Providers and purchasers Readiness for Case-Based Payment and its Systemic Constraints in Ethiopia: A Mixed-Methods Study

Abstract

<title>Abstract</title> <bold>Background:</bold> Ethiopia’s Health Sector Transformation Plan II prioritizes transitioning from fee-for-service to Case-Based Payment (CBP) to enhance efficiency and equity. This study assesses the readiness of healthcare providers and purchasers for CBP implementation. <bold>Methods:</bold> A sequential exploratory mixed-methods study was conducted (Sep-Oct 2025) across three regions and Addis Ababa in Ethiopia. Data included 30 key informant interviews, 8 focus group discussions, and structured surveys with 344 facilities and 57 purchaser institutions. Qualitative data were analyzed thematically; quantitative data using descriptive statistics. <bold>Results:</bold> Provider readiness is hampered by a critical digital divide: while 98.8% use DHIS2 for aggregate reporting, only 40.4% have functional Electronic Medical Records (EMRs), and existing systems lack bundled-pricing capability. Problems​‍​‌‍​‍‌ to data integrity have been identified with coding sometimes being a nurse's task and the use of rule-out diagnoses. Major differences in development level are observed at regions level, with Addis Ababa showing advanced readiness while Somali (15.3%) and Southwest Ethiopia (46.5%) are lagging behind. Purchaser institutions appear to have a strong strategic design, however, they face critical operational gaps: 95% of them are dependent on spreadsheets for claims processing, they do not have automated fraud detection and they encounter a median claim rejection rate of 4%, which is mainly due to incomplete documentation (100%). <bold>Conclusion:</bold> The implementation of CBP in Ethiopia can be successful only if deep-rooted systemic constraints are addressed. The report recommends focusing on integrated digital infrastructure renovation, capacity building for data integrity on a nationwide scale, and aligning operational protocols to the UHC goals while making them more ​‍​‌‍​‍‌efficient.