Bolivia - Integrated Health Development Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 8001-BO STAFF APPRAISAL REPORT BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT DECEMBER 20, 1989 Human Resources Division Country DepartmenZ III Latin America and the Caribbean Regional Office IThis document has a resticted d6lribaion and way be used by redpknt only in the performance of their offical dutes. Its contents may not otherwise be dscdosed wtot World Bank aulhriztion.  CURRENCY EQUIVALENCY UNITS Currency Unit - Boliviano B$1.O - US$0.35 US$1.0 - B$2.86 FISCAL YEAR January 1 - December 31 I  AL BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. ABBREVIATIONS ...................... ............. ......... ......... iii DEFINITIONS OF POPULATION, HEALTH AND NUTRITION TERMS .............. iv BASIC DATA ........................... vi CREDIT AND PROJECT SUMMARY .......................... ... vii I. THE PROJECT CONTEXT ........................................... 1 II. SECTOR AND INSTITUTIONAL FRAMEWORK ..... ....................... 3 Organization of the Health Sector ..... ........... ................ 3 Major Sector Issues ........ ............................ ............... 7 Donor Activities . .............................. ............... 9 IDA Assistance Strategy ........................................ 9 III. THE PROJECT ................................. ... s .......... 10 Project Origin and Objectives ...... ............................ 10 Main Features of the Project ...... ............................. 10 The Service Delivery Component ...... ........................... 12 The Human Resources Development Component ..................... 14 The Institutional Development Component .............. .......... 15 Plan of Action ..........................7................. . 17 IV. PROJECT IMPLEMENTATION .. ............................. 18 Implementation Arrangements ..8........... i Regional Participation ......................... 19 Community Participation ...................................... . 20 Monitoring and Evaluation ......................... 20 Procurement ......................... 20 Disbursements ......................... 22 Special Account ........................ 22 Project Account ......................... 23 Audits ......................... 23 This report is based on the findings of an appraisal mission carried out in May 1989 and comprising M. Plessis-Fraissard (Leader, LA3HR); M. Grosh (Economist, LATHR); Consultants G. De Lemos (Pharmacist), E. Guilera (Health Administrator), G. Herrera (Training Specialist), A. Karp (Sanitation Engineer), and J. Van Domelen (Resident Mission, La Paz). The consultants A. Webb (Sociologist), N. Wilkie (Nutritionist), and A. Zuniga- Wager (Architect), participated in the preparation mission. 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.  Page No. V. PROJECT COST AND FINANCING ........... .......****..... ...... 23 Project Costs ..................................................... 23 Financing ........................ ....................... 0.... 24 Cofinancing Arrangements ....................................... 24 Cost Recovery ............................ ............ ..... 24 Replicability .................................................. 25 VI. BENEFITS AND RISKS ............................. ... ........ 25 Health, Efficiency and Effectiveness Benefits ......... ... 25 Poverty Impact ............................................... 26 Impact on Women ................ .............................. 26 Environmental Impact ........................................... 26 VII. AGREEMENTS AND RECOMMENDATION ......................... . .... . 27 Agreements Reached at Negotiations .............. ............... 27 Conditions of Effectiveness .............................. ....... 28 Conditions of Disbursement ........................... ........ .... 28 ANNEXES I - Public Health Facilities and Personnel 2 - Sector Financing 3 - Integrated Health Care Model and Organization for Maternal and Child Care 4 - Plan of Action 5 - Letter of Intention 6 - Project Tables 7 - Hiumn Resources Development Component 8 - Terms of Reference 9 - Organizational Charts 10 - Monitoring and Evaluation of Project Impact on Local Health and Nutrition 11 - Selected Documents and Data Available in the Project File Maps: IBRD 21669, 21670, 21671, 21672  - iii - ABBREVIATIONS CDS Consejo Departamental de Salud (Departmental Health Council) CPS Comite Popular de Salud (Popular Health Committee) EIH Encuesta Integral de Hogares (Tr.tegrated Household Survey) EHSO Economic Management Strengthening Operation ENSP Escuela Nacional de Salud P6blica (National School of Public Health) ETS Escuela Tecnica de Salud (Technical School of Health) FIS Fondo de Inversion Social (Social Investment Fund) PSE Fondo Social de Emergencia (Emergency Social Fund) HD Health District IBSS Instituto Boliviano de Seguridad Social (Bolivian Institute of Social Security) IDA International Development Association IDB Inter-American Development Bank IHCM Integrated Health Care Model INE Instituto Nacional de Estadisticas (National Institute of Statistics) LSMS Living Standards Measurement Survey MPSSP Ministerio de Prevision Social y Salud P6blica (Ministry of Social Welfare and Public Health) NGO Non-Governmental Organization PAHO Pan-American Health Organization PEM Protein-Energy Malnutrition PFMO Public Financial Management Operation PU Project Unit RDC Regional Development Corporation SU Sanitary Unit SVEN Sistema de Vigilancia Epidemiol6gica y Nutricional (Epidemiological and Nutritional Surveillance System) TGN Tesoro General de la Naci6n (Nationr General Treasury) UNDP United Natiuns Development Program UNICEF United Nations Children's Fund USAID United States Agency for International Development WHO World Health Organization  - iv - DEFINITIONS OF POPULATION, HEALTH AND NUTRITION TERMS Adult Literacy Rate The percentage of persons aged 15 and over who can read and write. Child Mortality Rate Annual deaths of children 1-4 year per 1,000 children in the same age group. Contraceptive Prevalence Rate The percentage of married women of reproductive age who are using a modern method of contraception at any time. Crude Birth Rate Number of live births per yeer per 1,000 people. Crude Death Rate Number of deaths per year per 1,000 people. Degree of Malnutrition The Gomez classification scale distinguishes three degrees in malnutrition, nanely: first (mild): 75-89? of expected (or standard) weight for age; second (moderate): 60-742 of expected weight; third (severe): under 60? of expected weigb l Dependency Ratio Population 14 years or under and 65 years or over as percentage of population aged 15 to 64 years. Incidence Rate The number of persons contracting a disease as a proportion of the population at risk, per unit of time; usually expressed per 1,000 persons per year. Infant Mortality Rate Annual deaths of infants under 1 year per 1,000 live births during the same year. Life Expectancy at Birth The number of years a newborn child would live if subject to the age-specific mortality rates prevailing at time of birth. Low Birth Weight Infant weight at birth less than 2,500 grams. It may be associated with either pre-term (less than 37 weeks gestation) or full-term but small for dates (38 weeks or more) of gestation.  Maternal Mortality Rate Number of maternal deaths per 1,0(J births in a given year attributable to pre8nancy, childbirth or post-partum. Morbidity The frequency of disease and illness in a population. Mortality The frequency of deaths in a population. Neonatal Mortality Rate The number of deaths of infants under 28 days of age in a given year per 1,000 live births in that year. Perinatal Mortality Rate The number of fetal deaths after 28 weeks of pregnancy and of infant deaths under 1 month of age in a given year per 1,000 live births. Prevalence Rate (Point) The number of persons having a particular disease at a given point in time per population at risk; usually -.spressed per 1,000 persons per year. Rate of Natural Increase Difference between crude birth and crude death rates; usually expressed as a pereentage. Total Fertility Rate The average number of children a woman will have if she experiences a given set of age-specific fertility rates throughout her lifetime. Serves as an estimate of average number of children per family.  - vi - BOLIVIA IFTECRATED HEALTH DEVELOPMENT PROJECT BASIC DATA A. General Country Data 1. Area (Km2) 1,099,000 2. Total Population (Million, Mid-1989) 7.1 3. Population Density (per Sq. Km.) 6.5 4. Rural Population as Proportion of Total Population 502 5. Primary School Enrollment (1986): Male 932 Female 822 6. GNP Per Capita (1987) US$570 B. Population, Health and Nutrition Data 1. Crude Birth Rate (1987) 43/1,000 2. Lrude Death Rate (1987) 14/1,000 3. Total Fertility Rate (1987) 6.1 4. Life Expectancy at Birth (1986): Male 51 years Female 55 years S. Infant Mortality Rate (1987) 110/.,000 6. Maternal Mortality Rate (1,80) 48/10,000 7. Physicians per 10,000 Inhabitants (1984) 6.5 8. Nurses & Auxiliaries per 10,000 Inhabitants (1984) 4.0 9. Hospital Beds per 1,000 Inhabitants (1987) 1.8 10. Proportion of Births Attended by Health Staff (1985) 362 11. Proportion of Children Between 1 and 2 Years of Age Fully Immunized (1986) 212 12. Contraceptive Prevalence Rate (Modern Methods) (1983) 1O0 13. Prevalence of Endemic Goiter (1983-84) 652 14. Prevalence of Protein-Energy Malnutrition Among Children Under 5 Years of Age (1981) 412 15. Daily Calorie Supply per Capita (1986) 2,143 Source: World Development Report, 1989, and staff estimates. Population, Health and Nutrition Sector Memorandum, 1988 (Report No. 6965-BO)  - vii - BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT Credit and Proiect Summary Borrowert Republic of Bolivia Beneficiary: Ministry of Social Welfare and Public Health (MPSSP) Amounts SDR 15.7 million (US$20.0 million equivalent) Terms: Standard IDA terms, with 40 years maturity Proiect Obiectives The project objective is to improve maternal and child and Description: health in Bolivia. The project would: Ci) support the extension of the basic health services, with priority for the most vulnerable groups of pregnant women, lactating mothers and children under five years of age; (ii) improve the effectiveness of basic health services through the development of appropriately trained human resources in health institutions; and (iii) strengthen central policy making and coordination of investment in health within a more coherent institutional framework and a national health plan. MPSSP would delegate the administration of some health districts and the operation of facilities to municipalities, NGOs or other provieers of health care, who would accept to provide a standardized level of services. In this first IDA project for the health sector in Bolivia, only the major constraints of the sector would be addressed while laying the ground for further improvement through future projects. Specifically, the project would include: (i) a service delivery component (US$29.6 million) consisting of extending maternal and child care in the marginal and low-income areas of La Paz, El Alto. Cochabamba and Santa Crvz. The credit would finance the extension of pre- and post-natal care, reproductive health care, child development and nutritional control, prevention and control of diarrheal and respiratory diseases. The credit would finance construction, rehabilitation and equipping of ambulatory centers; supply and management of stocks of essential drugs; equipment; vehicles; logistic and maintenance system<; and the construction of one maternal and child health facility; (ii) a human resources development component (US$1.0 million) consisting of the development of decentralized training capacity, the training and supervision of selected staff from MPSSP, municipalities and NGOs, and health education campaigns; and (iii) an institutional development component (US$6.5 million) covering the phased reorganization of MPSSP, in its Planning, Human Resources, Administration and General directorates, and in the regional units involved in the project. It would establish a system for planning, budgeting and control for MPSSP, and participating  - viii - municipalities and agencies. It would also support the development of a management information system. A Plan of Action, essentialUy addressing more appropriate resource balance across levels of service and key institution reforms, would reinforce the policy actions and institutional changes of the project. Preparation and start-up actions (US$1.5 million) were completed with IDA financing. Benefits: The project would benefit about 790,000 women in reprod- uctive age and children currently without access to basic health services, in the low-income neighborhoods of the four largest cities. It would reorient public health expenditure in favor of basic health care and improve the efficiency of resource use through improved coordination with NGOs and among donors. Risks: The risks include possible lack of full commitment and follow through of the Government and/or the municipalit- ies to carrying out administrative reforms and intro- ducing effective management systems. Annual reviews of the Plan of Action, carefully planned zechnical assistance and donor coordination would help minimize these risks. Estimated Cots:t al Local ForeiRn Total -__-____--- -US$ million --------- Total PPF 1.05 0.45 1.5 Service Delivery Infrastructure & Maintenance 6.65 1.85 8.50 Drugs and Supplies 1.92 3.41 5.33 Vehicles & Equipment 2.76 1.79 4.55 Salaries 7.63 0.00 7.63 Subtotal 18.96 7.05 26.01 Human Resources Development Training 0.65 0.16 0.81 Subtotal 0.65 0.16 0.81 Institutional Development Contracts, Material & Equipment 1.53 0.03 1.56 Commission and Supervision 1.05 0.82 1.87 Technical Assistance 0.33 1.11 1.44 Studies, Monitoring & Evaluation 0.57 0.18 0.75 Subtotal 3.48 2.14 5.62 Total Base Cost 24.14 9.80 33.94 Physical Contingencies 1.18 0.48 1.66 Price Escalation 2.13 0.87 3.00 Subtotal 3.31 1.35 4.66 Total Project Costs 27.45 11.15 38.60 a/ Amount of taxes and duties is negligible.  - a - Financing Plant Local Foreign Total ------ (US$ million) ----- IDA 15.1 4.9 20.0 Government of Bolivia 9.4 0.1 9.5 Public Regional Entities 2.9 0.0 2.9 Government of the Netherlands 0.0 6.2 6.2 Total 27.4 11.2 38.6 Estimated IDA Disbursements: IDA FY 1990 1991 1992 1993 1994 1995 1996 1997 --------------------- US$ million ---------------------- Annual 1.8 2.4 3.0 3.4 3.2 2.8 2.n. 1.0 Cumulative 1.8 4.2 7.2 10.6 13.8 16.6 19.0 20.0 Economic Rate of Return: Not applicable Mapst IBRD 21669, 21670, 21671, 21672  BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT STAFF APPRAISAL REPORT I. THE PROJECT CONTEXT 1.01 Geographic Location and Characteristics. The population of Bolivia, currently 7.1 million and growing at 2.7Z annually, is the poorest of South America, with a GNP per capita of US$570 in 1987. The ethnic diversity of the population and its uneven distribution in this large landlocked country, the fifth largest in the continent, add to the challenge of addressing the issues of human resources development. Overall, no more than 37Z of the population speaks Spanish at home, literacy rates are low, at 63S, and a fifth of Bolivians speak only Aymara or Quechua. J.vt over half of the population lives in urban areas. Thirty-eight percent of the population lives in the high plains, 3,500 to 4,000 meters above sea level. This population is spread around the capital, La Paz, in mining towns, or in rural areas on lands of little agricultural potential. In these high plains the Aymara Indian tradition is predominant. Forty-two percent of the population, with Aymara, Quechua or European backgrounds, live in the semi-tropical valleys and foothills and have diversified activities. The rest of the population, in which European settlers outnumber the Guarani and Amazonian Indians, is scattered across the sparsely inhabited lowlands which comprise a mix of fertile plains, marshlands and jungle on 652 of Bolivia's territory. A minnimal transport system links the three regions, and large parts of the country are accessible only by air. 1.02 Health and Nutrition Status of the Population. The population of Bolivia has the worst health indicators in the continent. Life expectancy averages 51 years for men and 55 years for women; infant mortality is twice the average of the region, at 110 per l,00e live births, and reaches 277 per 1.000 live births in some poor communities in the highlands and low income urban districts. Maternal mortality, at 48 per 10,000 live birLhs, is almost twice the average for the region, and leads to 1,400 deaths a year. It is associated with high fertility, poor health conditions of mothers, lack of prenatal and delivery care, and an alarming incidence of induced abortion. Malnutrition is widespread, particularly in the rapidly growing suburbs of the larger cities and in rural areas. Recent surveys show daily caloric intake averaging 602 to 652 of requirements in El Alto, the new city adjacent to the Capital, and 59Z in depressed rural areas. The contraceptive prevalence rate is low (102, modern method, 1983), especially among Quechua and Aymara communities (52). The lack of adequate birth spacing contributes to the high rate of maternal and infant mortality and malnutrition. Tuberculosis and silicosis are prominent public health problems and major causes of adult mortality. The poor health status is also associated with the unsanitary living conditionst only about 69Z of the urban population and 10 of rural population have access to piped water, while 37S of urban and 4S of rural households have sanitation. On average, 65Z of the urban population of the four major cities do not have excreta disposal. This proportion reaches 85S in Santa Cruz, the most rapidly growing city. Crowded and inadequate housing is the norm, with a third of dwellings with only one room, 602 with dirt floor, and 90S without bathroom.  - 2 - 1.03 Social Impact of the Economic Crisis. Poverty has deep roots in Bolivia and living standards have declined in recent years. The social impact of poor economic performance since the early 1970s was compounded by the economic collapse which culminated in 1985, and, in the mining areas, by the austerity measures taken since then. The Government, which took office in August 1985, faced a country in acute economic crisis. Real GDP was contracting for the fifth consecutive year and per capita income had declined by wore than 202 since 1980; inflation was reaching 24,000? per year, international reserves were virtually depleted and private and public investment was at a standstill. The Government's stabilization and adjustment program has been successful in reducing inflation, controlling the public sector deficit, restoring external and internal financial balance and laying the foundation for sustained economic recovery. However, about 27,000 miners from public and private mines and another 15,000 to 16,000 workers from the rest of the public sector were laid off. Unemployment and under-employment peaked at an estimated 20 to 25?, with dramatic social consequences. The contraction of public expenditures and reduction of salaries, and the deterioration of the terms of exchange between urban and rural areas and between the country and abroad also had a regressive impact on welfare. Indicators of standards of living are not available on a continuous basis since 1970. There are consistent indications that, while alarming enough before the depression, infant mortality, maternal mortality, malnutrition, incidence of diarrhea and parasitic diseases have worsened until 1985. The share of the national product spent on public health care and education was also reduced until 1985, and has only partially recovered since then. The proportion of the population covered by social security schemes fell from 25? in 1980 to 21? in 1986. Time series of hospitalization for malnutrition shows deterioration of the status of children between 1981 and 1985, with a recovery by 1987 only in the rural areas. In 1988, the proportion of school-aged children not attending school had increased 15? above the 1980 level. It is estimated that currently 60? of the population lives in households whose income covers only 80? of the cost of essential food. ..04 Recent Efforts to Address Social Issues. Since 1986, the Government bas increasingly focused on social issues, particularly those of emergency and short-term nature. The Emergency Social Fund (FSE) created to finance, by means of grants, small-scale employment and income- generating projects and social assistance programs was designed to benefit those hardest hit by the economic crisis. This program, partially fuided with two IDA Credits (Cr. 1829-BO and Cr. 1882-BO) and major external donor cofinancing, has had a large and positive impact. By November 1989, it had financed over 2,300 projects, provided at all times about 26,000 jobs with accumulated commitments of US$145 million and employment generation of 574,000 man/month equivalent. About 229,000 persons also benefited from direct assistance projects such as health and nutrition. The Government is seeking to reorient the emergency effort towards more investment-oriented targets, through the creation of a Social Investment Fund (FTS). The FIS is expected to be established by Tanuary 1990. The emergency fund ceases to approve new subprojects in January 1990, and is mandated to close in December 1990. Drawing from the experience of the FSE, the FIS would set the social programs within the long term social and economic development strategy of the nation. The proposed project is also part of this effort.  3 - II. SECTOR AND INSTITUTIONAL FRAMEWORK Organization of the Health Sector 2.01 Organization of Health Services and Share of Coverage. The health sector comprises a multiplicity of public and private institutions serving a variety of target populations estimated to equal less than two-thirds of the Bolivian population. The Ministry of Social Welfare and Public Health (MPSSP), established in 1948, includes a subsecretariat of Public Health and one of Social Security responsible for the Bolivian Institute of Social Security (IBSS). In 1983, the MPSSP's public health system served about 382 of the population, mostly in cities, declining more recently to about 302. The social security system set up by the 1959 Social Security Code, provides wide benefits for insured workers and their relatives. Its schemes cover wage-earners in industry, commerce, mining and government services, mostly in mining areas and in La Paz. They benefited about 26S of the population in 1982 and now about 202. hon-governmental organizations (NGOs) serve about 20 of the population, mostly in peri- urban and rural areas. Only a few municipalities and Regional Development Corporations (RDCs) are active in the health sector, but in Santa Cruz the city supports, in its jurisd!ction, a more extensive health service network than the MPSSP. The private for-profit sector serves a small portion (no more than 52) of the population which decreased recently with the general impoverishment. Traditional medicine is the only recourse of large segments of the population, particularly in rural areas. 2.02 The Public Health Subsecretariat of MPSSP. The Public Health subsecretariat and its regional public health system were designed to promote basic health care, but this has not been achieved. The current organization of the regional public health system was adopted in 1983. It includes eleven Sanitary Units (SUs) covering the nine departments, with regional hospitals responsible for ambulatory and inpatient curative care; 84 Health Districts (HDs) where health centers are designed to provide in- and out-patient maternal and child care, specialized ambulatory care, and serve as referral centers for a network of scattered health posts; and 426 health areas in charge of the outreach activities and basic health care functioning in multipurpose facilities. A new plan of activities for HDs was designed in 1984, giving higher priority to basic health care. This approach was subsequently developed with a shift from vertical management at the central level to a management at the level of the SUs. It emphasized community participation and provision of services of maternal and child care, and water and sanitation. A National Directorate of Social Mobilization was created in the MPSSP. Participation of Popular Health Committees (CPS) was institutionalized. Implementation, however, has been hampered by organization problems, and by insufficient human and financial resources. 2.03 The Social Security Subsecretariat of MPSSP. The Social Security subsecretariat is responsible for policy making and planning of the social security system. The Social Security Code was streamlined in 1987 by the Law 924 and the Supreme Decree 21637. The long-term benefits are new managed by 20 pension funds, and the health benefits by five Funds and six insurance schemes. The funds and insurances are characterized by a low emphasis on basic care, and curative interssntions provided mostly in hospitals. The health benefits were reduced between 1978 and 1986. During 1985 expenditures on health and maternity care fell by 502. The number of hospitals and clinics also fell from 146 in 1983 to 112 in 1985. The fees,  - 4 - the costs of benefits received, and the facilities and services made available to the beneficiaries vary between regions and funds. Administrative costs are high. Lack of coordination prevents investment planning and efficient use of the facilities. The growing deficit and virtual bankruptcy of the smaller funds impose an increasing burden on the national treasury. The long-term benefits absorb a growing portion of the expenditures of the IBSS, with problematic trends for the future. 2.04 The Non-Governmental Organizations (NGOs). Over 300 NGOs operate in the health and tnutrition sector in Bolivia. Recent initiatives to promote coordination between them have yielded only modest results. NGOs proliferated during the last decade. They are funded primarily in the United States, Europe and Canada, and are managed by religious, charitable or civic institutions. Only a few NGOs have a national coverage, and most are limited to the financing and management of a single or a few service centers. 2.05 The Local Governments. In the larger cities, municipalities own almost as many health facilities as MPSSP. La Paz and Santa Cruz have active health programst the city of La Paz carried out the very successful basic health component of the First Urban Development Project (Ln. 1489-BO), and inzludes sanitation and basic health in the programs managed b- its Community Participation Directorate; Santa Cruz financed in 1987 42 of all health expenditures in the city, gives ad hoc support to MPSSP's facilities and recently allocated increased budget to basic health care. El Alto is actively supporting community participation activities, including sanitation and basic health, with its limited technical and financial resources. The city of Cochabamba has not directly sponsored health programs. Likewise, the nine RDCs promote economic activities in their respective departments and are not directly involved with health. However, in the departments where mineral and gas provide revenues, such as Santa Cruz, the RDCs have played a role in planning, executing and maintaining health facilities, principally in the rural areas. 2.06 The For-Profit and the Traditional Medicine. For-profit health providers have been affected by the economic recession. A large number of private medical offices, catering to the middle and higher income groups in urban areas, closed recently. Traditional medicine is used by a large portion of the population. It is practiced by about 12,000 traditional hfalth practitioners, chemists, healers and midwives. Some training of 'empirical oldwives', sponsored by UNICEF, has had a definite local impact on maternal health when coordinated with a referral institution, but this effort has remained marginal. 2.07 Physical Resources for Health Care. Health facilities have low efficiency because they are unevenly distributed, often of inadequate design, and poorly equipped and maintained. Inadequate operating hours also contribute to the low usage. There are about 1,200 health facilities in Bolivia. There are eight beds per 1,000 inhabitants in Sucre, but less than one per 1,000 inhabitants in Oruro and Potosi. Overall, there are about 1.8 hospital beds per 1,000 inhabitants, an inadequate figure below the 2.8 average for the region. In the proposed project area, comprising the urban and peri-urban areas of La Paz/El Alto, Santa Cruz and Cochabamba, there are 346 health facilities, of which about 10? belong to MPSSP, 35Z to the private sector, 30? to NGOs, 72 to the Social Security and institutions such as the police and armed forces, 82 to the municipalities and 102 to neighbors' communities (Annex 1). Seventy percent of the health facilities have no more than two rooms, and many  -5- health posts have only one room. A recent MPSSP survey found that 68? of the facilities present some deficiencies, such as lack of water or sanitary connection, and that 272 of them are unable to provide adequate services. Overall, this situation is worse in Santa Cruz than in any other large city. Public health facilities have outdated equipment and are poorly maintained. Maintenance is mostly done through ad hoc repairs, without planning or budget. 2.08 Human Resources for Health Care. HPSSP plays a central role in developing and financing training of health care workers, but the health system suffers from an inadequate skill mix, and a skewed deployment of personnel. MPSSP has 11,000 employees, which is adequate (Annex 1). The ministry provides staff to many NGOs who supplement the MPSSP salary according to their own policy. In Santa Cruz for example, MPSSP pays salaries to 340 NGO staff, contributing 58Z of NGO's expenditures in the area. Many employees cf NGO and private institutions received their initial training in MPSSP. Accordingly, the quality of supervision and inservice training of MPSSP staff has an impact on the entire sector. The inadequate skill mix in MPSSP is similar to that in the rest of the sector. It is characterized by a shortage of nurses and auxiliary nurses, and a lack of adwinistrative and managerial capacity. In the project area, only 25Z of hospital directors have some training in administration, and the public health system is even more deprived of qualified administrative and financial skills. Finally, resources are concentrated in hospitals with only 30? of personnel assigned to basic care. 2.09 In Bolivia organized groups of beneficiaries represent an asset capable of overcoming to a large extent the lack of institutional capacity. These organizations include Neighbors' Councils, which are the basis for participation of the community in municipal, labor and political activities. They are used in particular for the execution of self-help projects. Another drrangement is the Popular Health Committees (CPS), elected by Neighbors' Councils for matters related to health. The CPS are organized at the district, departmental and national level and assist in the definition of priorities, planning, execution and evaluation of health activities. Their coordinators provide the contact between the families and members of the community and the health system. The Youth Participation Groups serve as information and motivation agents during national campaigns. Finally, mothers' clubs assume a major role in food distribution, and child nutrition and survival programs. All of these organizations are more active in La Paz and El Alto where 25Z of families belong at least to one of them, than in Santa Cruz (20?) or Cochabamba (18?). Despite the heavy emphasis placed by MPSSP on community participation in its policy statements, effective participation has been mostly limited to vaccination campaigns. 2.10 Financial Resources for Health Care. The budgetary allocation for MPSSP fell dramatically from 1980 to 1986 and has not returned to its 1980 level. The Government recently increased NPSSP's share of the budget. In 1988, public health expenditures had grown back to 3? of national budget and MPSSP's budget was US$20.5 million, or 55? of the 1980 budget. Overall, financial resources for the health sector, even including food aid, are exceedingly limited in Bolivia (Table 1).  . 6 - Table Is PUBLIC FUNDING OF THE HEALTH SECTOR a/ USS Million of 1987 MPSSP IBSS FSE Food TOTAL TOTAL TOTAL National budget Health Health Aid per X per X Services Projects Capita of USS capita bud&at USS USS USS US$ US$ GNP million US$ million million million million 1980 37.1 6.65 4.39 65.6 - 23.0 90.7 16.3 2.7 1981 23.2 4.04 3.47 53.7 - 12.1 57.6 10.1 2.0 1982 21.0 3.57 3.53 38.1 - 21.6 71.9 12.2 1.9 1983 19.7 3.26 3.36 42.5 - 48.1 82.8 13.7 2.2 1984 17.6 2.84 3.36 45.1 - 32.4 101.6 16.4 3.1 1985 19.0 2.97 2.87 45.1 - 43.8 86.2 13.5 2.4 1986 11.7 1.78 2,11 27.3 - 38.8 61.2 9.3 2.0 1987 16.9 2.51 3.01 .... .3 .... .... .... 1988 20.5 2.96 .... .... 4.1 .... .... .... ... 1989 bi 24.2 3.'O . ... .... Source: MPSSP, IBSS, INE, FSE, Analysis Unit in the Planning Ministry and mission estimates. a/ MPSSPs' figures have been deflated monthly. IBSS and GNP figures have been deflated only annually. The high IBSS figure for 1984 may be a result of this discrepancy, and may not be representative of an increase in real expenditures. _/ Amount budgeted. 2.11 The sharp reduction of public funding for health was not fully compensated by donors activities and by the large increase in cost recovery. NGOs expenditures reached US$19.3 million in 1988. or 282 of total expenditures in the sector (Annex 2). Foreign aid finances 20? of recurrent costs and all of the investment. User fees, through charges for medical attention, drugs and supplies, increased by 6002 between 1984 and 1988, rising from US$1.7 to US$10.3 million per year. The budgetary allocation for the MPSSP now covers only half of the recurrent expenditures. Investments, halted in 1984, have been resumed (Table 2). Financial resources at the local level are directed mostly (66?) to hospitals, while basic health care receives only between 20 and 402 of budget (Annex 2). Table 2s SOURCES AND USES OF FUNDS IN THE MPSSP 1984 1988 TGN a/ Cost Foreign TGN Cost Foreign Recovery Aid Recovery Aid : S z z z z Recurrent 92.1 5.6 2.2 50.1 22.1 19.9 Investment 0.1 0.0 0.0 0.0 0.0 7.9 Total 92.2 5.6 2.2 50.1 22.1 27.8 Sources MPSSP and mission estimates a/ TGN: National General Treasury  7- Maior Sector Issues 2.12 The major sector issue in Bolivia is the limited coverage of maternal and child care. Issues related to this low coverage include the inadequate organization and management structure and coordination among key Agencies; the constraints related to personnel management; the poor financial management; the absence of a viable system for purchase and distribution of essential drugs and medical supplies; and the inadequate training of medical personnel. 2.13 Limited Maternal and Child Care. Only about a third of the lolivian population receives adequate basic health care. In the proposed project area prenatal care coverage was 201 and postnatal care coverage 61 in 1988. Only 36Z of deliveries nationwide were assisted by a person with some knowledge of medicine in 1985, and this proportion has declined. The coverage for vaccination is about 602 for polio 3 and DPT3 in urban areas. and ranges from 1OZ to 451 in rural areas (1987). Less than one in five of target families in the proposed project area have been visited by personnel of the MPSSP or other health institutions during the last year. Secondary and tertiary services are accessible to yet a smaller portion of the population. Referral is impeded by communication constraints, poor integration of facilities and lack of outreach services in health centers and hospitals. The high cost of care in these facilities also prevents access to most of the population. 2.14 Inadequate Organization, Management and Coordination. Excessive centralization has prevented MPSSP over the years from assuming its normative and coordinating responsibilities. Executive functions in MPSSP are concentrated in the National Directorates in La Paz. Only 201 of the budget, consisting of the revenues generated locally, is executed in the SUs. The inefficiencies associated with central execution are exacerbated by severe communication, constraints. This leads to inadequate information flows and monitoring. Lack of guidelines for program implementation and lack of accountability perpetuate the weak technical and programming capacity at the local level. 2.15 The proliferation of self-contained project units in MPSSP disrupts the fulfillment of its responsibility and objectives. The National Directorates have gained virtual independence through the execution of projects financed by donors. The General Secretariat, which has not been the object of specific cooperation programs, is weaker than the directorates under its supervision. The weak enforcement of MPSSP's plan cf activities prevents the Ministry from integrating donors' support. This has led to the development of 16 major national programs, with overlapping objectives and beneficiaries, and inadequate monitoring. 2.16 Poor coordination between MPSSP, the IBSS and NGOs is a complex issue at the national level, but is starting to be addressed in the SUs. In MPSSP, coordination is made difficult by incomplete interinstitutional information, the numerous national programs, and the separate legal and operational system under IBSS. The relationships between NGOs and the MPSSP have often been difficult, and occasionally marked by mistrust. Impediments to coordination include the lack of an identification and selection system for NGOs presence and activity in Bolivia, and cumbersome and contradictory registration procedures. In the SUs, coordination is hampered by the lack of credibility of SUs as relevant partner in the delivery of services. Poor information about MPSSP and the SUe is another problem. Tn 1988, a survey in the proposed project area showed that only  452 of institutions providing health services were aware of MPSSP's programs. Familiarity was lowest for programs addressing maternal issues. More recently, coordination and cooperation with NGOs and local governments improved. It is supported by the renewed confidence in the public sector created by the funding of over 300 NGO projects by the FSE. 2.17 Personnel Management in the Public Health Sector. MPSSP employees are poorly paid, but improved personnel management would be necessary before salary increases could contribute effectively to improve performance. Health workers' salaries fell by 301 in real terms over the last decade. The salaries in the Public Health subsecretariat, ranging from US$31 to US$240 per month, are 'the second lowest in the public sector. Accordingly, staff seeks better salaries and working conditions in NGOs and the IBSS, and personnel turnover is 301 annually. The salary structure of MPSSP needs improvement to reflect the priorities of the sector. Doctors in HDs have lower status and pay than doctors with comparable training in hospitals or with administrative functions. This condition discourages able staff to move to the areas of greater needs. Salaries for administrative or managerial posts (such as the directors of SUs) are grossly inadequate. Weak personnel policy and management compound the salary issues in the public health sector: SUs and many hospitals have no administrative committee, no organizational plan, no job description for personnel, erratic hiring procedures, and ad-hoc systems of personnel gratifications and salary supplements. 2.18 Financial Management. Financial management is weak because of the inadequate distribution of financial responsibilities, the outdated structure of the information used for budgeting, and the inefficient procedures for budget preparation and execution. The inadequate distribution of financial responsibilities stems from a combination of excessive centralization of functions within MPSSP along with an inadequate management information system. Budgeting is also separated from planning, and budget categories reflect inadequately the sources and uses of funds. Sources of funds in MPSSP are now depending too much on cost recovery to ensure adequate coverage of health services, and particularly of basic health care. Programming and execution have been complicated by the dependence on project specific donations from the international community. Projects financed by donors are not coordinated or set within the national health plan. Uses of funds favor secondary and curative care and the share of basic health care does not reflect government priorities. 2.19 Purchase and Distribution of Essential Drugs and Medical Supplies. The weak capacity of MPSSP to enforce existing legislation, and the acute shortage of funds have led to the deficient procurement and distributicn of drugs, medical supplies and equipment. The Supreme Decree 21060 of 1985, article 41, exempts drug supply from the free trade regime, but local production of essential drugs has not developed. Quality control is insufficient and health facilities lack financial and human resources to participate effectively in the rationalization of distribution and use of drugs. Drugs are purchased mostly using a petty cash system. 2.20 Training of Medical Doctors, Nurses and Auxiliaries. Although the capacity to train the necessary health staff exists in Bolivia, the design of curricula does not respond to the staffing requirements for basic health care, and the education process is not conducive to the extension of services in low-income areas: the autonomous medical schools in universities offer a curriculum for medical doctors and nurses which is not I  directed to the epidemiological and social reality of the country. In particulars (i) maternal and child care, community medicine and nutrition do not receive the necessary attention; (ii) no training is given on the administrative and team management responsibilities of doctors and nurses; and (iii) the health personnel are often ill-prepared to deal with illiterate and non-Spanish-speaking patients. The Cochabamba Technical School of Health (ETS) and the La Paz National School of Public Health (ENSP1 train auxiliaries, nurses and technicians. These schools depend on MPSSP and their curricula is more oriented towards basic health. They are also willing and better prepared to further improve curricula than the autonomous medical schools. The educational process is not supportive of the objectives of basic health care in impoverished communities. The professional ties between the medical schools and MPSSP staff responsible for basic health are weak, unlike the ties between the medical schools and I hospitals. Too few auxiliary nurses are trained, and few staff are prepared to serve in remote areas. In addition, no manual of standard procedures are distributed to the graduating students, or updated for their use. Donor Activities 2.21 Major donors' programs have been taken into account during project preparation. In addition, the World Health Organization (WHO/PAH0) participated in the preparation of the proposed project, and UNICEF administered the project preparation fuiLds. WHO/PAHO coordinates about US$1.0 million of technical assistance programs yearly. UNICEF is carrying out a US$39.9 million multisectoral pro.'ram in support of child survival. The 1989-93 program aims at reducing mortality among children and mothers, improving their nutritional status and giving them greater opportunities for social development. It encourages better use of existing public services and the development of family services organized by the community. A 1988-1990 USAID project for Community and Child Health, amounting to US$22 million, seeks to suppo.t the decentralization and the expansion of services in rural areas surrounding the proposed project zones. The International Development Bank (IDB) is preparing the extension of the proposed project in the departments of Sucre, Tarija and Chuquisaca. In order to sustain inter-agency cooperation, a Donors Coordination Committee has been set up during the project preparation. It is chaired by MPSSP and includes representatives of IDA, UNDP. WHO/PAHO, UNICEF, IDB and USAID. This committee addresses the day-to-day coordination needs between major investments in the sector, rationalizes their geographic distribution, and integrates design features (para. 3.16). IDA Assistance Strategy 2.22 IDA Assistance Strategy in Bolivia. IDA supports the Government's economic policy with the objectives of laying the basis for sustained growth, ana improving the living conditions of the bulk of the population. This requires major investments in human resources development, particularly in health and education. The proposed project is a central part of the package of actions developed by the Government in coordination with donors to fulfill these objectives. It complements, in particular the demand driven approach of the Social Investment Fund (FIS). It Js supported by, and contributes to, other parallel projects which include: (a) the Emergency Social Fund (Crs. 1829-BE and 1882-BO) which would be broadened from an emergency fund to a development institution through the financing of a proposed third credit. The FIS is being created for that purpose;  - 10 - (b) the Economic MaPagement Strengthening Operation (Cr. 1977-BO) dealing with issues of public service efficiency and effectivenesst (c) the Public Financial Management Operation (Cr. 1809-BO) supporting the upgrading of the Governrent's finuncial management including budgeting and accounting; (d) the proposed Water Supply and Sewerage project which is to benefit the same area of the country; and, (e) the proposed Primary Education Project whose institutional set-up and investment approach would be developed along the same lines as in the health sector. 2II. THE PROJECT Protect Origin and ObJectives 3.01 Project Origin. at the request of the Government, a health sector analysis was carried out by the Bank in 1987 (Bolivia. Population, Health, and Nutrition Sector Memorandum, Report 6965-BO). It led to the identification of the proposed project in March 1988. A Project Preparation Facility of US$490,000 was approved in April 1988. A supplemental facility to increase the original amount to US$1,490,000 was approved LA January 1989. Appraisal was carried out in May 1989. 3.02 The obiectives of the project are tot (a) improve maternal and child health by increasing the coverage of basic health care services, and giving priority to pregnant and lactating aomen, children under five years of age, and women at reproductive risk. This would be carried out in the most populated part of the country, namely the urban and peri-urban areas of La PazIEl Alto, Santa Cruz and Cochabamba; (b) improve the efficiency and effectiveness of health services in Bolivia through the development of adequate human resources in the MPSSP and other institutions providing health services; and (c) strengthen central policy making and coordination of investment in health within a more coherent institutional framework and a national health sector development program that devolve greater operational responsibility to regional levels. Main Features of the Prosect 3.03 The project is based on the Integrated Health Care Model (IHCM) of the MPSSP which essentially seeks to improve infant and child survival and maternal health (Annex 3). Under this approach, MPSSP would focus more on policy formulation, coordination, monitoring, and resources mobilization. At the departmental level, the Sanitary Urits (SUs) would coordinate with local governments, regional institutions and NGOs, supervise, and provide technical support to the local providers -.f health care. The provision of basic health cart services, with an emphasis on maternal and child care, would be organ-zed in Health Districts (HDs) of about 100,000 to 200,000  - 11 - inhabitants. About 832 of these services would be targeted to women and children. They would include pre- and post-natal care. promotion of reproductive health, child development and nutritional control, prevention and control of diarrhea and acute respiratory infection, diagnostic and initial treatment of malaria and tuberculosis and routine follow-up of risk groups, simple odontological services. external medical consultat1on, emergency attention, distribution of basic drugs and referral to secondary facilities. The services would be provided in five to ten health centers strategically located in each HD. 3.04 The project would finance the extension of basic health care services in public or private facilities distributed according to the IHCM. The providers of health care participating in the IHCM would receive supervision of the SU and carry out the activities corresponding to their assigned level of service. They would benefit from the activities of the project with upgrading, expansion or construction of new facilities, equipment, training of staff and supply of essential drugs and supplies. They would also receive additional support in staff from the MPSSP. 3.05 The outreach activities would form an integral part of the health care delivery system. They would be the responsibility of the HDs and would be organized in areas of about 20,000 inhabitants, and sectors of about 3,000 inhabitants. They would consist mostly of promotion of maternal and child health, and health education campaigns. They would include activities performed by auxiliary nurses, such as vaccinations, pre- and post-natal care, identification and training of midwives, nutritional control and food distr 'ion. They would be coordinated with the CPSs. They would take place in .isting community buildings, such as schools, parishes, community centers, and other multipurpose facilities called Integrated Centers. 3.06 The project would support a few far-reaching health policy decisions. They would include a more adequate resource allocation from the national treasury to the health sector; a revised balance of financial and human resources between the basic health care, mostly for the benefit of mothers and children, and the secondary and tertiary hospital care; a review of the training curricula of the health schools to integrate the training with the basic care as closely as it is coordinated with hospital care; and a review of the status of basic care doctors and administrators to reflect the priority of basic care, and of improved financial management. 3.07 The policy decisions and the project's critical path, described by key indicators, would constitute a Plan of Action (para. 3.16 and Annex 4). The indicators would iuclude institutional and staffing targets and service delivery performance indicators. Annually, a joint review of the status of implementation of the Plan of Action and of the investment program in the project area would be completed by IDA and the Government. This review would take place before October 31 of each year. By November 30, the finalized project investment program for the coming year, with the proposed budgeted counterpart, would be sent to IDA for approval. Views would be exchanged on all planned expenditures in the sector, including investments outside the project area and the expansion of the IHCM and basic health care services within the total health expenditures (para. 7.01).  - 12 - 3.08 It is also the intention of the Government during the execution of the proposed project, to define its medium-term objectives in the Health sector. This includes addressing broader issues such as the coordination with the IBSS and the financing of the health sector, the salary structure of the MPSSP, medical education, and hospitals management and the referral system. This intention of the Government was laid out in a policy letter, dated October 31, 1989, and signed by the Minister of Health (Annex 5). A review of proposed policies would be made jointly by IDA au.d the Government by October 1993. 3.09 Project Description. Che project would finance: rehabilitation and construCLIon of physical facilitiec, medical equipment, furniture, and supply of pharmaceuticals to build up a stock oi basic drugs; human resources development: and institutional reforms and managerial systems development. The project would include three components, as follows: (a) Service Delivery Component, to develop the IHCH in the urban and peri-urban areas of La Paz, El Alto, Santa Cruz and Cochabamba, integrating under one structure, the human resources and facilities of MPSSP, the municipalities and NGOs; (b) Human Resources Development Component, to ensure that the staff of MPSSP and of the relevant health care providers, receive essential training and supervision to car-y out the tasks defined i.; 'i-3 IHCM; and (c) Institutional Development Component, to assist MPSSP in assuming its normative and coordinating role at the Central level and its coordinating, planning and executing role in the three SUs of La Paz (covering La Paz and El Alto), Santa Cruz and Cochabamba. The Service Delivery Component (US$29.6 million, including contingencies) 3.10 The service delivery component would be implemented in the SUs of La Paz (covering La Paz and El Alto), Santa Cruz and Cochabamba. The IHCM defines precisely the functions of the SUs and districts, the maternal and child care and other basic services, and the staffing of the health facilities (Annex 3). Standard agreements satisfactory to IDA would be signed between MPSSP and local governments and NGOs to delegate the administration of districts, and the operation of facilities to such local governments and NGOs. The SU would provide sectoral information, supervision and training; the implementing entity would extend the IHCM services to the population of an agreed area. Copies of the agreements would be available for IDA's review during supervision (para. 7.01). 3.11 The service delivery component would include: a) Civil Works (US$8.3 million). The new construction, expansion and upgrading of about 166 facilities in the project area (Annex 6).  - 13 - Table 3: SUMMORY OF CIVIL WORKS BY FACILITY TYP': AND CONSTRUCTION REQUIREMENT Inte- Health Health Regional Ware- grated Center Center Office house Total Center w/Beds New construction 0 24 1 3 2 30 Expansion 14 30 0 0 1 45 Upgrading 69 6 13 1 2 91 Total 83 60 14 4 5 166 The Health Centers would follow regional prototype designs of about 300m2 each. They would include specific consulting rooms for pediatrics, gynecology and obstetrics, oral rehydration, child growth monitoring, dentistry, general medicine and first aid. They would be adapted to varying regional climatic conditions and to future expansion needs. In about 48 centers a doctor's dwelling (57m2) would be attached to the hcalth center. The Integrated Centers would function in adapted community infrastructure, equipped and staffed in a joint effort with the MPSSP. Space requirements for ambulatory care would be 37m2. Proposed locations for the above facilities have been agreed upon. Ninety percent of site identification had been completed by pre-appraisal. A condition of negotiatione was that 802 of sites where new constructions are programmed would have formal title or a donation agreement. Except in El Alto. health centers, with up to 20 beds, would represent expansions and upgradings of existing facilities. Ambulatory services would be those of a Health Center. In-patient services would consist of maternal and child care services. In El Alto, the effective basic health care system requires a maternal and child facility of up to 50 beds. This facility would be financed under the project. MPSSP would contract through public bidding the operation and maintenance of this facility, according to the cost recovery policy to be defined during the project and taking account of the results of the financial study (para. 3.15, b). MPSSP would finance the operating budget and staff required. The project would also include the provision of adequate storage facilities for essential drugs and medical supplies, at central and SU level. The Government presented to IDA before negotiations a model contract to ensure that physical facilities financed by the Credit would be used exclusively for the purpose of the project, in the event that the project finances rehabilitation or construction of facilities that are not a public property. Copy of the contracts would be kept in the SU for supervision. b) Services (US$7.6 million). The project would include the cost of incremental personnel and the incremental salary of SU directors. The incremental staff would be composed only of personnel who cannot be reassigned from hospital or administrative posts. This includes only the auxiliary nurses necessary to staff the districts (about 41 persons of a total of 126 in a typical district). Doctors, dentists and nurses, of which there is no shortage in MPSSP, would be reassigned from hospitals and administrative posts. The review of the staffing of HDs would be included in the annual review of implementation (para. 4.08). The Credit would finance on a declining basis the cost of the US$80 salary of 49 auxiliary nurses and the upgraded salaries (US$1,000) of the 3 SU directors. IDA  - 14 - would finance 10OZ of these costs in 1990, and 50t in 1991. Disbursements would be conditioned to the Government providing IDA the plan for assuming the cost of thesa' salaries after June 1991. This would include the financial and administrative steps to be taken by June 1990, December 1990, and June 1991 (para. 7.03). c) Malntenance Program (US$1.9 million). The maintenance program for project fa:ilities atid medical equipment would consist of: the construction and equipment of one workshop/training center; equipment and vehicles; and the maintenance of buildings and equipment, financed in a declining proportion. Maintenance would be contracted outside MPSSP whenever reasonable. d) Vehicles, Equipment and Material (US$5.4 million). The project would provide about 52 vehicles, including 28 four-wheel drive vehicles, five ambulances, five trucks, five station wagons, one forklift, and eight hydraulic loaders. It would also include equipment and furniture for Integrated and Health Centers. The facilities, the equipment and vehicles financed under the proposed project would be adequately maintained and would be used only for the purposes of the project. e) Essential Drugs ard Medical Supglies (US$6.4 million). The project would provide acquisition and logistic support to ensure efficient distribution of supplies and essential drugs. In most cases, distribution of supplies and drugs would be in kits corresponding to three months of operation in selected areas. These sealed kits, easy to t;ansport and monitor, would be imported and assembled locally. The adequacy of the distribution method would be reviewed after two years and corrected as necessary. The import of essential drugs and supplies would be cofinanced by the Government of the Netherlands through a balance of payment support scheme (para. 5.04). The Human Resources Development Component (US$1.0 million, including contingencies) 3.1i This component would finance a variety of manpower development activities, including: li) induction to project objectives and procedures, strengthening of the MPSSP system for personnel supervision and inservice training, and improvement of interinstitutional coordination; (ii) basic skills and technical training, in the form of preservice or inservice training of MPSSP, other public and NGO personnel, and the revision of selected curricula in health schools, with an emphasis on an upgraded educational and training process; and (iii) training of midwives, and health education campaigns for community leaders (Annex 7). 3.13 Decentralized training capacity would be developed and would ensure relevance to the local working conditions. Technical support would be provided by the Cochabamba ETS and the La Paz ENSP, and by local and foreign consultants. The hosting of the training activities and coordination with trainees would be the responsibility of the district training centers. The detailed training program was reviewed during appraisal. The updated training program for each following year would be sent to IDA for approval as part of the investment program (para. 7.01). Technical assistance has been designed to ensure adequate quality of the courses through the participation of WHO/PAHO who would cofinance the formal training. The component would also be cofirtanced by UNICEF (training of midwives and health education campaigns), who would provide  - 15 - technical assistance. The project would finance consultants fees, travel and per diem. MPSSP and other trainees travel and per diem, a study, and equipment and material, including some equipment for the ETS and ENSP. 3.14 Trainlng programs would be designed as follows: (i) Induction courses to the IRCM and the project would be organized in La Paz and the SUs for selected staff of MPSSP, NGOs, municipalities and IBSS; the National Human Resources Dir-ctorate in MPSSP, and human resources units in SUe would be strengthened tk jugh orientation seminars; selected curricular reform at the Cochabamba ETS and La Paz ENSP would be supported by a panel of staff with experience in basic health care, assisted by consultants. Emphasis would be put on the skills and attitudes necessary to operate the IHCM, focusing on community involvement, and interinstitutional coordination; (ii) basic skills and technical trainina. Basic skills training would be provided to about 125 nurses and auxiliaries, and 20 technicians every year identified among students of the Cochabamba ETS and La Paz ENSP, and staff in the relevant districts. Technical training would include planning, management, personnel administration and supervision, financial administration and control, and information system. A key technician, selected from each project SU, and three staff from MPSSP would receive about three months of training in health systems planning and administration abroad; and (iii) training of midwives would be organized by nurses to ensure referral of high-risk pregnancies and the integration of the midwives to the outreach program of the HD. Health education campaigns would be organized with coordinators of CPS and other relevant community leaders such as primary school teachers. A study on traditional medicine would also be carried out to identify actions to integrate traditional practitioners with the referral system (Annex 8). The Institutional Development Component (US$6.5 million, including contingencies) 3.15 This component would include activities in three areas: the restructuring of the MPSSP; the administrative rationalization of the MPSSP; and, the strengthening of the financial, human and physical resources management. It would be cofinanced partially by WHO/PAHO who would provide technical assistance. IDA would finance technical assistance, project data management and office equipment, and contracted works from MPSSP directorates (para. 4.02). In addition an international consultant would be financed to follow up and provide technical guidance twice a year. Training activities, carried out under the Human Resources component, would also support these activities. a) Restructuring the MPSSP. A new organizational structure would be sent to IDA no later than December 31, 1990. It would be supported by the job descriptions, procedures and lines of accountability of the departments to be restructured. The reorganization would be phased in, beginning in 1990 with the directions of Planning and of Human Resources, and the three Sanitary Units involved in the project. In 1991, the Direction of Administration, the General Direction, and the Health Districts in the project area would be restructured. By 1994, the revised organizational structure would be fully operational. The Direction of Planning would oversee the changes and monitor the transfer of personnel and designation of budgetary slots to complete the staffing requirements of the new organigram (Annex 9). The project would finance: office equipment and technical assistance; salary supplements for HPSSP staff carrying out specific tasks defined in terms of reference included in the annual investment program; commissions for the bidding agent and supervision; and salary and costs of the Project Unit (para. 4.01).  - 16 - b) Administrative Rationalization. The functional capabilities of the MPSSP would be strengthened in three areas: i) planning. ii) supervision, and iii) the generation and processing of information. A planning format, integrating the health sector needs, service delivery and the budgeting system of the MPSSP, would be implemented at the central level by the Direction of Planning. The use of this format would be extended to each of the 11 SUe of the country, starting with those of the project, and would facilitate the integration of public, donors and NGO activities in the annual planning process. The three project SUs would elaborate their annual health plans to support and be integrated to the national plan, starting in 1991. The project would finance office equipment and technical assistance. Supervision norms for the IHCM would be developed and implemented. with technical assistance and cofinancing from WHO/PAHO. The content of supervision would be reinforced to include educational activities, monitoring of output targets and feedback. The project would finance materials and supervision. An improved management information system would be set up. It would integrate demographic, epidemiological, social and nutritional data, service statistics and financial and other management data. The gathering and elaboration of data would be decentralized to the lDs. It would include the tracking of NGOs and other organizations operating in the health sector. The statistical unit within the Direction of Planning would be strengthened. The project would finance office equipment, hardware and softvare at the central, SU and HD levels, technical assistance, a supervision budget, and studies including one on nutrition status (Annex 8). c) Management of Financial, Human and Physical Resources. Mi) Financial Resources. This would include the development of a computerized budgeting system for basic health. It would be incorporated in the management information system. It would be coordinated with the activities of the IDA-financed PFMO project. While the PFMO would concentrate on strengthening the budgeting and financial control at the central level, the proposed project would support the implementation of institutional-level budgetary procedures and the generation of relevant and timely information at the SU and HD levels. The management of financial resources would incorporate external aid and food distribution information. Unit costs of services, supplies and medicines would be monitored in a sample of facilities. A study of health care financing would analyze alternative sources of financing. It would make practical recomendations for standardizing financing, and cost recovery policies and procedures (Annex 8). The project would finance office equipment, technical assistance and the study. (ii) Human Resources. The personnel management system would be improved, supervision would be emphasized and would be based on the revised job descriptions. Personnel management would be decentralized. The status of SU directors, doctors in HDs, and qualified administrators to key posts of MPSSP would be upgraded, in coordination with the salary review of the IDA-financed EMSO project. The project would finance technical assistance. (iii) Physical Resources. The management of the national acquisition, distribution and control of essential drugs would be upgraded. Adequate supervision and control of the acquisition and distribution of essential dru.,8 and medical supplies would be ensured through training, technical assistance and institutional strengthening in coordination with WHO/PAHO. A manual of procedures would be prepared and distributed for use in health institutions carrying out MPSSP programs. A technical assistance program would define procedures in the maintenance system in which programming, contracting and supervising would be developed. The project would finance office equipment, technical  - 17 - assistance, and supervision. The project would also finance the preparation of a project to provide water supply and basic sanitation in the project area (Annex 8). It would consist of public standpipes and latrines for about 36,000 beneficiaries in Santa Cruz and 50.000 in Cochabamba. The design and execution of a pilot project to provide services to approximately 4.000 people would complement the final designs. Technical assistance and the developmert of a human resources program would also be included. The execution of the works is not included in the proposed project. It would be carried out by the FIS, in coordination with the SUe of Cochabamba and Santa Cruz. Plan of Action 3.16 The Plan of Action would set annual performance indicators and targets for the policy decisions and the project critical path (Annex 4). In particular, it would define the priority to be assigned to basic health; the major steps of the reorganization and strengthening of MPSSP; the effectiveness of community participation; and the integration of other public and NGO resources in the IHCH. The salient elements of the Plan of Action are presented below: (a) Sector Health Policy. The share of the national budget allocated to public health would increase from 32 to at least 42 by the end of the project, an increment of about US$10.0 million. The proportion of public health expenditures allocated to basic care would grow from between 20 and 301 to no less than the highest historical level of 352. This is consistent with the requirements of the IHCM in the project area. The percentage of MPSSP budget administered by the SUs in the project area wouild be consistent with the revised distribution of responsibilities. It would increase from about 201 to no less than 902. The Department Health Councils (CDSs) in the project area, and the Donors Coordination Comuittee would be kept active during project execution (para. 4.04). The percentage of food aid distributed according to MPSSP criteria would grow from between 40 and 60t to 801 in the project area. (b) Service Delivery. The percentage of SU vehicles in operation would grow to no less than 80Z by 1991, and contracts for maintenance would be according to an agreed schedule. No less than 902 of health facilities would inform their districts about drug distribution by the end of project implementation. The ratio of auxiliary nurses to doctors would not be less than three to one in the districts of the project area. The number of facilities with extended hours of attention would be according to agreed schedule. The number of health institutions with active agreements with the SUs, and implementing the IHCM, would grow according to schedule. (c) Human Resources Development. The decentralization of human resources management would be effective by 1991. All districts in the project area would have a fully operating training capacity by the end of project implementation. The participation of the organized communities would be according to schedule, and no less than three midwives would be trained in each area of the project. (d) Institutional Development. The improved procedures of budget elaborab.ion and execution in districts. SUs and in the ministry would be finalized according to the agreed timetable: all the  - 18 - local management units of the project area would elaborate complete financial reports by 1991, and would generate and use the management information system by 1992. The revised chart of the directorates of Planning, Human Resources and Administration would become effective according to the agreed timetables. The external monitoring and evaluation of the project impact on local health would be pursued according to schedule (paras. 4.07 and 4.08). The terms of employment of basic health care doctors and administrators would be reviewed during 1990 and upgraded by March 1991. Annual work programs of districts would be integrated in the national health plan. The international cooperation piojects would be formally included in MPSSP annual health plan by 1992. The investment plans of the two subsecretariats of MPSSP would be coordinated after 1994. IV. PROJECT IMPLEMENTATION Implementation Arrangements 4.01 The project would be managed by a Project Unit (PU) financed by the proposed credit. The PU would be part of the Planning Directorate of MPSSP. It would be composed of: a project manager specialized in business administration who would be responsible for the overall development of the project and the interlocutor of IDA. He/she would be selected among the responders to a public invitation; a technical director, with experience in public health administration, responsible for the execution of the project components; an administrator; three support staff and a chauffeur. The PU would have an office in each SU. It would include an administrative director. counterpart of the project manager; the planning director, counterpart of the technical director; and one secretary. The project manager would report to the director of planning. Assurances were given at negotiations that the PU would be staffed with qualified personnel satisfactory to IDA. The replacement of the project manager and technical director would be made only after IDA has approved their qualifications. Curriculum vitae of all the staff of the PU, at national and SU level would be submitted to IDA prior to their replacement, and IDA would be given an opportunity to exchange views on the appropriateness of their quali- fications (para. 7.01). The Government provided a signed contract for the employment of a satisfactory project manager and of a technical director as a condition of negotiations. 4.02 The PU would provide and receive technical support from relevant directorates of MPSSP. This support would, a: necessary, be contracted under terms of reference approved by IDA to be. financed under the project. A set of professionals, normally from MPSSP staff, would also work for the PU on a part-time basis, or during specific periods of time. They would include: a statistician; an engineer/architect; and technical advisors for the drug acquisition and related activities, the equipmentlmaterial and vehicles and their maintenance, the community participation and health education campaigns, the management and development of human resources, and the institutional development and studies; and an accountant. The program of contracted support from the directorates of MPSSP and other professionals would be approved by IDA as part of the annual investment program. All curriculum vitae and terms of reference, consistent with the annual program mentioned above, would be submitted to IDA for approval before contracting. Pay policy for contracted personnel would be competitive with the private sector (para. 7.01).  - 19 - i.03 Overall responsibility for the project would be vested in the PU. Execution would be carried out in the PU according to the revised distribution of responsibilities in MPSSP. Execution of the training component would be supported by UNICEF (training of midwives and health education campaigns), and by WHOIPAHO (formal training) who would provide continued assistance to the PU. Bidding documents would be prepared by the SU and prices would be revised by the FIS. FIS has a comparative advantage to ensure adequate standards of construction materials. Procurement would be carried out by a procurement agent, as required by Bolivian legislation (paras. 4.10 to 4.12). In Santa Cruz, technical supervision and control of materials would be done by the RDC who has the adequate experience and capacity to do so, and often assumes this responsibility for public works. In the other departments, supervision would be contracted to a private firm by the SU. The Municipality of La Paz has completed a Bank Loan and is executing an IDA credit (Cr. 1842-BO). The SU of La Paz may delegate contracting of works to the municipality according to procedures approved by IDA. The FIS would perform the financial follow-up of the works, and administer the payments to the contractors. The FIS has an agile financial managemert system and is able to pay contractors in all the national territory. As a condition of negotiations, the Government submitted to IDA the PIS procedure manuals, and a draft agreement of cooperation between MPSSP and FIS. Prior to the effectiveness of the Credit, the Government would submit to IDA evidence that the FIS has been established with a mandate satisfactory to IDA. It would also provide evidence that the FIS procedure manuals acceptable to IDA has been adopted, and that an agreement between MPSSP and FIS, has been signed with terms and conditions satisfactory to IDA (para. 7.02). Regional Participation 4.04 Department Health Councils (CDSs) would be responsible for the definition of regional health priorities within the national policy framework. Although not responsible directly for project execution, these CDSs were set up during project preparation in each SU to be forums of negotiations among local institutions. The major consensus to be reached deals with the distribution of regional resources between basic and hospital care. CDSs would also address issues unsolved at national level, such as the coordination with IBSS. They would include representatives of the SU, the main municipalities and the RDCs, and could include other relevant institutions, such as NGOs and civic organizations. The statutes of the Departmental Health Councils were finalized as a condition of negotiation. The creation of the CDSs would be a condition of disbursement for expenditures in each department (para. 7.03). 4.05 A Summary Reference Document of the Health Project would be prepared by each SU. In order to ensure adequate regional disclosure of the health priorities, project objectives, and responsibilities of local health providers under the IHCM, the three documents would be published no later than June 1990. The text of these documents was sent to IDA as a condition of negotiations. The Credit would finance the publication of the Summary Reference Documents. Leaflets describing the progress made in the implementation of the project, and any development in the extension of the IHCM would be distributed quarte-ly to all BUs.  - 20 - Community Participation 4.06 The participation of the communities, and in particular expectant mothers and women with young children, would be ensured through the activity of the Popular Health Committees (CPSs). The districts would be responsible to ensure the formation and continued activity of the CPSs in each area. CPS Coordinators would receive health education and would promote maternal and child care and sanitation among the women of the communities. The CPSs would participate in the quality control of the services delivered. They would define the community responsibilities during the execution of works and operation of the facilities. Participation would be in kind, such as manpower, supervision or control, maintenance and operation. It would have particular importance for food and drug distribution. CPSs would clarify with the communities the cost recovery scheme and the care provided to indigents and persons unable to pay a full fee. The effectiveness of the CPSt would be monitored as part of the Plan of Action and would be included in MPSSP's management information (Ann x 4). Monitoring and Evaluation 4.07 Monitoring and evaluation would be accomplished by means of a two- part system. The first is internal to MPSSP and consists of the Monitoring and Evaluation of Services Supplied. It is an improved information system which would integrate finance, service, epidemiological, nutrition and drug data. It would also indicate the level of community commitment to health programs. The second part of the system is the Monitoring and Evaluation of Project Impact on Local Health. It is based on the Integrated Household Survey by the National Statistical Institute (IKE) financed under IDA's Economic Management Strengthening Operation (Cr. 1977-BO). The household survey would supply at regular intervals information on household expenditures, health and nutrition statub, use of health facilities, and coverage of outreach programs. The survey would also cover the health facilities in the project area. Indicators would include immunization and pre- and post-natal coverage, basic health care coverage, and percentage of households knowing about oral rehydration therapy and iodization of salt. The two parallel monitoring systems would make possible a comprehensive tracking of key indicators, and provide a foundation for information-based management (Annex 10). A preliminary survey of the project area during the first year of the project would provide a baseline for subsequent evaluations. 4.08 Reporting. The PU would send to IDA every March and September a mid-year report according to an agreed format (para. 7.01). It would include information on the implementation of each component, information on the status of the Plan of Action, the staffing of the HDs, and an executive su9mary of the monitoring and evaluation data as it becomes available during project implementation. It would also make a general statement about the financial, managerial and technical status of the project at the central level and in each SU. The maintenance of updated project archives in the PU and each SU would also be required. Procurement 4.09 The Government requires that public institutions use international agents specialized in procurement to carry out all bidding, including locally advertised bidding. The procurement of civil works and of goods (except drugs) utilizing LCB and ICB procedures would be through one of  - 21 - these agents, under the coordination of the PU. The credit would finance the fee of the procurement agent (about US$.8 million). The contract with the procurement agent would include the timing requirement for the bid award recommendation. It would also specify the staff that the procurement agent would employ full time to support the project. 4.10 Civil Works. Except for the me-rnal and child facility in El Alto (US$1.2 million) which would be proLared through ICB, civil works consist of predominantly small facilities, widely scattered in the project area. These are unlikely to be of interest to foreign bidders, and contracts for the construction of these facilities totalling about US$1.7 mi'lion and with a contract value of between US$100,000 and US$400,000, would be awarded on the basis of LCB acceptable to IDA. Foreign contractors would not be excluded. Prior review by the Bank would be required. The contracts size would range from approximately US$120,000 to US$380,000 equivalent. The construction, expansion and upgrading of facilities, with a maximum value of US$100,000, not exceeding US$5,650,000 in the aggregate would be done through shopping with at least three price quotations, according to the FIS agreed procedures. Some other improvements of small magnitude, some of which would be performed with community participation or force account mechanisms, would be managed directly by the SU. These contracts carried out under force account would not exceed US$10,000, with an aggregate value of US$400,000 and would be financed entirely by the Borrower (Annex 6). Table 4: PROCUREMENT ARRANGEMENTS (US$ Million) Procurement Procedures Total Category of Expenditure ICB LCB Other NA Costs a/ Civil Works 1.20 1.69 6.04 8.93 (1.20) b/ (1.18) (3.85) (6.23) Furniture, Vehicle 2.23 3.57 1.30 7.10 & Equipment (2.24) (2.24) (0.83) (5.30) Drugs & Supplies 1.92 4.10 6.02 (1.53) (1.53) Studies & 5.43 5.43 Technical Assistance (3.32) (3.32) Commission & 2.24 2.24 Supervision (2.24) (2.24) Salaries and contracts 8.88 8.88 within HPSSP (1.38) (1.38) TOTAL PROJECT COSTS 3.43 7.18 19.11 8.88 38.60 (3.43) (4.95) (10.24) (1.38)(20.00) a/ Totals represent total estimated costs per category including price and physical contingencies. b/ Numbers between brackets reflect IDA financing.  - 22 - 4.11 Goods. Procurement of materials, equipment and furniture with contracts exceeding US$30,000 would be made by the procurement agent, and ICB procedures would be required for purchases over US$100,000. Prior review by IDA would be required for contracts exceeding US$100,000. Other contracts would be subject to selective post-award review. Materials, furniture and other goods valued less than US$30,000 may be acquired locally by the SUs, through local shopping with three price quotations, if each ;;ndividual purchase does not exceed US$30,000 up to a total of US$1.3 million in the aggregate. Drugs costing in the aggregate no more than US$4.1 million would be procured through International Shopping by WHO/PAH0 that would be acting as the procurement agent. PAHO is well suited to carry out these procurement actions and has an excellent record of economy and efficiency. Contracts would be awarded on the basis of comparison of price quotations solicited, on the basis of detailed technical and quality requirements, from a list of at least six potential eligible suppliers with a wide geographical representation. These drugs would be financed by the Government of the Netherlands (para. 5.04). Acquisition of locally produced drugs such as creams, syrups and serums valued between US$30,000 and US$100,000 would be procured through LCB procedures acceptable to IDA. Foreign eligible bidders would be allowed to participate and a 15Z margin of preference would be applied for national products. Technical assistance would be financed and executed by WHO/PAHO, or, when financed by IDA, contracted following the IDA guidelines for the use of consultants (Annex 6). Disbursements 4.12 The proposed credit would be disbursed over an eight and a half year period. This corresponds to the regional disbursement profile for the sector. Project completion would be in March 1996 and the closing date would be December 31, 1996. Proceeds of the credit would be disbursed as follows: (i) 80X against local expenditures of contracted civil works, and 100X against foreign expenditures; (ii) 802 of local expenditures for equipment and furniture, materials, drugs and supplies, and 1002 for foreign expenditures; (iii) 1002 of total expenditures for technical assistance, training, studies, commissions and supervision contracts; and (iv) 1002 of eligible costs of the PU, contracts within MPSSP and eligible salaries of auxiliary nurses and SU directors during 1990, and 502 of such salaries during 1991. Disbursements for civil works contracts, all other local expenditures with a contract value less than US$200,000 equivalent, and foreign expenditures with a contract value less than US$50,000 would be made on the basis of certified statements of expenditure. Supporting procurement documentation for these expenditures, including procurement documentation, would be retained in the PU, and made available for periodic review by Bank staff. Disbursements on all other items .ould be fully documented. Retroactive financing for an amount not exceeding 102 of the credit amount would be permitted for expenditures made after February 1, 1989, for technical assistance, training, engineering, civil works and the purchase of goods (Annex 6). Special Account 4.13 A Special Account would be established in the Central Bank in US dollars. The Association would make an initial deposit of US$1.0 million, equal to four months of estimated disbursements. The Central Bank would submit monthly statements on this account to IDA. The FIS would have  - 23 - access to the Special Account for payment of the civil works contracts. The FIS would prepare and submit the corresponding reimbursement requests and inform the PU of the financial flow of funds under the project. For payment of all other items, the PU would have access to the Special Account and would prepare and submit the reimbursement requests (para. 7.01). Project Account 4.14 The PU and FIS would maintain separate sub-accounts for all expend4 ures of the project. Within MPSSP, such accounts would be clearly identified within the ministry's accounting system and be adequate to record, monitor and report on the financial transaction of the project, including local and IDA financing. The counterpart expenditures of the nation, consisting of salaries, would be identified through account reconciliation. Audits 4.15 The project sub-accounts would be audited by independent auditors acceptable to IDA in accordance with terms of reference provided by IDA. Such audit would include in particular a separate opinion on the statements of expenditures. The audit would include a review of supporting procurement documentation, in particular in respect of statements of expenditures. The Auditors' report would be furnished to IDA no later than four months after the close of each fiscal year. The Borrower would have the Special Account audited by independent auditors acceptable to IDA, and would furnish such audits no later than four months after the close of the fiscal year. The cost of the audit would be financed out of the proceeds of the Credit (para. 7.01). V. PROJECT COST AND FINANCING Project Costs 5.01 Investment Costs. Total project costs are estimated at US$38.6 million, excluding taxes and duties. All costs are calculated in US$ of November 1989. Consultant costs, including fees, travel and subsistence is expected to be US$10,000 per month for international consultants, US$6,000, for WHOIPAHO and UNICEF financed consultants. Fees and expenses for local consultants are expected to range from US$45 to US$60 per day. Physical contingencies range from 52 for equipment and vehicles to 122 for infrastructure. The maintenance costs include 0.5Z for infrastructure, from the year following construction; 4.0Z for equipment, and 16.52 for vehicles starting from the year of installation or purchase. The foreign exchange component is US$11.15 million, or 292 of total costs. Price contingencies have been calculated based on the forecast international price trends: for 1989-1995, 4.92; for 1995 and thereafter 3.72 (Annex 6). 5.02 Recurrent Cost and Budget Requirement. Total incremental recurrent costs over the project life are US$16.9 million. They represent, for the first year of implementation (1990), 5.72 of the treasury 1989 public health allocation. This proportion would reach 10.42 in real terms in 1992, and decline afterwards. About 602 of total incremental recurrent costs are for salaries. Salary costs grow steadily throughout the project as additional facilities are brought on line. The share of IDA financing of recurrent costs would be declining accordingly from about 482 in 1990 to  - 24 - about 242 in 1996. Other recurrent costs include the nutrltlon and comaunity partLcipation activLtLes, the monitoring and evaluation, the technLcal assistance, the maintenance. and the cost of drug and supplies (Annex 2). FLnancLng 5.03 Project fLnancing would include an IDA credit of US$20 million equivalent (522 of total estimated cost). Bolivian counterpart funding requlrements would be shared among the MPSSP and the regional development corporatlons and municipalLties in the project area. Local financial capacity has been estimated conservatively (paras. 5.06 and 5.07). The financing plan la shown ln Table 5. Table 5: FINANCING PLAN (US$ millions) IDA 20.0 Government of Bolivia 1/ 9.5 Public Regional Entities 2.9 Government of the Netherlands 6.2 Total 38.6 1/ Includes lWHO/PAHO, US$0.8 million; and UNICEF, US$1.3 million. Cofinancing Arrangements 5.04 The Government of the Netherlands has agreed to finance, with parallel cofinancing, the implementation of the project in one HD of El Alto (US$2.1 million). The foreign acquisition of basic drugs would also be financed using the balance of payment support scheme financed by the Gover:ment of the Netherlands (US$4.1 million). WHO/PAHO would continue providing technlcal assistance to MPSSP within the framework of the project and would finance part of that assistance (US$0.8 million). UNICEF would finance part of the education health campaigns and promotion of the sanitatlon in Santa Cruz and Cochabamba (US$1.3 million). During negotiations assurances were obtained that cofinancing arrangements would be finalized promptly. 5.05 The MPSSP/Treasury Contribution. The financing plan assumes that incremental recurrent expenses would be covered by the Treasury through MPSSP receiving a larger budget share. This is because possibilities for reallocating within exslting public funding are limited. Specifically: (i) monies in the contributory schemes of the social security system are not fungible and cannot support MPSSP's eervice network; (ii) while curative care consumes two-thirds of MPSSP expenditures, efficiency gains are only indirectly supported in the project. These gains should be reinvested in the institutions producing them as an incentive and in order to improve the quality of care provided. Furthermore, the creation of a basic health care system and referral network can be expected to increase demand for hospital services. Cost Recovery 5.06 Prospects for further cost recovery are uncertain. During the last five years. cost recovery increased dramatically but basic health care services was not able to generate a large amount of self-financing. The  - 25 - substantial share of household expenditures made for health care among the poor suggests that a higher percentage of cost recovery in the basic health care system would price substantiAl portions of the target population out of the market (60S of households in the project area spent 10 of the average household income for the area in health services in July 1988). It is assumed that 20? of the cost of drugs and 102 of other recurrent costs can be met through cost recovery. Demand information obtained through the monitoring and evaluation during the first two years of the project would permit a more prscise formulation of cost recovery policies and financial projections for the outer years of the project. Replicability 5.07 The proposed project would create a basic health care network to serve 2.1 million people. The project costs can be broken into three categoriest (a) costs for the benefit of the whole population, which would not have to be replicated when extending the coverage of the IHCM (i.e. most of the institutional development costs). They represent 102 of the project cost, or about US$0.5 per capita; (b) investment costs for the project population (i.e. health facilities in the project area). They represent 342 of the total costs, or about US$6 per beneficiary; and, (c) incremental recurrent costs for the project population (i.e. incremental salaries of health facilities staff in the project area). They reach US$1.5 per beneficiary during the peak year of project execution. The extension of the project to the remaining 5.0 million in the population would require total investment representing 12 of GDP. The incremental recurrent costs of US$10.2 million per year would be met by raising MPSSP's share of a constant treasury budget from 3.1? in 1987 to 4.62 in 1993. This is slightly higher than its 1980 share, and still below the average for the region. If the budget growth forecast in the Country Economic Memorandum (Report 7645-B0) is achieved, the share of budget resources for MPSSP would need to rise only to 4.1? by 1991. At this level, the project is affordable for Bolivia on a national basis. Furthermore, the coordination procedures established during project preparation with other donors seek to ensure that parallel projects maintain a similar level of per capita costs. VI. BENEFITS AND RISKS Health, Efficiency and Effectiveness Benefits 6.01 The project would have two sets of benefits: it would improve the health status of the mothers and children in the low-income neighborhoods of the four larger cities of the country; and it would upgrade the efficiency and effectiveness of the health sector. The project would provide for the first time, or improve, access to maternal and child health care for about 790,000 women in reproductive age and children of mostly peri-urban areas of La Paz, El Alto, Cochabamba and Santa Cruz. Of these, 68? have been identified as a high risk population with high maternal mortality, infant mortality and malnutrition. It is expected that the expansion of the network of facilities, the improvement of health care services and the supply of essential drugs will lead to an increase in utilization of health services and a reduction of morbidity and mortality. The project proposes to increase the percentage of women receiving prenatal care and adequate attention during delivery to 40?, to reduce infant mortality to 70 per 1,000 live births, and maternal mortality to 33 per 10,000 live births in the project area (Annex 3).  _ 26 - 6.02 The project would improve the efficiency of the health sector by implementing an improved and affordable Integrated Uealtth Care Model. The explicit policy framework and the coordination of investment in health would support increased resources for the sector and better use of these resources. (i) Increase resources for the sector. The external resource mobilization would be eased by the devolution of operational respons- ibilities to regional levels and NGOs. Adequate allocation of budgetary resources would be ensured through the annual review of the Plan of Action. An adequate and fair cost recovery would be sought through the review of fees and the introduction of consistent recovery procedures within each institution. (ii) Better use of the resources of the sector. Public health expenditures would be reoriented in favor of basic health care. Considerable waste would be avoided by the coordination of investment and the integration, at regional level, of all health providers into an annual health plan. Usage of facilities would be made more effective through the increased demand for services. The effectiveness of the medical staff would be improved through redeployment, training and enhanced supervision. Poverty Impact 6.03 About 801 of the total project expenditure would benefit the poor, and 602 the extreme poor. This is if the poverty distribution in the project area is assumed to be the same as nationwide, in the absence of better data. About 762 of project costs would be for basic health service delivery in the project area, and the remaining would have an indirect national impact. Impact on Women 6.04 About 70t of the adults using basic health services provided through the project would be women. The services would seek to address the core of the precarious health condition of women in Bolivia, and curb maternil and infant mortality. In addition, women would represent up to 90S of the beneficiaries of the health education campaigns. The project would alsor have a positive social Impact on women through the promotion of midwives and CPSs. About 85 of the members of CPSs are women. CPSs constitute a social participation opportunity for the poorer women, and help them assume their full social role. Social services provided in the Integral Centers would also support the greater economic integration of women. Their growing participation as providers of health services (up to 68Z of the staff), would be encouraged through the formal training programs, not only as auxiliary nurses, nurses and social workers, but also as doctors and at the levels of decision making. Other services provided in the project would also help women indirectly. They include attention to the school age children, nutrition and food aid, and the promotion of improved hygiene, sanitation and better environmental conditions. Environmental Impact 6.05 The project would have a positive environmental impact. Health posts and health centers would be designed with an incinerator to ensure that they do not contaminate the vicinity. When centers and posts have access to a sewerage system with adequate treatment plant, they would be connected to such system. In the majority of facilities where no sewerage system is available, they would be equipped with septic tanks or improved latrines. Training on environment issues and protection would be an  _ J I - integral part of the promotion activities in the communities. Finally, a basic sanitation project would be prepared and promoted through the project. 6.06 The main risk includes possible lack of full commitment and follow through of the Government and/or the municipalities to carrying out administrative reforms and introducing effective management systems. Annual reviews of the Plan of Action, focusing principally on financial and administrative management, and carefully planned technical assistance and donor coordination would help mitigate this risk. VII. AGREEMENTS AND RECOMMENDATION Agreements Reached at Negotiations 7.01 During negotiatAons, assurances were obtained that: (a) a Plan of Action would be carried out, including sector health policy, service delivery, human resources and institutional development actions (paras. 3.07 and 3.16); (b) annually, a joint review of the implementation of the Plan of Action and of the investment program in the project area would be completed by IDA and the Government; the finalized project investment program for the coming year would be sent to IDA for approval; and views would be exchanged on all planned expenditures in the sector, including the expansion of the IHCH (para. '.07); (c) agreements would be signed between MPSSP and the institutions undertaking the responsibility to admanister a district, or operate a facility, to include mutual obligations (para. 3.10); (d) the updated yearly training program would be sent to IDA for approval as part of the yearly investment program (para. 3.13); (e) the PU would be staffed with qualified personnel satisfactory to IDA (para. 4.01); (f) the program of contracted support from the directorates of MPSSP and other professicnals would be approved by IDA as part of the annual investment program. Curriculum vitae and terms of reference would be submitted to IDA for approval before contracting (para. 4.02); (g) the PU would send to IDA every March and September a project mid- year report according to an agreed format (para. 4.08); (h) a Special Account would be established in the Central Bank with an initial deposit of US$1.0 million (para. 4.13); and (i) audits would be made by independent auditors acceptable to IDA and in accordance with terms of reference satisfactory to IDA. Such audit would include a separate opinion on the statements of expenditures, and a review of supporting procurement documentation in particular in respect of statements of expenditures (para. 4.15).  - 28 - Conditions of Effectiveness 7.02 Prior to effectiveness of the Credit, the Government would submit to IDA: (a) evidence that the FIS has been established with a mandate satisfactory to IDA (para. 4.03); (b) evidence that the FIS procedure manuals acceptable to IDA have been adopted (para. 4.03); and (c) a algned agreement between MPSSP and FIS with terms and conditions satisfactory to IDA (para. 4.03). Conditions of Disbursement 7.03 Disbursements against salaries of auxiliary nurses and SU directors would be conditioned to the Government providing IDA the plan for assuming the cost of these salaries after June 1991, including the financial and administrative steps to be taken by June 1990, December 1990, and June 1991 (para. 3.11). 7.04 The creation of the CDS would be a condition of disbursement for expenditures in each department (para. 4.04). 7.05 Given the above conditions and agreements, the project would be suitable for an IDA Credit of SDR 15.7 million to the Republic of Bolivia.  - 29 - ANNEX 1 Peg 1 of 8 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT PUBL'C HEALTH FACILITIES AND PERSONNEL Tabl- 1: EXISTING INFRASTRUCTURE BY OW4ERSHIP AND RESPONSIBILUTY OF MANAGEMENT HeaIth Ownership of Integrated Health Centers Facility City Center Center With Beds Total MPSSP La Paz 1 2 2 20 lISS El Alto 1 8 2 11 Other govern. 26 2 4 82 NOD 8o 7 0 87 Community 52 1 2 SS Private 6 1 28 30 Sub-total l18 21 a8 18S UPSSP Cochabamba 0 a 2 5 IBSS 0 10 4 14 Othor govern. 0 1 0 1 NOO 6 8 a 1e Cowuunity 18 0 18 81 Private 0 a 26 29 Sub-total 28 25 48 96 UPSSP Santa Cruz 0 0 0 0 IESS 0 0 2 2 Other govern. 18 2 2 17 NOO 10 14 8o 54 Community 8 1 0 4 Private 4 a 0 7 Sub-total 80 20 84 84 Total 184 es 115 as6 All Four Cltivs: Organization Integrated Centers Health Centers He lth Center v. Beds Total Number Number Number Number Number Number Number Number Owned Operated Owned Operated Owned Operated Owned Operated MPSSP 16 67 5 11 4 6 25 84 IBSS 1 5 18 19 8 4 27 28 Other govern. 89 18 5 6 6 6 SO 80 mo0 45 s6 29 11 88 11 107 78 Commnity 7a 1 2 0 1S 0 90 I Private 10 8? 7 19 49 88 6s 144 Total 184 184 66 6s 115 115 S6O a6s  - 30 - ANNEX 1 Pago 2 of 8 BOLIVIA INTEGRATED HEALTH DEVELOPMIEN PROJECT PULIC HEALTH FACILMTES AND PERSONNEL Table 2i BED DISTRIBUTION FOR 1,000 INHABITANTS PER DEPARTMENT (1986-1987) Total Nbr. of TOtWl Number Numer IBM BWds/ lPSSP Beds/ MPSSP & lBSS Numbr of Bee 1,000 1,000 (MPSSP Bods/1,000 of Beds (MPSSP) (PSS person totaI 1986-87 Bes (I8NS) person served) Inhabitant served) La Paz 1,918 986 928 2.2 0.6 0.9 Santa Crux 2,589 466 2,088 2.5 2.6 2.4 Cochabamba 1,061 870 681 2.2 1.8 1.0 Chuquisaca 1,812 178 1,189 4.8 2.8 2.7 Oruro 607 274 888 2.1 1.8 1.4 Potoi t1,809 401 908 2.4 1.8 1.6 Terisj 58 119 l61 2.4 1.0 2.1 Boni 417 C8 389 1.9 1.8 1.8 Pando 61 2 59 0.4 1.6 1.8 TOTAL 9,789 2,886 6,651 2.2 1.6 1.6 Sourpeo WISP, INE  ftJSC If.LT PDCILT1S *0 P5E LU Ts&ll St_8P STAFF PER CATWA MOM (1907) cetegrim Soots clqi- oPeorsool La Pts U Crux s bam. I Oiru p.94.l t c I Tsrija S O..I p nd.S Total I Sectwo S 6 1.7 a1 13.1 218 17.2 e118.9 120 15.1 8 618.4 107 12.1 10 u12.e 1s 5. 1.76 15.9 (5) 35.4 17.2 12.1 4.6 6.6 10.5 6.1 6.2 1.0 100.0 Odmtoloulgta 67 2.0 so 1.8 2g 2.1 12 2.5 21 2.6 2 2.6 17 1.9 22 2.6 a 1.9 22B 2.0 (3) 80.0 18.5 11.7 5.4 9.4 11.2 7.6 9.9 1.8 100.0 W itr. 219 8.6 m 9.6 92 7.4 so 8.2 46 6.0 0 910.6 u14 15.2 44 5. 8 1.9 910 g.I ( 24.1 24.4 10.1 4.8 5.J 12.0 14.7 4.6 0.8 100.0 Nur.. Aid. 807 15.2 12 51.4 SU 24.4 188 26.9 2m2 64.8 19 ..4.4 IM 21.8 27e9 3.4 45 26.9 2.748 24.9 0) 22.1 26.8 11.0 5.0 9.9 7.1 6.6 10.2 1.6 100.0 Othwr prorefIawl, A Tdmlame 468 15.6 146 6.8 118 9.4 so 7.9 76 9.6 102 10.1 62 7.0 84 7.7 1o 11.9 1.0?5 9.7 *19) 42.1 13.5 10.8 8.6 7.1 9.6 5.6 6.0 1.6 100.0 Ad.milatretivii P.ramam.l 702 21.1 821 1.9 182 14.7 a2 10.9 106 18.4 US 11.4 N4 14.1 IN8 16.9 8 20.6 1.788 16.0 (5) 89.7 15.2 10.8 2.9 6.0 e .5 7.0 7.5 9 100.0 LV I Servie. 669 19.8 861 24.4 SW 24.9 118 24.7 ift 19.0 276 27.4 260 26.8 1 22.2 41 26.6 2.604 2.1 ( 26.9 22.0 12.1 4.6 5.9 10.8 9.6 7.3 1.6 100.0 W To"l 53.229 100.0 2,308 100.0 1.289 100.0 478 10O.0 794 100.0 1. 0100.0 62 100.0 8a 100.0 to6 100.0 11.028 100.0 (S) l0.2 20.9 11.2 4.S 7.2 9.1 8.0 7.6 1.5 100.0 w Source: WSSP  - 32 - ANNEX 2 Page 1 of 5 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT SECTOR FINANCING Table ls PUBLIC FUNDING OF THE HEALTH SECTOR USS Millions of 1987 MPSSP a/ IBSS b/ ESF Food Aid 1980 37.1 30.6 23.0 1981 23.2 22.3 12.1 1982 21.0 29.3 21.6 1983 19.7 15.0 48.1 1984 17.6 51.6 32.4 1985 19.0 23.4 43.8 1986 11.7 10.7 38.8 1987 16.9 n.a. .3 1988 20.5 n.a. 4.1 1989 c/ 24.2 . ~~~~~~~~~~~~~~~~~~~I Source: UDAPE, Schulthess, ESF, World Bank a/ Executed bI Spending on the provision of health services only; pensions are excluded c; Budgeted Table 2: SHARES OF MPSSP FUNDING BY SOURCE (I) Source 1984 1985 1986 1967 1988 TGN 92.2 62.2 48.7 60.2 50.1 Cost Recovery 5.6 17.2 30.2 25.4 22.1 International Financing 2.2 20.6 21.1 14.4 27.8 TOTAL 100.0 100.0 100.0 100.0 100.0 Sourcet Mission Estimates  A ,2 - 33 - Page 2 of 5 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT Table 3: TGN SUPPORT TO MPSSP 1980 1981 1982 1983 1984 1985 1986 1987 TGN SUPPORT TO MPSSP 37.1 23.2 21.0 19.7 17.6 19.0 11.7 16.9 millions of 1987 US$ TGN SUPPORT TO MPSSP 6.7 4.0 3.6 3.3 2.8 3.0 1.8 2.5 1987 US$ per caAita _ SHARE OF MPSSP Z TGN 4.4 3.4 3.5 3.4 3.4 2.9 2.1 3.1 EVOLUTION OF SHARE 100.0 79.0 80.7 76.5 76.5 65.4 48.1 68.6 with 1980 base TGN SUPPORT FOR MPSSP .8 .5 .4 .4 .4 .4 .3 .5 as Share of GDP (X) EVOLUTION OF SHARE 100.0 65.8 50.6 51.9 45.6 50.6 36.7 57.0 with 1980 base SHARE OF TGN IN GDP (2) 16.2 15.0 28.1 10.7 35.6 60.9 13.8 14.5 EVOLUTION OF SHARE 100.0 92.7 173.9 66.5 220.2 376.7 85.6 89.4 with 1980 base Source: Mission Estimates Table 4s PERCENT SHARE SOCIAL SECURITY EXPENDITURES IN GDP Year Total Health Care 1978 2.9 1.6 1979 3.5 2.0 1980 2.8 1.4 1981 2.7 1.2 1982 2.0 1.1 1983 1.9 0.8 1984 3.5 2.0 1985 1.9 1.0 1986 1.7 0.7 Source: Central Bank of Bolivia and IBSS.  ANNEX 2 - 34 - Page 3 of 5 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT Table 5: PERCENT OF RESOURCES GENERATED THROUGH COST RECOVERY Hospitals 2984 1985 1986 1987 1988 La Pas z 1 1 1 Centro Gastroenterologico 13 40 56 31 67 Hospital de Cllnicas 3 13 29 22 37 Instituto Nacional del Torax 5 18 33 24 49 Hospital 20 de Octubre 3 18 28 41 25 Instituto Nacional de Oftalmologia 9 28 55 37 69 Hospital del NifLo 3 11 33 24 38 Cochabauba Hospital Viedma 19 40 73 49 26 Maternidad German Urquidi 49 76 89 75 74 Centro Gastroenterol6gico 38 62 89 69 86 Psiquittrico de San Juan de Dios 4 25 39 20 20 Santa Cruz Hospital San Juan c'e Dios 24 53 76 68 36 Hospital de Niffos 1 47 66 44 36 Percy Boland 15 53 76 68 45 Hospital Metropolitano 6 44 Instituto Oncol6gico Boliviano 17 76 75 75 33 Hospital Psiquiatrico 0 0 0 0 0 Hospital Japones - 0 27 58 42 Clinics Proyecto Montero 0 0 0 0 0 Centro de Salud de Santa Cruz - - 52 48 33 Centro de Salud La Paz No. 1 6 11 20 14 25 Centro de Salud La Paz No. 2 11 25 54 37 41 Primary Rural Health La Paz 1 3 5 1 5 Cochabamba 2 8 36 20 7 Santa Cruz 0 0 0 0 0 Source: Mission Estimates  - 35 -AN= 2 Page 4 of 5 BOLVIA DNTEGRATED HEALTH DEVELUPMENT PROJECT Table 6: FINANCIAL SOURCES FOR NCO OPERATIONS IN THE HEALTH SECTOR 1/ (In USS) TOTAL EST. 1986 SUBTOTAL PERCENT SOttCE COUMITMEIT EXPENDITURES BY TYPE OF TOTAL * BIlstaral A1d: W4ITED STATES - USAID (non-PL480) 28,782,000 8,416,000 - PL480 Title 11-Food 208.86,000 29,886,000 - Inter-Amrican Foundation 119,600 FRANCE 180,SOO 66,000 SWITZERLAND - COTESU 1,719,000 280,000 BELGIUM 1,877,469 470,280 NETHERLANDS - Technical Cooperation 8,200,000 1,288,888 - Dutch Aid Agencies 600,000 CANADA 1,012,806 814,080 ITALY 11,614,840 962,060 Subtotal Bilateral (Excluding PL480) 12,889,908 68.44 * Multilatoral Agencies (UNICEF.WNDP): 70,000 Subtotal Multilateral 70,000 * Church: SWITZERLAND 870,667 CERMANY V 1,800,000 OTHER j 1.000,000 Subtotal Church 8,170,667 10.41 * Externol MOO. (Own Funds in Health Projects): Con i rd I/ 1,456,666 Estimated 1/ 1,000,000 Subtotal External NOOo 2,456,66 12.72 * Government of Bolivis Emrgency Social Fund (Disbursed) 782,816 Subtotal Government ot Bolivia 762,616 4.05 TOTAL EXCLUDINO USAID PL480 19,820,052 100.00 TOTAL INCLUDING USAID PL480 48,706,052 Source: Mission estimates I/ Doe not Include water and sanitation expenditures. / Aseume that 10X of the 01.8 millton spent by German churches In 19t8 goes to health. O/ Rough estimat of church contribution from the U.S., Italy, Spain, etc. J May Include Indirect government finaneing not included In the bilaterel totals above. Estimate bae d on general Impr.eiera of number and ls" of external NCOo operating in Bolivia for which Information was not avallable.  - 36 - A ~2 Page 5 of 5 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT Table 7t MPSSP EXPENDITURES BY CATEGORY (US$ Millions of 1987) Category 1984 1985 1986 1987 1988 Salaries 25.31 12.50 7.88 16.01 15.31 Food 1.66 1.25 1.77 1.85 7.06 Medicines 0.89 1.21 1.42 2.91 4.67 Other 1.6i 2.81 6.88 8.05 16.01 Total Recurrent 29.47 17.77 17.95 28.82 43.05 Investment 0.03 2.10 0.67 0.00 3.44 Total 29.50 19.87 18.62 28.82 46.49 Source: Mission Estimates Table 8S SHARE OF MPSSP EXPENDITURES BY DESTINATION (2) Cochabamba Destination 1984 1985 1986 1987 1988 Administration 41 28 19 25 14 Preventive Basic Care 13 12 9 14 19 Secondary Care 46 60 72 61 67 La Paz Destination 1984 1985 1986 1987 1988 Administration 10 11 13 7 6 Preventive Basic Care 35 31 33 37 28 Secondary Care 55 58 54 56 66 Santa Cruz Destination 1984 1985 1986 1987 1988 Administration 16 10 11 13 9 Preventive Basic Care 34 16 20 14 23 Secondary Care 50 74 69 73 68 Source: Mission Estimates  - 37 - ANNEX 3 Page 1 of 5 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT INTEGRATED HEALTH CARE MODEL AND ORGANIZATION FOR MATERNAL AND CHILD CARE I. Objectives of the Integrated Health Care Model (IHCM) and Role of MPSSP 1. The Integrated Health Care Model (IHCM) defines the health system in which preventive and basic health services are to be provided to all Bolivians on the national territory, particularly women and children. Its objective is to improve infant and children survival and maternal health, which are at the core of the national priorities. The IHCM has three dimensions, one of services, one of administrative structure and one of financing. The IHCM describes a pyramid of services of increasing complexity and cost, sufficient to improve the current health status of women of reproductive age and of children. It redefines the role of MPSSP from that of a provider of care, to that of a normative, coordinating and fund raising agent. It serves as a framework to integrate within one program the activities of the numerous providers of health services, particularly the maternal and child care of the NGOs. With the gradual implementation of the IHCM, redundant services in the sector would be redeployed, and the sector effectiveness and efficiency would be improved. II. The Characteristics of the IHCM 2. The IECH is based on the following premisest (a) the objective of the IHCM is to improve infant and children survival and maternal health in Bolivia; Cb) the target population of the public health system consists of pregnant and lactating mothers, children under five years of age and the women at reproductive risk, and also the population with no access to any health services; (c) maternal and child care is the core activity of the basic health care services; (d) the access to health services is a basic right of the population, whether in the urban or rural areas; (e) the promotion of health, the preventive care, the curative services and the rehabilitation of patients are integral parts of the health care system. All health facilities, from health centers at local level to specialized hospitals, need to be gradually integrated into one system;  - 38 - ANNEX 3 Page 2 of S (f) the promotion of public, family and personal health, and the prevention of illness through health education campaigns is an important element of the IHCH. In particular, the mobilization and social participation is essential to ensure mitigation of social and environmental causes of pathology, and effective access to servicest and (f) the decentralization of responsibilities within MPSSP is necessary to ensure the implementation of the IHCK. 3. The basic health care programs of the IHCM include: (a) integral maternal and child health care. This is the largest and most important program, corresponding to about 83Z of all the basic health services. It encompassess prenatal attention, nutritional supplementation, and promotion of breastfeeding; obstetrical care according to risk category, and care of the new born; promotion of reproductive health; preventicn and treatment of abortion; reproductive maternal and child health education; detection and treatment of genital and breast cancer; preschool and school-age health care including immunization, growth monitoring, complementary feeding, oral rehydration, detection and treatment of iodine and vitamin deficiencies, nutritional anemias, acute respiratory infection, and parasitic diseases; (b) nutritions food technology, goiter, anemias, production of native foods, cammunity and family gardens, hypovitaminosis A, RfluorLzation, school and popular meals, milk centers and lntegral children centers; tc) control of infectious diseases: tuberculosis, Chagas disease, leprosy, AIDS; and control of vectors of the yellow fever, malaria, dengue, leishmaniasis, hemorrhagic fever, exanthematous typhus; (d) general medicine and odontology; oral and mental health; adolescent health care including detection and treatment of venereal diseases; and (e) epidemiological surveillance and environmental sanitation, promotion of latrines. III. The Sanitary Unit (SU) 4. The eleven Sanitary Units (SUs) correspond mostly to the de- centralized departmental offices of the MPSSP. More specifically, the role of the Sanitary Unit includess (a) the establishment of the regional health policy norms. SUs are responsible for interpreting the IHCM in their circumscription according to the local epidemiological profile and institutional capacity. SUs zone the health services according to local development plans and the distribution of communities without access to basic health care; (b) the promotion of intersectoral and interinstitutional coordination tc improve the use of resources in Jse health sector. The SUs  - 39 - ANNE 3 Page 3 of S promote the Developmental Health Council as the instrument of interinstitutional coordination and regional policy development. They negotiate with the various providers of basic health, municipalities, other public institutions, IBSS and NG00, their participation in the IhOG. The SUs contract such institutions to manage HDs, or promote the contracting of such institutions to manage specific health facilities vithin their assigned level of service; and (c) the development of a management system to strengthen local health services. They support the programing. budgeting and execution of basic health care services in the health districts (HDs). They manage the distribution of essential drugs at the regional level and the purchase of those drugs acquired locally. They support the human resources management of the HDs, particularly the hiring, in-service training and supervision of medical and administrative staff. They provide assistance and technical supervision to the providers of health care in the department. They administer the MPSSP personnel assigned to SUs and HDs. IV. The Health District (HD) 5. There are 84 districts in Bolivia (between two and 17 districts in each SU). The HD administration represents the apex of the district level health system. The districts are the central piece of the IHCM becaups they are responsible for extending the maternal and child health care, and more generally the preventive and tasic care. They are responsible for geographic areas with a population of 100,000 to 200,000 inhabitants. They ensure epidemiological surveillance, carry out needs assessment, program planning, coordination of maternal and child care, prevent.ve and basic service delivery, and evaluation. HDs report to the SUs and can be contracted out, typically to municipalities or NGOs. The HD administration is directed by a public health physician and staffed by an epidemiologist, a nurse, an administrator, a social worker, a nutritionist, a statistician, a sanitation specialist as necessary, and supporting staff. 6. The roie of HDs includes: (a) developing a management capacity to execute the ICHC at local level. The HDs support the programming, budgeting and execution in the various health facilities and areas. They promote, supervise and evaluate the application of health ncrms; (b) promoting the intersectoral and interinstitutional coordination to ensure efficient use of resources in the sector. They ensure the implementation of the referral system. They coordinate within the sector with NGOs, hospitals. IBSS and other health agencies in the district to avoid duplication and maximize efficiency. They coordinate with other sectors and local governments on all health related matters, including nutrition and sanitation. They may negotiate with health providers the operation of facilities within the IHCM; (c) assisting the administration of personnel, including hiring and training of staff. They facilitate district levei training of auxiliaries and health professionals with the health schools. They promote and coordinate in-service training and popular health education campaigns;  - 40 - A i 3 Page 4 of 5 (d) producing the basic management information for MPSSP. HDs are responsible also for the epidemiological control, and for processing the corresponding information. They analyze and interpret sociodemographic and clinical information collected in the areas. They conduct special surveys to probe disease outbreaks, r'sk factors or problems in service delivery. They report to the SU and provide feedback on the district health situation to area pnysicians, hospital directors, NGOs and other relevant agencies; and (e) providing logistic support to all the levels of the IHCM. 7. A health center with beds serve the population of a health district. It is staffed by general physicians, a pediatrician, an obstetrician, social worker, a registered nurse, and auxiliary nurses. The district health centers take referrals from the integrated health centers in addition to servicing residents of the immediate neighborhond. Although the health center is primarily an ambulatory care facility for maternal and child care, some may have inpatient services. Those services would not be added through the project, but would be continued and upgraded when they already exist. They would be centered around maternal and child health services (deliveries and oral rehydration). They would pay particular attention to the cultural background of the patient, the family participation, and reproductive maternal and child health education. Clinical problems that cannot be resolved in the health centers are referred to hospitals and specialized institutes in the district or elsewhere in the city. Patients referred from the health centers would have access to hospital care, patients who demand outpatient services at hospitals would be referred to health centers when appropriate. V. The Health Area b. Health areas have a population of 10,000 to 20,000. They are served by health posts which are the first fixed installation of the health care system. They are staffed by one or two physicians, a part-time dentist, and no less than three nurses and auxiliary nurses per physician. Nurses coordinate and supervise the activities of the auxiliary nurses working in the community. They plan outreach activities for women of reproductive age and children, surveys and special campaigns. Auxiliary nurses assigned to health posts assist in clinical care and carry out specific tasks such as the promotion of pre- and post-natal care, child growth monitoring and vaccination. 9. The responsibilities of the health area are: (a) maintaining up-to-date information on sanitation, nutrition and health status of the area through periodic surveys, progressive enrollment of the population and development of an appropriate record system; (b) developing appropriate preventive programs in keeping with district priorities; (c) supervising and supporting the activities of the entire area health team. The area supports popular health campaigns; and  - 41 - Page 5 of 5 (d) providing clinical care to patients whose problems cannot be solved by auxiliary personnel. VI. The Local Services 10. The base of the service pyramid is located in the community and organized in sectors. It consists of the activities of volunteer popular health workers and local health committees (CPS) guided by auxiliary nurses. At the end of the project implementation, there should be about one popular health worker per 500 inhabitants. Services are organized in existing community infrastructures, such as schools, community centers, nurseries, milk centers, integral child :enters, or popular food centers. These integrated facilities are usually provided by the community or NGOs and serve about 3,000 persons. The auxiliary nurses operate out of these facilities. They promote pre- and post-natal care, maternal and child health care including prenatal sorting, monitoring of infant and child health, nutrition, vaccination, oral rehydration. family health associations and simplified medicine. They also refer clients to health posts or health centers for child growth monitoring, educational activities and treatment of more complex problems. They identify and train midwives and integrate them in the referral system. The auxiliary nurses provide instruction to popular health workers and consolidate household level information collected by them. They report to the health post nurses. 11. The services provided 1. the integrated centers includet (a) infant and child care, vaccination, attention to diarrheas, respiratory infections, control of nutrition and food complementation; (b) attention to pregnant women and mothers, identification and referral of high risk pregnancies, identification of women at reproductive risk, reproductive maternal and child health education, and follow-up of midwives; (c) attention to school children, with defarasitation; and (d) attention to the population in general according to the epidemiological profile, with care of tuberculosis and other endemic illnesses, first aid, and simple pathologies. VII. Expected Outcomes 12. The project objectives are to ensure that, by the end of implementation, the health district reach the following targetst - 40Z of pregnant women receive prenatal care; - 402 of women receive attention from qualified personnel during delivery; - 80 of one-year-old children are fully immunized; - infant mortality decreases to 70/1,000; - 602 of persons reported ill receive care; and - maternal mortality decreases to 33 per 10,000.  -O AT-nu ma AM A. eiath bectew PFb let A.1 Priority of halAth in the Sof national budwet 8.0 8.2 8.4 8.6 a.s 4.1 sial development progera allaeW to public of the Osernumt helth A.3 Pr.iorlty of priory health Propertion of pereannel In the public lth pro aoiwd to La Pa 8 #6 as 42 48 primary Sant Crus so 82 84 U 40 fecilition Cochabto_ s0 so Be 42 48 Idantiat all dntist Id d d ia reassigned to primary facilities A nob contrcted In project Ore Lcrer_ S of baeic 26.6 M7.6 35. 9.8 10.2 81.1 heltb care doto to l _. - Ie of e dterdea m, LaPa 90 8 82 8a I allocated to St. Crum 24 2S s6 8o S2 JS prieary care Cochaboek 19 24 2 8D #2 It L.3 Dianconettion of i of ntional bud 20get 3 305 30 no ls" no lae no loft adainietration A financ opnt in the projet thn 90 thn 90 then 90 arn ahich s controlled at SU lev A.4 Coordination of donor Donwe cordination Active * id Id Id id id comittee Chal red by _sP A.5 Improveaant af efficiency I af food aid distributed gee SVEN date no Ils than of nutrition pragra accordine to SP criteria to qualify 8o5 in the La Paz 40 baneficiaeroe in iO id id id Sents Cruz - IM at ND FO towmatogi'- Cochabamba i plemented A.6 RPaoonslizstion of health Cs activ cive Id CDS participating i' id id prograei in allocation of regionl reaocone In the hnlt _t_r  3 . U S U U 5 3 . : w Wgi l1 Ei hr I; Ea^| ' If l |I i Jji> . . ~~. L . .2.r -. , I - - - -; i t 30 Z a8Ba ct~~~~~~~~~  -~~ - C. in Resourc C.2 Decentralization of training S district. with training 1o0 of wea id i8 capacity In function lIpl_ented C.$ J .lopant of outr&Ah Train * midwivee per arc IO0 of arrn Id id Id id etIvity in community In Iplem_nted HD . stitutional Development 0.1 Davelopment of financial Dletricte A . elaborating 8 SEU of 1001 of the id ;d id management at locl level cmplte financial reportc the project MD0 implemented including foreign aid a on reourcee nd eanding It in c til_y Mannr to I~SSP 0.2 Development of finaecial bdgwt elaboated according Partially Copletly id id mngamet In a SSP to no procedurc for primry for primry core care Partially for Completely id hoaptal for hoeitals 40 -~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~0 0.D Developmnt of menagaant iObnagamt InformltiOn Syste Syate Syate. partially id with Syot=m in id Id Informtihn in opration diealnpd in operation with enifi d operation unified financial programtic infor_tion Information 0.4 Dewelo t of mnitoring S of SM * MM r evine ME Implemented in id id and evaluation Inforation for thele annual plane 0.5 ReSorniaation of functlons Definition of function, with Planning A me, Id Id id An permonnal manl med pereonnel trained In Adinittion Resourcee Heath General directorate directorte rergnied reorgnized A otffed mtffed aromnic Organic Organic trueture structure of structure of of WiSP lISP approved iWSSP aplamented designed  -45- ANNEX 4 Page 4 of 4 5 I~~~~~~~~~~~~~I 16 ~ ~ ~ ~ 3 ,ItO  -46 - ANNEX 5 Page 1 of 3 CiGee N@PIDS-1185-213.11.89 MINISTERIO DE PREVISION SOOAL Y SALUD PUBLICA Bolivia LETTER OF INTENTION Mr. S. Shahid Husain Vice-President of Latin America and the Caribbean World Bank OBJECTIVEs The Development of Health Sector Policy During the Next Five Years as Part of The Integrated Health Development Project. INTRODUCTION. The Integrated Health Development Project is intended to serve as the framework for the restructuring of the Health sector with reference to public health and primary health care. Nevertheless, the project has left open the definition of other sector issur3o such as the social security system, financing policies at each level of health care, coordination of health worker training, incorporation of the university level medical faculties, and the integration of health sector investments with the Goverment's broader social policies. Such policies and their relationship to an integrated health system had not been defined during the preparation phase of the project. The proposed project presents an opportunity for continued policy dialogue with the International Development Association (IDA) and further internal coordination in the Ministry of Health (MPSSP) to develop the essential elements of these policies. It is the intention of the Government of Bolivia that these policies be elaborated during the course of the project, with the goal of preparing a second IDA project which has a wider sector focus. This letter outlines the primary policy issues which will need to be further developed in the course of the next five years.  ANNEX 5 Page 2 of 3 CiGte No .P 182 MINISTERIO DE PREVISION SOCIAL Y SALUD PUBLICA Bolivia OJECTIVES CF THE INTEGRTED HEALTH DEVELOPMENT PROJECT The proposed project aims tos i) redefine the role of the Ministry of Health at each level of responsibility, enabling the MPSSP to fulfill its role as normative head of the sector, ii) develop the managerial capacity of the MPSSP in order to assure improved efficiency and effectiveness of its activities and the activities of other actors in the sector. iii) encourage a more optimal use of inicial resources, and a reconsideration of overall sector spending levels in order to assure financing both from the National Treasury and from international donors which is sufficient to cover sector needs. Within this framework, the Government intends to extend the health care model to the other regions of Bolivia, including rural areas, through external financing already partially identified, iv) improve the capacity of the human resources working in the health sector, both within the MPSSP and in other government and non- governmental institutions, v) extend the coverage and quality of primary health care services in the major urban areas of the departments of La Paz, Cochabamba and Santa Cruz, covering 100% of the population at risk in these areas. HEALTH SECTOR POLICY The Government of Bolivia has charged the MPSSP with the elaboration and implementation of national policies in the following areass  - 48 - ANNEX 5 Page 3 of 3 CeN0PIDS-1185-2/.11.89 ............. MINISTERtO DE PREVISION SOCIAL Y SALUD PUBLICA Bolivia i) incorporation of the social security system within overall sector policies and service delivery, defining its financial and social role within the sector; ii) establishment of a mechanism which regulates at each level of the health sector the participation of the government, the region and the community based on an analysis of efficiency and equity; iii) definition of the needs, in terms of quantity and quality, of human resources in the health sector, including revision of curriculum content as well as in-service training needs; iv) coordination between the MPSSP and the Social Investment Fund to optimize planning, execution and monitoring of public and private investment in the health sector. Sincerely, Dr. Mario Paz Zamora Minister of Social Security and Public Health  - 49 - ANNEX 6 Page 1 of 4 BOLIVIA INTEGRATED HEALTH DEVELOPMENT PROJECT PROJECT TASLES Table 1: CIVIL WORKS AND MADINENANCE Typ of Integrated Health Hblth Regional Ware- Matntenance Total Works Centers Centers Center. Office. houses Facility W. Beds La Paz * Construction 0 8 0 1 0 1 10 * Expanslon 6 6 0 0 1 0 18 * Upgrading 40 0 2 0 2 0 44 Totel 46 14 2 1 8 1 67 El Alto * Construction 0 2 1 0 0 0 a ' Expansion 4 8 0 0 0 0 12 0 Upgrading 18 0 0 0 0 0 18 Totel 17 1O 1 0 0 0 28 Cochabamba O Construction 0 6 0 1 1 0 8