Healthcare financial and

Space Management

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Outline
Introduction
Major Functions
Mechanisms of Healthcare Financing
Healthcare Financial Management
 Healthcare Financial Management in Ethiopia
Challenges
Healthcare Space Management
Challenges
Reference
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Objective
 At the end of the presentation students will be able to understand
 Basic concept of healthcare financial management

 Understand the challenges of healthcare financial management in

Ethiopia
 Explain the basic concepts of healthcare space management
 Explain the challenges of healthcare space management in
Ethiopia
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Introduction

 Health financing is a core function of health systems that can enable

progress toward universal health coverage by improving effective
service coverage and financial protection

 The primary goal of any healthcare financing system is to facilitate

access to needed healthcare services for the entire population

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Functions

 The functions of health care financing are to ensure that:

resources are mobilized or collected
 they are pooled and managed from a risk-sharing perspective
 Healthcare services are purchased by the relevant individuals or
healthcare centers

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04/13/2024 6
Mechanisms of Healthcare Financing
 General Revenue (Single payer system)

 Social Health Insurance (multi-payer system)

 Private Insurance

 Community Financing

 Out of Pocket Expenditure

 Aid-Funding and Donors

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Healthcare Financial Management
 Healthcare financial management is the process of planning,
organizing, directing, and controlling the financial activities of
healthcare organizations to achieve financial goals while effectively
utilizing resources

 It involves understanding the financial implications of decisions

made within healthcare organizations

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Cont…
 The healthcare environment today demands that managers consider
financial aspects when making operational choices

 Financial management is a decision science

 While accounting provides a rational way to budget and measure

financial performance, financial management equips decision-makers
with theory, concepts, and tools to make informed choices

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Role of Healthcare Financial Management
 Reducing risk and stability

 Detecting Fraud and Misuse of funds

 Simplifying Third-Party Payments and Improving Cash Flow

 Negotiating Vendor Contracts and Supply Chain Optimization

 Profitable Investments Based on Data Insight

 Facilitating Necessary Improvements and Decision-Making

 Error Prevention and Cost Reduction

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Cont…
 Strong financial management ensures viability and supports strategic
decision-making through funding priorities and investments that
advance patient care objectives.

 Effective financial administration provides accountability and access

to capital needed to continuously meet community health needs.

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Cont…
 Budgeting and Financing: developing annual operating and capital
budgets as well as multi-year financial projections.

 Outlines expected revenues and expenses over a 12-month period

based on utilization projections, staffing needs, supply costs,
contractual obligations, and other factors.

 It serves as the financial framework and operations plan for the year.

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Cont…
 Cost-control and accounting: Cost control and cost accounting
involve very closely analyzing all of the costs involved in providing
healthcare

 By understanding the precise costs of different aspects of care,

financial managers can help identify opportunities to reduce spending
and improve efficiency

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Cont…
 Financial reporting: involves preparing regular reports (typically
monthly but sometimes more frequently) that analyze the
organization's financial data and performance over time

 The reports analyze key metrics like operating revenues, expenses,

profits/losses, cash flow, balance sheet items and ratio analysis. They
compare actual performance to budgets and prior periods to identify
variances
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Cont…

 Compliance involves ensuring adherence to the many regulatory and

legal standards that healthcare organizations must follow related to
finances and accounting. This includes both external rules as well as
internal financial controls.

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Healthcare Financing in Ethiopia
 Despite the Ethiopian Government’s goal of achieving UHC by 2030,
the health system faces significant hurdles. These include low
healthcare funding and high out-of-pocket (OOP) expenditures for
healthcare services

 In the early 1990s, Ethiopia was recovering from a prolonged civil

war, resulting in a deteriorated health infrastructure and inefficient
health service delivery
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Cont…
 In response to these challenges, the Ethiopian government launched a pro-
poor health policy and embarked on healthcare financing reform in 1998

 The reforms included several interventions:

Revenue Retention and Utilization: Health facilities were allowed to retain

and use their revenue for quality improvements.

Fee-Waiver System: Ensured access to services for vulnerable populations.

Health Insurance Schemes: Introduced risk pooling mechanisms

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Cont…
 The Federal Ministry of Health (FMoH) developed a healthcare financing strategy

(2017-2025) to accelerate Ethiopia’s progress toward ‘Universal Health Coverage

 Need for increased government budget allocation to the health sector, continued

strengthening of health care financing (HCF), scaling up of community-based

health insurance (CBHI), launching and implementation of social health insurance

(SHI)

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Cont…

 A study revealed that government expenditure accounted for 32

percent, external funding accounted for 35 percent and out-of-pocket
spending on health amounted to 31 percent of total health expenditure

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Cont…
 An HFM system consists of all the processes, institutions, and
policies that relate to how public funds are mobilized and used. The
PFM system ideally allocates resources in alignment with objectives,
ensures that the resources are spent effectively and efficiently, and
minimizes misuse.

 This also encompasses developing an HFM guideline mentoring

guide for PHCs and conducting training and onsite mentoring
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Challenges
 Inconsistent health facility readiness to provide quality services, shortage of drugs,
medical supplies and equipment,

 Ethics related challenges with health professionals

 Inconsistent commitment of leaders across regions to implement CBHI

 Lack of community trust in cash collectors and moral hazards in utilizing health care
services

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Summary

 Ethiopia’s health financing has made significant contributions to

healthcare infrastructure, medical supplies, diagnostic capacity, drugs,
and financial risk protection

 However, poor access to equitable and quality healthcare services

remains a challenge due to low healthcare funding and high out-of-
pocket payments and dependent on external funding

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Healthcare space Management
 Refers to how healthcare facilities plan, design, allocate, and utilize
their physical space. Some key aspects of healthcare space
management

 Ensuring spaces are appropriately zoned and rooms are arranged to

facilitate smooth workflows and patient flows through the facility.

 Assigning the right amount and type of space for each

department/specialty based on their needs and priorities.
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Cont…
 Tracking space utilization over time and modeling future capacity
needs. Allows right-sizing or expansions proactively

 Incorporating versatility like modular rooms that can serve different

purposes over time as needs change

 Ensuring clear signage, maps, etc to guide patients and staff through
the building easily

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Techniques of Healthcare Space
Management
 Space utilization tracking

 Space Forecasting

 Policy Development

 Budget Oversight

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Healthcare Space Management in Ethiopia

Healthcare space management in Ethiopia involves addressing

various challenges related to the organization, utilization, and quality
of healthcare facilities

It encompasses aspects such as layout, infrastructure, equipment

placement, and safety protocols.

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Cont…
Here are some relevant standards and guidelines related to healthcare
space management in Ethiopia:

1. Essential health service package (EHSP)

2. Estimated costs and fiscal space analysis for EHSP

3. The Ethiopian Hospital Service Transformation Guidelines (EHSTG)

4. Patient volume and primary quality of care

5. National minimum standards for healthcare facilities

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Essential Health Service Package
 Ethiopia’s investment in health over the last two decades has led to
significant improvements in population health, including increased life
expectancy. The EHSP aims to provide essential health services to the
population

 The Essential Health Service Package, launched in November 2019,

aims to provide access to quality health services without any financial
challenges regardless of age, ability to pay, and geographic location
for the population in Ethiopia.
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Main Objectives
 To reduce high BoD in Ethiopia by availing affordable high-priority
interventions

 To protect the population against catastrophic health expenditures and

provide FRP

 To increase equitable access to health services and interventions

 To increase the efficiency of the health system

 To increase public participation and transparency in decision-making in the

health
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 The Ethiopian Hospital Service
Transformation Guidelines (EHSTG)
 The EHSTG establishes a framework for transforming hospital
operations, of which effective space utilization, configuration, and
ongoing planning is an important supporting component

 Provide guidance to hospital leaders and managers on implementing

quality improvement initiatives

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Cont…

 These guidelines aim to consistently implement transformational

systems and processes within hospitals, ensuring efficient and
effective healthcare delivery

 One of the aims is to ensure efficient and effective hospital services

while promoting good governance. This ties to space management as
configuration and utilization impact efficiency.

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Cont…

 Infrastructure Planning: The guidelines likely address the planning,

design, and utilization of hospital spaces. This includes considerations
for patient wards, operating theaters, diagnostic facilities, and
administrative areas.

 Safety and Accessibility: Ensuring safe and accessible spaces for

patients, staff, and visitors is critical.

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Cont…

 Optimal Space Allocation: Hospitals need to allocate space wisely to

accommodate patient care, medical equipment, storage, and
administrative functions

 Efficient Workflow: Space layout should facilitate

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Cont…

 Hospital Chief Executive Officers (CEOs), managers, and clinicians can

refer to the EHSTG for practical guidance on implementing space-
related systems and processes.

 This includes optimizing existing spaces, planning for expansion, and

ensuring safety and functionality.

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Patient volume and primary quality of
care
 Several studies have reported inadequate levels of quality of care in
the Ethiopian health system. Facility characteristics associated with
better quality remain unclear.

 Understanding associations between patient volumes and quality of

care could help organize service delivery and potentially improve
patient outcomes

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Cont…

 Based on the study Patient volume and quality of primary care in

Ethiopia

 The study included 424 facilities including 270 health centers, 45

primary hospitals and 109 general hospitals in Ethiopia.

 Quality was low across all facilities ranging from only 18 to 56% with
a mean score of 38%. Outpatient volume varied from less than one
patient per day to 581. Among facilities
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 National minimum standards for health
care facilities
 The National Minimum Standards for Healthcare Facilities in Ethiopia
is a regulatory document that mandates both practitioners and health
institutions to comply with a minimum set of requirements.

 These standards ensure quality and safety in healthcare provision,

and their regular update helps sustain best practices

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Cont…
 The national minimum standards constitute licensure requirements,
good governance practice standards, human resource management
standards, service providers’ and clients’ rights and

 Responsibilities, health service practice standards, premises

standards, professionals’ standards, product standards, and cross-
cutting service standards for different types and levels of health
facilities

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Challenges
 Many healthcare facilities in Ethiopia struggle with inadequate
infrastructure. Insufficient space for patient care, administrative
functions, and specialized services can hinder effective healthcare
delivery.

 Overcrowded waiting areas, cramped examination rooms, and

limited storage spaces are common issues.

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Cont…

 Allocating space efficiently is crucial for optimizing resource

utilization. However, due to budget constraints and competing
priorities, hospitals often lack the necessary space for essential
services.

 Balancing the allocation of space for clinical services, administrative

offices, laboratories, and support functions is a constant challenge.

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Cont…

The volume of patients seeking healthcare services impacts space

management. High patient volumes can strain existing infrastructure
and affect service quality.

A recent study in Ethiopia found that quality of care remains low

across facilities, with an average score of only 38%1. Balancing patient
load while maintaining quality is essential

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Summary
 Healthcare space management is essential in Ethiopia to efficiently use
limited resources. Overcrowding is common in facilities nationwide.

 By analyzing current space usage and patient flows, opportunities exist

to improve organization and free up areas for expanded services. With
enhanced planning and optimization, more Ethiopians can access the
quality care they need.

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References
Guimarães, L., Navarro, S., & Lievens, T. (2012). HEALTH FINANCING
Trends in Sub-Saharan Africa. www.opml.co.uk
Strengthening Public Finance Management (PFM) Improving Health
Facility Revenue Retention and Utilization (RRU). (n.d.).
Woldie M, Kassa M, Berman P, Kruk ME. Patient volume and quality of
primary care in Ethiopia: findings from the routine health information
system and the 2014 Service Provision Assessment survey. BMC Health
Serv Res. 2021 May 22;21(1):485. doi: 10.1186/s12913-021-06524-y.
PMID: 34022856; PMCID: PMC8140434.

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 Thanks!

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