District hospitals in Ethiopia play a crucial role in healthcare delivery, particularly for primary care services. However, their effectiveness and sustainability are subject to various methodological challenges. A longitudinal study design was employed, utilising a multilevel regression model to analyse data from multiple hospitals across different regions. The model accounts for both hospital-level and regional-level variations in patient outcomes. The multilevel regression analysis revealed that the presence of robust referral pathways significantly improved clinical treatment success rates by an average of 15% (95% CI: 7-23%). This study provides a methodological framework for evaluating district hospital systems in Ethiopia, emphasising the importance of established referral networks. District health authorities should prioritise strengthening referral mechanisms to enhance patient care and outcomes. district hospitals, multilevel regression analysis, clinical outcomes, Ethiopia Treatment effect was estimated with $\text{logit}(p_i)=\beta_0+\beta^\top X_i$, and uncertainty reported using confidence-interval based inference.