Deadline: 17-Sep-2024
The United States Agency for International Development’s (USAID) Mission in Ethiopia (USAID/Ethiopia) is seeking applications for a Cooperative Agreement from qualified entities to implement the USAID Health Financing Activity, subject to the availability of funds.
The purpose of the Health Financing Activity (HFA) is to improve access to equitable and quality health services and prevent catastrophic health expenditure through increased resources for health, efficient allocation and utilization, and enhanced financial risk protection in alignment with Ethiopia’s overall aim of achieving Universal Health Coverage (UHC) through Primary Health Care (PHC) by 2035.
Health care financing reform in Ethiopia, initiated in 1998, aimed to improve the quality and equity of health services. The strategy focused on increasing resources for health care, promoting efficiency, and ensuring long-term sustainability through multiple financing mechanisms. Key interventions included revenue retention at health facilities, a fee-waiver system, standardized exemption services, and the introduction of health insurance schemes. These reforms have significantly improved health service delivery and financial protection for citizens.
USAID’s investments in healthcare financing reform are largely focused on strengthening and institutionalizing health care financing (HCF) functions and systems to support universal health coverage of quality primary health care (PHC) services for Ethiopian citizens with reduced financial barriers.
The HFA will build upon the lessons derived from previous USAID Ethiopia Health Care financing reform initiatives, including the recent five-year Health Financing Improvement Program (HFIP). The expected outcomes will be evidence-based and objectively measured through the progress made in the country’s capacity to achieve sufficient, equitable, sustainable, and efficient financing for universal healthcare coverage.
Goal and Objectives
- Sufficient, equitable, sustainable and efficient financing is not only critical for expanding access to improve quality of health and nutrition services but also for strengthening health systems, achieving universal health coverage, addressing health inequalities, responding to emergencies, and fostering research and innovation. Therefore, the overall goal of the activity is to improve access to equitable and quality health services and prevent catastrophic health expenditure through increased resources for health, efficient allocation and utilization, and enhanced financial risk protection in alignment with Ethiopia’s overall aim of achieving Universal Health Coverage (UHC) through Primary Health Care (PHC) by 2035. USAID/Ethiopia aims to partner with key Ethiopian government stakeholders, other development partners, private sector entities, civil society organizations, local universities, and/or professional associations in working towards this vision.
- The Activity’s goal will be achieved through four key, interrelated objectives:
- Build the capacity of the Ethiopian health system to mobilize adequate and predictable resources for health at all levels of the governance system for sustainable financing.
- Support the health system to consolidate and further streamline the risk pooling mechanisms for reduced out of pocket payments.
- Strengthen optimal allocation and use of available resources to increase efficiency and effectiveness.
- Boost the health financing evidence generation and use to inform policy, planning and monitoring of Ethiopia’s health financing reforms.
Funding Information
- USAID intends to award one Cooperative Agreement pursuant to this notice of funding opportunity. Subject to funding availability and at the discretion of the Agency, USAID intends to provide up to $40 Million in total for implementation of Health Financing Activity over a five-year period.
Results Framework
- The USAID Health Financing Activity will aim to improve access to equitable and quality health services by implementing key health financing interventions that will help achieve the IRs and sub-IRs described below.
- IR 1: Share of Domestic Resources for Health Out of Total Spending Increased
- One of the main objectives of health financing is to secure sufficient resources from various sources to sustainably deliver essential health care services of acceptable quality to the population. Despite the considerable growth in spending on health, there is a significant gap in financing health services in Ethiopia. The key sources of health financing in Ethiopia include government allocations, household out-of-pocket spending, and donor contributions. In addition to the financing gaps, the significance of funding flows from the latter two sources pose a great challenge to equity and sustainability of financing of the health sector respectively.
- Expected Outcomes
- Increased share of domestic resources mobilized and spent on healthcare
- Illustrative Indicators
- Proportion of domestic resources spent on healthcare out of the total healthcare spending
- IR1.1: Innovative financing mechanisms operationalized
- Expected Outcomes
- Opportunities for sustainable innovative financing identified, appraised, tested and scaled up (if applicable).
- Resilience and Equity Health Fund (REHF)1516 operationalized with strong governance and management structure to handle the innovative financing sources
- A coordination mechanism for the REHF and other Disaster Risk Management resources for efficient allocation, utilization and response to health emergencies institutionalized
- Illustrative Indicators
- # of innovative financing mechanisms appraised and operationalized
- Number of regions that operationalized at least one innovative financing mechanism.
- Value ($) of non-donor resources mobilized for local development priorities. (CBLD-10)
- Expected Outcomes
- IR. 1.2: Institutional capacity to mobilize resources at all levels enhanced.
- Expected Outcomes
- Strengthened resource mobilization units at the federal, regional (especially among DRS and newly established regions), zonal and woreda level for mobilizing domestic and external resources
- HCF structures and champions capacitated to meaningfully advocate for HCF reforms and alignment of different initiatives
- Program based budgeting scaled-up to regions and woredas
- Federal and regional expenditure assignments for key aspects of the health system redefined reflecting their respective budgetary room for health resource allocation
- Illustrative Indicators
- # of regions established resource mobilization units
- # of relevant federal, regional and district actors trained on resource mobilization
- Percent of USG-assisted organizations with improved performance (CBLD-9)
- # of regions that have a robust resource mobilization plan
- # of regions that mobilized at least 90% of planned resources
- The proportion of domestic resources out of the total health expenditure nationally and regionally
- Expected Outcomes
- IR 2: Reduced Out-of-Pocket Spending on Health
- Reducing out-of-pocket healthcare expenses holds a significant importance for several reasons. First, it serves as a protective measure against financial hardships, shielding individuals and families from overwhelming medical costs that could otherwise plunge them into poverty or exacerbate existing financial struggles. Second, this reduction fosters a more equitable access to healthcare by ensuring that essential medical services are within reach for everyone, irrespective of their financial capabilities. Third, it encourages the uptake of healthcare services by removing the barrier of high out-of-pocket expenses, thereby promoting timely and necessary medical interventions.
- Expected Outcomes
- Reduction of share of the out of pocket (OOP) expenditure out of total health expenditure to 25%
- Illustrative Indicators
- Share of OOP expenditure for healthcare from the total health expenditure
- IR2.1: Higher level health insurance pool are established and made functional
- Expected Outcomes
- Regional and Zonal pooling arrangements are established and utilized to cover health care payment of primary and secondary health care
- Federal level pooling arrangements are strengthened and utilized to support payments for tertiary care and equity of zonal/regional pools
- Illustrative Indicators
- Number of regions with regional pooling arrangement
- Number of zones with zonal risk pooling arrangement
- Expected Outcomes
- IR.2.2: Health Insurance proclamation operationalized
- Expected Outcomes
- Mandatory CBHI participation implemented
- Coverage of indigents increased
- Roll-out of CBHI (or similar financial protection) in Developing Regional States strengthened
- Stratified premium payments implemented to strengthen equity
- System to regularly review and update the health insurance package institutionalized
- SHI program operationalized per government’s SHI introduction plan
- Illustrative Indicators
- Number of regions that instituted mandatory CBHI participation
- Number of indigents covered with CBHI
- Percent of regions that implemented stratified premium payments effectively
- Expected Outcomes
- IR.2.3: Capacity of key insurance structures at national and sub national level strengthened
- Expected Outcomes
- Current staffing standard for Insurance scheme reviewed.
- System to regularly build new and existing health insurance staff’s capacity institutionalized
- Knowledge sharing forum among key national and subnational insurance structures established
- Supportive supervision and mentoring provided to key health insurance structures
- Illustrative Indicators
- Number of key national and subnational health insurance structures capacitated
- # of experience sharing forums
- Number of key insurance structures that received supportive supervision and mentoring visits quarterly
- # of health insurance staff trained
- Expected Outcomes
- IR 3: Strategic purchasing mechanisms operationalized for harmonizing/ integrating fragmented payment mechanisms
- As the key manager of health financing resources flowing to the health sector (close to 47% per the 2019-2020 National Health Accounts19), the government’s purchasing arrangement has a bearing on the optimal use of the resources flowing to the health sector to acquire delivery of priority health services efficiently and equitably to the population. For it to be strategic, it requires a closer and explicit consideration of a clear benefit package that incorporates the priority interventions and population groups, service delivery arrangements, and a provider payment mechanism that incentivizes provision of high-quality services for the target population20. Associated with these, there is a need to streamline the different funding flows through which the public health sector obtains its resources and strengthen the public financial management (PFM) system (budget formulation, execution and monitoring) capacity of selected public health structures at the selected regional, zonal and woreda level to support roll-out of program-based budgeting in the health sector.
- Expected Outcomes
- Relevant strategic purchasing mechanisms operationalized that harmonize and integrate the fragmented payment mechanisms in Ethiopia
- Illustrative Indicators
- Number of effective strategic purchasing mechanisms operationalized
- IR3.1: New provider payment mechanisms Evaluated and scaled-up to Health facilities
- Expected Outcomes
- Piloted Capitation payments for CBHI among PHCUs evaluated and scaled-up to all public health facilities
- Alternate hospital payment mechanisms piloted and scaled-up
- Alternate provider mechanisms socialized and accepted by public health facilities
- Illustrative Indicators
- Number of regions in which the piloted provider payment mechanisms are implemented
- Number of health facilities implementing capitation payment system
- Expected Outcomes
- IR.3.2: Purchasing governance and implementation arrangements developed and implemented to ensure provider purchaser split
- Expected Outcomes
- Effective advocacy conducted for provider purchaser split
- National policy document developed to formalize provider-purchaser split
- National implementation manuals developed for effective implementation of provider purchaser split
- Illustrative Indicators
- # of advocacy sessions for provider purchaser split conducted
- A National Policy document to formalize provider-purchaser split
- An Implementation manual for provider purchaser split
- Expected Outcomes
- IR.3.3: PFM systems strengthened to effectively utilize public resources at sub-national level
- Expected Outcomes
- Program based budgeting scaled-up to regions and woredas to allow better alignment of the PFM systems to the health sector program and policy objectives.
- Capacity to use the program based budgeting associated PFM system to utilize publicly available resources effectively developed
- Illustrative Indicators
- Number of regions that scaled up program based budgeting
- Number of regions that used the PFM system to effectively utilize the public health resources
- Expected Outcomes
- IR 4: Streamlined Health Financing Evidence Generation and Utilization in Place
- Given the magnitude and implications of the critical issues that pose challenges to the further advancement of Ethiopia’s health financing reforms, there is a continued need to document the processes and findings of the activities and interventions that address the above issues, generate evidence on what works and what doesn’t and thereby identify the best practices in going forward. In addition, similar to the tracking of critical health service morbidity and utilization, there is a need to build on existing practices to strengthen the health information system to regularly track the health financing information system and enable monitoring of the health financing status starting from the health facility up to the national level. The applicant is expected to build on investments thus far and propose activities to strengthen the health financing information system and mechanisms through which it will utilize the learning questions that will be developed as part of the CLA/LME Plan to build capacity of the Ministry of Health, regional health bureaus (RHBs), the federal and regional public health institutes, woredas and public health facilities in generating and documenting evidence as well as dissemination and the utilization of the lessons learned.
- Expected Outcomes
- Health financing information system strengthened and utilized.
- Illustrative Indicators
- Proportion of regions in which the health financing information system is consistently utilized for evidence based decision making
- IR4.1: Integrated health financing information system established and made functional
- Expected Outcomes
- System in place to regularly track flow of health finance through the health sector
- Illustrative Indicators
- An integrated health financing information system established
- Proportion of regions in which the integrated health financing information system is functional
- Expected Outcomes
- IR.4.2: Evidence based advocacy and strategic communication skills strengthened
- Expected Outcomes
- Capacity and systems in place to utilize evidence to communicate and advocate for key health financing reform topics at national and sub national level
- Illustrative Indicators
- # of capacity building sessions on advocacy and strategic communication
- Expected Outcomes
- IR.4.3: Relevant Health financing policy research supported to advocate for evidence-based reform
- Expected Outcomes
- Operational/policy research conducted to inform the Health Financing Reform activities supported
- Illustrative Indicators
- # of health financing policy researches supported
- # of health financing researches converted into policy briefs for actions
- # of research dissemination and knowledge sharing platforms organized
- Expected Outcomes
- IR 1: Share of Domestic Resources for Health Out of Total Spending Increased
Core Implementation Principles
- USAID/Ethiopia has identified the principles below as overarching guiding principles. These principles are necessary for the success and sustainability of the activity. The Recipient will be expected to implement an approach that aligns with the following principles:
- Promoting local leadership
- As recognized in principles of aid effectiveness, local ownership, and country leadership are critical to the success and sustainability of any development intervention. Programmatic approaches must place local actors in the position to shape and direct program inputs, building on their strengths and expanding their capacity to increase their effectiveness and sustainability.
- Appreciating and building on the positive, using local assets
- It can be easy for development practitioners to get caught up in analyzing and treating problems. Appreciative, asset-based approaches look for what works and what can be built upon. They encourage individuals, communities, local and regional governments to own the development process and focus on optimizing use of local resources, which may mitigate creation of dependency on outside resource flows and increase a sense of self-reliance.
- Value for Money/Cost-effective
- Analysis Monitoring results and dollars spent over the life of the award will be critical to inform how the solutions developed and funded under this Activity can be scaled but also, to identify opportunities to be more cost-efficient and effective.
- Conflict Sensitivity
- Given the current multiple unresolved conflicts across different parts of Ethiopia, partners will be expected to integrate a proactive conflict sensitive approach in the design and implementation of this activity. Conflict sensitivity refers to the discipline and capacity of an organization to: (1) understand the conflict context in which activities are being implemented; (2) understand how the context might affect the activity and how activity might affect the context; (3) act on this understanding to minimize risk of negative impacts on interventions and resources (i.e., staff, beneficiaries, communities, results) and the conflict dynamics; and (4) identify options for positively impacting the conflict context.
- Flexibility
- Given the currently frequent shifting environment in Ethiopia, the activity must be able to operate in a wide range of possible security, economic, and political environments. Partners should address how it will approach programming under such variable conditions including significant deterioration or improvement of the operating and security environments. USAID desires to fund an activity which is adaptive to these contextual changes in order to achieve the stated objectives. A successful application should describe how the activity will respond to dynamic changes in the operating environment and should incorporate regular risk assessment and flexibility to revise program activities that quickly respond to the needs of Ethiopian citizens, the United States Government (USG), key stakeholders, and the changing political environment. Plans and methods for assessing, mitigating, and adapting to risk factors should be vetted with USAID and regularly reviewed.
- Promoting local leadership
Geographic Code
- The geographic code for the procurement of commodities and services under this Activity is 935 (the United States, the recipient country, and developing countries other than advanced developing countries, but excluding any country that is a prohibited source), authorized USAID Principal Geographic Code for the procurement of commodities and services.
Geographic Focus
- The USAID Health Financing Activity will entail a targeted investment around activities that have national implications and more focused investments at selected regions. The latter are to be determined based on the status of financing reform implementation at the regional level. Priority will be given to the Regions that are behind rolling out the health financing reform, and the activities are expected to build on gains of USAID’s prior investments. USAID expects a gradient of investment support required for the different regions and districts, taking into account the status of financing reform, understanding of current investments related to financing reforms.
Eligibility Criteria
- USAID welcomes applications from organizations that have not previously received financial assistance from USAID.
- Faith-based organizations are eligible to apply for federal financial assistance on the same basis as any other organization and are subject to the protections and requirements of Federal law.
For more information, visit Grants.gov.