Reaching the Health MDGs in Ethiopia

Financing Challenges and Prospects

OECD Global Forum on Development

Aid Effectiveness in Health

4 December 2006, Paris

Tedros Adhanom

FMOH

2

Country Profile

1.1 million sq.km

77.3 million population

Population growth rate: 2.7% /year

Rural population:85%

Federal government :– 9 Regional States, and 2 City

Administration

– 624 Woredas (districts)

– 15,000 kebeles (villages)

Part 1 - Challenges:Mobilizing Domestic Resources and

Improving Execution of External Funding

Overview of Health Expenditures

5

He

alt

h E

xp

en

dit

ure

s in

Su

b-S

ah

ara

n A

fric

a

01

020

30

40

50

Countr

y

Buru

ndi

Dem

ocra

tic R

epublic

of

Congo

Lib

eria

Rw

anda

Sie

rra L

eone

Eth

iopia

Eritr

ea

Madagascar

Guin

ea-B

issau

Nig

er

Centr

al A

fric

an R

epublic

Mozam

biq

ue

Tanzania

Mala

wi

Chad

Ghana

Mali

Togo

Maurita

nia

Uganda

Burk

ina F

aso

Congo

Benin

Kenya

Gam

bia

Sudan

Zam

bia

SS

A A

vera

ge

Guin

ea

Nig

eria

Côte

d'Iv

oire

Senegal

Cam

ero

on

Zim

babw

e

Djib

outi

US

$ p

er

cap

ita

Ethiopia still among the lowest spenders …

SSA Average Ethiopia

6

The share of donors and NGOs has increased while the share of government and households has decreased

Ethiopia Health Expenditures 2001/02-2004/05

33%

16%

36%

10%

4%

31%

19%

31%

19%

1%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Government World (public) Household NGO (international& local)

Private(employers &

others)

2001-2002 2004-2005

7

Budget Execution of Capital Budget by Source of Financing

62%

106%

68%

87% 89%

76%

88%

74%

5%13%

18%

37%

23%21%

12%5%

10%

26%

1991 1992 1993 1994 1995 1996 1997 1998

Domestic External Loan External Assistance

Execution rates of capital budgets markedly lower for external assistance compared to domestic sources

Audited Values Unaudited Values

8

What explains the low execution rates of donor funds?

Fragmentation– Large number of accounts with different rules

Donor Procedures– Different and cumbersome reporting systems

Capacity

SOLUTION: MDG Performance Fund– Early experience of PBS as a financing instrument has

been positive, but there are huge disappointments with management procedures and procurement systems

9

Strengthening the MDG Performance FundGeneral Revenue Protecting Basic Services

MOFED

FMOH

Bilaterals, UN agencies, Global Funds etc

Central Procurement and Logistics Agency

: drugs and equipment

(in kind)

BOFED

WOFED

Budget Flow (channel 1A)Sector Specific Assistance Flow (channel 1B)Purchasing flow

(in kind)

(in k

ind)

Health Center

Health Post/ Community

PBS BLOCK Grant

Health MDG Performance Fund

Capacity Building TA, training

Strenghthening procurement/

logistics

International commodities (vaccines, contraceptives,malaria drugs,TB drugs, ITNs, HSEP drugs)

10

The Three Key Questions

How to increase the share of domestic funding as a share of total public spending?

How to improve the execution rate of donor funds?

How to improve the public reporting systemto better capture the efficiency and equity of health spending?

Scaling up: what can be achieved and at what cost?

12

Cost of scaling up health servicesincremental cost per capita 2005-2015 for reaching the MDGs

Current Health Expenditures

Step 1

Step 2

Step 3

Step 4

Step 5

0

5

10

15

20

25

30

35

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US$ (2004 constant $)

Reversed trend in HIV incidence and stabilized trend in HIV prevalence

Decrease in child mortality due to HIV, malaria, diarrhea diseasesReduced HIV transmissionReduced malaria morbidity and mortality

Step 1: Information and Social Mobilization for Behavior change

Reduced child mortality by two third

Decrease in child mortalityReduction in HIV Mother To Child TransmissionReduction of deaths due to pregnancy by 40%Reduce malaria mortality morbidity Reduce Child malnutrition

Step 2: Health Services Extension Program

Reduced malaria mortality by 50%Increase TB DOTS coverage

Further decrease of: Child mortalityMaternal MortalityMalaria, morbidity & mortalityTB

Step 3: First level clinical upgrade

Reduced MM by 75%Further decrease of :child mortalitymaternal mortalityHIV MTC transmission

Step 4: Expansion and Upgrade of Emergency Obstetrical care

Further decrease of :child mortality,maternal mortality,HIV MTC transmissionProvision of HAART , multi-drug resistant TB and severe malaria treatment

Step 5 : Expansion and Upgrade of Referral Care

MDGs reachedHealth OutcomesScale Up Strategy

13

Volume, speed and quality

Reduce morbidity attributed to malaria from 22% to 10%

Maintain HIV prevalence at 3.5

Reduce mortality attributed to TB from 7% to 4% of all treated cases

U5MR 123 to 85

IMR 77 to 45

MMR 871 to 600

Outcome

20 million ITNsMalaria

Reach every household

ART 263,000HIV/TB

Immunization > 80%

Child Health HMIS

Logistic system

Financing system

Harmonization

Health Post:

13,635

Health Center:

3,135

Health Extension Workers:

30,000

Health Officers:

5,000

CPR > 60%Maternal Health

BloodlinesVehiclesTargetsFocus areas

14

Three implementation scenarios for HSDP3

Scenario 1: Full implementation of the HSEPaccess to health post 100% (13,635 HP, HR, essential inputs)access to health center 80% (2,229 HC, HR, essential inputs, functional B-EOC)

Scenario 2:– Full implementation of accelerated expansion of PHC

access to health post 100% (13,635 HP, HR, essential inputs)access to health center 94% (3,135 HC, HR, essential inputs, functional B-EOC)Increased coverage of clinical services

Scenario 3: No resource constraintsfull implementation of accelerated expansion of PHCfunctional C-EOChigher coverage targets for clinical careall health MDGs achieved

15

Facilities, human resources, HIV and malaria drugs represent the largest share of HSDP3 cost

Ethiopia:Cost Items for each HSDP3 scenario

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

Scenario I Scenario II Scenario III

Monitoring, evaluation, technical &institutional supportPromotion + demand creation

Food supplements

Water and sanitation

Transportation

Pre-service training

Insecticide treated nets

New vaccines

Classical vaccines

Malaria drugs

Other drugs and supplies

HIV/AIDS and TB drugs and supplies

Human resources

Health facilities & equipment

Financing outlook

17

HSDP III Financing Gap

0%

20%

40%

60%

80%

100%

Scenario 1 Senario 2 Scenario 3

HSDP III Financing Gap with HIV/Aids funding

Government budget Global Fund Bilateral and multilateral GAVI Gap

18

Pledges generally cover partially the cost of each component ... When PEPFAR and Global Fund are not included

Source: Health Care Financing Study

Ethiopia: Donor Pledges by HSDP3 component and sub-component (including PBS excluding Global Fund and PEPFAR)

0

10

20

30

40

50

60

70

Fam

ily H

ealth

Ser

vic

es

HIV

& T

B

Ma

laria

Oth

er

com

mun

icab

le

Hy

gien

e an

d

env

ironm

ent

Cur

ativ

e

Phy

sica

l acc

ess,

tran

spor

tatio

n

Hum

an

reso

urce

s

deve

lopm

ent

Str

eng

then

ing

phar

mac

eut

ical

s

sect

or IEC

BC

C

HM

IS/m

anag

em

ent

He

alth

car

e

finan

cing

Cro

sscu

tting

2005-6

2006-7

2007-8

2008-9

2009-10

19

But very large amounts for HIV/AIDS treatment distort the picture

Source: Health Care Financing Study

Ethiopia: Donor Pledges 2005-2010 by HSDP3 component and sub-component (including PBS, Global Fund and PEPFAR)

0

50

100

150

200

250

300

350

400

Fam

ily H

ealth

Se

rvic

es

HIV

& T

B

Mal

aria

Oth

er c

omm

unic

able

Hyg

iene

and

env

ironm

ent

Cur

ativ

e

Phy

sica

l acc

ess,

tran

spor

tatio

n

Hum

an r

esou

rces

dev

elo

pmen

t

Str

engt

heni

ng p

harm

aceu

tical

s se

ctor

IEC

BC

C

HM

IS/m

anag

emen

t

Hea

lth c

are

finan

cing

Cro

sscu

tting

2005-6

2006-7

2007-8

2008-9

2009-10

HIV

20

Health System receives less attention from donors

1.1 Family Health Services 1.2 HIV 1.2 malaria

1.2 others 1.3 hygiene and environment 1.4 curative

1.service delivery and quality of care 2.physical access, transportation 3.human resources development

4.strengthening pharmaceuticals sector 5.IEC BCC 6.HMIS/management

7. Health care financing 8.crosscutting

HIV

HIV

MCH

Malaria

MCH

Health System

Ethiopia: Donor Pledges 2005-2010 by HSDP3 component and sub-component (including PBS, Global Fund and PEPFAR)

21

…but gap still large form child health, malaria and health systems even for scenario 1

Funding Gap per HSDP3 component

0

500

1000

1500

2000

Family HealthServices

Malaria Health System HIV & TB

Th

ou

san

d U

S$

Scenario 1 Scenario 2 Scenario 3 Funding

Source: Health Care Financing Study

22

The Three Key Questions

How to mobilize domestic funding –from the current 5% to 10-15% of total public spending? (in line with the Abuja commitment)

How to reestablish some balance between donor funding sources and most efficiently use the large amounts available for HIV/AIDS treatments?

Which resources mobilization strategy to address the heath system and child health gap?

Thank you