History: Started a pilot in 2015, extended it in 2019, and ended it in 2024.
Coverage Estimate: 0.5% ⇒ 1.5% after extension
Feasibility: Between 32% (federal team) and 34% (Jimma Zone team) conducted during the 78th PBF course in Mombasa of April 2019
Supported by the Government; financed by the Netherlands Embassy and implemented by the Dutch NGO Cordaid.
Description
Ethiopia is Africa’s second most populous country, with 102 million inhabitants. Health service delivery and indicators in Ethiopia have been improving over the last 25 years. Yet there are still important caveats, such as that 1 in 3 children are chronically malnourished and that the MMR is high, at 412 per 100,000 live births.
Under the Health Sector Transformation Plan, the Federal Ministry of Health addresses Universal Health Coverage (UHC) as a key component, aiming to cover all essential health services for everyone without financial hardship. As part of this strategy, the draft Health Financing Policy mentions performance-based financing (PBF) to improve efficiency. Cordaid has run a showcase PBF project since 2015 in Borena Zone, Oromia Region, serving a population of 186,000, with encouraging results.
In 2019, there was hope that the Ethiopian government, with World Bank financing, would expand Cordaid’s PBF pilot. This hope was mirrored in earlier Cordaid PBF programs in Rwanda, Burundi, Zimbabwe, and the Central African Republic. Unfortunately, this did not materialize in Ethiopia.
Did the Ethiopian PBF program apply underlying international theories and best practices that define PBF as a holistic health reform approach?
In April 2019, two Ethiopian teams, one from the federal level and another from Jimma Zone level, attended the 78th PBF course in Mombasa. They found that PBF in Ethiopia was narrowly defined, identifying several flaws in the PBF intervention design. These include a rigid, centralized human resource policy; limited autonomy for health facilities; non-utilization of the direct exemption with the individual equity bonus for vulnerable patients; the non-use of the wider quality improvement bonus; no integration of the private sector; too few output indicators, making it a vertical MCH program; imperfect integration of PBF indicators with HMIS systems; and an unclear separation of functions.
Despite these challenges, Cordaid’s 2023 End Evaluation paper, conducted by ICOS Consulting, states that the PBF intervention improved quality, health worker motivation, accountability, transparency, and patient satisfaction, and that vulnerable populations increased their access to care. Yet the ICOS study found no improvement in technical efficiency and only a limited impact on service quantity. This may be related to the CBHI schemes applied in both arms, which create a below-equilibrium price that increases demand but sacrifices quality, health workers’ motivation, and patient satisfaction. They also report that sustainability remains seriously in doubt.
Community Based Health Insurance and PBF?
The main driver of the health financing policy is the Community Based Health Insurance Scheme. The CBHI scheme in Ethiopia initially (2011-2013) achieved remarkable results with a 30-40% increase in utilization and a 56% decline in costs (Mebradie, A; et al. in SSM 2019). Yet later evaluations show a different picture, with CBHI coverage impact reduced to 6.9% compared with uninsured citizens, despite full political and financial support from the government and donors (check Mulat, AK; 2022 et al.; Fetene, S; et al., 2023). They identified multiple challenges, such as (i) shortage of human resources and demotivation, (ii) out-of-stock of drugs and medical supplies, and (iii) long waiting times for service and reimbursement claims. We may summarize these flaws as a lack of quality in several dimensions.
Can PBF address these problems?
Ethiopia’s PBF setup was narrower than what most PBF project designers recommend. This is unfortunate because it means the pilot did not fully grasp the opportunities PBF offers. The team also made insufficient effort to integrate the PBF program with CBHI. Is there still a way forward with a detailed study on how PBF can reinforce the national CBHI system?
