Equity in public health spending in Ethiopia: a benefit incidence analysis

Inequality in access and utilization of health services because of socioeconomic status is unfair, and it should be monitored and corrected with appropriate remedial action. Therefore, this study aimed to estimate the distribution of benefits from public spending on health care across socioeconomic groups in Ethiopia using a benefit incidence analysis. We employed health service utilization data from the Living Standard Measurement Survey, recurrent government expenditure data from the Ministry of Finance and health services delivery data from the Ministry of Health’s Health Management Information System. We calculated unit subsidy as the ratio of recurrent government health expenditure on a particular service type to the corresponding number of health services visits. The concentration index (CI) was applied to measure inequality in health care utilization and the distribution of the subsidy across socioeconomic groups. We conducted a disaggregated analysis comparing health delivery levels and service types. Furthermore, we used decomposition analysis to measure the percentage contribution of various factors to the overall inequalities. We found that 61% of recurrent government spending on health goes to health centres (HCs), and 74% was spent on outpatient services. Besides, we found a slightly pro-poor public spending on health, with a CI of −0.039, yet the picture was more nuanced when disaggregated by health delivery levels and service types. The subsidy at the hospital level and for inpatient services benefited the wealthier quintiles most. However, at the HC level and for outpatient services, the subsidies were slightly pro-poor. Therefore, an effort is needed in making inpatient and hospital services more equitable by improving the health service utilization of those in the lower quintiles and those in rural areas. Besides, policymakers in Ethiopia should use this evidence to monitor inequity in government spending on health, thereby improving government resources allocation to target the disadvantaged better.