Health calamities are one of the conU1lOn causes of impoverishment at the household level; andrndifferent households find different mechanisms for adapting to the same calamitousrncircumstance. Nowadays, in many developing countries, affordability of health care is a growingrnconcern both for policy makers and households, as people are expected to contribute more fromrntheir own pockets in getting health care due to health sector financing reforms and privatization.rnThis cross-sectional study, which has used both quantitative and qualitative methods of datarncollection, was conducted from February to October 2000 in 630 randomly selected rumlrnhouseholds living in a predominantly coffee growing district of southwest Etlliopia. The mainrnobjective of the study was to assess the strategies used by households to cope with the financialrnand time costs of illness.rnThe average cost of visiting a health care provider for one illness episode was found to be 32.87rnBirr (about 4 US$), of which expenditures for drugs, transpOlt and lodging away from homernwhile seeking health care were considerable. In an attempt to quantify the economic implicationsrnof morbidity at the household level, days lost due to illness were determined. Accordingly, adultsrnwho have repOlted illness in the one-month recall period have lost 9.23 working days, whichrncorresponds to a loss of about 138.45 Birr (about 17 US$) in one month .rnAbout 42% of the studied households with sick family members in the recall period of sixmonthsrnwere found not purchase outside health care for reasons associated with out of pocketrn11rnexpenditure of health care costs. Main mechani sms use to cope with the financial costs ofrnillnesses were looking for exemption paper (16.8%), sale of household assets (13.3%), use ofrnhousehold saving (3.1 %), and going into debt ( 12.7%). In addition, about 64% of tJlernhousebolds did nothing to cope the potential time lost due to illness. Using multiple logisticrnregressIOn, socio-demographic and economic factors at the household le ve l, which havernsignificant association with the choice of mechanisms for coping, were identifi ed. Based on thernresults of the study, altemative strategies of financing the local health services incorporatingrnindigenous social networks like "eder" were di scussed and reconullendations forwarded