The Effect of Ethiopia’s Community-Based Health Insurance Scheme on Revenues and Quality of Care

Ethiopia’s Community-Based Health Insurance (CBHI) scheme was established with the objectives of enhancing access to health care, reducing out-of-pocket expenditure (OOP), mobilizing financial resources and enhancing the quality of health care. Previous analyses have shown that the scheme has enhanced health care access and led to reductions in OOP. This paper examines the impact of the scheme on health facility revenues and quality of care. This paper relies on a difference-in-differences approach applied to both panel and cross-section data. We find that CBHI-affiliated facilities experience a 111% increase in annual outpatient visits and annual revenues increase by 47%. Increased revenues are used to ameliorate drug shortages. These increases have translated into enhanced patient satisfaction. Patient satisfaction increased by 11 percentage points. Despite the increase in patient volume, there is no discernible increase in waiting time to see medical professionals. These results and the relatively high levels of CBHI enrollment suggest that the Ethiopian CBHI has been able to successfully negotiate the main stumbling block—that is, the poor quality of care—which has plagued similar CBHI schemes in Sub-Saharan Africa.