Who Benefits from Public Spending on Health Care ? Longitudinal Evidence from Ethiopia

This study investigates the distribution of benefits from public health care spending in Ethiopia by combining individual health care utilization data from the 2018/19 and 2021/22 waves of the Ethiopia Socioeconomic Panel Survey with regional budget information. It analyzes how health care subsidies and out-of-pocket expenditures are distributed across income groups and rural-urban settings. The results show that, although public health care use and subsidies are generally progressive, they tend to favor wealthier individuals. Further disaggregation by facility type and location over time provides deeper insight into these distributions. Hospital care subsidies are largely pro-rich, while benefits from health centers and posts are strongly pro-poor. Furthermore, rural residents face regressive out-of-pocket costs. However, the longitudinal nature of the data allowed an assessment of temporal changes, showing recent improvement in pro-poorness at primary facilities. Subsidies at health centers and health posts demonstrated an increased pro-poor orientation between 2019 and 2022, which was particularly strong for outpatient and inpatient services in urban areas. The observed trends over time suggest potential to reduce disparities across all service types, including hospital care, through targeted approaches aimed at improving community access to these facilities. These findings have significant implications for equity in health care financing and inform policy priorities aimed at achieving universal health coverage in Ethiopia.