Mexico - Basic Health Care Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 16662 IMPLEMENTATION COMPLETION REPORT REPUBLIC OF MEXICO BASIC HEALTH CARE PROJECT (LOAN 3272-ME) June 3, 1997 Mexico Department Human and Social Capital Development Group Latin America and the Caribbean Regional Office This document has a restricted distribution and may be used by. recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS CURRENCY EQUIVALENTS Currency Unit = New Peso (N$) US$1.00 = 7.8 New Pesos (June, 1997) FISCAL YEAR January I - December 31 ABBREVIATIONS & ACRONYMS BH It Second Basic Health Care Project CAS Country Assistance Strategy ENSA National Health Survey (Encuesta Nacional de Salud) IBRD International Bank for Reconstruction and Development ICB International Competitive Bidding ICR Implementation Completion Report IDB Inter-American Development Bank IMSS Mexican Social Security Institute (Instituto Mexicano de Seguridad Social) INSP National Public Health Institute (Instituto Nacional de Salud Puiblica) ISSSTE Public Sector Employees Social Security Services (Instituto de Servicios de Seguridad Social para Trabajadores Estatales) LAMXC Mexico Country Department LASHD Social and Human Development Group LCB Local Competitive Bidding MIS Management Information System MTR Mid-term Review NAFIN National Financing Company (Nacional Financiera) NGO Non-Governmental Organizations (Organizaciones no- gubernamentales) PAC Programa de Ampliaci6n de Cobertura PASSPA First Basic Health Project (Programa de Apoyo al Sector Salud para la Poblaci6n Abierta) PCU Project Coordinating Unit PROSSE Program of Essential Social Services (Programa de Servicios Sociales Esenciales) SHCP Secretariat of Finance and Public Credit (Secretaria de Hacienda y Credito Pzublico) SSA Ministry of Health (Secretaria de Salud) TAP Primary Health Care Technician (Tecnico de Atenci6n Primaria) Vice President Shavid Javed Burki Director Olivier Lafourcade Sector Manager Julian Schweitzer Staff Member Armin H. Fidler  FOR OFFICIAL USE ONLY IMPLEMENTATION COMPLETION REPORT MEXICO: FIRST BASIC HEALTH CARE PROJECT (Loan 3272-ME) Table of Contents PREFACE ............................................... in EVALUATION SUMMARY .................................................v PART I: PROJECT IMPLEMENTATION ASSESSMENT ................................................1 PROJECT BACKGROUND ................................................1 PROJECT OBJECTIVES AND DESCRIPTION ................................................2 Original Objectives ...............................................2 Assessment of Original Project Objectives ...............................................2 Original Project Design and Organization ..............................................3 Agreed Changes ...............................................3 IMPLEMENTATION RECORD ................................................3 Procurement ...............................................4 Disbursements ...............................................4 Civil Works ...............................................5 Vehicles and Equipment, Drugs and Supplies ...............................................5 Maintenance ..............................................S5 Human Resources ...............................................6 Research ...............................................6 ACHIEVEMENT OF ORIGINAL OBJECTIVES ................................................7 Improving and Extending Health Service Delivery in Poor Areas ......................... ......................7 Institutional Strengthening .....................................8 MAJOR FACTORS AFFECTING THE PROJECT ....................................9 Factors Not Subject to Government Control .................................. 9 Factors Subject to Government Control ...................................9 Factors subject to implementing agency control ................................... 10 PROJECT SUSTAINABILITY ................................... 10 BANK PERFORMANCE ................................... 10 BORROWER PERFORMANCE ....................................11 ASSESSMENT OF OUTCOME ....................................11 LESSONS LEARNED ................................... 12 FUTURE OPERATIONS ................................... 13 PART II: STATISTICAL ANNEXES ................................... 14 Appendixes; A. Mission's Aide Memoire B. Government's Contribution to the ICR C. Government's Comments on the ICR This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  \ 0 :: l 0:t :  IMPLEMENTAIO COMPLETION REPORT MEXICO BASIC HEALTH CARE PROJECT (LOAN 3272-ME) PREFACE This is the Implementation Completion Report (ICR) for the first Basic Health Care Project in Mexico, for which Loan 3272-ME, in the amount US$180.0 million equivalent, was approved on November 29, 1990 and became effective on September 18, 1991. In October 1995, responding to a request from the Borrower, US$40 million from this loan were canceled in response to the 1995 economic crisis. This cancelation would have been, in any case, done at project closing due to late effectiveness, constant delays in budget releases, the peso devaluation and some initial implementation delays. The Loan was closed on December 31, 1996. An additional period of four months was granted for submitting withdrawal applications for expenditures incurred before the Closing Date. Final disbursement took place on May 14, 1997, and a balance of US$3.8 million was canceled. At closing, the total loan amount was thus reduced to US$136.2 million. Total project cost amounted to US$205.2 million. Loan versus Government contributions represented 66 and 34 percent respectively compared with the proposed breakdown of 72/28 percent estimated at appraisal. Although the contribution of the central Government was considerably higher than anticipated, the comnitment of state Governments to participate with 25 percent of the Borrower's contribution was lower than expected. This experience was taken into account in the design of the Second Basic Health Project (Loan 3943-ME), for which formal implementation agreements were signed between the central Government and the participating states, to ensure compliance with state contributions. In this new project the states are obligated to cofinance the annual investment plan with at least 15 percent. But project states are free to choose the counterpart finding for any line item of the annual project budget. This has resolved the issue of non-compliance by project states. The ICR was drafted by Nydia Maraviglia, Consultant (LASHD/LAMXC); John Paul Rathbone (Consultant) participated in a first ICR mission in 1995 and in initial drafting. The report was finalized by Armin Fidler, Task Manage+, and Maria Colchao, Operations Assistant (LASHD). Anna Sant'Anna, Co-task Manager,nd Carmen Hamann,  iv Sector Leader (LAMXC) provided comments. The Country Director was Mr. Olivier Lafourcade (LAMXC). The Sector Manager was Mr. Julian Schweitzer (LASHD). Preparation of the ICR began during a Bank supervision mission in July 1995 and was finalized with inputs from a project completion mission that took place on October 21- 25, 1996. Early start of evaluation studies and project closing reporting had the specific purpose of providing feedback on lessons learned to the teams preparing and implementing the second Bank project in this sector. This report is based on supervision reports and other relevant documents in the project file, findings of the ICR missions, field visits, and interviews with Government officials and Bank staff. The Borrower prepared its own evaluation of project execution (summary included as Annex B, in Spanish) which was reviewed in detail and commented upon by the October, 1996 Bank mission. The ICR mission suggested that the detailed Government report be distributed to the project teams in the 18 states participating in the Second Basic Health Care Project. The Borrower reviewed the draft Bank ICR.  v IMPLEMNTATION COMLETION REPORT MEXICO BASIC HEALTH CARE PROJECT (LOAN 3272-ME) EVALUATION SUMMARY Introduction In the late 1980's, the Government adopted several strategies to ease the most prominent health problems facing Mexico's 40 million uninsured and underserved, including targeted interventions in the poorest districts of the most disadvantaged states. The poor areas of the Federal District and selected states -- Chiapas, Guerrero, Oaxaca and Hidalgo -- included about one-third of the underserved (13 million). The Basic Health Care Project was the first IBRD financed health operation undertaken in Mexico. A Second Basic Health Care Project, approved in 1995, is extending a redefined model of services to risk areas in 18 states, learning from the lessons of the first project. It also includes components in support of decentralization and institutional development at the federal level. The First Basic Health Care Project was prepared by the Secretariat of Health (SSA) with help from the Bank and consultants, between June 1989 and June 1990. The Loan 3272-ME, in the amount of US$180.0 million equivalent, was approved by the Board on November 29, 1990 and became effective on September 18, 1991. In October 1995, upon request from the Borrower, US$40 million from the loan were canceled in response to the 1995 economic crisis. The Loan was closed on December 31, 1996. Final disbursement took place on May 14, 1997, and a balance of US$3.8 million was canceled. At closing, the total loan amount was thus reduced to US$136.2 million. The loan and Government contributions represented 66 percent and 34 percent, respectively, compared with appraisal estimates. Project Objectives and Description Original Objectives consisted of: (a) improving and extending the delivery of basic health care and nutrition to about 13 million uninsured people in 47 districts in Oaxaca, Chiapas, Hidalgo, Guerrero, and marginal areas of the Federal District; and (b) supporting institutional improvements at State and Federal levels to decentralize budget,  vi management and operations and strengthening management. These goals were to be accomplished through two project components: (1) Strengthening Health Services Development to upgrade and expand a deteriorating health network which included a maintenance plan for facilities and equipment, purchase of equipment, firniture, materials, vehicles, and basic medical supplies, hiring or reassigning and re-grading staff, and improving training and supervision. (2) Institutional Development was designed to support health services at national and state levels in achieving decentralization; it had financing for operational research to improve service delivery, evaluation and policy studies and included the development of a management information system (MIS). At a Midtenn Review (MTR) in 1993, a more equitable reallocation of resources was made to strengthen achievement of objectives, and the share for the Federal District was decreased because of a new Government policy on health delivery for the uninsured in the Federal District. Consequently, the proceeds of the loan were redistributed among the four poorer states which received 80 percent of the funds, instead of the originally apportioned 64 percent. Moreover, new construction and rehabilitation of health centers and hospitals were scaled down. The project objectives were considered sound. Strategies were enhanced with the reallocation of resources in favor of the poorer states. Furthermore, the project formed an integral part of the Bank's assistance strategy (CAS) for Mexico and supported the Government's 1989 poverty alleviation program. On the other hand, the original objectives did not include provisions for reform on health strategies, staff incentives, health financing, or for seeking a larger role for the private and/or non-governmental organizations (NGOs). However, in 1989-90, when this project was developed, circumstances were not favorable to warrant an all out health reform effort through an externally financed project. Implementation Experience and Results As the project was appraised in 1990 and implemented during the period 1991- 1995, initial high-level Government support for the project -- especially with regard to the institutional development component -- was weak. Initially there were frequent changes in project staff at all levels and this inevitably slowed progress. After the MTR, in 1993, implementation improved. The Project Coordinating Unit (PCU) played an important role in maintaining project stability in the face of high rates of staff turnover at both the central and state levels and successfully monitored the implementation of project objectives, priorities and programs, as agreed with the Bank. In addition to the expansion of the health network, the project provided for the financing of a permanent maintenance program and the use of private contractors for specialized maintenance, but progress under this approach was slight, although there was more success when maintenance was delegated to the jurisdictions. Identifying appropriate incentives for employing and retraining qualified health professionals in rural areas remained mostly unresolved. SSA created 5,464 positions for health professionals, representing 95.6 percent of the revised target. These additional  vii positions enabled the four states to increase by 23 percent the health staff working in direct contact with patients, although there are still shortages of doctors and other health staff in the targeted districts. Also, facilities still face shortfalls in basic medicines reflecting problems in the logistics system, but also budget constraints. Studies aimed at identifying specific issues hampering institutional development, management and delivery of services, and monitoring and evaluation were of uneven quality and the studies' recommendations were often not followed up by political decision makers. The Bank correctly highlighted sector policy issues and addressed serious constraints limiting efficient health service delivery, but while the Bank foresaw many of the risks associated with the project, it may have underestimated the obstructive role that such risks did finally play, vis-a-vis project implementation. However, the Bank ensured staff continuity from appraisal through supervision and acted flexibly in resolving implementation problems, conducting a thorough midterm review and re-dimensioning certain project contributions to better meet objectives. Regarding Government performance, initial problems were due to a lack of political commitment and limited training on project management for state level staff. This situation was further aggravated by high turnover of key project management staff at the federal and state levels. For reasons beyond the PCU's control, there were problems throughout the project regarding delays in the transfer of project funds to the states and the implementing levels, although during the project's second half this situation improved. Funds started to be transferred from Nacional Financiera (NAFIN) directly to the States. This was corroborated by the changes in the pace of disbursements. While by October 1992, disbursements had only reached 23 percent of appraisal targets, by June 1995, they were $127 million, or 80 percent of original targets. Also, new budgetary procedures initiated in 1995 increased flexibility and transparency. The project was completed within reasonable expectations, albeit with some under-spending. Assessment of Outcome Projects which incorporate many complex elements, such as in the case of health (HNP) operations, are more likely to fall short of original expected targets. Nevertheless, the project achieved many of its objectives and, overall, provided a flexible model for improving health care in the targeted states. More work, however, is required to achieve financial and administrative reform and greater efficiency, responsiveness and quality in health care delivery. Overall, the project outcome is rated satisfactory. Major Factors Affecting the Project The most important factor with no direct connection to project management affecting project implementation was the 1995 peso devaluation and the ensuing economic crisis. Another factor beyond Government's control were the delays in construction caused by failure of contractors to meet agreed contractual terms. Potentially preventable or avoidable factors that slowed down the project included delays in the  viii release of counterpart funds, rigid budget processes, inadequate handling of the project accounts, and perennial delays at the Federal level in releasing funds to the states. Four main factors that affected the project were subject to the control of the health central level and/or the state health departments were: (a) complicated requirements for programming; (b) high turnover of federal and state project staff; (c) inexperience with procurement at the state level; and (d) awarding of bids to contractors that proved to be unsuitable for tasks at hand. Summary of Findings The evaluation of project implementation concluded that the project accomplished to a great extent its principal objective of expanding health services in underserved areas in the four poorest states. Moreover, it partially met goals of institutional development by preparing the states for formal decentralization. The new and rehabilitated facilities benefited a large proportion of the poorest districts by increasing the health network by 12 percent, and rehabilitating 63 percent of the existing facilities, Also, over 90 percent of the new construction had lower costs than the regular civil works programs of several public health agencies. In spite of the significant strengthening of manpower, the project had little success in motivating medical and nursing staff to take assignments in the targeted districts, fact which continues affecting negatively service provision. Between 1990 and 1995, due to population growth in the four project states, the number of uninsured who were fully dependent on SSA services, increased from 8.1 million to 9.3 million. During the same period, service coverage to the uninsured grew by 1.8 million (15 percent) with the help of the project and, of this increase, 315,500 people were served through new construction, two-thirds in areas of high or very high poverty levels. In addition, the continued presence of a primary care technician (TAP) in many communities decreased the gap in coverage by about 1.5 million people. Moreover, mobile health units, an increased offer of specialized medical services, and training benefited an unquantifiable number of clients, and the new up-to-date equipment provided hospital services to about 300,000 additional patients. The three public health laboratories financed through the project in Hidalgo, Chiapas and Oaxaca serve the population of those states. Overall, qualitative surveys indicate that the community in the project areas perceive improvemnents in the quality of care and staff willingness to serve (about 30 percent higher than the results for the whole country). Yet, in spite of these favorable perceptions, service utilization was slightly lower (4.8 percent) than the national average (5.8 percent) due in part to the highly scattered population, and perhaps reflecting effective prevention prograns. The evaluation also revealed that while targeted communities remain dependent on public health services (72 percent of sick persons attend SSA facilities), many people are willing to use private practitioners (16 to 30 percent) when available, despite out-of-pocket expenses.  ix The institutional development component lagged behind appraisal expectations. The legal decentralization of health services from SSA to the targeted states did not materialize -- with the exception of Guerrero, decentralized between 1982-1988. Nevertheless, the project helped prepare the ground for future changes. In many respects, the project states are now better equipped to tackle planning, budget and operational issues, than many of the early legally decentralized states. Decentralization was completed in all states, by Presidential decree in 1997. A new MIS to provide state managers with better tools for health services administration was only partially implemented. The SSA established a computerized system so that the states could collect and transmit project related data in a uniform manner. Concerning project financed research, the national evaluation concluded that, with some notable exceptions, the studies financed by this loan were costly and often of low impact, in particular regarding implementation of policy recommendations. Key Lessons Learned Even with a strong commitment by the Borrower, implementation problems are likely to arise if sector agencies do not share project ownership; the lack of project ownership during the project's first two years proved to be one of the largest constraints in project implementation. Mechanisms for planning, budgeting, and transferring funds to the local level must be simple, transparent and easily applicable to ensure timely project implementation. The difficulties confronted with fund transfers in this project prompted the design and implementation of clear procedures for loan fund transfers in the Second Basic Health Care Project. Project flexibility is essential to accommodate revisions in project design and priorities, as well as changes in the political environment; additionally, the rigidity of the rules and procedures of the national implementing agencies is often a more formidable obstacle. Attracting qualified staff to remote areas is a continuing problem, and innovations are needed in this area. In place of financial and/or career related incentives, some remote areas may be better served by mixed approaches of public and private participation and/or community health workers. Creating new staff posts may not always be necessary, or optimal. Indeed, financing of higher recurrent costs -- without, at the same time, experimenting with new sustainable forms of health financing -- may limit the chances of attaining continuity of project gains after the international assistance phases out.  x Future Operations The project established a strong basis for further institutional change. Mexico's long-term health sector strategy is being supported by the Program of Essential Social Services (PROSSE) and the Second Basic Health Care Project (BH II). Better health resource allocation, more efficient resource use, and exploring alternative financing and service provision continue to be major issues in gaining health improvements. Other issues to be tackled, related to sustainability, include the need to rationalize expenditures for hospitals and study alternatives for decentralizing and improving hospital management, taking into account that those institutions absorb the largest portion of the budget allocation for health in all the states.  PART I: PROJECT IMPLEMENTATION ASSESSMENT PROJECT BACKGROUND 1. The Basic Health Care project was the first IBRD-fmanced health project undertaken in Mexico. When the loan was initiated in 1990, some 40 million Mexicans of a total population of 84 million, were uninsured and lacked adequate access to health and social services. About one third of the underserved group (or 13 million) lived in the four poorest southern states -- Chiapas, Guerrero, Oaxaca and Hidalgo, and in the Federal District -- the targeted population for this project. While urban centers and northern states enjoyed health indicators comparable to OECD levels, in urban slums, rural areas and the aforementioned southern states, the poor continued to be subject to malnutrition, immuno-preventable diseases and other common gastrointestinal and respiratory diseases linked with malnutrition and poor sanitary conditions. Available public resources were about US$13 per capita in the poor states, compared to a national average of US$20 for the uninsured population. A spending squeeze that followed the collapse of oil prices in 1982 had further aggravated this health gap and the inequity in resource allocation -- health infrastructure notably deteriorated in the mid-to-late 1980's. But limited resources were also unsatisfactorily administered by an over-centralized system, and rural health centers, when accessible, were frequently inadequately staffed, under-supplied and under-funded. 2. To ease the most prominent health problems facing Mexico's 40 million underserved, the Government of Mexico adopted several strategies, including: targeted interventions to reach the most disadvantaged areas in the poorest states; participation of the community in construction of health centers; the reallocation of resources from expensive curative care to preventative health care; the expansion of social security coverage; and the decentralization of health service operations from federal to state authorities. To reach these objectives -- supported by the Basic Health Care Project -- the SSA developed PASSPA (Programa de Apoyo de Servicios de Salud para la Poblaci6n Abierta) in addition to the basic health services model for the Government's National Solidarity Program (IMSS - Solidaridad). 3. Although Solidaridad was a nationwide program, PASSPA -- through this project -- targeted the southern states. It sought to reduce infant, child and maternal mortality, and the prevalence and severity of diseases common among the poor. Health service delivery was organized at two levels: (1) primary health care, which includes health promoters, rural ambulatory units, health posts and centers, and (2) secondary health care hospitals, which provide support and serve as points of referral for primary health care posts. Under the PASSPA model, health service delivery was strengthened by rehabilitating existing medical facilities (and  2 if necessary constructing new ones); by boosting management capacity at all levels; and by providing appropriate equipment, trained staff and medical supplies. PROJECT OBJECTIVES AND DESCRIPTION Original Objectives 4. The original objectives consisted of: (a) improving and extending the delivery of basic health care and nutrition to about 13 million uninsured poor in 47 health jurisdictions, in Oaxaca, Chiapas, Hidalgo, Guerrero, and marginal areas of the Federal District; (b) supporting institutional improvements at the State and Federal levels that would decentralize the budget, management and operations, enhancing the efficiency and effectiveness of the health care system; and (c) strengthening management capabilities at both the State and Federal levels. Assessment of Original Project Objectives 5. The objectives were sound. First, the project formed an integral part of the Bank's assistance strategy for Mexico (CAS) and, by focusing on the basic health and nutrition needs of the poor in Mexico's most disadvantaged states, it also supported the Government's 1989 poverty alleviation program (Solidaridad). The targeted population for the project was correctly selected. Indeed, the four project states have similar socioeconomic characteristics: over 50 percent of the population live under precarious conditions, with 75 percent of those employed receiving less than two minimum salaries and the uninsured population reaching almost 80 percent of the total. Second, the project was based on the correct assumption that greater autonomy for the states was an effective means of improving the efficiency of health service delivery in Mexico. This required managerial improvements at the Federal and, especially, State level -- improvements that the project emphasized. Third, the project was designed to reallocate more equitably central resources for health among the states towards basic and preventative health care, to realize worthwhile goals of equity and efficiency gains. On the other hand, the objectives did not include provisions for reform of health strategies, staff incentives, health financing, or other innovations that could have implied a larger role for the private sector and/or non-governnental organizations (NGOs). Innovations along these lines are being implemented by the Second Basic Health Care Project. Experiences in other countries, however, have shown that successful pursuit of these concerns usually requires a receptive social and political climate, a thorough awareness of the means and consequences of structural changes, and a momentum created by sectoral changes elsewhere. In 1989-1990, when this project was developed, none of these circumstances were strong enough to warrant an all out health reform effort through an externally financed project.  3 Original Project Design and Organization 6. The Health Services Development Component (89 percent of total cost, including contingencies) would, specifically: upgrade and expand a deteriorating health network; develop a maintenance plan for facilities and equipment; provide resources for the purchase of equipment, furniture, vehicles, and basic medical supplies; hire, reassign and re-grade personnel according to PASSPA needs; improve the training of health care personnel; improve the supervision system; and, produce and distribute operational manuals and materials. The Institutional Development Component (11 percent of total cost), would support the Federal Government in its efforts to speed up the decentralization of health services. At the Federal leveL this component would: assist in the decentralization process of the SSA; conduct operational research on ways to improve service delivery, provide software and technical assistance to improve planning and management; conduct studies on health policy and project evaluation; and, find ways to mobilize additional resources for health care. At the State level, this component would: improve the administrative and technical capacity of the state health authorities to deliver PASSPA basic health services; improve the MIS; improve personnel policies; provide training for managerial and administrative staff; and provide legal support for the decentralization process. Agreed Changes 7. At the MTR in 1993, a more equitable reallocation of resources was made on the basis of new inventories, to strengthen achievement of objectives. The share for the Federal District was decreased in favor of the four poorer states that, as a result of those revisions, received 80 percent of the funds, instead of the originally apportioned 64 percent. In addition, new construction and rehabilitation of health centers and hospitals in the Federal District were scaled down. A total of 895, or 63 percent of existing health care facilities were rehabilitated in the project areas by 1990. Of these, 870 were primary health centers (90 percent of which were located in the four states), one office, 15 hospitals, and 9 specialty clinics; also 172 new primary health centers were built. New construction was also reprogrammed and the implemented program included, in addition to the 172 new primary health centers, three warehouses, three public health laboratories, and one anti-rabies laboratory. IMPLEMENTATION RECORD 8. With the change of Government administrations between appraisal and implementation, initial high-level Government support for the project was weak; there was a lack of ownership on the part of the new health authorities, due to the change that took place in 1990. Indeed, during the 1993 MTR, the SSA informed the Bank that no legal decentralization would take place during the then current administration. After a slow start, The PCU played an important role in maintaining project stability in the face of high rates of staff turnover at both the central and state levels and monitored carefully the implementation of project objectives, priorities, and programs, as agreed with the Bank. Difficulties related to transfer of funds to the states were  4 reviewed during the MTR and improved in 1995, when new procedures were established, including: (a) creation of a budget fund in NAFIN to channel funds directly to the state project offices and contractors, through regional banks; and (b) giving greater responsibility for executing project activities to the state health departments. Procurement 9. One of the most important gains of the project was to delegate procurement activities to the states, although the degree of success varied among states depending on the willingness and the capacity of the state authorities to implement new and transparent procurement procedures and to delegate functions to the jurisdictions. Two states made great strides toward independent action and efficiency in procurement. Hidalgo showed original thinking by involving the municipal presidencies and the communities as executing agencies; although the results were mixed due to variations in local capacity, it provided a model to work on and improve through training and technical support. In Oaxaca, almost all jurisdictions organized its procurement through committees that participated from the budgeting stage to the purchase of equipment or furmiture or the execution of construction. On the other hand, in Chiapas, only one jurisdiction participated in procurement of medicines and rehabilitation of health centers, and in Guerrero, the only state legally decentralized, there was no delegation below the state level. Many procurement related experiences that were acquired under this project were of great relevance for the Second Basic Health Care Project: (a) SSA officials at the central and state levels became familiar with Bank regulations; (b) cross-fertilization between experienced and new project states takes place providing an opportunity for systematic hands-on training; (c) annual joint state- federal procurement planning has evolved as standard practice; (d) local shopping procedures, used for small, rural civil works has yielded positive results. More research and dialogue will be needed, however, with regard to cost-effective procurement practices in the light of fiscal and administrative decentralization, currently under implementation in the SSA. Disbursements 10. At the State level, unfamiliarity with Bank procedures slowed disbursements, although better progress followed the MTR. While by October 1992, disbursements had only reached 23 percent of appraisal targets, in June 1995, they were $127 million, or 80 percent of original targets. By the end of the project, disbursements reached US$136.2 million which is 97 percent of the total loan amount. Another problem tackled by the project was the outdated budgeting system, consisting of allocating funds to states on an historical basis, according to program targets that did not provide proper incentives to improve efficiency. New budgetary procedures, started in 1995, increased flexibility and transparency in the transfer of funds from Federal to sSate levels, so speeding project execution. These procedures are continued in the second project, resulting in the implementation of a new health budget allocation, based on a risk- adjusted per capita formula in 1996.  5 Civil Works 11. Progress in civil works during the first three years of the project was slower than estimated at appraisal due to delays in releasing budgetary funds, transfer of funds from the central Government, frequent management changes, lack of experience, and training in procurement and in supervision of civil works by the states. There were several instances of problems with contractors due to non-compliance and low quality of the works. This was mainly due to the procurement process, through which large construction firms from Mexico City and other large urban areas were awarded the contract, but subsequently did not carry out the work because of the unexpected high mobilization costs. In some cases legal proceedings had to be initiated, contracts had to be canceled and new contractors selected. Improvements followed when in 1994-1995, the PCU hired local consultants with long experience in supervising construction in the private sector, to review designs and supervise civil works. This procedure produced good results and is being carried forward to the second project. The states of Guerrero and Hidalgo were successful in introducing community participation for construction of facilities, resulting in shorter construction times, cost reduction, and a closer identification of the community with its health center. Vehicles and Equipment, Drugs and Supplies 12. During the first half of the project, the use of outdated technical manuals in the Federal District led to the purchase of inadequate equipment (X-rays and dental equipment), which then had to be redistributed by the PCU to other project sites (e.g. Hidalgo). New catalogues were subsequently prepared by Oaxaca and Hidalgo and adopted by other states. Otherwise, suitable purchases of drugs, vehicles, computers and audiovisual equipment (for use in training) reached and often exceeded appraisal targets. Irregular schedules in the distribution of medicines and materials continue to affect service delivery. Most of the health facilities in the evaluative sample did not have a complete and timely provision of basic medicines (for instance, almost 70 percent experienced delays in receiving antibiotics). Although the problem is partly a result of a deficient distribution system, there are also budgetary constraints affecting the availability of these items. At least in two states, the current budget allocations were not enough to cover adequate supplies of medicines and materials. Corrective actions are being sought through the second project decentralizing pharmaceutical procurement to the states, leaving it to the state's discretion to participate in central procurement. Maintenance 13. The project provided for the financing of a permanent maintenance program, and the use of private contractors for specialized maintenance, but progress under this approach was slight. A maintenance manual developed by consultants and reviewed by the Bank, was distributed to the states but enjoyed only limited use. There was more success when maintenance was delegated to the jurisdictions, but continuity of this approach was jeopardized by lack of allocations for this purpose in the annual budgets. For example, in Chiapas and Guerrero, the program functioned satisfactorily up to 1995, but after that year there were cuts in the budget for maintenance due to  6 the economic crisis. In Oaxaca, the maintenance plan has been fully adopted by the jurisdictions. There are still shortcomings in fund availability and local staff capacity to do more sophisticated maintenance. In sum, the most useful outcome from the project regarding maintenance has been the concept that responsibility for maintenance of health facilities should be delegated to the jurisdictions in most project states. Human Resources 14. Hiring. Identifying appropriate incentives for employing and retraining qualified health professionals in rural areas remained unresolved. The SSA created 5,464 positions for health professionals, representing 96 percent of the revised target (and 20 percent below the over- dimensioned original target). Ninety five percent of these positions were distributed among the four project states and 5 percent were assigned to the central level. The project financed the salaries of the newly recruited staff on a declining basis and these additional recurrent costs have been absorbed by the Government budget. From the total new positions, 979 were physicians, 926 nurses, 578 health technical and auxiliary personnel and 903 TAPS. These additional positions enabled the four states to increase by 23 percent the health staff working in direct contact with the communities, although there are still shortages of doctors and other health staff in the districts that were being targeted by the project. Although service coverage increased, there are still unmet needs in many communities. The results of a sample survey carried out in 82 facilities indicated that 32 percent did not have a physician or a ''pasante"'l in its staff and 15 percent did not have a nurse. The project also created 2,057 administrative positions, 6 percent above the re-dimensioned target. 15. Training. By project completion, 71,152 health services staff and 4,239 management staff had received various forms of training, well above targeted plans. The project also complemented regular training by placing 28 training coordinators at the jurisdictional level, and by providing materials and equipment. While during the first half of the project training was focused on health service providers, during the second half emphasis shifted to management training, with teaching provided by consultants, universities and technological and public administration institutes. The project's financial support for the "Data for the Decision Making" project was particularly successful. Research 16. The loan financed a number of studies aimed at identifying specific issues hampering institutional development, management and delivery of services, and monitoring and evaluation. The decisions to include a research sub-component in the project and to try to involve the states in defining research needs and administering its execution were forward looking and commendable. But there were many problems with this part of the project. The definition of research themes was flexible to provide the SSA with the opportunity to define studies relevant A doctor fulfilling social services requirements before graduation.  7 to their needs, during the life of the project. However, there was no proper direction, supervision and technical assistance, and the assessment of proposals lacked the necessary rigor to ensure a useful product. The initial objective was to undertake 34 study initiatives during the five years of the project. In the first two years of the project, however, there were no funds for studies in the budget. During the MTR the goal was redefined to 11 studies. Although 25 studies were finally financed, only 21 were finished. Almost all research studies were carried out at the central level (80 percent), only Hidalgo and Oaxaca proposed and undertook their own research. In 1995- 1996 the National Institute of Public Health (INSP) conducted an evaluation of the relevance, methodological quality and potential impact of the studies and concluded that, in general, the results were of uneven standards. Also, there was little dissemination, with the exception of the National Health Survey II (ENSA II) that received partial funding from this project. ENSA II produced a wealth of information, which was used in project evaluation and for the definition of the second project. Despite their technical and methodological soundness and the relevance of study topics, many studies lacked translation of recommendations into new policy. ACHIEVEMENT OF ORIGINAL OBJECTIVES Improving and Extending Health Service Delivery in Poor Areas 17. To what extent did the resources received by the states from this project benefit the districts most in need? Answers to this question were sought by the national evaluation study. The general conclusion was that the new and rehabilitated facilities benefited a large proportion (over 80 percent) of the poorest districts. The network of physical facilities increased by 12 percent, and 63 percent of the existing facilities were rehabilitated. For example, in Chiapas, the state with the worst socio-economic indicators, 56 percent of the new construction (39 primary care centers, one warehouse and one public health laboratory) was located in areas of high or very high poverty. In that state, the new services benefited 260,000 people which previously did not have access to any health service (or eight percent of the uninsured population). The states of Hidalgo and Guerrero experienced similar results. On the other hand, in Oaxaca, a large part of the new construction was located in areas with medium to high socioeconomic conditions (about 40 percent of the new construction took place in poor or very poor localities). However, during the last two years of the project efforts were made to give preference to low income areas for remodeling and for allocating other resources. Regarding construction costs, in a comparative analysis it was concluded that over 90 percent of the new construction under the project had lower costs than the regular civil works programs of the SSA or the Mexican Social Security Institute (IMSS). 18. In spite of the significant strengthening of manpower, there was little success in motivating medical and nursing staff to take assignments in poor rural or semi-rural areas, which continues to affect the provision of services in those areas. The increase in coverage with TAPS, although impressive and useful in terms of lessening the inequities in access to services, is considered by the Government only a first step towards more comprehensive and higher quality availability of services to the areas targeted by the project. There were other forms of services  8 generated by the project that contributed to enhanced health services. These included the use of mobile health units that visit communities where there are no established health facilities, although they may have a TAP. Also, the increased availability of specialized medical services and the additional new equipment available through this project, as well as the strengthened training of the medical and paramedical staff led to a higher level of resolution for medical treatments. In all, about 300,000 persons have benefited from services of higher complexity in hospitals in the project states (not included in the total increase of population covered). 19. Between 1990 and 1995, the uninsured population which relies mainly on SSA's system for health care increased in the four states from 8.1 million to 9.3 million as a result of population growth. Expansion of service coverage through the project, is estimated at 1.8 million (from 3 million of the uninsured population in 1990, to 4.8 million in 1995). Thus, the project helped increase the coverage of the uninsured by 15 percent (from 37 to 52 percent). New construction benefited 315,500 people, two thirds of which live in areas of high or very high poverty. In addition, the continued presence of a TAP in many communities of difficult access contributed to provide basic health services for about 1.5 million people. 20. Overall, the evaluation surveys indicate that the community in the project areas perceive improvements in the quality of care and in the relationship between the health professionals and the patients. Users' perception of a better quality of medical attention and of the services offered by the health facilities were 24 percent and 30 percent, respectively higher than the figures of the national health survey. Notwithstanding these favorable perceptions, service utilization in the project states was slightly lower than the national average -- 4.8 per 100 population compared to the national average of 5.8, perhaps reflecting the lower level of income and education of the communities and the highly scattered population in the project areas. Among those who were sick during the two weeks preceding the health survey (ENSA II) in the four states it was found that between 55 and 72 percent went to a SSA facility, 7 to 20 percent went to an IMSS or the Public Sector Employees Social Security Institute (ISSSTE) facility, and 16 to 30 percent sought the services of a private practitioner. While the targeted communities remain dependent of the public health services, people are willing to seek assistance from the private sector when it is available. Although no information is available regarding willingness or capacity to pay private doctor fees, when asked about the charges the patients had to pay in some SSA facilities (the average charge is N$10.00) all responded that the cost was not significant. The percent of patients who paid for consultations varied between 22 and 55 of those attending the SSA centers. Institutional Strengthening 21. The second component was intended to address issues of decentralization, including program budget, planning, management and operation. However, despite a thorough MTR in October 1993 that sought to bring institutional development up to speed, it lagged behind appraisal expectations. The legal decentralization of health services2 from the SSA to the 2 All thirty-two states became legally decentralized by presidential decree in 1997.  9 targeted states never occurred-- with the exception of Guerrero, which was among the 14 de- centralized states during the 1982-1988 administration. Yet, in many respects, the project states are now better equipped to tackle decentralization issues than many states that have been legally decentralized. There were also improvements in client responsiveness. Moreover, a greater role is now played at the state and jurisdictional levels in conceptual design and policy formulation, supervision and training of staff, planning of annual work plans and budgets, and in procurement. 22. Although the project financed computer and communications equipment for a MIS, this never materialized as an integrated system. Instead, a computerized system, developed by the PCU, was established so that the states could collect and transmit to the PCU, project-related data in a uniform manner, including control of disbursements. This was useful, but did not meet the requirements sought by the project, i.e. to provide state officials with a tool to manage health services more effectively. Concerning project financed research, the national evaluation conducted by the INSP concluded that, with some exceptions, the studies financed by this loan were costly and of uneven quality. 23. In sum, the institutional component achieved much less than expected at appraisal, but the improvements just mentioned are significant as preparatory steps for current, renewed efforts in this area under new projects. MAJOR FACTORS AFFECTING THE PROJECT Factors Not Subject to Government Control 24. The most important factor which affected the project, with no direct connection with project management, was the 1995 peso devaluation and the ensuing economic crisis faced by the country. These circumstances affected fund availability and continued to cause delays in the release of funds; as a consequence, targets for 1995 and 1996 had to be redefined. Another factor beyond Govermnent control were the problems and delays in construction caused by failure of contractors to meet agreed contractual terms. Factors Subject to Government Control 25. Potentially preventable or avoidable factors delaying the project included rigid budget processes and perennial delays at the Federal level in releasing funds to the states. Changes adopted in 1995 in the budget system somewhat improved transfer of funds to the states. Another issue was related to the way the Federal level handled the Special Account as a macro- economic instrument, rather than to the benefit of the project. This, however, does not only pertain to this project.  10 Factors subject to implementing agency control 26. The main factors that affected the project subject to the control of the SSA central level and/or the state public health authorities were: (a) complicated bureaucratic requirements for programming and often conflicting norms and regulations; (b) initial inexperience with procurement at the state level; (c) awarding of bids to large contractors well qualified to perform in large urban areas, but experiencing overwhelming problems in carrying out the agreed contracts for construction in remote rural areas; and (d) frequent changes in staffing at both federal and state levels, and within the PCU. PROJECT SUSTAINABILITY 27. The project established a strong basis for further institutional change, in support of Mexico's long-term health sector strategy. It also increased local participation, to the extent that jurisdictions are now capable of preparing investment proposals under the second project. Political commitment in support of the health sector is likely to remain high at all levels. Extending and consolidating basic health care services throughout Mexico remains a national priority, as demonstrated by the Second Basic Health Care Project. But the project also increased recurrent costs and this may pose significant long-term problems. While further rationalization will provide budgetary savings, and some beginnings have been made in establishing meaningful user-fee mechanisms as of the MTR, the regular SSA budget had declined in four out of five project areas, indicating that project funds were partially acting as substitutes for original contributions of the SSA, rather than complements. This has recently been reversed again due to implementation of the PAC component (Programa de Ampliacion de Cobertura) of the Second Basic Health Care Project. 28. Although regular budget allocations improved in 1995 and 1996, Federal fund availability to reforn the health system and keep up with the population growth and demand is an issue. More needs to be done regarding new approaches to resource allocation, more efficient resource utilization, and a better grasp on alternative sources of financing. Other issues to be tackled toward increasing sustainability include the need to rationalize expenditures for hospitals, improve the quality of care and study alternatives for decentralizing and improving, management, taking into account that curative health care institutions absorb the largest portion of the budget allocation for health in all the states. This will be done in the Second Basic Health Care Project. BANK PERFORMANCE 29. Preparation and Appraisal The Bank correctly highlighted sector policy issues, properly addressed the serious constraints limiting efficient health service delivery, and paid  11 attention to the need of training programs, particularly management training. However, the Bank did not adequately assess potential demand for health services and the dimensions of the expansion of the health network. In addition, while the Bank correctly foresaw many of the risks associated with the project, such as a lack of administrative capacity, it may have underestimated the obstructive role that such risks did finally play, especially with regard to the mechanism for transferring funds from the central to state levels. 30. Supervision. The majority of staff that carried out the appraisal also supervised the project. The Bank acted properly and flexibly in response to the client's requests and quickly resolving several implementation problems that arose after project effectiveness, in conducting a thorough mid-term review and in re-dimensioning certain project subcomponents in order to better meet objectives of a more equitable resource allocation among states and in addressing program effectiveness. BORROWER PERFORMANCE 31. While the PCU was in general of high quality, initial problems were due to a lack of commitment of the state health agencies and a training gap on project process for state level staff. This situation was further aggravated by a high turnover of management staff at the Federal and State level, which in turn led to a need for constant efforts by the PCU to provide orientation to new staff. There were problems throughout project implementation regarding timeliness of transfer of budget funds to the states and the implementing jurisdictions. During the first half of the project, the mechanisms for planning and budgeting were complicated, confusing and very difficult to apply. During the project's second half, the transfer mechanism for funds allocated to the states improved somewhat. This mechanism also provided the opportunity to decentralize planning and budgeting to the states. In spite of these constraints, the project was completed within reasonable expectations, albeit with some under-spending, mainly as a result of a slow start, complex budgeting (with over 20 steps prior to budget approval), and the 1995 peso devaluation. The Government maintained a record of timely submissions of audits of project accounts, indicating no major breach of accountability. In addition, this first Bank experience in the health sector in Mexico did lay the ground work for the successful preparation and implementation of the Second Basic Health Care Project. ASSESSMENT OF OUTCOME 32. Health, Population and Nutrition (HNP) projects, incorporating many complex elements, are more likely to fall short of original, expected targets. Nevertheless, the project achieved most of its objectives and, overall, provided a flexible model for improving health care in the targeted states. The project demonstrated that even the weakest states could become adept at managing decentralized functions. Many of the targets not met, or issues not properly addressed, include: continuing public sector problems such as inadequacy of sustainable financing, lack of staff incentives, uneven quality of services, and indifference towards health care demand of the  12 beneficiaries. Greater concern for these issues, coupled with financial and administrative reform, should lead to greater flexibility, responsiveness and quality in the Mexican health care system. In the final analysis of all project results, the overall outcome of this project is rated satisfactory. LESSONS LEARNED 33. The following were lessons learned from the First Basic Health Care Project, which were taken into account in designing subsequent related projects, in particular the Second Basic Health Care Project: a) The institutional capacity of executing agencies at all levels has to be assessed carefully at appraisal and incorporated into project design, implementation and disbursement schedules. b) Baseline and follow-up surveys are essential in order to measure credibly project outcome. c) The MTR, planned and conducted jointly by the PCU, the States and the Bank, was perceived by all parties as a valuable contribution to institutional capacity-building. Moreover, it was a valuable model of cooperation and increased the sense of project ownership by both the SSA and state authorities. d) Mechanisms for planning and budgeting, as well as for transferring funds to implementing jurisdictions, must be simple, transparent and easily applicable to ensure timely project implementation. The difficulties confronted with fund transfers in this first project prompted the definition of new procedures for loan fund transfers in the Second Basic Health Care Project. e) Project flexibility is essential to accornmodate revisions in project design and priorities, as well as changes in the political environment; additionally, the rigidity of the rules and procedures of the national implementing agencies is often a formidable obstacle for smooth implementation. f) Even with a strong commitment by the Borrower, problems will arise if sector agencies do not share a sense of project ownership; projects may be reformulated and personnel arbitrarily moved, resulting in efficiency losses. The initial lack of project ownership by the SSA proved to be one of the largest constraints in project implementation. g) Although the inclusion of studies is essential in this type of projects in which various new approaches are being tested, it will be important to ensure clear definition of topics, substantive terms of reference, strong management, and thorough evaluation of the capacity of institutions, researchers and methodology. Appropriate technical assistance and sound research strategies will generate proposals that ensure geographic diversity, timely dissemination of results and finally induce policy change. h) Local construction projects consisting of remodeling or building modest facilities are not always well served by larger national contractors. Using local contractors instead can, with  13 adequate (often private) supervision, provide better quality construction; Bank procurement procedures have taken this into account, giving more responsibility to communities for small works. i) Attracting qualified staff to remote areas is a continuing problem, and innovations are needed in this area. In place of a system of financial and/or career related incentives, some remote areas may be better served by mixed approaches of private contracting with NGO's, in addition to training and recruiting TAPS. j) Creating new staff posts may not always be necessary or optimal; indeed, financing increased recurrent costs -- without, at the same time, experimenting with new forms of health financing -- may limit the chances of attaining continuity of project gains after the international assistance is phased out. k) Decentralized procurement and investment planning requires a high level of local management capacity but results in a greater sense of ownership in the states, more appropriate planning, faster procurement and a more timely release of funds. 1) Community participation --especially in more remote areas -- is an essential requirement for the demand for public health services, for the extension of coverage, as well as for effective supervision and monitoring or project implementation. FUTURE OPERATIONS 34. A Second Basic Health Care Project has built upon the lessons learned from the First Health Care Project in Oaxaca, Hidalgo, Guerrero and Chiapas, and extended a redefined model of services to risk areas in 14 additional states. The Bank also financed the PROSSE project, which seeks to protect and strengthen essential social services threatened by the financial crisis in late 1994. The latter also includes financing for development of new health budget indicators for the Secretariat of Finance and Public Credit (SHCP). Lessons applied in new operations include emphasis on: building institutional capacity at a local level, building efficient management practices, locally-led investment programs, new approaches to resource allocation, and testing incentive schemes for professional medical staff assigned to remote areas. Further, the Second Basic Health Care Project was designed, through its component on policy and operational studies and pilot testing, to spawn a dynamic process regarding enhancement of state ownership and responsibility for coordinating health services, measures to encourage a more efficient use of resources, improvements in management and service decentralization as a means to rationalize expenditures and liberate funds for basic health care, as well as designing and testing alternative sources of financing health services. The first annual review of the Second Basic Health Care Project, carried out jointly by the Bank and the Government in February 1997, demonstrated a successful incorporation of lessons learned during the first project.  14 IMPLEMENTATION COMPLETION REPORT MEXICO BASIC HEALTH PROJECT (LOAN 3272-ME) PART II: STATISTICAL ANNEXES Table 1: Summary of Assessments Table 2: Related Bank Credits Table 3: Project Timetable Table 4: Cumulative Estimated and Actual Disbursements Table 5: Key Monitoring Indicators Table 6: Studies included in Project Table 7A: Project Costs Table 7B: Project Financing Table 8: Status of Legal Covenants Table 9: Bank Resources: Staff Inputs Table 10: Bank Resources: Missions  15 Table 1: Summary of Assessments Macro policies V Sector policies / Financial objectives / Institutional development V Physical objectives / Poverty reduction Gender issues / Other social objectives / Environmental objectives / Public sector management V Private sector development V/ Other (specify) .. Pr ......h....iel....ey.......... a L Sustainability V C~~~ R~~~wk perI~~~~~~rm~~inci~~~~ High~~~~~y S~~~~................. Identification V Preparation assistance V/ Appraisal V Supervision / . erf.~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~...... ......A. U. ..~~~.: ...:.........:.......,.:,.......:... ........................ ~~ ~ ~ ~ ~ ~ ~ ~ ............ .. .r.. :......... : .. .:.:. Wl.'.~ ~ ~~. St ........... Preparation V Implementation V Covenant compliance / Operation V Assessmen .......... Assssen of OvrllOtcm.  16 Table 2: Related Bank Loans Agricultural Pilot rural nutrition program 1991 Completed Sector Adjustm. Loan (Ln. 3357-ME) Second Basic Following the first basic health 1995 Ongoing Health Care care project, to improve and Project extend access to basic health services in eighteen targeted states Program of Maintain financing of ongoing, 1995 Ongoing Essential Social high priority, social sector Services programs  17 Table 3: Project Timetable .,c.',''''- 'vg .................... .,.1,, ....... m ....,. ....,... ...... ,... ..,,...... , 1. Preparation 06/87 05/87 2. Appraisal 04/88 06/06/90 3. Negotiations 07/88 10/09/90 4. Board presentation 08/88 11/29/90 5. Signing 09/88 04/12/91 6. Effectiveness 07/12/91 09/18/91 7. Project completion 06/30/96 12/31/97 8. Loan closing 09/30/96 04/30/97 Project Timetable 24-Jul-98 28-Oct-95 - 31-Jan-93 Dates 7-May-90 11-Aug-87 1 4-Nov-84 _ 1 2 3 4 5 6 7 8 Processing Steps  18 Table 4: Cumulative Estimated and Actual Disbursements (Millions of US$) ..R . ... . , Y ..........Y9 . ,...7 Appraisal estimates 13.00 39.50 83.50 129.50 161.50 180.00 Revised Appraisal 13.00 39.50 83.50 129.50 130.00 140.00i estimates Actual --- 10.00 47.34 94.74 127.29 128.23 136.2342/ Disbursements Actual as % of --- 25 56.7 73.2 97.9 91.6 Revised Estimate Date of last Disbursement May 14, 1997 11US$ 40 million were canceled from the total loan of US$180 million on July 1995. 2/ There is a balance of US$3.766 million that will have to be canceled. Disbursements 200 r 150 100 .<Ct=f8oiD8 81 m, -40-Appraisal Estimates M 50 -U--Revised Estimates 0 -a-Actual C'4 co ~~LO) CD r cla N n t a) a) al Disbursements LL IL IL IL L U.L LL Bank Fiscal Year  19 Table 5: Key Monitoring Indicators ....... .. .g..:.*. ...n....g.......................... I. Civil Works A. Rehabilitation 1. Rehabilitated Primary Health 1,141 928 870 94 Facilities 2. Rehabilitated office - 1 1 100 3. Rehabilitated Hospitals 25 17 15 88 4. Rehabilitated Outpatient Specialty - 9 9 100 Clinics Total, Rehabilitated Facilities 1,141 945 895 95 B. New Construction 5. Primary Health Care Facilities 267 172 172 100 6. Warehouses - 3 3 100 7. Public Health Laboratories - 3 3 100 8. Antirabies Laboratories - 2 1 50 Total, New Buildings 292 180 179 99 Total, Rehab. & New Facilities 1433 1,125 1,074 95 New Staff Positions 1.Doctorsa/ 1,760 882 979 110 2. Nurses 982 1,086 926 85 3. Prof/Tech/Aux staff b/ 712 746 578 77 4. TAPS c/ 965 1,034 903 87 5. Managing Staff d/ 99 35 21 60 6. Administrative Staff e/ 2,320 1,935 2,057 106 Total new staff positions: 6,838 5,718 5,464 96 Training 1. Managing Staff NA NA 4,239 NA 2. Operational Staff NA NA 71,152 NA Vehicles Total vehicles (ambulances, Jeeps, 250 354 396 112 mobile units, combis, trucks, sedans, pick-ups) a/: includes regular appointments and doctors in social services (medico pasante k/: includes health and sanitation promoters; lab technicians, attendants; auxiliary nurses c/: A total of 1015 TAPs will be posted, with the expected addition of 112 TAPs which recently completed trained and will be posted by state Governments in 1997 d/: hospital and health center directors, jurisdictional and state level directors and chiefs c/: accounting staff, personnel and office support staff, and federal services staff.  20 Table 6: Studies Included in Project ~~~~~~~~........... ........ ... vm 1. Operational Evaluation of PASSPA Evaluation of Program and Completed Quality: average - SOLIDARIDAD-SSA: project Impact: average a. Health & nutrition profile of Define health and nutritional Completed Quality: average indigenous groups profile of indigenous population within PASSPA program b. Evaluation of medical care-2nd Evaluate medical care in Completed Quality: average level PASSPA states hospitals c. Impact evaluation of PASSPA - Evaluate the program's impact Completed Quality: average primary level through availability and accessibility indicators 2. Coverage and Utilization of Health Examine patterns of demand Completed Quality: average Services in the Fed. District and supply of health services in PASSPA states 3. Survey of Managers and Health NA Completed Not assessed Centers in Hidalgo State 4. Factors Affecting the Demand of Identify factors related to the Completed Not assessed Primary Health Services in demand of primary health care Aguascalientes, Chiapas, D.F., services in PASSPA states and Guerrero, Hidalgo and Oaxaca Aguascalientes 5. Analysis of Second National Evaluate national health needs, Completed Quality: good Health Survey (ENSA II)- and delineate future health Households polices 6. Analysis of data from ENSA II, Explore alternative sources of Completed Not assessed representative at state level - financing and cost recovery for Aguascalientes: Financial Resource health Mobilization for Health 7. Analysis of Data from ENSA II on Finding out the causes of low Completed Quality: average determinants and use of health utilization of public health services in Aguascalientes, Coahuila, services Chiapas, Guerrero, Hidalgo, Michoacan, Veracruz and Yucatan 8. Modernizing the organizational Finding new organizational Completed Not assessed model of coordinated public health models for public health services in Hidalgo services at state level 9. Strategies for further improving the Addressing quality issues in the Completed Quality: good quality of primary health care primary health services 10. Effects of home treatment of Examine strategies for reducing Completed Not assessed diarrhea among pre-schoolers in two infant mortality PASSPA states - D.F and Oaxaca 11. Risk of sludge and its effect on Improve strategies for Completed Quality: average health in the Southwest of the controlling environmental Mezquital Valley factors affecting health  21 12. Poverty Indexes in the 570 Poverty Indexes in 570 Completed Quality: poor municipalities of Oaxaca and municipalities in Oaxaca in relationship to health problems 1980- descendent order 1990 13. My Health and Myself (public NA Completed Not assessed education campaign) 14. Measurement and geographic NA Completed Not assessed location of poverty in the Federal District - First Phase 15. Id. - Second Phase NA Completed Not assessed 16. Health Expenditures in four states Propose financial alternatives Completed Quality: good with high levels of poverty (1987-93) for PASSPA program entities - Chiapas, Guerrero, Hidalgo and Oaxaca 17. Evaluation of infrastructure and NA Completed Not assessed quality of the emergency medical services in D.F. and Metropolitan Area 18. Evaluation of the process disease- Define an environmental Completed Quality: good care and death from diarrheal disease assessment of mortality due to in children under 5 years, applying diarrhea among children under 5 the technique of verbal autopsy - years old in PASSPA states Chiapas, D.F., Guerrero, Hidalgo y Oaxaca 19. Timely detection of Uterine- Identify and quantify the Completed Not assessed Cervical Cancer: an evaluation of the principal indicators of quality and accessibility of the accessibility and quality of DOC program program in D.F. 20. Development and evaluation of Developing effective strategies Completed Not assessed four strategies of integrated nutrition to offer nutrition services care for children aged 6 months to 4 years and pregnant and lactating women 21. Impact of mothers' training on Examine strategies for reducing Completed Quality: poor handling diarrhea cases in the home infant mortality 22. Qualitative study: Assessment of Identify factors related to the Completed Not assessed factors affecting the demand of health demand of health care services services in Aguascalientes, Chiapas, from the users perspective D.F., Guerrero, Hidalgo and Oaxaca  22 Table 7A: Project Costs (US$ Millions) Appraisal Estimates (US$M) Actual costs (US$M) ,Xii,,i,,~~~~~~~~~~~~~~~~~~~~~....... .,,,,,JW Civil Works 30.0 9.8 39.8 24 29.5 9.3 38.8 24 Equipment and 29.8 9.9 39.7 25 20.6 6.9 27.5 25 furniture Vehicles 3.9 0.2 4.1 5 5.9 0.3 6.2 5 Training TA & 18.3 2.8 21.1 21 9.8 2.5 12.3 20 Studies Incr. Salaries and 102.0 9.9 111.9 9 114.4 6.0 120.4 5 op.costs Unallocated 28.1 5.3 33.4 16 tZOSTh~~~~~~~~~~~~~~~~~~~~.... ..M _*ES~~~~~~~~. ....... Table 7B: Project Financing (US$ Millions) Appraisal Estimates Actual Costs IBRD 142.1 37.9 180.0 110.0 25.0 135.0 Government 70.0 - 70.0 70.2 70.2 .... ... ........ ...... ~ ~ ~ ~ ~ ~ ~ ~ ~ 20.2  23 Table 8: Status of Legal Covenants Loan Agreement 2.02(b) Borrower to open and maintain in dollars a special account 3 C on terms and conditions satisfactory to the Bank; deposits into, and payments out of, the Special Account shall be made in accordance with provisions of Schedule 5 to the Loan Agreement 4.01(b)(ii) Have records and accounts audited once a year by I CD Annuall independent auditors and forward audit report to Bank no y later than 6 months after close of fiscal year. 4.01(b)(iii) Furnish to the Bank each month certified statements of the I C Monthly Special Account 6.01(c) Maintenance Plans, satisfactory to the Bank, to be presented 5 C to Bank for at least three of the Project States. 6.01(d) Human Resources Training Plans, satisfactory to the Bank, 5 C to be presented to the Bank for at least three of the Project States 60.1(e) Draft contracts and a short list of consultants, satisfactory to 5 C the Bank, for preparation of Institutional Development Plans, to be presented to the Bank for each Project State Guarantee 3.03 Guarantor, through SSA, to maintain a Federal PCU, with 5 C the characteristics specified in the October 11, 1990 letter, regarding the Federal PCU and Project State PCUs, furnished to the Bank by the SSA 3.04 Guarantor, through SSA, to maintain Project State PCUs, 5 C with the characteristics specified in the October 11, 1990 letter mentioned above 3.05(b)(ii) Guarantor to furnish to the Bank not later than six months I after the end of each fiscal year, a certified copy of audit report 3.05(b)(iv) Guarantor to cause SECOGEF to comply with obligations I C set forth in agreement between the Bank and SECOGEF referred to in Section 3.06 (b)(ii) of the Guarantee Agreement 3.06 Guarantor, through SSA and SPP to enter into separate C Participation Agreement, satisfactory to the Bank, with each 6.01(a) of the Project States, whereby each of those Project States agrees to: 3.06(b) -perform, or cause to be performed, in collaboration with I C SECOGEF, the obligations with regard to such records and accounts as set forth in the agreement between the Bank and SECOGEF entitled Providencias de Auditoria Externa para la Ejecuci6n del Programa Solidaridad-SSA por parte de la Secretaria de Salud y los Estados Participantes (External Auditing Arrangements Regarding the Health Secretariat's and Project States' Execution of Solidaridad-SSA)  24 dpLihn C:w~n~rn. 3.06(d) -provide or cause to be provided, in a timely manner as 3 CD needed, a portion, consistent with the Decentralization Action Plan, of the funds, facilities, services and other resources required to carry out the Project in the project state in question 3.07 Participation Agreement entered into with state of Guerrero CD pursuant to 3.06 of the Guarantee Agreement to include additional provisions, whereby state of Guerrero agrees to: 3.07(a) -maintain a Project State PCU within SESA; such Project 5 C State PCU shall in all other respects be governed by terms identical to those set forth for other Project State PCUs in the letter referred to in Section 3.04 of the Guarantee Agreement; 3.07(b) -contribute data required for proper operation of HMIS and 5 C for proper compilation of data regarding Monitoring and Evaluation Indicators; 3.07(c) -prepare and carry out, in conjunction with SSA, the SESA 5 CD 6/30/91 Maintenance Plan and SESA Human Resources Training Plan, to be presented no later than either the Effective Date or June 30, 1991; 3.07(d) -contract, no later than June 30, 1991, with a consultant to 5 CD 6/30/91 12/6/92 prepare the SESA Institutional Development Plan, satisfactory to the Bank 3.07(e) -participate through SESA, in annual reviews 5 C 3.08 Upon entering into an agreement similar to the Acuerdo de Coordinacion, pursuant to Decentralization Action Plan, with a Project State other than the state of Guerrero, Guarantor to simultaneously amend Participation Agreement for that Project State, so as to add the following provisions: 3.08(a) -that the Project State PCU for the Project State and continue 5 C to cooperate with the Federal PCU in coordinating execution of the Project 3.08(b) -that the Project State adopt and carry out, in conjunction 5 CP with SSA, the Maintenance Plan, Human Resources Training Plan and Institutional Development Plan already existing with regard to that Project State 3.08(c) -that the project State contribute data required for proper 5 C operation of HMIS and for proper compilation of data regarding the M&E Indicators; and 3.08(d) -that the Project State participate, through its SHA, in the 5 C annual reviews referred to in Section 3.16 of the Guarantee Agreement 3.10 No later than July 31, 1991, Guarantor shall present to the 5 C 7/31/91 7/31/91 Bank Maintenance Plans, satisfactory to the Bank, for each of the Project States of Chiapas, Hidalgo, Oaxaca, or the Distrito Federal for which no maintenance plans were presented as of the Effective Date 3.10 Guarantor, through SSA, shall carry out the Maintenance 5 C Plans with regard to all those Project States, and assist any Project State in carrying out their Maintenance Plans. 3.11 Guarantor shall carry out the measures referred to in the 5 C Staffing Normalization Letter with regard to SSA personnel.  25 11~~~~~~~~~~~~~~~~~Tp S*fiu ftzfi L i*Iif 3.12 No later than June 30, 1991, Guarantor shall present to the 5 C 6/30/91 6/30/91 Bank Human Resources Training Plans, satisfactory to the Bank, for each of the Project States of Chiapas, Hidalgo, Oaxaca or the Distrito Federal for which no Human Resources Training Plans were presented as of the Effective Date 3.12 Guarantor shall carry out the Human Resources Training 5 C Plans with regard to all those Project States, and assist any Project State in carrying out their Human Resources Training Plans 3.13 Guarantor shall, no later than June 30, 1991, enter into 5 CD 6/30/91 contracts, satisfactory to the Bank, with consultants for the preparation of Institutional Development Plans satisfactory to the Bank, for each of the Project States of Chiapas, Hidalgo, Oaxaca and the Distrito Federal. 3.13 Such Institutional Development Plans shall be prepared to 5 CD 12/31/91 the Bank no later than December 31, 1991 3.13 Guarantor shall carry out the Institutional Development 5 CD Plans with regard to all those Project States, and assist any Project State in carrying out their Institutional Development Plans 3.14 Guarantor, through SSA and in conjunction with SESA, 5 CD 12/31/91 shall review the operation and shall prepare an HMIS Plan for its improvement, satisfactory to the Bank, and deliver such HMIS plan to the Bank no later than December 31, 1991 3.14 Guarantor shall carry out the HMIS Plan. 5 C 3.14 Throughout Project execution, SSA shall use he HMIS to 5 C gather data regarding the Monitoring and Evaluation Indicators. 3.15 Guarantor shall carry out the Decentralization Action Plan 5 CD 3.16(a) Guarantor, through SSA, shall conduct annual reviews, 5 C 9/91 Annually beginning September 1991. 3.16(b) As part of the annual review procedure, by August 30 of 5 C 8/30 8/30 Annually each year, beginning in 1991, Hospital Infantil and any other research institutions carrying out studies, and each Project State PCU, shall deliver to the Federal PCU draft annual plans containing targets and a description of activities for Project implementation proposed for the subsequent calendar year 3.16(b) By June 30 of each year beginning in 1993, the Federal PCU 5 C 6/30 6/30 Annually shall submit to the Bank in terms acceptable to the Bank, annual reports on the Project status. 3.17 Guarantor, through SSA and with the assistance of 5 C 10/28/93 consultants, shall complete a mid-term review of the Project no later than three, but no earlier than two and a half years after the effective date 3.17 Federal PCU shall prepare terms of reference, satisfactory to 5 C 11/30/93 the Bank for the consultants involved in the Mid-Term Review, and shall present the results of the mid-term review to the Bank immediately upon its completion 3.19 No civil works for new health centers under Part A. I of the 5 C Project shall be undertaken without taking into account the results of an environmental impact study, satisfactory to the Bank, regarding such works.  26 XmXSM~~~~~~~~~~~~~~~~~~~~ . i . .................... 3.19 For civil works under Part A. 1 of the Project involving 5 C expansion or rehabilitation or already existing hospitals and health centers, it must first be determined by SSA, to the Bank's satisfaction, that increased waste disposal generated by such facilities would not have negative environmental impact. 3.19 Such environmental impact studies and waste disposal 5 C 7/31/91 4/92 analyses shall be prepared based on environmental assessment guidelines, satisfactory to the Bank, to be prepared by SSA no later than July 31, 1991 3.19 Results of such studies and analyses shall be examined 5 C during the course of the annual reviews 3.20 No later than July 30, 1992, Guarantor, through SSA, shall 5 C 6/30/92 present to the Bank for comments the results of a review performed by the SSA of the efficiency and adequacy of the purchase and distribution of drugs and medical supplies by the SSA and SHAs in the Project States; such results shall include an action plan, to he carried out by SSA and SHAs during the course of Project implementation, for the purpose of improving such purchase and distribution practice. 3.21 Guarantor, through SSA, shall, no later than June 30, 1992, 5 CD 6/30/92 10/94 complete the health sector resource allocation and mobilization study, present its results to the Bank and exchange views with the Bank regarding such results 3.21 On the basis of the results of the study and such exchange of 5 CD 12/31/92 10/94 views, Guarantor shall, by December 3 1, 1992, prepare an action plan satisfactory to the Bank 3.21 Guarantor shall implement such action plan in accordance 5 CD with the implementation schedule included in the action plan. Covenant types: I = Accounts/audits; 2 = Financial performance/review; 3 = Flow and utilization of Project Funds; 4 = Counterpart funding; 5 = Management aspects of the project. Present Status: C = Covenant complied with; CD = Complied with after delay; CP = Complied with partially  27 Table 9: Bank Resources: Staff Inputs _ ~~~~ Avwd Preparation to Appraisal 102.5 178.4 Appraisal 74.0 139.0 Negotiations through Board Approval 65.1 134.6 Supervision 166.0 538.6 Completion 13.1 29.4 '. . ...  Table 10: Bank Resources: Missions Through Appraisal Identification 01/87 5 12.0 B,D,H,I,O n/a n/a n/a Preparation 05/87 5 13.0 A,B,D,K n/a n/a n/a Preparation 11/87 4 4.8 A,B(2),J n/a n/a n/a Preparation 12/87 1 2.0 B n/a n/a n/a Preparation 02/88 6 6.6 B,C,D,I n/a n/a n/a Preparation 04/88 1 2.4 B n/a n/a n/a Preparation 06/88 1 1.4 B n/a n/a n/a Preparation 08/88 2 2.8 B,J n/a n/a n/a Preparation 01/89 1 1.4 B n/a n/a Preparation 06/89 7 21.0 A,B(2), C(2), I,J n/a n/a Preparation 03/90 9 27.0 A,B(2),C(3),I,J(2),L n/a n/a Preparation 05/90 1 0.4 E n/a n/a