Assessing catastrophic out-of-pocket payments in Ethiopia’s health system

Abstract Background: Providing adequate financial protection for all remains an essentialaspect of Universal Health Coverage (UHC). In Ethiopia, although the government has introduced reforms, out-of-pocket (OOP) spending accounts for 37% of current health expenditure in 2016. This is considered high enough to lead to financial catastrophe—a situation where a household spends more than a given fraction of its expenditure (or capacity to pay) OOP on health services. This study assessedfinancial catastrophe resulting from OOP health spending in Ethiopia. Methods: Data come fromthe Ethiopian Household Consumption Expenditure Survey (HCES) 2010/11 with about 28,000 households. The incidence and intensity of catastrophic spending were estimated using rank-dependent thresholds that are different depending on household income levels—the thresholds become lower for low-income households. Initial thresholds used ranged between 5% and 25% of total household expenditure, and between 20% and 40% of household non-food expenditure. Concentration indices are used to assess whether financial catastrophe is more prevalent among the poor or rich. Results: Atthe 10% initial threshold of total household expenditure, financial catastrophe was estimated at 4.08%, translating to over 668,000 households. At an initial threshold of 40% of total household non-food expenditure, about 0.82% or about 133,600 households incurred financial catastrophe, paying more thantheir rank-dependent thresholds. Financialcatastrophe was more prevalent among poorer and urban households, butthere was a mixed pattern across Ethiopia’s 11 regions. Conclusion: Financialcatastrophe resulting from paying OOP for health services exists in Ethiopia, affecting over 100,000 households. The low incidence compared to other studies may suggest that government’s initiatives like the fee-waiver and exemption systems have been successful, but the prevalence of financial catastrophe among the poor may signify that more is needed to achieve universal financial protection in Ethiopia. Keywords: Universal health coverage; financial catastrophe; Ethiopia