonprimarycareinthosecountries.thisworkwassupportedbythebill MelindaGatesFoundation (BMGF). AspartofthegrantactivitiesinEthiopia, the HSPH team undertookarapidassessmentofthecurrentlandscapeofpublicexpenditureonprimarycarein consultationwithbmgf,thegovernmentofethiopia(goe),andthegovernmentoftheoromia region.thisdocumentpresentsthefindingsfromtheassessmentandproposedactivitiesforthe resourcetrackingandmanagement(rtm)project. Key'Challenges'and'Potential'Actions' Insufficientmeasures/systems to track all resources for primary care to better inform thebottom\upplanningprocess.action:trackflowoffundsforchannel2andchannel 3aswellaslocalcontributions(communitycontributionsandretainedfundsfromuser fees)toidentifybottlenecks,proposesolutions,andevaluateinnovations.furthermore, analyzegapsandstrengthenresourcemappingatregionalandworedalevels. Limitedcapacitytoadvocateformorefundingforthehealthsectorwithintheoverall government financing priorities, and to appropriately inform health care policy and program decision\making. Action: Generate robust evidence to leverage for a higher resourceenvelopeforthehealthsectoratthenationallevel.,, A weak linkage between policy\making for the health sector and the actual resource envelope exists, leading to large resource gaps. Action: Conduct an analysis on actual costs based on standards set for hospitals, health centers, and health posts; and comparewiththecurrentresourceenvelopeforprimarycareoperations., Primarycareislargelyfinancedbydonorfundsandfuturesustainabilityisinquestionas Ethiopiadevelops.Action:,Analyzetheefficiencyandeffectivenessoffundsonaselect numberofhospitalsandhealthcenters.thisactionalongwiththepreviousonewould allowforamoresustainablesourceoffundsforprimarycare., Inconsistentdistributionofdrugsandmedicalequipmentfromnationaltofacilitylevels. Action: Analyzetheefficiencyandeffectivenessofprocurementatthefederallevel timeittakestoprocureandallocatedowntothelowerlevelsthroughits hub system. Programmatic and financial data are not integrated into the regular reporting health management information system (HMIS) to explore whether funds are being spent efficiently at all levels. Action:, Initiate, demonstration project on integrating finance\ relateddataintothecurrenthmistoillustratehowthissystemcouldaddressefficiency questions. Woredas have limited fiscal space with insufficient funds allocated towards recurrent non\salary expenditures. Action: Conduct fiscal space and sustainability analysis of ETHIOPIA'RAPID'ASSESSMENT'REPORT' 5

6 primarycareattheworeda level andidentifywaystoincreaseefficientandeffective poolingattheworedalevel. Little evidence from analysis using methods like benefit incidence analysis (BIA) to understand the distribution of benefits across socio\economic groups and the effectiveness of targeting in pro\poor schemes. Action:, Conduct BIA to assess the distributionofbenefitsacrosssocio\economicgroupsandtheeffectivenessoftargeting inpro\poorschemes. ' Proposed'Core'Activities'for'RTM'Project'' Strengthen' and' update' the' Health' Care' Finance' Reform' (HCFR)' strategy' U' Review the successesandchallengesoftheimplementationofthehcfrstrategyoverthelast15years, and work with the Federal Ministry of Health (FMOH) to propose changes that may be neededinthecurrentpolicytobettermeettheemerginghealthcarefinancingneedsofthe country.themajorevidence\findingactivitiesinclude: ReviewcurrentHCFRimplementation. Analyze the financing implications of the revised primary care package for the fifth HealthSectorDevelopmentProgram(HSDPV). Assess the cost to provide quality primary care and develop an advocacy paper for woredastouseforresourcemobilizationbygeneratingadequateevidence. Assesstheroleandpotentialcontributionoftheprivatehealthcaresector.Thiswillbe conductedunderthehepcaps 1 project,andwillbeavaluableinputforthisactivity. Improve' the' level' and' sustainability' of' financing' for' exempted' services' U' In order to improvethelevelandsustainabilityoffinancingforexemptedservices,weproposeto: Analyze the implications of shifting the financing of exempted services from developmentpartnerstogovernment.thiswouldincludehowmuchtheycost,current sourcesoffinancing,andimplicationsformorbidityandmortalityincaseofinadequate funding. Assess the potential contribution of health sector investment, in general and for exemptedservices,onthegrowthandtransformationoftheethiopianeconomy. ThefindingsfromthesetwostudieswillbesynthesizedintoapolicypaperfortheFMOHto advocateforincreasedprimarycarefundingthroughfederallevelallocations.furthermore, thissupportwillfacilitatepolicydialoguebetweenthefmohandministryoffinanceand Economic Development (MOFED) as well as other relevant government agencies to understandthecostandbenefitsoftheserecommendationsandhelpgovernmentofficials totakethenecessarypolicyactions. Strengthen'systems'to'track'Channel'2,'Channel'3,'and'local'contributions"Inconsultation withtheclintonhealthaccessinitiative(chai),supportthefmohtoscale\upitsresource mappingexercisetoallregionsandworedasinordertoadequatelyinformthebottom\up planning process. Although regions and woredas are expected to implement annual resourcemappingexercises,suchexercisesarenotcommon(emergingpracticesinafarare 1 TheHEPCAPS(orBuildingFuturePrimaryCareCapacityforHealthResultsinEthiopia)projectisimplementedby HSPH,incollaborationwithFMOH,andsupportedbyBMGFthataimstobuildEthiopia sprimarycarecapacityfora moresustainableandadaptablesystem. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 6

7 anexceptiontothisgeneralpattern).activitiesforstrengtheningsystemstotrackchannel 2,Channel3,andlocalcontributionsare: In consultation with CHAI, provide simpler tools aligned with the current resource mapping tool for regions and woredas to capture Channel 3 resources, community contributions,andretainedfunds; Developacleartime\tableforthecollection,analysisanduseoftheinformation; Trainregionalandworedalevelplanningofficersonresourcemapping;and Provide targeted technical assistance for a short period of time at regional levels to institutionalizetheprocess. Improve' targeting' of' beneficiaries'at' the'woreda' leveluconductabiainethiopiawitha focusontheeffectivenessoftargetingthroughpro\poorschemes,suchasthefeewaiver program.thisactivitywillhelpidentifythemajorchallengesinimplementationandenable bettertargetingmechanismsforservicedeliveryatthefacilitylevel. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 7

8 1.'Introduction' HarvardSchoolofPublicHealth(HSPH) is developing aproject to strengthen health resource tracking and management(rtm) for improving the delivery of primary care (PC) in India and Ethiopia.Theproposedprogramofworkincludesanalyticalactivitiesthatwouldstrengthenthe continuumofhealthcarefinancingfromoverallresourcemobilization,budgetingandresource allocationthroughtheflowoffundsfromgovernmentsystemsatnational,regional,andlower levels,tothefinalusesoffundsinsupportingthedeliveryofpcservicestothepopulation.a rapidassessmentoffinancialflowsinthehealthsystemthatexplorestheconstraintstomore effectiveuseoffundsfordeliveryofpc serviceswasdoneineachofthetwocountries.this reportsummarizesthekeyfindingsfromtheassessmentinethiopia,whichwasconductedby the HSPH team in collaboration with Ethiopia s Federal Ministry of Health (FMOH) and Bill Melinda Gates Foundation (BMGF) in May and June This work was supported by a planning grant from the BMGF. Dr. Hong Wang of BMGF contributed actively to this rapid assessment. Goals'of'the'Rapid'Assessment' TheassessmentinEthiopiasoughttodothefollowing: Identifyconstraintstothemobilization,allocation,anduseoffundsforPCinEthiopiaat allgovernmentlevels federal,regional,andworeda,(district). Propose potential policy and operational measures in a resource tracking and managementframeworkthatcouldincreasetheresourceenvelopeforhealth,improve theefficientandeffectiveuseoffunds, andultimatelyservicesandhealthoutcomes, someofwhichareincorporatedintotheprojectproposalthathsphteamisdeveloping. Conceptual'Framework'for'the'Assessment' For the purpose of this assessment, we defined primary care as all health service related activities(prevention,promotion,andtreatment)thatdonotrequireinpatienttreatmentina hospital. An exception would be institution\based deliveries, which are financed through maternalandchildhealthprograms and may include lower level hospital\based deliveries. In Ethiopia, the primary hospital 2 is considered part of the primary health care unit the planning unit for populations of 100,000. This is currently a working definition and specific technicaldefinitionswillbedevelopedaspartofthelargergrantactivities. Therapidassessmentexploredthefollowing5topicsrelatedtothefinancingofprimarycare services: Resource, Mobilization: how the resource envelope for health is determined and achievedatthefederal,regional,andworedagovernmentallevels. Resource, Allocation: the ways in which funds are allocated to the health sector with specificfocusonprimarycare. Resource,Utilization:howbudgetedresourcesflowthroughthesystemandwhatfactors explainthedegreetowhichtheygetconvertedintorealizedspending. Resource, Productivity: to what extent is government health spending, including externallycontributedfundsandin\kindcontributions,purchasingtherightinputsand therightmixesofinputs,anddotheseinputsreachtheservicedeliverylevelinatimely waytodelivervalueformoney. 2 PrimaryhospitalsarearelativelyrecentconceptforthePHCU,andtodatenonearefullyfunctioningyet. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 8

9 Resource,Targeting:arethebenefitsfromprimarycarefundingreachingtheintended beneficiariesintermsofhealthneedandsocio\economicfocus. Withineachofthe5coreareas,theassessmentsoughttodothefollowing: 1. Developaprecisedescriptionofthekeyprocessesandactors. 2. Identifythecriticalchallenges,includingaccountability. 3. Analyzethechallengesusingthefollowingfive filters orquestions: a. Isthisacriticalchallenge? b. Isthereaplausibletechnicalsolution?Dothebenefitsofthesolutionoutweigh thecostsofimplementingit? c. Are there major investments by the government or other players in the solution? d. Are there potential opportunities to address the bottlenecks that are outstanding? e. What is the level of support from country counterparts for the proposed solutiontoaddresstheseoutstandinggaps?istherepolicyandimplementation potential for the proposed solution including political will, commitment (does thepoliticalenvironmentencourageorsuppressinterestinchange),technical capacity,aswellassufficientperceivedneedandpriority? 4. Applya resourcetracking lenstoidentifychallengesandpotentialtechnicalsolutions toselectstrategicareasofworkthattheproposedhsphprojectonstrengtheningrtm forprimarycaredeliveryinindiacouldundertake. Methodology' Thetermsofreferencefortherapidassessmentwerediscussedandfinalizedincollaboration with the FMOH and BMGF. As per the terms, the team first undertook a desk review of the existingliteraturetodevelopacomprehensiveoverviewofhowpcservicesareorganizedand financed, and to learn about key constraints and recommended solutions documented by existingstudies.second,theteamundertookkeyinformantinterviewswithstakeholdersatthe federal\, regional\, woreda\, and facility\levels (see table in Annex A for a list of institutions interviewed). At the federal\level, the team interviewed senior government officials in the FMOH, the Ministry of Finance and Economic Development (MOFED), as well as technical experts from donor agencies. In consultation with Dr. Kesetebirhan Admasu, the Minister of Health,OromiaandSouthernNations,Nationalities,andPeoples Region(SNNPR)wereselected astwofocusregionsfortherapidassessment.howeverduetosomeconstraints,onlyoromia was visited. In this region, a woreda, implementing community\based health insurance (CBHI) and a woreda not implementing CBHI were visited. The team interviewed officials at the regionalandzonalaswellasstaffattheworeda,andfacilitylevel. It' is' important' to' emphasize' that' this' rapid' assessment' is' an' exploratory' study.' It' was' not' intended'to'be'representative'of'the'situation'in'ethiopia'as'a'whole.'its'findings'are'indicative' and'provide'direction'for'the'larger'project'being'developed.'' Section 2 provides an overview of the PC delivery system and how it is financed. Section 3 summarizesthekeyfindingsfromthedeskreviewandkeyinformantinterviewsregardingkey successesandoutstandingchallengesineachofthe5focusareasfortheassessment.section4 analyzes the challenges to identify priority areas that can be addressed through feasible ETHIOPIA'RAPID'ASSESSMENT'REPORT' 9

10 technical solutions. Section 5 discusses the implications of the assessment for the proposed projectdevelopedbyhsph. 2.'Primary'Care'Landscape' Context'' Ethiopia,sub\SaharanAfrica ssecondmost\populouscountry,hasalarge,predominantlyrural, and impoverished population with poor access to safe water, housing, sanitation, food (nutrition), road, basic social and health services. These factors result in a high incidence of communicable diseases including tuberculosis (TB), malaria, respiratory infections, diarrheal diseases,andnutritionaldeficiencies.morethan70%ofthesediseasesarepreventable.ahigh fertilityrateandlowcontraceptiveprevalencecontributetoanannualpopulationgrowthrate of 2.7%, one of the highest in the world. According to the most recent Demographic Health Survey(DHS)theproportionofwomenusingmodernfamilyplanningmethodsincreasedfrom 6% in in 2000 to 27% in 2011 (CSA and ICF International, 2011). Despite this increase, high fertilityandlackofaccesstoqualityhealthservicesresultinhighratesofmaternalandneonatal mortality.ethiopiahasoneoftheworld shighestratesofmaternaldeathsintheworldat676 deathsforevery100,000livebirths(csaandicfinternational,2011).over90%ofwomenin needofacaesariansectionareunabletoaccessthisservice;anestimated19,000womendie fromchildbirth\relatedcauseseveryyear.theunder\fivemortalityrateis88deathsper1000 live births while infant mortality stands at 59 deaths per 1000 live births (CSA and ICF International, 2011). Neonatal deaths account for 42% of under\five mortality (CSA and ICF International,2011).Ethiopiaalsohasthe7thhighestTBburdenintheworldwith394outof 100,000peoplehavingthedisease,15%ofwhomarealsoHIV\infected(CDC,2012;WHO,2011). TheEthiopianGovernmenthasembarkedonanambitioushealthsectorprogram knownas the20\yearhealthsectordevelopmentprogram(hsdp),rolledoutin5\yearincrements to address the key health problems, designing various initiatives to achieve the Millennium Development Goals (MDGs). The country has achieved significant improvement in the health statusofthepeoplebyfocusingonpcasitspriorityhealthservice.themajorvehicleforpcis thehealthextensionprogram(hep). Health'Service'Organization' Aspartofthe4 th HealthSectorDevelopmentProgram(HSDPIV),theFMOHreviseditsdelivery structure into three major tiers: primary, secondary and tertiary. These tiers also fall under different functional responsibilities: the FMOH, Regional Health Bureaus (RHBs), and Woreda HealthOffices(WorHOs).TheFMOHandRHBsfocusmoreonpolicymattersandtechnicaland materialsupport,whileworhoshavethebasicroleofmanagingandcoordinatingtheoperation ofpcservicesdeliveredthroughadistricthealthsystemundertheirjurisdiction.thestandard catchmentpopulation,theirlevelofstaffing,andthemainservicesprovidedunderthethree tiersisdescribedbelow. Ethiopia spcsystemhas3servicepoints healthposts,healthcentersandprimaryhospitals.a primary health care unit (PHCU) consists of 1 primary hospital, 4\5 health centers and 20\25 satellite health posts (5 health posts per health center), which are interconnected through a referral system, and reach an average population of 100,000 in rural setting. The overall landscapeforservicedeliveryingeneralandforpcinparticularispresentedinfigure1.the ETHIOPIA'RAPID'ASSESSMENT'REPORT' 10

11 HEP now has three variants: the agrarian, the pastoralist, and the urban to meet the health needsofdifferentsettings. Figure'1:The'Primary'Care'Landscape'in'Ethiopia,,, Health, Posts: Typically, 2 health extensions workers (HEWs) reside in one health post and providepromotionandpreventiveservices.recently,somecurativeservicesareofferedatthis level through Integrated Community Case Management (ICCM) 3 and Community\Based ManagementofAcuteMalnutrition(CMAM) 4 programs. All health services at the health post level are free to the beneficiaries since only essential or exempted services (explained in moredetailbelow)areprovidedatthislevel.thecatchmentareaforthehealthpostis2,500 people,theaveragesizeofakebele(village). Health,Center:Ahealthcenterservesasthefirstcurativereferralcenterforthesatellitehealth postsunderitscatchmentareaandservesaspracticaltrainingcenterforhews.atypicalhealth centerhassomeemergencyinpatientcareservicecapacity,anaverageof10beds.thenormis for a rural health center to cover 25,000 people; the urban health center to cover 40,000 people;andapastoralhealthcentertocover15,000people.theservicesareofferedthrougha combinationoffinancing:outofpocket/userfees,freeofcharge(exemptedservices),andthird partyreimbursement(waivedpatients). Primary,Hospital:Aprimaryhospitalprovidesinpatientandambulatoryservicestoanaverage populationof100,000andhasaninpatientcapacityof25\50beds.italsoservesasareferral 3 ICCMisaprojectthataimstoreducechildmortalitywiththefocusoncommonchildillnesses.Thisprojectisfunded by UNICEF with strong support from The Last Tem Kilometers (L10K) project funded by Bill Melinda Gates Foundation,andimplementedbyJSIResearchTrainingInstitute,Inc.tocontinuetostrengthenhealthpostsand HEWsskillsaswellaspromotecommunity\basedmodelstochangenorms. 4 CMAMprogram sgoalistoreducetheeffectsofsevereacutemalnourishedchildrenthroughtheprovisionofready\ to\usetherapeuticfood. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 11

12 centerforhealthcentersinitscatchmentarea,andisapracticaltrainingcenterfornursesand other paramedical health professionals. The services are offered through a combination of financing: out of pocket/user fees, free of charge (exempted services), and third party reimbursement(waivedpatients). BeyondthePCsystem,secondaryandtertiarylevelsofcareexistinEthiopia.Thesecondarycare level consists of a general hospital that provides inpatient and ambulatory services to an average of 1 million people. It serves as a referral center for primary hospitals as well as a training center for health officers, nurses, and emergency surgeons, and other health professionals. The tertiary level care is comprised of a specialized hospital, which serves an averageof5millionpeople,andservesasareferralpointforgeneralhospitals. For more detailed information on the different levels of health care in Ethiopia, please see AnnexB. ' Essential'Health'Package'Delivered'by'PHCU' Ethiopia s essential health service package (EHSP) was developed to provide a minimum standardthatfostersanintegratedservicedeliveryapproachessentialforadvancingthehealth ofthepopulation.ehspservicesareofferedatthedistricthospital,healthcenter,andhealth post. The package covers family health, communicable diseases, hygiene and environmental sanitation, essential curative care and chronic diseases, and health education and communication.foraspecificlistofservicesofferedateachlevel,pleaseseeannexc. Figure'2:'Types'of'Services'in'the'Health'Sector' High'Cost'Services' On)cost-recovery- Essential'Health'Services' On)cost-sharing- Exempted'Services' Free-of-charge- ' Source:,Adapted,from,Federal,Ministry,of,Health,(2005), Figure 2 illustrates in broad terms the different types of health care services along with how these services are to be financed. As shown, high cost services (some in\patient services at tertiarylevel)areseparatefromtheehsp.forsuchservices,healthfacilities(districthospitals, specialized hospitals, etc.) need to mobilize their own resources and therefore charge higher feesthanwhatischargedfortheessentialservicesoffered.exemptedservicescoverpartofthe ESHP and are free for everyone. These services include: TB (sputum diagnosis, drugs, and ETHIOPIA'RAPID'ASSESSMENT'REPORT' 12

13 follow\up);maternalcare(prenatal,delivery,postnatal,anddeliveries);familyplanningservices; immunization services; HIV/AIDS (VCT and PMTCT); leprosy; fistula; and epidemics (Federal Ministry of Health, 2005). Donor partners currently finance most of these services, while retainedfundscollectedatthehealthcentersandhospitalsfundsomeoftheseservicesaswell (e.g., maternal care). The government subsidizes the remaining essential health services, allowinghealthcentersandhospitalstochargeaminimalfee(knownasuserfees).however, thegovernmentfullysubsidizestheseservicesforthepooresthouseholdsselectedintothefee waiverprogram. SincetheEHSPwasfirstdefinedin2005,Ethiopiahasexperiencedrapideconomicgrowthalong withchanginghealthneeds.forexample,non\communicablediseasesareincreasingandthis trendisexpectedtocontinueasethiopiadevelops.therefore,theeshpneedsrevisionashealth needsevolve. ' Financing'of'Primary'Health'Care' Ethiopiapracticesfiscaldecentralization,wheredifferenttiersofgovernmentareassignedwith defined expenditure discretion (expenditure assignment), revenue\raising powers (revenue assignment),anddefinedintergovernmentaltransferandborrowingfunctions,asprovidedby Federal and Regional States Constitutions. The expenditure assignment of the 3 government levelsforthehealthsectorisshownintable1. Table'1:'Expenditure'Assignments'in'the'Health'Sector' Federal'Level' Regional'Level' Woreda'Level' Recurrent' Capital' Tertiary hospitalsand parastatals ' Generalandprimary hospitals,health trainingcolleges, regionalreferral laboratory Forhealthfacilityequipmentand furniture Perdiemforroutineimmunization Perdiemandmedicinesforepidemic control Procurementofmalariaspraychemicals andassociatedperdiem Medicines Recurrentbudgetfornewhealth facilities Constructionof healthposts andhealth centers Source:,Alebachew,and,Alemu,(2010), Ethiopiausesthreedifferentchannelstotransferheathsectorresourcesfromfederaltolower levels.fundsfromthegovernmentofethiopia(goe)andexternaldonorsaredistributedtothe different administrative levels and health facilities in Ethiopia using:channel 1 (unearmarked andearmarked),channel2(unearmarkedandearmarked),andchannel3. 'Channel1aisused bythegoetodistributebudgetarysupporttotheregionsandworedasaswellasbydonorsthat providebudgetsupportthroughthepromotionofbasicservices(pbsiii) 5 ;whiletheremaining threechannelsarespecificallyfordonoruse.box1summarizesthesethreechannelsandfigure 3 illustrates the flow of resources (funds, procurement, human resources, and technical assistance/training). ' 5 InitiallythisfundwascalledtheProtectionofBasicServicesforthefirsttwophases.However,withtheinitiationof thethirdphaseitwasdecidedtochangethenameslightlytopromotionofbasicservices. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 13

14 Box'1.'Ethiopia s'funding'channels'for'the'health'sector' Source:,Adapted,from,(Waddington,,Alebachew,,and,Chabot,,2013), ETHIOPIA'RAPID'ASSESSMENT'REPORT' 14 Channel'1:'Ministry'of'Finance'and'Economic'Development'(MOFED)' Channel,1a(unearmarked):TheGovernmentofEthiopiaaswellasdonorsprovidingGeneralBudgetSupport (GBS)usethischanneloffunding.GBSbythedonorsisprovidedthroughapooledfundcalledPromotionfor BasicServices(PBSIII) thefirst2phasesofthispooledfundwasknownastheprotectionofbasicservices. Thefiscaltransfersfromthefederalgovernmenttotheregionsarebasedonthreecriteria:1)population,2) revenue generating capacity, and 3) development status. Many regions have been implementing a similar formula to transfer funds down to the woredas based on current expenditures, development status, and revenuegeneratingcapacity.oncetheseblockgrantsreachtheworeda,level,thereislimitedfiscalspacefor woredas,whereamajorityoftheblockgrantsgotowardssalaries.onaverage,90%oftheblockgrantscover salaries,whichleavesverylittleforrecurrentnon\salarycosts(operationalbudgetsandcapitalbudgets). ThefiscaltransfersuseEthiopia streasurysystem meaningatthefederallevelthemofedtransferfundsto the regional Bureau of Finance and Economic Development (BOFED), which are then transferred to the Woreda Office of Finance and Economic Development (WOFED). Since this system is automated using wire transfers through the bank, delaysinthe flowof Channel1fundsis uncommon. This is the GoE s most preferredmodality. Channel,1b,(earmarked):Fundsthroughthischannelareearmarkedforspecificactivitiesandoutcomesagreed byaparticulardonor,and areconsistent withethiopia s priorities.program\specificbankaccountsfor these resourcesareused.largermultilateralandbilateraldonors,suchastheworldbank,theafricandevelopment Bank,UK'sDepartmentFundforInternationalDevelopment(DFID),andUnitedNations(UN)agenciesusethis channeloffunding.fundsaretransferredfromthedonors specialaccounts tomofedandfollowthesame governmentfinancialmanagementsystemasdescribedinchannel1a(mofedtobofedtowofed).although Ethiopia's health sector is focused on harmonizing its system with "one plan, one budget, and one report", donorsthatusethischanneloffundingalsorequireaseparateplanningdocumentwiththeirownseparate format. Channel'2:'Federal'Ministry'of'Health'(FMOH)' Channel, 2a (unearmarked): This channel mainly consists of the MDG Pool Fund (MDG PF). Resources are allocatedbasedonagreedworkplansduringtheworedabasedplanningprocessandfollowthedecentralized system,meaningfmohallocatetotherhbswhicharethenallocatedtotheworhos.typically,allocationsare intheformofcommoditiesandsupplies,ratherthanfunds,procuredatthenationallevel.thisisthefmoh s preferredchanneloffunding. Channel,2b,(earmarked): Similar to Channel 1b, these funds are program\specific and allocation through this channel follow the agreed upon project/program plans. These resources are managed by the FMOH but accounting and reporting mainly follow donor procedures. Partners, such as Global Fund, GAVI, and UN agenciestransferresourcesthroughwofedstomanageandreporttheuse. Channel'3:'Outside'of'Government'Oversight' Resources through this channel do not use government systems; instead donors or implementing agencies managetheresources.currently,mostofthedonorsreporttheuseofthesefundsthroughresourcemapping. However,thedonorshandletheday\to\dayfinancialmanagementoftheseresources.Someexamplesofthis are: 1. HealthPooledFund(HPF) UNICEFonbehalfoftheFMOHprovidetechnicalassistance.SinceFMOH isincharge,thehpfisconsideredapreferredvenueifresourcesaregothroughchannel3. 2. UnitedStatesGovernment(USG)(UnitedStatesAgencyforInternationalDevelopment(USAID),the President s Emergency Fund for AIDS Relief (PEPFAR), and the Center for Disease Control and Prevention(CDC)) Fundsimplementingpartnersonthebasisofannualcontracts.Workplansmight be shared with the FMOH or RHBs but budgeting and reporting is separate from Government institutions. 3. Otherdevelopmentpartnersornon\governmentalorganizations(NGOs)thatfundactivitiesdirectly

15 Figure'3:'Flow'of'Resources'in'Ethiopia s'health'sector' ' SomekeyissuestohighlightrelatedtotheflowoffundsinEthiopiaare: The flow of funds is complex. Primary care is financed from all 3 channels, and with significant autonomy to allocation and use of resources by regions, specifically for Channel1funds. Channel3fundingmaybeveryimportantinprimarycare,particularlyastheyprovide the needed support for supportive supervision, technical assistance, and in\service trainingforhealthprofessionals.whiletotalsareknown,localspecificshavebeenhard tomeasure,monitor,andincorporateintoplanning. CriticalbottlenecksdelaytheallocationandutilizationofChannel2fundsdowntothe woredaandfacilitylevel. Coregovernmentfinancing(mostlyChannel1)largelyfinancessalaries. 3.'Key'Findings'from'the'Assessment' Resource'Mobilization' HealthhasbeenapriorityfortheEthiopiangovernment,whichhassubstantiallyincreased healthspendinginabsoluteandpercapitaterms.accordingtothenationalhealthaccounts (NHA),between2004/2005(NHAIII)and2007/2008(NHAIV),thetotalhealthexpenditure increased from USD 522 million 6 to USD 1.2 billion leading to an increase in per capita 6 ReferringtoFMOH(2010b),theaverageexchangerateusedfortheconversionfromBirrtoUSDwasUS$1=Birr ' ETHIOPIA'RAPID'ASSESSMENT'REPORT' 15

16 , healthexpenditurefromusd7.141tousd16.09.althoughusd16.09isabovethehsdpiii per capita target (USD 12), it is less than 50% of the World Health Organization (WHO) CommissiononMacroeconomicsandHealth srecommendedamountofusd34percapita forprovisionofessentialhealthservices(fmoh,2010b;who,2001).in2007/2008,total health expenditure (THE) as a percentage of gross domestic product (GDP) was 4.5%, howeverrecentestimatesareashighas5.6%.accordingtonhaiv,externalresourceswere the highest contributors, accounting for 39% of the THE, while out\of\pocket (OOP) expendituresforhouseholdswas37%andgovernmentwas21%(seefigure4). Figure'4:'Breakdown'of'total'health'expenditure'as'a'percentage'of'GDP' 6' 5' 4' 3' 2' 1' 0' 1995/1996' 1999/2000' Source:,Adapted,from,FMOH,(1996);,FMOH,(2003);,FMOH,(2006);,FMOH,(2010b), 2004/2005' Despiteincreasingpoliticalsupportforhealth,GoEcontributionasapercentageofTHEhas notincreasedovertimeandisnotclosetoreachingtheabujatargetof15%.theshareof health spending in the government budget has stagnated at about 8.5% over the last 3 years,despiteincreasesinabsolutevalue.thiswillposeachallenge,particularlyintermsof improving the quality of care and utilization of services. Figure 5 illustrates the total GoE budget in red and the total health sector budget in green for 1998\2004 Ethiopian fiscal years(2003\2011ingregoriancalendar). Figure'5:'Trend'for'the'Share'of'GoE'Budget'for'Health'(Ethiopian'Fiscal'Year)' 2007/2008' Total'Health'Expenditure' Rest'of'World' Household' Government' Public'Enterprises' '' '' '' '' '' '' '' '' '' '' 0'' 1998'' 1999'' 2000'' 2001'' 2002'' 2003'' 2004'',,,,,,,,,Source:,MOFED,(2013), ETHIOPIA'RAPID'ASSESSMENT'REPORT' 16

17 Furthermore, the NHA IV subaccounts indicate that international development partners largelyfinancepriorityhealthservices(knownastheessentialhealthservices),whicharea lion sshareofthephcuexpenditure.theseservicesincludehiv/aids,reproductivehealth (maternalhealthincluded),childhealth,malaria,andtb(seefigure6). Figure'6:''Finance'source'(%)'for'key'health'programs/services'at'PHCU' 90%' 80%' 70%' 60%' 50%' 40%' 30%' 20%' 10%' 0%' DPs' Government' OOPs' Others' HIV/AIDS' 84%' 11.40%' 4.60%' 0' Reproducdve'Health' '(Maternal'Health)' 36%' 28%' 25%' 11%' Child'Health' 63%' 12%' 24%' 0' Malaria' 25%' 29%' 46%' 0' 'TB' 22%' 14%' 63%' 1%' Source:,Adapted,from,FMOH,(2010b),, The bulk of the essential commodities for services at the PHCU (with the exception of essential curative drugs procured through revolving drug funds scheme) are procured through funds from development partners. Development partners finance almost all exemptedprogramcosts,exceptforthesalariesofpersonnelandtheoperationalbudget. Giventhepossibledecreasingtrendindevelopmentaidinthelong\termalongwithare\ definitionofthephcu(nowincludingprimaryhospitals),arevisionoftheehspincludingits financingshouldbecarriedoutbeforehsdpv,whichinturncouldinformthestrategicplan development process. Non\exempted curative services are covered by OOP and more recently by the CBHI scheme with some subsidy from GoE, where implemented. The operational budget for non\exempted services is predominately covered through facility revenue.theotherfinancialcontributionofthegovernmentisonthepre\servicetrainingof thephcupersonnel. Woredas have limited fiscal space, withlittlerevenuegoingtowardsrecurrentnon\salary expenditures. As per regional constitutions, woredas only have taxation power to collect rural land use fee, agricultural tax, income tax and other revenues determined by the regions(amharaconstitution).evenwiththislimitedautonomyofrevenuegeneration,the logisticstocollecttaxesisquitedifficult.accordingtothewofedingimbichu,mountainous landscapes,badroads,anddifficultyinestimatingtaxabletraderincomegreatlyinhibitsthe woreda s ability to generate the expected revenue. Furthermore, the norm is for the woredas to transfer the revenue collected from agriculture and land\use taxes (major contributors for woreda revenue generation) to the regional government, however in ETHIOPIA'RAPID'ASSESSMENT'REPORT' 17

18 practice woredas retain either all or some of the proceeds (Garcia and Rajkumar, 2008; Ayele, 2011; Alebachew and Alemu, 2010). The imbalance between availability of fiscal spaceandtheexpenditureneedsattheworedalevelleavespcunderfunded. Giventhelimitationsforgeneratingrevenueatthelocallevel,woredas budgetsareheavily dependentontheregionalfinancialdistributionintheformofblockgrantsthroughchannel 1 funds. In Adaa, a non\cbhi woreda in Oromia, the WOFED stated that 95\97% of its budgetwasintheformoftheblockgrant,ofwhich90%goestowardssalariesand9%for capitalbudgetorproject\specificfunds,leavingonly1%fornon\salaryrunningcosts.funds from the regional block grants are not sufficient to cover operational expenses of the woredas.healthfacilitiesrelyonexternaldonorsupportandretainedfeesacquiredfrom userfeestofillthegapsintheiroperationalbudget.insomeinstances,suchasingimbichu (acbhi\woredainoromia),savethechildrensupportscommunityhealthdays(chds)by providing cars and fuel, per diems to HEWs and health center staff, and supportive supervision. In other cases, like in Adaa (non\cbhi), health centers may not have donor supportandsolelyrelyonretainedfees,whichisnotsufficienttocoverallnecessarycosts. Withoutrobustevidenceillustratingtheimportanceofcertainhealthinitiatives,alongwith accurate costs, the FMOH may not be in a strong position to negotiate with MOFED and development partners. As shown in Figure 7, the budget allocated to the health sector variesacrossregions;itwasaslittleas5%inaddisababaandashighas16%indiredawain 2011 (Ethiopian fiscal year (EFY) 2004). As was discussed above, even with significant contributionfromdonorpartners for the health sector, Ethiopia s per capita spending on healthisfarlessthantherecommendedamountbythewho.anexampleofhowrobust evidenceisbeneficialinleveragingmorefundsforhealthinternallywasprovidedduringa key informant interview with a CHAI staff member. In Swaziland, the government was reluctanttopayforantiretroviral(arv)medication.however,theministryofhealthwas equipped with the right skills and tools, and was able to present evidence to the GovernmentofSwazilandaboutthepossibleoutcomesofnotfundingARVs,whichcaused thegovernmenttofundtheprovisionofsuchdrugs. Figure'7:'Percentage'of'Total'Budget'Allocated'to'the'Health'Sector'Across'Regions' Source:,FMOH,(2011), ETHIOPIA'RAPID'ASSESSMENT'REPORT' 18

19 The GoE has not yet assessed the potential of generating resources for health outside generaltaxesthroughtheuseofinnovativefinancingmechanisms.forexample,taxeson goodsthatadverselyaffecthealth,suchastobaccoandalcohol(sintax),couldbeallocated specifically to support health care services. Thailand has a 2% excise tax on tobacco and alcohol that is earmarked for its Health Promotion Foundation, and this tax generates around60millionusdperyear(who,2012).highdonordependencyfortheprovisionof primary care and the absence of alternative and innovative financing mechanisms have stymied the FMOH s ability to sustainably generate more revenue for the health sector, especiallyforpc. Despiterecentefforts,trackingofinternalandexternalfundingsourcesforPCisinsufficient. The Resource Mobilization Directorate under the FMOH has been performing a resource mappingexercisesincefy2008/2009.everyyearthistoolistobefilledoutbydevelopment partners, implementing partners, andnon\governmental organizations (NGOs) in order to captureplannedexpenditures(especiallythosethatcomethroughchannel3).theresource mapping tool contains fields such as a description of activities implemented, what organization is implementing and financing the activity, and how funds are allocated geographically (region and woreda). 7 CHAI is providing technical support to the FMOH on addressing some previous issues with this tool. Although these efforts are useful for attemptingtotrackexternalhealthresourcesacrossthecountry,somepartnersandngos do not participate in the resource mapping exercise due to barriers such as different planningandbudgetingcycles.thetoolalsofallsshortofcapturingcontributionsatlower levels, such as community contribution and retained funds (FMOH, 2011; Altman, Alebachew,Vogus,Silla,Won,2012).Furthermore,regionalandworedaadministrations havestatedthattheylackthecapacitytoworkwithdevelopmentpartnersandtherefore thistoolisnotfullyimplementedatlowerlevels(altmanet.al.,2012). Insomeinstances,thefinancialimplicationsofhealthcarepoliciesincludingtheactualcosts of implementing the policies have not been well articulated. For example, the GoE established exempted services (EPI, delivery at PHCU level, TB, leprosy, PMTCT, post and antenatalcare,vctandfistula)tobeprovidedathealthfacilities,butthefundsallocated fromthegoearenotalwayssufficienttocoverthecostsoftheseservices.therefore,this forceshealthfacilitiestorelyonretainedfundsorsupportfromexternaldonorstoprovide suchservicesfreeofchargetobeneficiaries(fmoh,2008).however,retainedfundsarenot alwayssufficienttocoverexemptedservices,specificallyformaternalcare,norwilldonors beabletocontinuesupportingsuchaninitiativeinthelong\term.thisissuemaystemfrom Ethiopia s decentralized structure and the functional responsibilities of the different governmentlevels,wheretheworedalevelisresponsiblefortheoperationsofpcservices andthefederallevelfocusesmoreonpolicymeasuresandtechnicalsupport. TheFMOHhasnotintroducedroutinetrackingoffinance\relateddatathroughthehealth managementinformationsystem(hmis).communitiesareexpectedtocontributetothepc systembywayofmonetarydonations,supplyofbuildingmaterials,andmanuallabor.often thesecontributionsgotowardstheconstructionofhealthpostsandhomesforhewsnear thehealthposts.monthlyreportsaresubmittedtotheministryofcivilserviceonthetotal 7 Source:ResourceMappingToolfortheEthiopianfiscalyearof2005(2012),InstructionsandReferencesretrieved fromthefmoh. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 19

20 monetary value of community contribution 8. However, these reports are not necessarily aggregated up to the regional level and are not part of the federal level reporting. Additionally, health facilities are keeping financial records and using financial data for facility\level decision\making by health facility management and governing boards. This information is not channeled up to the federal level. Therefore, federal officials are not aware of the amount of retained funds and whether these funds are sufficient to cover exemptedservices,operationalcosts,andminorinfrastructureimprovements. Vertical fiscal imbalances between responsibility and tax collection assignments exist, creating heavy reliance on federal transfers to the regions. According to the World Bank (2010),regions revenuecollectioncouldonlycover18.3%oftheirtotalexpenditureduring FY2007\2009;andthereforefederaltransfersthroughblockgrantscoveredmorethan81% oftheirexpenditure.onecriticalissueisthatmanyregionslackthenecessaryinstitutional andskilledpersonneltocollectrevenue,whichleadsthefederalgovernmenttocontinueto dominate the fiscal management, particularly among regions (World Bank, 2010). Unfortunately,thisisabroaderissuerelatedtothelegalframeworkandchangescannotbe madewithinthehealthsectoralone. Aconsiderablylargefinancegapbetweenavailableresourcesfrompublicanddonorfunds and annual targets is identified on an annual basis. The need\based budgeting produced targetsandbudgetsthatwereambitiousinlightofavailablefunding(altmanet.al.,2012). InFMOH(2010a),twoscenariosforcostingestimateswerepresented:base\caseandbest case.base\caseiswhereethiopiawouldachieveallofthemdgsby2015,whilebest\case goesbeyondfulfillingthemdgsandassumesnofinancialconstraint.givencommitmentsby the government and 14 major development partners to the health sector, the base\case scenariowouldleaveafinancinggapofusd4.337billionoverthenext5years(2009/2010\ 2014/2015) and the best\case scenario would have a financing gap of USD billion (FMOH, 2010a). It is important to note that donors that use Channel 3 funding are not includedintheseestimates/projectionsbecausetheyfalloutsidethegoe soversight. The Health Care Finance Reform (HCFR) strategy, established in 1998, provided greater autonomy to health care facilities with initiatives such as retaining user fees, outsourcing non\clinical services (e.g. laundry), and opening of private wings in public hospitals as an incomegenerationmechanismformedicalprofessionalsinordertoretainneededstaff.this strategy has become outdated with the changing financial landscape, specifically: (1) the changingglobalaidarchitectureandthelikelihoodofitsdeclineincontributiontoethiopian healthcarefinancing;(2)theemergenceofsocialhealthinsurance(shi)andcbhischemes, andtheneedtolinkthemwiththeconceptof UniversalHealthCoverage ;(3)thechanging disease and health conditions and their implication for financing; (4) the need to revise Ethiopia shealthservicedeliverystructureandservicesoffered,includingprimarycare,as partofthealongertermvisionduringhsdpiv,anditsimplicationforfinancing. Currently,thecontributionoftheprivatesectorisinsufficientlyconsidered.Outofthe37% OOP payments, households spent 43% in private for\profit hospitals and clinics in 2007/2008.(FMOH,2010b).Thisshowsthatthecontributionoftheprivatesectorforthe 8 Manual labor is converted to a monetary value by using the daily wage for that type of labor and monetary estimatesareprovidedfortheconstructionmaterialsdonated. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 20

21 provisionofhealthcareservicesissignificant.withethiopia scurrentinterestandfocuson health insurance, the insurance proclamation considers the involvement of the private sectorinshi,butthereisnoclearguidanceregardingtheroleoftheprivatesectorforthis scheme. Consultations with the private sector during the design of the health insurance were limited. This is true for both SHI and CBHI. Private health providers are typically characterizedasweakinnetworking.thereis nofocalpersonorinstitutioninthefmoh structuresorclearmechanismsforpublic\privatecollaborationatdifferentlevels. Resource'Allocation' ProtectionofBasicServices(PhaseIIInowknownasPromotionofBasicServices)(PBS)has workedwiththemofedtoputsystemsinplacetoensuretimelyandappropriateallocation of funds for Channel 1. Ethiopian banks now use electronic transfers and this allows for timelytransferoffunds.additionally,pbsperformsa FairnessTest onabi\annualbasisas part of its Joint Review and Implementation Support Mission (JRIS). The most recent, available JRIS in November 2012 illustrated that the GoE passed the Fairness Test, meaningatleast90%offundswereallocatedfromthefederalleveldowntoregionaland woreda levels 9 (World Bank, 2012). WOFEDsvisited stated there were no issues receiving Channel1funds. Channel 2 funds still face allocation issues. Often, disbursement of Channel 2 funds is delayedduetoincompleteannualplansandthe liquidation issue.bothworedasinoromia statedthattheyreceivechannel2fundingverylateintheefy,wheretheywouldhaveonly 1 month and even as few as 5\10 days (in Gimbichu) to spend the money. World Bank (2012)citesaverylowdisbursementrate(4.6%)fromtheMDGFundforthefirstquarterof the EFY 2005 (2012). Long delays in allocation of funds is particularly challenging for activitiesthattaketime,suchasprocurementofdrugs.atthefederallevel,challengesexist fordonorstoknowwheretoputfundsthatgothroughchannel2duetoincompleteannual comprehensive plans. This plan consists of the Woreda Based Core Plan and plans for FMOH and government agencies (e.g., Food, Medicine and Health Care Administration Control Authority of Ethiopia (FMHACA) and Pharmaceutical Fund and Supply Agency (PFSA)). At the woreda level, a critical challenge is the liquidation issue. Based on the agreed upon plans for programs, woredas are to submit their statement of expenditures (SOEs)regularlyinordertogetthenextreleaseoffundsforidentifiedactivities.Attimes, SOEsarenotsubmittedontimebyworedasforvariousreasons themostcitedisthatthe woreda,didnotusethefundsbasedontheplans.attimes,thisisduetolocalprioritiesnot matching higher government priorities. An example provided was that one woreda in OromiaboughtalaptopthatwasnotintheirbudgetandthereforedidnotsubmittheirSOE. Althoughthisreportingmechanismisaformofregularinternalauditing,itdelayspayments tootherworedasthatsubmittheirsoesontime.thefmohhasrecognizedthisproblem andrecentlyformedagrantsmanagementunittoensurebottlenecksofallocatingchannel 2resourcesareaddressed.Stillinitsinfancy,thisunitlacksadequatetraining,capacity,and manpower especiallyattheregionallevels tobecompletelyeffective.furthermore,an integrated financial management information system (IFMIS) is a major financial reform 9 Allregionalgovernmentsreceived100%ofthetransfersfromthefederallevel,andalmostalloftheworedasinall regionsreceivedtheirbudgettransfers.therewereafewexceptions,whichwereexplainedinaccuratereflectionof transferdata;newworedaandchallengesrecruitingnecessarystaff;andunusedbalancesinaccountsresultingina reductionoftheblockgrantfromthefederalgovernment(worldbank,2012). ETHIOPIA'RAPID'ASSESSMENT'REPORT' 21

22 program that is ongoing; the design phase for implementation was completed EFY 2004 (2011),howeverthesystemhasnotbeenfullyimplementedyet(FMOH,2011). TheWorHOinAdaaalsostatedthatmultipleadministrativelevelsslowdowntheallocation of Channel 2 resources. The funds for per diems and transportation to provide vaccines duringthechdaswellastrainingsaredelayedfromthezonalhealthoffice(zho).often moneyfortrainingsisnotpaiduntil6monthsafterthetraininghasoccurred.unlikeother woredas,theworedaheadisalsoamemberoftheworedacabinetandisabletoborrow money from WOFED from the woreda s, contingency fund and then the ZHO reimburses WOFED.Thisissueneedstobeexploredfurther. Drugsandprocuredmedicalequipment(e.g.,ambulances)arenotcompletelydistributedor distributed in a timely fashion. Both woredas claimed that distribution of drugs is inconsistent,wherethepfsahubsdonothavetherequesteddrugsinstock(attimesthisis duetoanationalshortage),givelessthanthequantityrequested,ordistributeexpiredor almost expired drugs. Currently, Management Sciences for Health (MSH) has several projectsworkingwithpfsaandlocaldrugvendors.thesupplychainmanagementsystem (SCMS) project focuses on improving forecasting (to determine what drugs are really needed), aggregating demand and negotiating lower prices, and bringing the delivery mechanism closer to the point of use through regional warehouses (MSH, 2013a). The SystemsforImprovedAccesstoPharmaceuticalsandServices(SIAPS)project emphasizes theglobalhealthinitiative(ghi)principles,especiallyimprovingmetrics,monitoring,and evaluation; empowering local governments and organizations; and increasing country ownership (MSH,2013b).Furthermore,thevariousadministrativelevelsoftenslowdown thedistributionofmedicalequipment,procuredbythefmohthroughthemdgpoolfund (Channel2).Forexample,theambulancestobedistributedtoworedaswerestillsittingat therhbinoromiawhentheassessmentfieldworkwasconducted. FMOHlacksacomprehensivehumanresourceforhealth(HRH)trackingsystem.Although thefmohhasimplementedthehumanresourceinformationsystem(hris),itisnotsetup totrackhealthprofessionalsoncegraduated.hrisdoesnotidentifyahealthprofessional s education,additionaltraining,salary,placeofwork(region,woreda,oroutofcountry),and currentposition. Somehealthcentersstillhavenotmetthestaffingstandardssetbythe FMOH,whileothershaveanoverabundance.Forexample,thehealthcenterinGimbichu has4healthofficers,whileotherhealthcentersarestrugglingtohave1healthofficer.a more comprehensive system would ensure adequate planning as the number of health facilitiesincreasesandexpectationsregardingthepositionsneededareupgraded. High staff turnover leaves institutional gaps in human resource capacity for the health sector. Various health actors, such as health facilities and WorHOs indicated high staff turnoverandaninabilitytofillcertainkeypositionsduetoissuesofgeographicremoteness andlackofadequatepay.furthermore,ithasbeenstatedthatpfsahasexperiencedastaff turnoverrateashighas40% ThisestimatewasgivenduringaninterviewwithMr.CouldwellfromMSH sscmsprojectinjanuary2013. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 22

23 Resource'Utilization' Greaterdependencyonretainedfundstocovercertainexemptedservicesandoperational costs is an inadequate short\tem solution. This greater dependency has led to retained fundsbecominganinadequatesourceoffundingforsuchcoststoprovidetheeshpatthe healthcenterandthusisnotasufficientformoffundingtoclosethecurrentfinancialgap. Humanresourcestandardsdonotmatchwithactualfundsavailableforpayingcurrentstaff salaries within the health sector. As highlighted by a DFID staff member during a key informantinterview,thecurrentgoebudgetallocatedforsalarieswasnotsufficient.this hasledtoregionscallingonnextyear sfundsinordertopaystaffsalariesforthecurrent fiscalyear. DuetotheissueslaidoutintheResourceAllocation,Channel2fundsarenotutilizedina timelyway.amajorityofthesefundsgotowardspurchasingofdrugsandsupplies,which facelengthyprocurementprocesses(fmoh,2011).' Resource'Productivity' AsdemonstratedundertheResourceAllocationsection,drugsandequipmentprocuredat the federal level must go through a number of administrative levels before reaching the intendedbeneficiary(whetheritbeworhoorhealthcenter).althoughcentralprocurement ofsuppliesallowsforbulkpurchasingandensuresvalueformoney,thisroutemaynotbe the most efficient use of resources for some types of procurements. For example, microscopesprocuredbythefmohusingchannel2fundswerebrokenbythetimethey reachedtheworhoingimbichu.thisledtotheworeda,procuringtheirownmicroscopes sincetheonesreceivedfromthefmohcouldnotbefixed. RetainedfundsaregoingtowardsexpensesoutsideofwhatisoutlinedintheHCFRstrategy, leadingtotheinabilityofhealthcenterstomaintainareserveofrevenuetowardtheendof theefy.thehealthcenteringimbichualreadyspentsome300,000birr generatedfrom retained funds with still 2 months left of the EFY. Although this woreda, did not seem alarmed,adaawasdefinitelyconcerned,especiallyifitwouldstartimplementingcbhiand demand for services increase. The Health Officer felt that the current model for retained fundsatthehealthcenterswouldnotbesustainable. Given that PFSA and its hubs are not always able to adequately distribute drugs to the healthcenters(e.g.pfsasendsdrugsthatareexpiredorclosetoexpirationdate,donot sendtheamountrequestedbythehealthcenters,etc.),healthcentersbecomerelianton privatepharmacies,whichthenincreasethepriceofuserfeesforthebeneficiaries. Weaknessinsupplychainmanagement(SCM),asoutlinedunderResourceAllocationand Resource Utilization are mostly due to insufficient capacity, high turnover of staff within PFSA,andissuesaroundthemotivationofstaff. 11 Forexample,staffatthePFSAhubswould onlydistributedrugsandsuppliesthatareeasiesttoaccessinsteadofusingstockcloserto 11 ThisinformationwasgivenduringaninterviewwithMr.CouldwellfromMSH sscmsprojectinjanuary2013. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 23

24 its expiration dates. 12 Although SCM has been strengthened over the years with MSH providingalotoftechnicalandhumanresourcesupport,significantchallengesremain. Delays in the procurement process have led to national shortages. Although the public procurementsystemwasstrengthenedinrecentyears,significantchallengesremainsuchas poorly functioning reporting systems and weak oversight (Plummer, 2012). On the other hand, FMOH (2011) noted that at times pharmaceutical shipments from international supplier and manufacturers are delayed. Drug stock\outs are higher than whatisactually reported,andifthereisastock\outofadrugthenitisleftoffthelistwhenreporting.little oversightonthereportingmechanismleadstovariousdonors,suchasglobalfund,tonot get the correct report, which in turn leads to them not procuring a particular drug even whenitisneeded. 13 The FMOH has begun focusing on establishing more sustainable internal financing mechanismsforhealthcarethroughitsrecentdevelopmentofshifortheformalsectorand CBHIfortheinformalsector.Despitetheserecentefforts,limitationsstillexistforEthiopia to fully implement both insurance schemes. To date, the preparatory work for implementationofshihasnotbeencompleted,suchastheestablishedinsuranceagencyto be fully functional, where delays occurred in hiring appropriate staff (FMOH, 2011). The piloting of CBHI has demonstrated tremendous increases in health service utilization. AlthoughCBHIispositivelyperceivedandscale\uphasbeguninsomeregions,preparation (such as organizational, operational budget, and targeted subsidy) is still needed. In Gimbichu, where CBHI is being implemented, beneficiaries have been complaining of the qualityofservicesprovided.ontheotherhand,healthcentershaveexpressedconcernthat theywouldnotbereadytoprovidequalitycareifthedemandshouldincrease.thiswasthe caseinadaa.additionally,nocopaymentmechanismexistsforcbhitoensurerationaluse of services bycbhimembers. The Health Officer at the health center in Gimbichu stated thatattimes,veryhealthypeoplecomeinfortestsduringbusytimes,suchasmarketdays, tyinguptheirtimetoseepatientsinmoreneed. Targeting' Seifu(2002) 14 illustratedthatethiopia sfiscalpolicyhasbeensuccessfulinenablingthepoor to access PC facilities, which is likely due to exempted services including maternal and childhealthservices providedathealthcenters.however,bothworedasvisitedinoromia demonstratedthattargetingforthefeewaiverprogrammightbeinadequate,eventhough selection into the program is based on a collective community process to identify the poorestofthepoorinthekebele.thehealthcentersinadaaandgimbichuclaimedthat utilizationofhealthcareservicesbythisselectedgroupisextremelylow.inadaa,onlyone programparticipantvisitedthehealthcenter,onceinthewholeefy.potentialreasonsfor thiscouldbelackofknowledgeofprogramonthepartofthebeneficiaries,thepoorestof thepoorbeingaccustomedtoalwaysbeingsick,orevenmentaldisordersinhibitingtheir ability to fully comprehend this program. On the other hand, as in the case in Gimbichu, somehouseholdsthatarequitepoorwerenotelectedintotheprogram. 12 Ibid. 13 Ibid. 14 Thisistheonlyknownbenefitincidenceanalysisconductedforthehealthsector. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 24

25 Noaccountabilitymechanismexiststomonitorfundsallocatedforthefeewaiverprogram and whether they are reaching the intended beneficiaries. In Gimbichu, the 75,000 birr allocatedforefy2005werepooledwiththecbhiaccountandthehealthcenterdoesnot needtoreportonwhetherthesefundswereusedspecificallyforthoseselectedintothefee waiver program 15. Given the low utilization of the fee waiver program, one woreda estimatedthatonly5,000birrforefy2005wereusedforservicesrenderedforthoseinthe feewaiverprogram. Despitethesignificantimprovementsingeographicaccess,distanceremainsabarrierfor maternalandchildhealthcurativeservices.accordingtohewssurveyedinchnde(2012), the major obstacles affecting the referral system is cost of transportation, lack of transportation,distancetohealthcenters,andpoorroadinfrastructure.sincehewswould referpatientstohealthcentersforcurativeservices,thisfindingimpliesthatdistancetothe healthcenterandassociatedtimeandtravelcosts(monetaryandopportunitycosts)inhibit accessibility. Figure 8 shows that a majority of kebeles are connected to a referral health center and WorHO by dry weather roads. Therefore, there is limited access during the Kiremt,(bigrain)frommid\Junetomid\September. Figure'8:'Percent'Distribution'of'Kebeles'by'Type'of'Road'Connection'to'Referral'Health'Center'and' Woreda'Health'Office,'Rural'Ethiopia'2010' Source:,CNHDE,(2012), 15 IntheCBHIworedas,thefeewaiverprogramismergedwiththeCBHIschemeandhouseholdselectedintothe program would receive a CBHI member card but would not have to pay the annual premium of 180 birr per householdfortheyear. ETHIOPIA'RAPID'ASSESSMENT'REPORT' 25