Colombia - Municipal Health Services Project

Document of The World Bank FOR OFFICIAL USE ONLY Report No. 11743-CO STAFF APPRAISAL REPORT COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT MAY 14, 1993 Country Department III Human Resources Operations Division Latin America and the Caribbean Region This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. CURRENCY EQUIVALENTS Currency Unit = Colombian Peso (Col$) Col$1.00 = US$0.0013 (March 1993) US$1.00 = Col$750 (March 1993) FISCAL YEAR January 1 - December 31 ABBREVIATIONS AND ACRONYMS DANE National Department of Statistics DNP National Planning Department DS Departmental Health Service EDP Essential Drugs Program FIS Social Investment Fund FNH National Hospital Fund ICB International Competitive Bidding ICBF Colombian Institute of Family Welfare IDB Inter-American Development Bank IMR Infant Mortality Rate ISS Social Security Institute LCB Local Competitive Bidding MHIS Municipal Health Information System MOH Ministry of Health NGO Non-governmental organization SOE Statement of Expenditure TFR Total Fertility Rate FOR OFFICIAL USE ONLY COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT STAFF APPRAISAL REPORT Table of Contents Page No. BASIC DATA ............................... iii LOAN AND PROJECT SUMMARY .................... iv I. SECTOR BACKGROUND ........................ 1 A. The Economic and Social Setting .................. 1 B. Population and Health Status ..................... 2 C. The Health Care System .......................3 D. Main Issues in Primary Health Care '........ 6 E. Government Strategy ........................ 10 F. Bank Strategy and Participation .................. 11 H. THE PROJECT..............................13 A. Introduction...............................13 B. Project Content............................14 C. CostsandFinancing.........................21 D. Project Management and Implementation ............ 23 E. Procurement .............................27 F. Disbursements, Accounts and Audits ............... .30 G. Project Benefits and Risks ...................... 31 HI. AGREEMENTS REACHED AND RECOMMENDATION ... 31 This report is based on the findings ofpreparation and pre-appraisal missions which visited Colombia during 1992, led by Mr. Xavier Coll and Ms. Eleanor Schreiber (LA3HR), and an appraisal mission in December, consisting of Mmes./Mr. Eleanor Schreiber (Mission Leader, LA3HR), Carol Collado (Consultant, Human Resources Planner), Cornelis Kostermans (Consultant, Public Health). Ms. Nuria Homedes (Consultant, Public Health), Ms. Marfa Victoria ister (LA3HR) and Mr. Scott Quehl (Consultant, Public Sector Management) participated in earlier missions and contributed to the preparation of the report. Poor reviews were undertaken by Mr. Jacques F. Baudouy (AF3PH) and Ms. Denise A. Vaillancourt (PHRPN). Messrs. Jacques van der Gaag and Yoshiaki Abe were, respectively, the managing Division Chief and Department Director. 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. - nI- LIST OF ANNEXES Annex 1: Health Status in Colombia Annex 2: Health System Organization and Management Annex 3: Public Health Financing Annex 4: Bank Involvement in the Health Sector in Colombia Annex 5: Characteristics of the Project Area Annex 6: Project Subcomponents A. Municipal Health Information System Monitoring, and Evaluation Indicators B. Staff Development C. The Basic Package of Services D. Terms of Reference for Policy Studies Annex 7: Project Costs Annex 8: Project Management A. Organization and Responsibilities B. Guidelines, Criteria and Implementation Procedures for Municipal Subprojects C. Flow of Funds D. Supervision Schedule Annex 9: Estimated Schedule of Ian Disbursement Annex 10: List of Documents Available in the Project File COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT BASIC DATA SHEET COUNTRY DATA Area (km2 thousands) .. ........................................ 1,139 Population (millions) ......................................... 32.3 Annual Growth Rate, 1989-2000 (%) ................................. 1.5 % Urban .. .................................................. 70 Total Fertility Rate* .. .................. ......................... 2.9 ECONOMY GNP per capita (US$) ........................................ 1,260 Average Annual Growth Rate, 1965-1990 (%) ......................... . 2.3 Health Expenditures (% of GDP) ................................... 6.1 Poverty Line (annual income in US$ per family of five) ................... 2,050 Population in Absolute Poverty (%) .................................. 40 HEALTH AND NUTRITION Life Expectancy at Birth (years) Male .................................................. 66 Female ...................................... 72 Infant Mortality Rate 1990 (per 1,000) ............................... 37 Child Mortality Rate 1990 (per 1,000) Male ................................................... 49 Female .. ............................................... 40 Births Attended by Health Personnel 1985 (%) .......................... . 51 Maternal Mortality, 1980 (per 1,000) .................................. 1 Children Aged 1 or Less Fully Vaccinated (%) * ......................... 68 Pregnant Women Fully Vaccinated Against Tetanus (%) * .................... 34 Physicians per 10,000 Population (1985) ............................... 5.8 Low Birth Weight Infants (%) ..................................... 15 Malnourished Children under 5 Years (%) ............................. 13 Daily Calories per Capita ...................................... 2,598 Access to Safe Water (%) Urban ... ............................................ 86 Rural ... ............................................ 33 EDUCATION Adult Literacy Rate M ale (% )................................................. 88 Female (%) .. .............................................. 86 Net Primary School Enrollment (%) ................................ 90 Data from the World Bank's World Development Report 1992 and other World Bank reports. Data marked with * have been drawn from Colombia, Demographic and Health Survey, for 1990; Profamilia and Institute for Resource Development, Bogotd, 1991.  - iv - COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT STAFF APPRAISAL REPORT Loan and Project Summary Borrower: The Republic of Colombia Benefciary and Executing Agencies: Ministry of Health Social Investment Fund Municipalities Loan Amount: US$50.0 million Terms: Repayment in 17 years, including a 5-year grace period, at the Bank's standard variable interest rate. Project Objectives: The project would represent the first phase of a 10-12 year program to reorient the public health system, with emphasis on primary health care. It aims to strengthen management and provide incentives, in the form of grants, to support municipal provision of a basic package of primary health care services. Specific objectives are to: (a) enhance municipal capacities, in nine areas (encompassing 220 municipalities), to plan and manage provision of primary health care; (b) improve the quality, efficiency and coverage of primary health services in those municipalities; and (c) strengthen key policy measures and evaluation activities designed to support development of effective primary health care. Project Description: The project would consist of three components, designed to: Institutional Development (11 percent of project costs): (a) introduce a municipal health management information system to support planning and monitoring of primary health care services; and (b) provide related training and technical support for municipal administrative authorities, municipal health administrators and community representatives, numbering about 6,000 in the project area. Service Development (80 percent): (a) implement municipal subprojects, to be co-financed by the municipalities and the central government, to support a basic package of primary health care services by: providing medical supplies and equipment; and financing rehabilitation, expansion, construction and furnishing of selected primary health care facilities; and (b) provide related training and technical support for some 13,000 municipal health practitioners in the project area. Policy Development (5 percent): support the design and implementation of selected policy measures for introducing systematic pricing and cost-recovery for primary health services in the public system and for quality control for primary health care, and for strengthening employment systems for public health personnel; and provide for an impact evaluation for the project. The project would also finance project management costs (4 percent). Benefits: The project would contribute directly to human resources development in Colombia by providing improved basic health services to about 8 million existing and potential users in the project area, with priority given to reaching the estimated 6 million persons classified as poor. It would also provide the experience required to replicate effectively the model on a national basis over the next decade. Community involvement in provision of the services, to be achieved through municipal health boards, health facility committees and local promotion and education activities, should contribute to sustainable gains in service relevance and quality. Local participation should also strengthen municipal accountability for the health care provided. The project would further strengthen management and implementation capabilities within the public health system, with a focus on effective resource use and municipal planning and management of primary services. Risks: The main implementation risks relate to institutional weaknesses. To reduce these risks and mitigate the complexities of evolving financing practices and procedures, the project will incorporate and build upon an ongoing process of decentralization in Colombia, but not depend upon the outcomes of that process. Rather, the project would focus on developing effective management and implementation capacity for delivery of primary health services at the municipal level. The implementation risks will be reduced by the limited geographic scope of the project, the application of guidelines and criteria to ensure, as possible, adequate institutional and financing capabilities of municipalities before launching municipal investment subprojects, and the provision of technical assistance and support for project implementation. Additional risks are that municipal interest in participating in the project, and municipal demand and cofinancing capacity for subprojects, would fall short of expectations. These risks have been minimized by selecting departments committed to project objectives, that would promote and support the municipalities; by setting limits on subproject size based in part on municipal revenues; and by the incentive provided through central grants. The project further includes mechanisms to review changes in municipal financing capacity and the adequacy of the grant mechanism as an incentive for municipal investment. - VI - Estimated Costs: US$ million - Local Foreign Total Institutional Development 5.2 2.5 7.8 Service Development 33.6 21.1 54.7 Policy Development and Evaluation 3.1 0.0 3.1 Project Coordination 2.4 0.1 2.5 Total Baseline Costs 44.4 23.6 68.0 Physical Contingencies 0.4 0.1 0.4 Price Contingencies 112 14.7 Total Project Costs 56.0 27 (Estimates exclude taxes and duties, which are negible, totals may not add due to rounding) Financing Plan: IBRD US$50.0 million (60 percent of total) Central Government US$ 8.7 million (11 percent) Municipalities US$24.4 million (29 percent) Estimated IBRD Disbursements: IBRD FY 1994 1995 1996 1997 1998 1999 2000 2001 ---------------------------US$ million -------------------- Annual 3.0 8.0 10.0 10.0 10.0 6.0 2.0 1.0 Cummulative 3.0 11.0 21.0 31.0 41.0 47.0 49.0 50.0 MAP: IBRD No. 24769  COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT I. SECTOR BACKGROUND A. The Economic and Social Setting 1.1 Despite the world-wide recession and price swings for major commodities, Colombia maintained an annual growth rate of 3.4 percent throughout the 1980s. The Economic Modernization Program was set in place in 1990 to support continued growth by improving the efficiency of resource allocation and use. Medium-term objectives of the Program center on sustaining growth in a competitive environment and moving towards upper-middle income status. To pursue these objectives, the Government initiated trade and financial sector reforms to remove price distortions and support private sector development. It must now initiate measures to address systematically institutional and infrastructure bottlenecks, and to upgrade skills of the labor force, to raise productivity. 1.2 Colombia also achieved impressive social gains over the past three decades. Between 1965 and 1990, the population growth rate declined from 3.7 percent to 1.5 percent, and infant and maternal mortality declined from 80 to 40, and from 2.5 to 1 per 1,000 births, respectively. Over 90 percent of the relevant age group now attends primary school and nearly 50 percent of the age group attends secondary school. Enrollments are equally divided between boys and girls. However, marked disparities persist in key social indicators and in the provision of related social services - health, water supply and sanitation, education - across regions and among rural, peri-urban and urban areas. 1.3 The distribution of the economic and social benefits of growth remains highly skewed. Incomes of the wealthiest 20 percent of households are six to seven times that of the lowest 20 percent. The National Department of Statistics (DANE) currently classifies about 40 percent of the population as poor, corresponding with annual household incomes of US$2,050 or less.1/ To achieve desired improvements in productivity and employment, and to ensure that the poor share in the benefits of development, the Government plans to strengthen and better target its social programs and services. The upgrading and expansion of primary health care services figures prominently in this strategy. 1/ DANE indicators include three measures related to shelter and sanitation and two related to income. Households with less than satisfactory conditions in one category are classified as the absolute poor (40 percent of the population); and households with less than satisfactory conditions in two or more categories are classified as the critically poor (20 percent of the population). -2- B. Population and Health Status 1.4 The total population of Colombia is estimated at 32.3 million. Some 70 percent of the population is urban; 67 percent lives in the four largest cities in the country (Bogotd, Medellfn, Cali, and Barranquilla). In parallel with rapid urbanization and expansion of social services in recent decades, the fertility rate declined, from 7.3 children per woman in 1960 to 3.0 by 1985. Increasing female participation in the educational system and the labor force, and effective family planning programs contributed to this decline. Age structure of the population is as follows: 0-14 years : 37 percent 15-64 years : 59 percent 65 and over : 4 percent Life expectancy at birth rose from 56 years in 1960 to 69 years at present and compares favorably with life expectancy in other low middle-income countries, but is less than the average for the most developed Latin American countries (e.g., Argentina, Chile, Costa Rica - all with average life expectancies exceeding 70 by the mid-1980s). The proportion of persons aged 60 or more is expected to increase from about 6 percent at present to 9 percent by 2010. 1.5 The overall health status of the Colombian population has also improved appreciably over the past several decades. However, the number of years of life lost was 7,380 per 100,000 persons in 1986.2/ This is twice the U.S. and Canadian levels, and the second highest in Latin America after El Salvador (9,921 per 100,000). Some 40 percent of early deaths are due to violence, 27 percent to chronic diseases, and 12 percent to infectious diseases. Premature deaths affect males more than females (65 percent versus 35 percent, respectively). 1.6 Perinatal conditions account for a high share of infant deaths (nearly 50 percent), followed by infections; and malnutrition continues to affect 13 percent of children under the age of five. For children, infectious diseases, chronic diseases and accidents are the most frequent causes of death. Violence and accidents account for the highest share of mortality among teenagers and adults aged 15 to 44 (homicides account for 55% of the deaths in this age group). Mortality rates for the age group between 45 and 59 decreased from 9 to 7 per 1,000 between 1973 and 1980, due to reduced incidence of tuberculosis and respiratory infections. Non-infectious, chronic diseases are the major contributors to mortality and morbidity for this group. While the incidence of AIDs in Colombia is low (3,000 reported cases) the situation is being monitored closely. 1.7 Despite the overall gains, the average health status of the population masks wide variations. Differences, across regions and socio-economic groups reflect, and influence, the extent of poverty. Differences are evident in the polarization in disease patterns resulting from the epidemiologic transition underway: Colombia is experiencing a gradual shift towards increasing levels of non-communicable diseases of adults and the elderly, while maintaining high levels of infectious diseases and malnutrition among the poor. The 1990 Demographic and Health Survey 2/ The number of years of life lost is an index that measures the years lost due to death after the first year of life and before reaching the life expectancy age. -3- (DHS)J/ (Annex 1, Table 1) data indicate that the poorest departments (states) on the Pacific Coast (Chocd, Cauca, Nariflo) have, on average, twice the infant mortality rate of the better-off coffee- growing region (Caldas, Risaralda, Quindio). The level of education of the mother is an important determinant of infant mortality: the rate among women with no formal education is four times that of women with higher education (60.5 versus 11.4 per thousand). Malnutrition, often associated with infectious disease, remains pervasive, though differences among regions are modest (Annex 1, Table 2). During the late 1980s, 13.1 and 20.8 percent of children under five showed low weight for age, or low height for age, wasting and stunting, respectively. The relation between degree of malnutrition and socio-economic status is more striking (Annex 1, Table 3). Malnutrition levels for children of women lacking formal education are nearly three times those of children of women with secondary education; and children from families living on less than one minimum salary are seven time more likely to be underweight and four times more likely to be stunted than those in families with incomes exceeding 4.6 minimum salaries. The total fertility rate (TFR) for women in the Atlantic Region was 3.6 children in the late 1980s, about one child over the national average; in contrast, women in Medellin and Cali had a TFR of only 2.1 (Annex 1, Table 4). The DHS estimates that some 20 percent of women of reproductive age living in poor Pacific Coast departments report an unsatisfied need for modem contraceptive methods, by comparison with about 9 percent in Cali. The persisting gap in health status between the poor and the non-poor reflects, inter alia, deficiencies in access to basic services of adequate quality. C. The Health Care System 1.8 Organization. Colombia's health system comprises three major parts: (a) public health services; (b) social insurance services, provided by the Social Security Institute (ISS) for private sector employees, CAJANAL for public sector employees, and other social security programs for specific groups, e.g., the military, the police, and the oil industry (about 300 funds); and (c) private services. The public sector is the largest health services provider, responsible for an estimated 65 percent of the population. Social security and private providers serve 18 percent and 17 percent of the population, respectively. The current public health structure at the central level includes the Ministry of Health (MOH) and three semi-autonomous institutes: the Colombian Institute of Family Welfare (ICBF), the National Institute for Health, and the National Cancer Institute. A fourth institute, the National Hospital Fund (FNH), set standards for health facilities and managed investments in the public sector until it was replaced at the end of 1992 by the newly created Social Investment Fund (FIS). The FIS will be responsible for cofinancing investment operations in both the health and education sectors. At the department level, the MOH is represented by Departmental Health Services (DSs). At the municipal level, the sector is represented by an administrative structure under the mayor and by health establishments. 1.9 Health care is provided at three levels in the public sector: a) local health posts, centers and hospitals (level one, in terms of complexity); b) departmental hospitals (level two); and c) specialized and university hospitals (level three). Infrastructure in the public sector includes over 4,000 health posts and centers, 500 local hospitals, 124 level two, and 27 level three hospitals. Level 3/ Colombia, Demographic and Health Survey, for 1990; Profamilia and Institute for Resource Development, Bogotd, 1991. -4- two hospitals provide services in the basic specialties (including internal medicine, surgery, obstetrics and gynecology, and pediatrics), generally not available at the first level. The tertiary level hospitals are equipped with advanced diagnostic and treatment technologies, and staffed with specialists. The ISS has several health centers and 40 hospitals. Health personnel in public and private sector employment included some 30,000 physicians in 1990, yielding a ratio of 9.4 to 10,000 population, but only 2.5 per 10,000 in the public health system. Some 50,000 nurses and nurse assistants (of which 8,000 are graduates), and about 8,000 health promoters are employed at the local level in the public health system. The ratios per 10,000 population in the public health service are 1.3 for nurses, 12 for nurse assistants and 3.8 for promoters. While overall numbers are acceptable, the distribution is skewed in favor of higher level institutions; nurse assistants and promoters are often the only staff available at health posts and smaller rural centers. NGOs, both national and international, play an important supporting role in the provision of public services at the primary care level. 1.10 Management Responsibilities and Decentralization. The MOH, together with the National Planning Department (DNP), is responsible for guiding health sector policy. The MOH is also responsible for providing technical support and supervision to lower administrative levels of the system and to health institutions, and for monitoring and evaluating performance of the system. Colombia is in the process of decentralizing management and fiscal responsibilities for public sector programs to the country's 33 departments and 1,029 municipalities. With the decentralization, each municipality will become responsible for the provision of primary health care. The departments will become responsible for the provision of secondary and tertiary services. While the key functions of the MOH, for policy and implementation support, would require considerable strengthening, they would not change. In contrast, the increase in DSs responsibilities for planning and managing higher level services and for supporting municipal planning and management, and in municipal responsibilities for planning, operating, and financing primary services, will be substantial (Annex 2). 1.11 To streamline the MOH structure, and support directly the decentralization process, the Ministry was reorganized in December 1992. Key features of the revised structure, which would be functionally replicated in the DSs, are the consolidation of policy and planning functions under the Office of the Vice-Minister and of administrative functions under the Office of the Secretary General. Technical and support functions are allocated among three Directorates General for: Decentralization and Institutional Development; Disease Prevention and Control; and Development of Health Services. The Directorate General for Decentralization and Institutional Development will play a critical role in preparing prototype programs for providing technical assistance and training to departments and municipalities to enable them to undertake decentralized functions. The MOH restructuring also includes provisions for reducing staff to improve administrative efficiency and enhance remuneration to a smaller group of well-qualified central staff. 1.12 The revised MOHIDS structure is designed to give priority to improving basic health services at the municipal level and to broadening the concept of health management to include active community participation. These priorities are reflected in recent legislation for the health sector and for decentralization: Law 12 of 1986 provided for a transfer of increasing shares of the national sales tax to local governments for investment activities; Decree 77, of 1987, transferred to the municipalities responsibility for selected public services, including the construction and maintenance of health posts, health centers and local hospitals; Law 10 of 1990, a health sector reform law, complemented Law 12 by providing for the transfer of central budget allocations to the local level, and created new opportunities for local resource mobilization (principally a health lottery); and the Constitution of 1991 legitimized the decentralization process and provided guidelines for the -5- decentralization of responsibilities and transfers of resources to subnational levels. A draft law, detailing criteria for the transfer of funds as well as responsibilities by administrative level is under preparation and is expected to be approved in the course of 1993. 1.13 Currently, the central Government still controls budgeting and revenue allocation in the majority of departments and in over 90 percent of municipalities. Budget allocations flow through the DS to regional and local hospitals. Local hospitals pass funds for recurrent and investment expenditures to health centers and posts. Under the decentralization guidelines, those departments and municipalities that fulfill standard requirements for fiscal autonomy will receive national transfers directly. Under the draft law (para. 1.12), funds would be transferred based on formula designed to reflect each locality's current and potential demand for services, cost-efficiency of service delivery, and degree of fiscal effort and administrative efficiency. From the departmental level, transfers will be directed to municipal health funds under the control of local health boards. The health boards, appointed by mayors, will consist of representatives from the municipal administration and from community groups and health institutions. 1.14 Law 10 incorporates a five-year timetable (1991-95) for achieving departmental and municipal decentralization in the health sector, which appears to be overly optimistic in view of progress to date. Municipalities are to be decentralized sequentially in accordance with indicators of social, demographic and economic development. The largest and most developed municipalities, were to be decentralized in 1991. The least developed, mainly rural, municipalities, would be expected to decentralize by 1995, with departmental DSs assuming control of municipalities unable to meet requirements for decentralization by that time. Based on Law 10, the criteria for certifying municipal health systems center on: (a) the definition of a municipal health plan; (b) the establishment of a health administration authority; (c) the creation of a health fund (to receive national transfers and other revenues for health); (d) the establishment of a municipal service for health workers and affiliation of health workers with benefit funds; (e) the creation of boards and committees to facilitate community participation, including the municipal health boards (para. 1.13) and health committees for each primary care facility; and, (f) the clarification of the juridical nature of health institutions (public or private) operating within the municipality. 1.15 Finance. Colombia's health expenditures declined as a share of GDP from 7.4 percent during 1981-85 to 6.1 in 1990, with public health expenditure representing about 2.4 percent of GDP. However, overall expenditure grew in real terms by about 5 percent annually during 1985- 90. Four primary sources finance health services. Within the total, private expenditure represents the largest source of financing, accounting for some 44 percent. The average household devotes 12 percent of its income directly to health, with two-thirds of the total allocated for drugs. Social security contributions are the second largest source for health financing, equivalent to 20 percent of total. Only 19 percent of the total consists of government revenues used to finance the direct services of MOH providers. Cost-recovery for public services provides 7 percent of funding, and a mix of other sources, including external credit, contributes 10 percent. 1.16 The public health system receives about 60 percent of its funding from national transfers. National financing is augmented by departmental taxes on alcohol and gambling (25 percent), sub-national government expenditures (4 percent), and cost-recovery for services (12 percent) (Annex 3, Chart). Central finance for public health derives from two main sources: a share of current revenues designated for health and education; and a value-added tax, recently renamed the social investment transfer. Additional central revenues are provided on an Ad hgg basis. -6- Departmental and municipal revenues, derived mainly from taxes on liquor and cigarettes and from lottery proceeds, are also allocated in part or whole for health. The central government transfer from current revenues constitutes a small share of revenues for health in the largest cities but nearly all of revenues available in smaller, poorer municipalities. The current revenue transfer represents 12 percent of total current revenues at present and is projected to rise to 19 percent by 1999. Of the total transfer, a minimum of 15 percent would be allocated for recurrent expenditures on health, with priority extended to primary health care. The Constitution mandates that the social investment transfer constitute 14 percent of current revenues in 1993, increasing annually to 22 percent by 2002. The municipalities will be required to spend at least 70 percent of this transfer, primarily intended for investment, on health, education, water supply or subsidies provided for other services to poor households. 1.17 In 1990, total public expenditure on health (including expenditure on the public system, ICBF, Social Security and CAJANAL but excluding departmental and municipal expenditures) represented nearly 22 percent of the central government budget. Of the total, an estimated 73 percent was allocated for recurrent and 27 percent for capital expenditures (Annex 3, Table). An estimated 40 percent of recurrent expenditure is allocated for the public health system (responsible for 65 percent of the population) and 60 percent for social security systems (catering for some 17 percent of the population). This split highlights a high degree of inequity in expenditure per capita for the relevant population groups and inadequate funding for the public system: social security expenditure per capita represented 5.8 times the expenditure per capita in the public health system in 1990, or about US$69 versus US$12; and per capita expenditure for private services runs about 10 percent below that for ISS services, indicating inefficiencies in the ISS system. Increases in civil service salaries, accounting for some 70 percent of all central government expenditures on health, and in overall costs at the secondary and tertiary levels of the public health and social security systems, have constrained resources available for basic health services. D. Main Issues in Primary Health Care 1.18 Public policy emphasizes a pivotal role for primary health care not yet reflected in services provided. Some 65 percent of total population represents the target group for public health services. However, effective coverage is limited to about 35 percent of the population, and quality and efficiency of services are poor. An estimated 30 percent of the population lacks access to health services. In order to provide appropriate health care for the full target group, the public health system requires a major overhaul, with primary health care forming the centerpiece of the effort. The particular issues facing primary health care in the public sector center on: a) Institutional Constraints. Weaknesses in municipal health information, and in related administrative capacity for service planning and management. b) Service Weaknesses. Poor quality and efficiency attributable largely to inadequate definition and provision of a standard set of services and supporting inputs; inefficiencies and inequities in coverage, reflected in imbalances in provision of infrastructure; and staff weaknesses. -7- c) Policy Management Shortfalls. Incomplete development of key policies and policy support measures in the areas of service pricing and cost recovery, standards enforcement, and employment systems. Institutional Constraints 1.19 Information. The MOH has the mandate to manage a national health information system, but has not succeeded in introducing a coherent system to support planning, monitoring and evaluation of services. As a result, the quality of demographic, epidemiologic and health service data varies widely across departments. Advanced metropolitan areas, e.g., Cali and Manizales, employ comprehensive information systems; and selected DSs have demonstrated success in collecting and analyzing municipal information. However, most departments have limited management information capacity and poor quality data (e.g., AtlAntico and Santander, where mortality statistics are incomplete and facility utilization and referral data are not systematically maintained). Planning, still carried out primarily at by the departmental DSs, is based largely on incremental adjustments to the prior year's program. 1.20 Under the decentralization process, the municipalities, with support from the DSs, will take on responsibility for planning and monitoring first level health services. The DSs would set guidelines for this planning and prepare related departmental plans. The MOH will therefore need to develop a municipal-based health information system centering on key indicators of demographic and health status, and of health system performance. Facilities status, location and use data, together with personnel and service costs data, will be priorities for planning, and the MOH has already begun work on design of a health services mapping system to collect this information. Linkages with information required for managing the secondary and tertiary levels of the health system would also need to be included. Building on the improved information base, the regular monitoring and evaluation of the outputs and outcomes of primary health care would follow. A premium should be given to simplicity in design of the information and monitoring systems. 1.21 Management Capacity. The weaknesses in health information form part of a broader pattern of constraints to effective planning and implementation of primary health care. These problems will likely be magnified in the early stages of the decentralization process since the municipalities largely lack experience with systematic planning, programming and monitoring of services. The recent reorganization of the MOH, particularly the creation of the Directorate for Decentralization and Institutional Development and of its counterparts at the DS level, is designed to facilitate the development of municipal capacity to plan and manage primary health care and the ability of the DSs to support this process. The MOH will thus need to develop mechanisms for strengthening DS guidance and for providing municipal training and technical support. Local training institutions, universities, foundations and non-governmental organizations (NGOs), with experience in municipal management and primary health care, could usefully participate in this effort. 1.22 The need to hold local authorities (mayors and health authorities) accountable for effective service provision requires special emphasis in the design and provision of municipal training and support. Municipal health boards and committees should play an important role in this process. Active community participation in the health sector has been limited to date. Mayors and other political forces may tend to discount community input. Mechanisms for encouraging community participation, including use of beneficiary assessments to determine health priorities, should reduce the limitation. -8- Services Weaknesses Quality, EMciency and Coverage 1.23 Systematic evaluation of the quality of primary health services is not available. With the exception of more advanced departments, however, poor average quality of primary health care is indicated. Services provided directly through the public health system vary among health institutions and municipalities making it difficult for the average user to rely on primary services as the entry point into the system. The system's development has emphasized curative over preventive care, and provision of higher level institutions over primary care institutions. Primary services are mainly institution-based and out-reach to the community has been limited largely to immunization programs, managed centrally. As a result of quality problems, primary care facilities are often by-passed for the higher-cost secondary and tertiary level facilities. In 1990, primary level hospitals reported an average occupancy rate of only 35 percent, compared to 59 percent and 77 percent at the secondary and tertiary health levels, respectively. / A lack of effective referral among the primary, secondary and tertiary levels of care, also contributes. 1.24 Service Content. The effectiveness of primary health care in the public sector is reduced by the generally limited and incomplete set of services provided. A standard package of primary care services, including health education and promotion, as well as curative and emergency services, has not been provided. The definition and systematic provision of a basic package of services, based on common municipal needs for primary services, is critical for the improvement of health care quality as well as the efficiency of resource use. 1.25 Service Support. The ability to respond to the population's needs and to emergencies is further limited by inadequate provision of supporting inputs. Most facilities cannot adhere to standard diagnostic and treatment protocols due to shortages in supplies and equipment. Notably, equipment to manage neonatal problems is often lacking; and staff, supplies and equipment required to care for trauma patients or resolve minor surgery cases may not be available. 1.26 Drugs are also in short supply. Each health establishment is responsible for providing pharmaceuticals and supplies. The financial situation of first level establishments is so precarious that physicians reuse sutures and other disposables, and patients must often provide drugs and supplies before treatment can be initiated. An essential drugs program (EDP) has recently been initiated by the MOH and 1,500 community pharmacies established. A list of 420 basic drugs, about 10 percent of those currently available in the country, has been prepared; and 60 of these are assigned to the first level of the system. The drugs, which are centrally financed, are purchased in bulk by the DSs and community health committees manage the pharmacies. Continued central government support for the EPD and its expansion is programmed. However, first level hospitals, where needs extend beyond the 60 assigned drugs, would remain vulnerable under the EDP. Most do not participate in cooperative purchasing arrangements and continue to buy at high cost from private pharmacies. The provision of basic equipment and supplies for first level institutions, extension of the EDP, and establishment of cooperative buying arrangements for drugs for first level hospitals are required to raise service quality. 4/ MOH, Finandal Analysis of the Health Sector, Bogotd, 1991. -9- 1.27 Facilities. The shortfall in coverage of the population requiring access to primary health care in the public sector results, in part, from excessive emphasis on provision and staffing of hospitals. Hospital construction absorbed the highest share of investment resources over the past decade, and secondary and tertiary level hospitals, nearly 60 percent of routine expenditures, compared with about 20 percent for primary care. With the advent of decentralized management, an increasing desire to upgrade first level hospitals and to provide municipal emergency and 24-hour care services has emerged. To extend coverage, some municipalities will require additional facilities and most, rehabilitated or expanded facilities. To avoid over-construction, however, sound facilities mapping and planning criteria should guide efforts to meet needs; and cooperative use arrangements between neighboring municipalities and among public and private sector providers, should be pursued. Staff 1.28 Weaknesses among technical staff in the public system contribute to the problems of low productivity and coverage in primary health care. Professional training institutions (for medicine and nursing) place emphasis on curative care at the higher levels. Students' exposure to practices of prevention, promotion, and community involvement, required at the first level of services, is limited. At sub-professional levels, courses vary in orientation and quality and promoters receive only in- service training, primarily limited to induction courses. Regular in-service training for all staff is lacking and technical support and supervision on-the-job are minimal. Supervision tends to be equated with administrative control rather than with improved performance and problem resolution. To prepare new health professionals and subprofessionals for providing effective primary care, the MOH will need to take the lead in setting appropriate standards for pre-service training programs. In accordance with decentralized responsibilities, the DSs will need to be strengthened to guide continuous in-service upgrading for municipal practitioners. DS supervision of municipal health care providers will also need to be strengthened and redefined as a support mechanism. 1.29 Service weaknesses also derive from high levels of turnover of professional staff at the municipal level, where employment conditions have been least attractive historically. Moreover, 40 to 50 percent of professionals staffing primary health facilities are new graduates with limited experience, pasantes, completing a mandatory year of social service required for licensing. The pasante system, in Colombia and elsewhere in Latin America, is associated with low efficiency, high levels of absenteeism, and inadequate supervision of lower-level health workers. Within overall plans to develop and supervise primary health care personnel on-the-job, strengthened incentives and career support at the primary health care level should receive particular emphasis. Policy Management Shortfalls 1.30 The lack of a strong MOH policy capacity explains, in part, the absence of a long- term policy framework for managing reform in the health sector. The relocation of the policy management function in the MOH, within the Office of the Vice-minister, is intended to elevate the status of the policy process within the Ministry and improve policy development. Effecting improvements in the productivity and coverage of primary health services will necessitate improvements in resource allocation and use within the public system. Key policy support measures are currently required to ensure efficient pricing of public services, to enhance cost recovery, and to strengthen quality control and employment systems. - 10 - 1.31 Service Pricing and Cost Recovery. Service pricing standards have not been established for primary care and complete cost data are not readily available in the public sector. The lack of standard pricing reduces potential for improving efficiency as well as for cost-recovery. Charges to patients are determined at the departmental level, within MOH guidelines. Fees are pro- rated by income level, but not collected uniformly. Municipal health centers charged US$0.30 for a consultation in 1992, on average. The total average revenues generated through fees in the 1980's fell 9 percent, in direct proportion to a 9 percent increase in central government transfers. Nonetheless, available data suggest that cost recovery at the municipal level varies widely (from 0 to 50 percent of local hospital costs) and more than can be explained by differences in average income. Variations in billing, means testing, and use of facilities, as well as political considerations explain the differences. Strengthened standards for pricing and cost recovery, which include differentials to discourage use of higher level services for standard primary health care consultations or treatments, are required. 1.32 Quality Control. At present, the quality control function in the public health system, assigned to the MOH, is weak. Licenses are granted mainly to private sector providers requesting accreditation, as a formality. To enhance the effectiveness of primary health care in the public system and to foster initial integration and competition between public and private sector providers, standards setting and enforcement mechanisms require development. 1.33 Employment Systems. The majority of current tertiary and secondary-level employees were hired through the national and departmental civil service systems. At the primary level, personnel include national and departmental civil servants and municipal employees. Under the ongoing decentralization, all public sector employees at the first level of care will become municipal employees. Municipalities will have to guarantee maintenance of current benefits for those already employed. The average effect of this change will be to increase the cost per employee. It should also improve incentives for retaining staff, including pasantes, for primary health care (para. 1.29). Over the medium-term, it will be necessary to introduce a unified personnel policy in the public sector, which will provide municipal health employees benefits comparable to those at other administrative levels. The policy would need to consider mechanisms for supporting poorer municipalities to establish employment systems, in the event that costs exceed financing capacity. E. Government Strategy 1.34 The Government's overall strategy in the social sectors is to improve the efficiency of resource use while increasing expenditure on priority services to expand coverage and improve quality. In addition, the Government aims to focus expenditures on social services with the highest social rate of return and services which benefit most those who can least afford to pay. In the health sector, evidence worldwide suggests that effective primary health care provides the most cost-effective way to contribute to an improved standard of living. The Government is thus giving priority to the expansion and improvement of primary health care and to the rationalization of services provided at higher levels. Improved competitiveness of public services in terms of quality and costs is also an aim. The Government intends to achieve improvements in health services through the process of decentralization, and the concomitant strengthening of municipal capacity to plan and provide primary health care. - 11 - 1.35 The Government has not yet taken decisions on all key economic and financing policy measures required to support its health sector strategy. It has, however, commissioned a study I/ to assess alternatives for the future of the social security system, including, a single insurance fund linked with associations of personal service providers and hospitals; a system of numerous insurers, contracted services, and a government fund to subsidize low-income users; and a public-private option which would subsidize services for the poor through the existing public health network and utilize a prepaid, competitive system for the non-poor. Each of the proposals emphasizes the need for equity and improved efficiency. Timing on changes in the social security system is uncertain, owing both to political and cost constraints; once decisions are taken, implementation would be expected to be gradual, for the same reasons. Plans are underway to support pilots for prepaid insurance programs for those not participating in the present ISS system. The Government also aims to introduce systematic pricing of health care services and recognizes the needs for strengthened cost recovery practices, improved health sector regulation and public service reform. F. Bank Strategy and Participation 1.36 Strategy. The Bank's strategy aims to assist Colombia to consolidate gains of recent structural reforms and to redress persisting constraints to development, with emphasis on the private sector. Chief among these are an inefficient regulatory environment; human resources gaps; poverty; infrastructure bottlenecks; and weak public sector agencies and implementation capacities. In the social sectors, priority is given to targeting resources to reduce poverty through the strengthening of basic services, in particular in health, education, water supply and sanitation. The Bank supports the Government's development strategy for the social sectors, and seeks to ensure that the strengthening of basic social services is developed within a viable macroeconomic and sustainable fiscal framework. It aims also to focus on improving management and implementation capabilities in the public sector. 1.37 The Bank completed an assessment of the Government's poverty alleviation program in late 1988 and is embarking on an in-depth review of poverty issues during 1992. For the health sector, in particular, an analysis of the impact of decentralization is nearing completion and results have been incorporated in design of the proposed project.6/ At present, the Bank is supporting the development of primary education to achieve coverage and quality improvements, and a child care and nutrition program in low-income urban areas. An initial basic health project, which faced design and implementation difficulties, is nearing completion; and the Bank is supporting a shelter policy and program which would cater directly for the needs of the poor. In 1993, the Bank plans to extend a loan to assist with the strengthening and expansion of basic education through the secondary cycle. The proposed project would support the effort to strengthen basic social services. It would represent the first phase of a longer term program to develop municipal management and service delivery capabilities for first level health care. It is designed within the framework of the ongoing decentralization. I/ Carlos Molina and Juan Pablo Trujillo, La Reforma del Sistema de Seguros de Salud: Una Comparaci6n de Tres Propuestas, FEDESARROLLO, Bogotd, April 1992. Colombia - Towards Increased Efficiency and Equity in the Health Sector - Can Decentralization Help?, draft, IBRD, March 1993. - 12 - 1.38 The proposed project would be complemented by an operation to be assisted by the Inter-American Development Bank (IDB), and supported by a loan of US$40 million. That project would assist in the strengthening of institutional capabilities at the second and third levels of the public health system. Key elements of the proposed operation include improved information and administrative systems for higher level hospitals and an assessment of requirements for infrastructure consolidation and upgrading at those levels in the future, and including facilities mapping for the primary level. The interface between the two operations, chiefly in the need for effective referral systems, for facilities assessment and mapping, and an integrated information system, have been agreed in principle. Moreover, the IDB would begin its project activities in departments and selected subdistricts of BogotA to be supported under the Bank-assisted operation. 1.39 Participation. The Bank has supported three health, or health-related operations in Colombia since the late 1970s (Annex 4). Included are the Integrated Nutrition Project (Loan 1487- CO of 1977); the Health Services Integration Project (Loan 2611-CO of 1986); and the Community Child Care and Nutrition Project (Loan 3201-CO of 1990). The Integrated Nutrition Project supported Government's integrated rural development programs. The main components included the provision of rural health, water supply and sanitation facilities; a food coupon program; and an evaluation system. While most physical targets were met, the direct benefits of the food coupon program (calories delivered) were low. Implementation experience underscores the importance of effective monitoring and evaluation for guiding and measuring project outcomes. The Health Services Integration Project, scheduled to be closed in mid-1993, aimed to rationalize and consolidate public health services at the local level, including health, nutrition, water supply and sanitation. This project suffered from limited implementation progress owing to fragmentation of components and management responsibilities among several agencies, and more generally to weaknesses in institutional and counterpart financing support. The project was restructured during 1990; US$19 million, about half of the loan, were cancelled and the project reoriented to provide support to the Government's recent efforts to reorient public health services. Outcomes of this project, which is the operation most closely linked to the proposed project, emphasize the advantages of maintaining simplicity in project design and management, in particular where implementation capabilities are weak. The Child Care and Nutrition Project supports a home-based day-care and feeding program for poor children aged two to six. The main objectives of the Bank's support are to maintain adequate quality and efficiency as the program expands. Implementation is proceeding on schedule. Efforts to develop an effective program evaluation system should help to avert the problems encountered under the earlier nutrition project. The Municipal Development Project (Loan 3336-CO of 1991) is also of relevance for the proposed project. It aims to support municipal development and local resource mobilization and provides a line of credit for municipal infrastructure development, including primary health care facilities. It also includes a large training component for municipal administrators in service management and planning. 1.40 Results of a recent review of 37 Bank-assisted health projects are also useful.2/ They confirm the difficulties of complex design in the context of institutional and implementation limitations and political turnover. Of particular relevance for the proposed project is a characteristic of the more successful of these projects: flexibility in project design, which allowed for adjustments in the course of implementation. 7/ Chile, Health Sector Reform Project, Staff Appraisal Report, No. 10987, October 23, 1992. - 13 - 1.41 The Colombian experience to date in the health sector conforms with the broader outcomes and lessons of experience of the Bank's larger portfolio in the sector. The proposed operation therefore places a premium on simplicity and flexibility in design. Monitoring and evaluation would form an emphasis of the operation, to keep major objectives of providing effective municipal health care on track and to allow for adjustments as warranted. The project further would be limited in geographic scope, representing a first phase of a broader national effort; and it would focus on developing management and implementation capacities. 1.42 Rationale for Bank Involvement. The proposed project would underpin a priority program of the Government and continue the Bank's strategy of supporting the development of improved social services to reduce poverty and to support human resources development. The main value-added of the project would be to establish, for later replication, an effective municipal model for delivery of improved basic health services, with a focus on the poor. The main value-added by the Bank's participation would be its emphasis on building management and implementation capacities, strengthening the framework for policy development for the health sector, and evaluating project outcomes. II. THE PROJECT A. Introduction 2.1 The project was prepared by the MOH during 1991 and 1992, based on inputs from local consultants financed under the ongoing project assisted by Loan 2611-CO. The preparation document was submitted to the Bank in October 1992. The project was preappraised in two stages, during May-June 1992 and during October 1992. Appraisal was carried out during December 1992. Negotiations were held in Washington, D.C. during April 28 - May 11, 1993. The Colombian delegation was headed by Mr. Wolfgang Munar, Vice Minister of Health, and included Ms. Nora Alvarado, Chief, Credit Division, DNP; Mr. Luis Fernando Duque, Director, Project Coordinating Office; and Ms. Martha Laverde, Director, Project Coordinating Unit for the ongoing health project assisted by Loan 2611-CO. 2.2 Objectives and Content. The project would represent the first phase of a 10-12 year program to reorient the public health system. It would strengthen management and provide incentives, in the form of grants, to support municipal provision of a basic package of primary health services targetted with priority to the poor. The objectives of the project are to: (a) enhance municipal capacities, in nine departments, to plan and manage provision of primary health care; (b) improve the quality, efficiency and coverage of primary health services in municipalities in the participating departments; and (c) strengthen the design and execution of key policy measures and evaluation to support development of effective primary health care. The project would consist of two largely sequential components, Institutional Development and Service Development, and a third component for Policy Management and Evaluation, designed to: - 14 - Institutional Development: strengthen municipal capacity to provide effective primary health care services through: (a) introduction of a municipal health management information system to support planning, monitoring, and evaluation of primary health care services; and (b) provision of related training and technical support for municipal administrative authorities, municipal health administrators and community representatives. Service Development: improve the quality, efficiency and coverage of primary health care services through implementation of (a) municipal subprojects centering on (i) introduction of a basic package of primary health care services; (ii) provision of supplies and equipment to support the package; and (iii) rehabilitation, expansion, construction and furnishing of selected primary health care facilities; and (b) provision of training and technical support for municipal health practitioners, as required to deliver the package. Policy Development and Evaluation: support the design and implementation of selected policies, including measures for introducing systematic pricing, cost recovery and quality control for primary health care, and for developing a unified employment system for public health personnel; and undertake an evaluation of project impact. 2.3 The Project Area. The project area includes eight departments (Atlintico, Bolivar, Cauca, Choc6, Cdrdoba, Nariflo, Sucre and Vaupes) and six subdistricts of Bogotd, which encompass 220 municipalities (including the BogotA subdistricts). The total population in the area is 9.8 million. These areas were selected on the basis of interest and institutional potential for participating in the project, as well as overall level of poverty as identified through DANE data and criteria. Six of the departments represent the poorest areas in Colombia, with rates of absolute poverty ranging from 61 to 93 percent. Of the total population in the area, about 6 million are identified as poor, and represent the priority target group for the project interventions. Within the area, 32 percent of the population is rural or indigenous; 68 percent is peri-urban. Annex 5 presents an overview of demographic, poverty, health, and health service and facility data based on a preliminary survey of 20 percent of municipalities in the project area. B. Project Content Institutional Development (Proposed Outlay US$9.4 millions, Including Contingencies) Institutional Development 2.4 Information. To strengthen the planning, monitoring and evaluation of primary health services, the project would include introduction of a municipal health information system, MHIS (Annex 6A and Project File). Three subsystems, based on health institution data, would form the core of the MHIS: (a) resource data - availability, use and status of personnel, equipment, supplies, drugs and facilities; (b) service data - direct services and patient records, outreach services and patient records, and community services, each provided by type of service; and (c) financing data - revenues by source, including fees, and costs by type of service and category of expenditure. The MHIS would be complemented by demographic and socio-economic data, available at the municipal level, including information on environmental health; and a health facilities mapping and planning system, which will be financed with IDB assistance (para. 1.38). - 15 - 2.5 Based on the MHIS, a set of key indicators for monitoring primary health services at the municipal level has been constructed. The indicators (Annex 6A) are designed to track changes in demand and use of resources as well as productivity of primary health care. Monitoring indicators for the service subsystem, for example, would include: average number of prenatal care visits per pregnancy; number of births attended; numbers of children immunized; and morbidity and mortality distribution by cause, sex and age. The MHIS and the monitoring system would provide sufficient information to support municipal planning for health services and to enable the departmental and central levels of the MOH to aggregate and analyze trends in demand and set targets for these services. It would further be linked to the information system to be established for second and third level hospitals, with the assistance of the IDB. As the main planning tool for the municipalities, the design of data collection forms would place a premium on simplicity; computerization would be compatible with the new MHIS but not a requisite for its operation at the municipal level. The project would include technical assistance (36 man-months) for the development, testing and introduction of the MHIS and the monitoring system, and for the printing and distribution of forms for municipal use. Computers, primarily for DS use, would also be provided. During negotiations, an understanding was reached that the MHIS, would be developed and introduced, giving priority to data for municipal planning. The schedule for introduction of the MHIS would be incorporated in the operations manual for the project (para. 2.40). 2.6 Service Planning and Management Support. To improve information use and capacity for planning and implementing primary health care services more generally, the project would provide training and administrative support for municipal health authorities, for administrators of primary health facilities, and for community representatives involved with primary health care (Annex 6B). At the outset of the project (years one and two), orientation to primary health care would be provided, followed by a focus on municipal responsibilities and procedures for providing and financing primary health care services. Subsequent emphasis would be given to the introduction and use of the MHIS for municipal planning, programming and monitoring of services. Continued training and administrative support, geared to particular municipal and community needs identified increasingly by the municipalities, would be provided after the start-up period, as part of a permanent human resources development program for primary care. 2.7 Training and support methodology would emphasize work sessions (to carry out particular tasks) and also include more formal short courses and workshops. Problem solving, in the context of regular responsibilities, would be emphasized, and training and support would be provided as close as possible to the workplace. Task-specific support would be included for municipal staff responsible for service planning and financing, based upon procedural manuals and job descriptions to be prepared in the key functional areas. Planning techniques would incorporate user, and potential user, needs assessments. Expected outputs from the training and support would include the preparation of medium-term municipal health plans and budgets, which would be updated and revised on an annual basis, and introduction of systematic monitoring for primary health services. Municipal health board and health committee members would participate, as well as selected health practitioners, to help ensure support for the process as well as the plans and budgets produced. The training would be complemented by more general programs for municipal administrators, offered by the Government to support the decentralization process. 2.8 The on-the-job support and training activities would be developed by the DSs under guidelines prepared by the MOH. To assist them, training and technical support teams would be assigned to each DS in participating departments. Each team would comprise four consultants with - 16 - expertise in one of the following areas: management information, planning and finance; community participation, communication and health education; content and delivery of primary health care services; and techniques of competency-based training and support. Ten public health training facilities, previously responsible for assistant nurse training, have been permanently assigned to the DSs in the project area, and would be strengthened selectively to work in consortia and with universities and NGOs to develop training and technical support. Guided by the DSs and their consultants, these groups which would serve several departments each, would prepare training and support programs, materials and trainers, and assist with municipal delivery of training and support on a continuous basis. Initial workshops, to orient DS staff and consultants, staff of the departmental training centers and potential departmental contractors, are scheduled to begin in August 1993. (A detailed list and schedule for municipal courses and workshops is included in the Project File). The training and support would be provided for all relevant municipal and health administrators in the project area, and for community representatives on health boards and committees and selected municipal health practitioners (approximately 6,000). The project would finance the DS consultant teams, and the design and delivery of training and support for the municipalities. Consultant services, fellowships and study tours would also be provided for human resources staff of the MOH, the DSs and the departmental training centers. (Technical training and support for health practitioners responsible for delivery of primary health care in the municipalities is described under the Service Development component, below.) Service Development (Proposed Outlay US$66.3 million, Including Contingencies) Quality, Efficiency and Coverage 2.9 Service Content. The project vehicle for improving the overall quality and efficiency, as well as coverage of primary health care, would be the systematic provision of a basic package of primary health services. The package of first level health services would be supported by municipal investment subprojects which would follow satisfactory completion of initial institutional development activities under the project, including preparation of an acceptable investment plan. The investment subprojects, to be co-financed through central grants and municipal funds (para. 2.35), would provide physical inputs to support the basic package, and include equipment, furniture, supplies and the upgrading, expansion and construction of health facilities. 2.10 The service package consists of basic health interventions which address highly prevalent health conditions in Colombia, and for which effective preventive, curative or palliative solutions can be provided. The services are designed to promote and prevent disease through community information and education; and to provide ambulatory and simple in-patient care, including surgical and emergency care (Annex 6C). The package focuses on: (a) Maternal and Infant Care, including prenatal care, safe delivery, postnatal consultation, breast feeding, growth monitoring, immunization and family planning; (b) Child Care, including diagnosis and treatment of infections, visual and hearing screening, growth monitoring, and nutrition and hygiene monitoring; - 17 - (c) Adolescent and Young Adult Care, centering on preventive education on health risk factors (smoking, alcohol, drug abuse, sex education), sexually transmitted diseases and diagnosis and treatment of infections; (d) Adult Care, focussing on prevention, monitoring and treatment of chronic diseases; (e) Older Adult Care, centering on early detection and treatment of chronic diseases. In view of high rates of accidents, political, drug-related and family violence in Colombia, emergency services would form an additional part of the basic package; and health promotion would emphasize the importance of resolving water and sanitation problems to reduce the incidence of communicable diseases. Ongoing programs for endemic disease reduction (e.g., for tuberculosis) should continue to be delivered through the package. Other desirable services, which could be added to the package pending management capacity and availability of resources, include: education for parenthood, early cancer detection, fluoridation of water, environmental and occupational health. 2.11 The organization for the provision of the basic services would vary by demographic status of the municipalities in terms of equipment, facilities and personnel required. Four models for delivery have been identified. All services included in the package would be delivered according to standard protocols. These protocols would include the corresponding instructions for referral. All municipalities should have (or have access to) vehicles and a working communication system to facilitate transport of emergencies, and an outreach service to follow-up clinic defaulters and patients who for different reasons do not seek needed attention. Outreach would be especially important for increasing coverage of maternal and child services, and of the elderly. 2.12 Service Support. To ensure appropriate support for the basic package, complementary inputs would be provided. Based on standard MOH lists (included in the Project File), medical equipment, and supplies for municipal health posts, centers, and hospitals would be provided. Replenishment of supplies and equipment, and maintenance of equipment, would be the responsibility of each facility and the municipality. Investment subprojects would incorporate local budget commitments to cover these needs. The project would provide financing for estimated equipment, furniture and initial supply requirements needed to operate facilities at the municipal level. The subprojects would not finance drugs, which would be provided separately under the EPD (para. 1.26), with early priority extended to the project areas, and through cooperative purchase arrangements for hospitals. 2.13 Facilities. The project will extend coverage of primary health care in the project area giving priority to unserved or underserved segments of the population, identified through the planning process. Improved access will derive from the focus on primary care at the municipal level, on supporting and strengthening community participation in the system and on the provision of outreach as well as institution-based services. Provision of adequate facilities will also contribute. Expansion of infrastructure will be based upon standard facilities planning criteria, including service-population ratios and physical access criteria. To further rationalize provision of facilities, in particular to avoid duplication of first-level hospitals and emergency services, criteria for inter-municipal agreements on provision, financing and use of facilities (including social security facilities) and, on a pilot basis, for service agreements with private sector providers and NGOs would be included in the criteria. Minimum adequate staffing would need to be guaranteed to enable a municipality to have its infrastructure plan approved. - 18 - 2.14 The project would include funding for the rehabilitation, upgrading and expansion of health facilities at the municipal level and for related furniture requirements. Routine maintenance of facilities and acceptable staffing arrangements would be required as complementary municipal inputs. An operations manual for the project, currently being finalized, includes the facilities planning criteria, as well as other subproject design guidelines, criteria and procedures (Annex 8B and Project File). Staff Development 2.15 To further support the delivery of the basic package of services, the project would introduce regular in-service training, and technical support and supervision for municipal health personnel. The program would build on and expand the system introduced during the initial period of project implementation for municipal health planning and management (paras. 2.6-2.8 and Annex 6B): methodologies and resources would be shared. 2.16 In view of the high level of turnover of nurses and physicians, introductory training, including orientation to the principles of primary care, responsibilities for delivery of the basic package, techniques for involving the community, and use of basic information would be provided continuously. Training and follow-up support would focus on strengthening leadership functions and an interdisciplinary approach in the provision of quality care. Key features of post-induction training and support would focus on the following areas: (a) Health Promoters. Health promoters will be an important link with the communities to be served under the project. Training and support would center on outreach to promote and ensure access to the basic package of primary health services; techniques for enhancing community participation in the identification and resolution of health problems; use of print and other materials for transmitting health information in different settings (e.g., clinics, schools, child-care settings); and provision of basic first aide. (b) Nurses and Nurse Assistants. Training and support for nursing staff would incorporate capacity-building in the areas described for promoters, adapted to reflect the higher level of training and responsibility of these staff, including preparation of materials for community promotion and education. It would, in addition, focus on strengthening diagnostic skills, use of standard protocols for treatment, use of drugs and laboratory tests, management of effective referral, and management of health posts and resources, including basic data and records management; and provision of preventive and basic curative care, including prenatal services, basic nutrition, sanitation and hygiene, growth monitoring, vaccinations, vision and auditory screening and first aide, including simple suturing; management of effective referral; and orientation and skills training in trauma management and management of community or municipal hospital pharmacies. (c) Physicians. The focus of training and support for physicians would be on the management and delivery of primary care services, leadership in promotion and community participation efforts, monitoring of epidemiologic patterns and service performance, diagnosis of developmental needs for staff, and participation in the - 19 - assessment of the impact of services and strategies for basic health in the community served. 2.17 Manuals are under preparation on the content and procedures for delivery of the basic health package (on diagnosis and treatment protocols, emergency treatment, referral practices, appropriate use of drugs, procedures for setting up community pharmacies and cooperative purchase arrangements for hospitals; and on outreach, community promotion and education activities). These would form the core materials for training and on-the-job follow-up for municipal health staff. The manuals would be complemented by reference materials provided through the regional training centers. Updated information on departmental experience with community involvement, service designs for improving efficiency and coverage, and working with special ethnic groups and traditional practitioners would be included. Materials for about 10 mass media campaigns for public education on topics related to the promotion of primary health care and community involvement in promotion, prevention and identification of local needs would also be provided. The materials for these campaigns would be prepared by the MOH with municipal participation. 2.18 The development program for health workers would further incorporate improved coordination and support of pasantes. A departmental coordinator, selected from technical staff, and a municipal coordinator, where capacity exists, would be responsible for overseeing the induction process and training and supervision for pasantes. Guidelines and standard performance criteria for monitoring pasantes would be developed in collaboration with regional universities; and incentives for continued service beyond the year required, in the form of rotational assignments, accelerated post- service promotion possibilities in public service, and fellowships for post-graduate studies in public health and family medicine, would be introduced. 2.19 As part of a longer term effort to orient and interest professionals in the principles of primary health care and community involvement, the project would also support the development of revised curricula and operations research programs for universities and professional schools. These programs would be introduced in about four universities in BogotA and Barranquilla. 2.20 The project includes financing for the design, preparation and provision of materials, and delivery of training and support for all municipal health personnel in the project area, numbering nearly 13,000. Included are 3,700 professionals (physicians, nurses, bacteriologists, dentists) of whom 2,000 are working in the subdistricts of BogotA included in the project, and nearly 1,000 are pasantes, serving a years' social service; about 7,000 are assistant nurses and 2,000, promoters. Financing is also included for the mass communication campaigns, the development of standards for coordinating the social service staff, the development and selective introduction of revised curricula and operations research oriented towards primary health care, and fellowships and study tours for selected technical staff at the central, departmental and municipal levels. Policy Development and Evaluation (Proposed Outlay US$4.1 million, Including Contingencies) 2.21 Policy Development. To strengthen the policy development function within the new MOH structure, and to improve resource use and management for the public health system, the project would support an initial set of action-oriented studies. Included would be studies to: (a) establish a system for pricing public health services; (b) standardize cost recovery for primary - 20 - services; (c) develop, improve and unify employment systems and conditions in the public health system; and (d) establish an autonomous quality control and accreditation body for the health sector, initially for primary health facilities. 2.22 The cost recovery study would focus in part on experience with the use of differential fees for primary health services provided at the primary, secondary and tertiary levels of the system, which would be required under guidelines for municipal subprojects under the project (Annex 8B and Project File). The introduction of differential fees would complement and provide useful information for the policy work on cost-recovery for the public health sector. The fees would not be used to increase charges among those least able to pay. The monitoring indicators for the project would incorporate data which would permit an ongoing assessment of results of the application of differential fees and improved referral practices. 2.23 The project would include financing for consultants to carry out this initial set of policy studies under guidance of the MOH. Additional studies, related to preparation of future projects or policy measures in the health sector, could also be incorporated. The terms of reference for the studies identified were developed and reviewed during appraisal and appear in Annex 6D. The preliminary design of the pilot programs for pre-paid insurance has been completed (and appear in the Project File) and the final plans would be reviewed by the Bank. During negotiations, the Government agreed to carry out the four identified project studies in accordance with terms of reference and schedules satisfactory to the Bank, to review results with the Bank, and, for the cost recovery study, that Bank comments be considered and changes introduced in the project operations manual to ensure that provisions for cost recovery are included in each subproject agreement (para. 3.1 a). Prior to completion of the study, existing MOH guidelines on cost recovery would be followed under the subprojects. 2.24 Evaluation. The project would include an impact evaluation, which would build on the monitoring indicators of the MHIS, adding both longitudinal and comparative dimensions. Baseline and annual data would be collected for the impact evaluation. Changes in key monitoring indicators would be assessed annually as part of the evaluation design. Emphasis would be given to changes in the following key indicators of impact: percent of catchment population served at health facilities (primarily to measure coverage); immunization coverage; numbers of women seeking prenatal care during the first trimester of pregnancy (an indicator of success of community education), share of deliveries attended and delivery fatalities; and child mortality due to upper respiratory infections and diarrhea (more general indicators of infant or child mortality would likely not be significant at the municipal level, but would be included for aggregated analysis at the departmental and central levels). The measurement in change of quantitative indicators would be complemented by qualitative information based on structured observations of services by trained personnel and by surveys designed to document user perceptions of the services provided. The evaluation model will also draw on data collected through national surveys conducted periodically by DANE (e.g., a thirteen city households survey) as well as regional health surveys. Additional data sets would be added to these surveys, as necessary, e.g., data drawn from comparable municipalities inside and outside the project area. The project would finance consultant services (36 man-months) to design and carry out the evaluation. During negotiations, the Government agreed that the evaluation of project impact would be carried out in accordance with terms of reference, and incorporating key indicators, satisfactory to the Bank (para. 3.1b). -21- C. Costs and Financing 2.25 Project Costs. The total cost of the project is estimated at US$83.1 million equivalent, net of taxes and duties. Base costs are calculated at US$68 million equivalent, and contingencies at US$15.1 million equivalent. The foreign exchange component would be US$27.1 million, or 33 percent of total project costs. The breakdown of costs by component is shown in Table 4.1, and by type of expenditure in Table 4.2. Detailed cost tables are presented in Annex 7. Table 4.1: COST SUMMARY BY COMPONENT US$ million , Local Foreign Total Institutional Development 5.2 2.5 7.8 Service Development 33.6 21.1 54.7 Policy Development and Evaluation 3.1 0.1 3.1 Project Coordination 2.4 0.1 2.5 Total Baseline Costs 44.4 23.6 68.0 Physical Contingencies 0.4 0.1 0.4 Price Contingencies 11.2 3 14.7 Total Project Costs 5.0 227t 83 (Totals may not add due to rounding) 2.26 Basis of Cost Estimates. Project costs are estimated at October 1992 prices. Civil works estimates are derived from current contracts for similar facilities in the project areas. Costs of equipment, materials and supplies are based on agreed lists of items and on the CIF prices of similar items procured recently by the MOH. Costs of training and consultants reflect local rates. 2.27 Contingency Allovance. Physical contingencies (averaging under 1 percent of base costs) are estimated at 5 percent for training and technical assistance, and are expected to be sufficient in light of the programmatic nature of the project. Price contingencies (averaging 22 percent of base costs) were estimated on the basis of expected annual international price increases of 3.1 percent a year for the life of the project, and local price increases, adjusted for expected changes in the exchange rate, of 24 percent for 1993, 16 percent for 1994, 22 percent for 1995, 20 percent for 1996, 18 percent for 1997, 16 percent for 1998, and 10 percent thereafter. 2.28 Foreign Exchange Costs. Direct and indirect foreign exchange costs are estimated at US$27.1 million equivalent including contingencies. Based on a detailed analysis of similar types of expenditures under the ongoing health project, the foreign exchange component for the major categories was estimated as follows: training 10 percent; civil works 30 percent; equipment 85 percent; materials and supplies 25 percent; and vehicles 100 percent. - 22 - Table 4.2: PROJECT COST SUMMARY BY CATEGORIES (US$ million) % Total % Foreign Base Lg,. E[rg I Tl Exchane Costs A. Technical Assistance 7.5 0.0 7.5 0 11 B. Training 8.0 0.9 8.9 10 13 C. Civil Works 13.2 5.7 18.9 30 28 D. Equipment 2.5 14.1 16.6 85 24 E. Furniture 2.3 1.1 3.4 30 5 F. Materials and Supplies 5.6 1.9 7.5 25 11 G. Studies 2.9 0.0 2.9 0 4 H. Project Coordination 2.4 0.0 2.4 0 4 Total BASELINE COSTS 44.4 23.6 68.0 35 100 Physical Contingencies 0.4 01.1 0.4 25 1 Price Contingencies 12 ..U 147 2A _ Total PROJECT COSTS 56..Q 27.1 i 10 122 (Excluding taxes and duties, which are negligible; totals may not add due to rounding) 2.29 Project Financing. Total project costs are estimated at US$83.1 million. A Bank loan of US$50.0 million would finance the foreign exchange costs and 41 percent of local costs, excluding taxes. The financing plan would be as follows: IBRD US$50.0 million (60 percent of total) Central Government US$8.7 million (11 percent) Municipalities US$24.4 million (29 percent) 2.30 Recurrent Costs. At completion, the project would be expected to generate incremental recurrent costs of about US$9.0 million equivalent (1993 prices), equal to about 4.3 percent of MOH recurrent expenditure on the public health system in 1990. Of the total, approximately US$5.5 million would be attributable to incremental salaries for health personnel and maintenance of new, expanded or - 23 - rehabilitated facilities, and borne by the municipalities. Commitments to this end would be incorporated in municipal subproject agreements. The remaining US$3.5 million would be primarily attributable to continuing requirements for staff development (training and supervisory support), and financed by the MOH and DSs, in line with revised responsibilities. A gradual post-project build-up of municipal financing for training would also be expected. D. Project Management and Implementation 2.31 Project Management Structure. Overall authority for project planning and execution would be vested in the Vice-Minister of Health, reporting to the Minister of Health. The Minister would be supported by a Coordinating Committee, comprising the heads of the MOH's three general directorates (for decentralization, services, and prevention and promotion) and a Project Coordinating Office, and one representative each from the Ministry of Finance and the DNP. The Coordinating Committee would be responsible for providing policy and implementation guidance for the project, with a view to ensuring effective use of project resources and efficient implementation. Day to day project management would be the responsibility of the Project Coordinating Office, composed of a Coordinator and units for administrative and technical coordination and control, which would be financed under the project (US$3.3 million including contingencies, for consultant fees, travel, supplies and vehicles). The Administrative Unit would be staffed by professionals responsible for coordinating disbursements, procurement, and financial management and control under the project. The Technical Unit would be charged with oversight responsibilities for monitoring the content and implementation of project components. The central Project Coordinating Office would report to the Vice-Minister through the directors of the MOH directorates on technical matters and directly on administrative and financing matters. A qualified Project Coordinator and the heads of the Technical and Administrative Units of the Project Coordinating Office have been named by the MOH. A condition of effectiveness would be the appointment of the remaining personnel to the Project Coordinating Office (para 3.2a). At negotiations, an understanding was reached that these would include a minimum of 12 professionals distributed among the technical, administrative/financial management, and legal specialties. At negotiations, the Government agreed that personnel satisfactory to the Bank would be maintained in the three key posts, for Project Coordinator, the Technical Subcoordinator and the Administrative Subcoordinator, throughout project implementation (para. 3.1c). 2.32 At the departmental level, existing staff of the DSs would be named as project coordinators. Included would be a director, a planner, and an administrator. The DS project coordinators would be supported by the team of consultants selected to assist with training and technical support in each department (for Bogotd, the project coordinating unit and the consultants would be assigned at the municipal level) (para 2.8). The departmental units would carry out coordination and oversight for implementation at the municipal level. At the municipal level, the project would be managed through the normal administrative structure for health, under the mayor. 2.33 Project Management Responsibilities. In line with revised institutional responsibilities under the decentralization effort, management and coordination responsibilities for principal project components would be as follow: the MOH/DSs would be responsible for the institutional and policy development components, and for all staff training and support; the municipalities would be responsible for service development subprojects. Project monitoring and evaluation activities would be managed by the central Coordinating Office, with inputs from the lower administrative levels (Annex 8A). - 24 - 2.34 Implementation Phases. The project would be implemented in two stages, on a municipal by municipal basis. The first corresponds with the implementation of the institutional development component, including the initial phase of human resources development (average duration two years). Implementation support would give emphasis to: (a) promoting municipal commitment to participate in the project and clarify requirements for participation; (b) completing agreements between the MOH and the departments stipulating financial and administrative responsibilities under the project, and between the departments and the municipalities interested in participating in the project; (c) strengthening municipal management capacity, in particular to complete and refine assessments of public health requirements and prepare investment plans and subprojects; The second stage of implementation (three years per municipality on average) would coincide with the service development component of the project. During this stage, municipalities would finalize and undertake investment subprojects, while continuing in the staff development program. 2.35 Criteria for Municipal Subprojects. The municipal subprojects would be drawn from municipal health plans for primary services prepared with departmental support in accordance with project guidelines and criteria, as follow (Annex 8B): (a) Guidelines on municipal participation would ensure incorporation of both advanced and less advanced municipalities, in accordance with coverage and quality objectives of the project. Requirements would center on participation in the institutional development activities of the project, preparation of a municipal health plan, and coamitment to co- finance subprojects. The DS project coordinators, in consultation with municipal authorities, would be responsible for determining appropriate levels of support for meeting these requirements. (b) Criteria for subproject approval stipulate four broad sets of standards for subproject approval. Managerial criteria focus on assessing municipal capacity for subproject implementation. Financial criteria incorporate requirements for recurrent financing (e.g., for appropriate staffing and facilities' maintenance) and for cost recovery, once systematic practices are established (para. 2.22). Technical criteria are based on MOH standards for facilities design, and lists for equipment, supplies and furniture, and on standard access and service-to-population ratios. Economic criteria would include assessment of alternative arrangements, as relevant (e.g., inter-institutional or inter- municipal sharing of services versus providing new facilities). (c) Guidelines for subproject financing incorporate cofinancing shares for the municipalities (70 percent of costs of works and 30 percent of costs of goods) under subprojects. Limits for subproject costs by type of municipality have also been set. In accordance with DANE methodology, municipalities are ranked from most (level one) to least (level 5) developed based on revenues, institutional capacities and other indicators. On a population basis, a disproportionally high share of subproject grants would be directed to - 25 - middle-income municipalities with comparatively developed local fiscal and institutional capacity. These municipalities (categories two, three and four) account for about half the poor (about 2.9 million) in the project area, and have reasonable potential for successful implementation of subprojects and limited resources. Subproject limits for grant financing would be US$3,300,000 for the three large metropolitan areas included in the project area (BogotA, Cartagena, Barranquilla); US$420,600 for the 80 municipalities classified at levels 2, 3, and 4; and US$81,000 for each of the category 5 municipalities (the least developed and most sparsely populated). It is expected that about 80 percent of the 220 municipalities in the project area would implement one subproject. (It is not expected that all requirements of participating municipalities would be met under the subprojects). 2.36 Municipal F1nancing Capacity and Demand. Based upon a pre-implementation survey of 20 percent of project municipalities, sufficient revenues would be available to permit all municipalities in the project area to participate in investment subprojects, pending satisfactory adherence to project guidelines and criteria. Central government transfers, by law, would not be less than past central allocations destined for primary health care, and will increase annually (Annex 3, Tables; Tables on resources available to the municipalities in the project area for 1992 are included in the Project File). Further, those municipalities least able to pay should benefit from revised allocation formula to be introduced through the planned law on transfers (para. 1.12). These will incorporate criteria for determining allocations on the basis of target population not yet served, in addition to shares based upon total population and population served, and used in the past to determine the variable share of the transfer. Additional revenues would also be available through the new health lottery; and contributions in kind (land, construction materials, labor) would be acceptable forms of municipal cofinancing. Municipal demand for participation in cofinancing of health investments managed through the FNH has exceeded the central government grant-financing available over the past two years. About 200 municipal projects were approved during 1991 and 1992, compared with several thousand requests. Total financing amounted to about US$35 million, including municipal cofinancing at 25 percent of total. Average project cost was US$175,000. In view of this high demand, it is expected that the incentive planned through the central government's share of cofinancing under this project would also be sufficient to ensure full use of the cofinancing grants for subprojects. 2.37 Subproject Processing. Subprojects would be proposed by the municipalities, based on local health plans approved at the department level, and reviewed at the department level to verify conformity with project criteria and guidelines. The subproject would then be submitted for approval at the municipal level (i.e., through the local health board to the mayor and municipal council). Ex post review and control of approved subprojects would be carried out by the new social sector cofinancing agent, the FIS, to provide assurance that resources are being used as intended. 2.38 Financing Flows and Control. Project funding would be handled in accordance with administrative responsibilities assigned to the MOH and the FIS (Annex SC). Financing for the centrally-financed components of the project (institutional and staff development activities, as well as project monitoring, evaluation and policy studies) would flow from the Ministry of Finance to the MOH, or, for departmental health funds, through the MOH. The Project Coordinating Office would be responsible for monitoring the flow and use of these funds. A condition for disbursement under the institutional development component, for departmental or municipal activities, or MOH activities directly affecting the departments or municipalities, would be the signing of corresponding - 26 - agreements between the MOH and the department, and the department and the municipality (para 3.3). The signing of such agreements, between the MOH and three departments, reflecting the departments' commitment to overall project objectives, would be a condition of loan effectiveness (para. 3.2b). 2.39 For the municipal subprojects, grant funds would flow from the Ministry of Finance through the MOH to the FIS, and from the FIS through fiduciaries, to the municipalities (the law establishing the FIS mandates its use of fiduciaries). Fiduciary agents, private and public, are commonly used in Colombia to administer funds. They are regulated by the Banking Superintendency under legislation and Presidential decrees dating from the 1920's to the present. The Superintendency ensures that fees conform with limits established (for fiduciaries operating non-income earning funds such as those to be managed through the FIS, current fees for service range between 2 and 3 percent of the value of the funds managed), and that fiduciary arrangements maintain transparency for users and the public, generally. (Annex 10 includes a summary of the legislation on fiduciaries). It would select and supervise fiduciaries to be used under the project in accordance with MOH criteria. The FIS would enter into service contracts with the fiduciaries; and the FIS and the departments would enter into subproject agreements with the participating municipalities. The fiduciaries would make payments to contractors and providers of goods and services. The fees charged by the fiduciaries would be paid by the municipalities, through their contribution to subproject financing, which would be deposited in advance in a local FIS account. The FIS would be directly responsible for monitoring the flow of funds and maintaining control. Upon the signing of contracts for goods, copies would be submitted to the relevant fiduciary, which would effect mobilization payments to the contractors equal to 30 percent of the price. Prior to subsequent disbursements, works supervisors, retained by the FIS and reporting to the FIS fiduciaries, would confirm that the contractors had performed adequately. Procurement of equipment and supplies would be managed similarly when carried out at the municipal level, with additional support for procurement provided through the MOH-Project Coordinating Office to the municipalities. A single system for accounting and control of project funds would be adopted by the MOH and the FIS for purposes of project management. Conditions for loan disbursement under municipal subprojects would be the operationalization of the FIS, including appointment of a Director General and a Board of Directors, issuance of by-laws, and signing of a contract between the MOH and the FIS; and the signing of subproject agreements among the municipality, the FIS, and one or more fiduciaries (para. 3.3). 2.40 Implementation Schedule, Monitoring, and Review. The project would be implemented over six years, with start-up scheduled for late-1993. Project promotion and orientation, training of MOH stuff and general project design activities would be excluded from this requirement. The Government has provided a detailed work program for the first year of implementation, including terms of reference for selecting five municipal investment projects which meet project standards, to pilot project processing procedures and criteria. The work program is satisfactory to the Bank. For project implementation, the Project Coordinating Office has consolidated guidelines, criteria, and procedures for project management and implementation in a project operations manual which was reviewed with the Bank in March 1993, as a condition for negotiations. Procedures for financial management and control would be added to the manual, together with procurement procedures and prototype bid documents. These items are currently being developed by the MOH using consultant services. A condition for effectiveness would be submission, for Bank review, of the final project operations manual, including prototype bid documents and procurement procedures, and a detailed plan and system - 27 - for financial reporting, accounting and auditing for the project, acceptable to the Bank (para. 3.2b). 2.41 The project would incorporate annual progress reviews, including an in-depth review at mid-implementation, as the principal monitoring tool. These will be conducted jointly by the Government and the Bank. The programmatic approach to investments under the project provides a flexible mechanism for periodic adjustments to the pace or scope of the program, as may be required. Decisions on annual project investment levels, project budgets and content would be based on: (i) availability of resources; progress achieved towards implementing investments agreed upon for the previous year; and advances made toward achieving institutional objectives. The execution of the municipal subprojects - including the implementation of cost-sharing arrangements, and effectiveness of the implementation process - would form a particular focus of the annual reviews. This would enable adjustments, as needed, to adapt the cofinancing mechanism to any changes in central government's revenue-transfer formula and to judge the adequacy of the grant mechanism as an incentive for municipal investment. The policy component would also be assessed annually, as a mechanism to promote informed dialogue on the health sector. At mid-implementation, the annual review would also give emphasis to project monitoring, initial evaluation results and replicability of the primary health care model supported through the project. During negotiations, the Government agreed to carry out jointly with the IBRD: an annual review of the project by Septembee 30, and to complete, for purposes of that review, the proposed budget and implementation plan the following calendar year; and a mid-implementation review in 1997 to assess overall progress towards project objectives, and incorporating key indicators of project impact (para. 3.1d). (Key indicators for measuring impact are provided in Annex 6A). The annual reviews would serve as the Bank's main vehicle for project supervision. They would be supplemented by a project launch workshop and intermediate supervision missions with a particular focus (e.g., on a component, on physical implementation, etc.). Annex SD provides a schedule and projected requirements for supervision. E. Procurement 2.42 Customary provisions taking into account discrepancies between local legislation and the Bank's guidelines for ICB and LCB have been incorporated in the Loan Agreement. Under the ongoing health project (assisted by Loan 2611-CO), bid documents for central agency procurement of goods through ICB and LCB were developed in consultation with the Bank to incorporate Bank guidelines. These documents would continue to be used under the proposed project. Standard bid documents for municipal works, and for procurement of goods at the municipal level, are being prepared in accordance with Bank guidelines as part of the operations manual for the project (para. 2.40). Procurement expertise, developed in the now defunct FNH during implementation of the current project, would be retained through transfer of ex-FNH staff to the MOH and the FIS. In view of the decentralized implementation structure for the project, however, it is planned that procurement consultants would also be retained by the MOH-Project Coordinating Office, primarily to assist the municipalities. Table 4.3 summarizes procurement arrangements for the Bank loan. 2.43 Civil Works. As a result of the decentralized nature of the project, procurement of civil works, which will be scattered geographically and in time, and comprise mainly rehabilitation of small buildings, will be carried out under LCB procedures at the municipal level, using standard bid documents and procedures acceptable to the Bank. The maximum value of works to be carried out under a single contract, would be US$200,000 equivalent. Works valued at US$50,000 or less, subject to an aggregate - 28 - limit of US$10 million, could be carried out using local shopping procedures based on a minimum of three quotations. 2.44 Equipment and Furniture. Computers (total estimated value US$2.7 million) included in the project would be procured centrally by the MOH using ICB procedures. Audio-visual equipment (total estimated value US$1.4 million) would be procured by the MOH in packages valued at US$250,000 or more using ICB procedures; packages of audio-visual equipment valued at less than US$250,000 would be procured using ICB procedures, subject to an aggregate limit of US$600,000; packages of audio-visual equipment valued at US$25,000 or less could be purchased through local shopping, subject to an aggregate limit of US$100,000. Vehicles (estimated value US$0.1 million) would be procured centrally by the MOH using LCB procedures. 2.45 It is proposed that medical equipment and supplies be procured through two sets of arrangements, to be confirmed at negotiations. The first would involve direct contracting with UNICEF to provide standard packages of equipment and supplies through its UNIPAC pre-packaging system for items subject to bulk purchase, which need to be pre-packaged for delivery to the end user. This procurement would be based upon aggregated municipal orders to be placed annually (total estimated value US$12.2 million). Miscellaneous items available locally, and estimated to cost less than US$25,000 per contract, would be procured by the municipalities using local shopping procedures, subject to an aggregate limit of US$8.1 million. Guidelines and limits by municipality for this procurement would be determined at negotiations and incorporated in the operations manual. All furniture (maximum expected contract value US$25,000) would be procured by the municipalities using local shopping procedures. 2.46 Training Materials. Paper and printing for training materials (estimated value US$3.0 million) would be packaged at the departmental level and by the MOH to the extent practicable. The maximum estimated value per package would be US$250,000. Packages valued at US$250,000 or less would be procured using LCB procedures. Miscellaneous packages, not exceeding US$25,000 each, could be procured using local shipping procedures subject to an aggregate limit of US$1.0 million. 2.47 Technical assistance, training services and studies required for the project would be hired following the Bank's Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency dated August 1981. 2.48 Prior Bank review would be required before bids are invited and before a final decision on contract award is made for the following procurement actions by the Borrower: (a) for the first LCB contracts for goods and works irrespective of value; (b) for all contracts for goods and works valued at US$100,000 equivalent or more; (c) for all contracts awarded using ICB procedures; and (d) for all annual contracts with UNICEF. Other contracts and bid evaluations would be subject to random e review by Bank staff. The proposed procurement procedures are expected to provide a prior review coverage of about 50 percent in value of Bank-financed contracts for goods and works. Although this coverage appears to be low, it is considered acceptable given the decentralized nature of the project and the need for extensive use of shopping procedures under small municipal subprojects. Contracts under municipal subprojects which require prior review by the Bank would be submitted at the evaluation stage by the municipality to the FIS, and from FIS to the MOH-Project Coordinating Office for transmittal to the Bank. Other contracts requiring prior Bank review would also be submitted through the central Coordinating Office. - 29 - Table!4: PROCUREMENT METHODS (US$ million) Procurement Methods Total Project Element LCB QJhff C= Civil Works 12.8 10.0 [.1 22.8 (3.8) (3.0) (6.8) Computers, and Audio Visual 3.4 0.6 0.1 [.i 4.1 Equipment (3.2) (0.5) (0.0) (3.7) Medical Equipment (including - - 20.3 [ai 20.3 supplies) - (14.2) (14.2) Furniture - 4.0 1w1 4.0 - (2.8) (2.8) Technical Assistance - - 21.8 [i 21.8 and Training :/ - - (14.5) (14.5) Training Materials - 2.0 1.0 [a] 3.0 - (1.4) (0.7) (2.1) Studies - 3.8 [bi 3.8 - (3.8) (3.8) Project Administration 0.1 **/ 3.2 3.3 - 0.1 (2.0) (2.1) TOTAL 3.4 15.5 64.2 83.1 (3.2) (5.8) (41.0) (50.0) Nt.ea: Figures in parenthesis are the respective amounts to be financed by the Bank loan. * Including training materials, provided under training service contracts ** For vehicles. [a] Local shopping, based on a minimum of three price quotations, and, for a share of medical equipment and supplies, through direct contracting with UNICEF. [b] These services to be procured using Bank guidelines on use of consultants. - 30 - F. Disbursements, Accounts, and Audits 2.49 Disbursements. Disbursement of the Bank loan would be at 100 percent of the FIS share for municipal subprojects and 100 percent for medical equipment and supplies procured through UNICEF; 100 percent of foreign and 85 percent of local expenditures for computers and audiovisual equipment; 65 percent for technical assistance and training (100 percent in the case of eligible expenditures under pilot subprojects); 100 percent, for studies and evaluation; and 65 percent for project coordination. 2.50 Withdrawal applications for goods with a contract value of US$100,000 or more and for works valued at US$100,000 or more, would be supported by full documentation. Disbursements for contracts of less than US$100,000 and disbursements against activities not undertaken by contract will be made on the basis of Statements of Expenditure (SOEs), for which supporting documents would be maintained by project authorities and the municipalities, and would be made available for Bank staff review and the auditors. 2.51 Disbursements are expected to be completed by June 2001, about 7-1/2 years after loan effectiveness (Annex 9), in line with the disbursement profile for Colombia. The project completion date would be December 31, 2000, and the project closing date would be June 30, 2001. A special account would be opened in the Banco de la Repiiblica with an initial deposit of US$3 million, corresponding to about four months of project expenditures. The project includes provision for retroactive loan financing for expenditures incurred after December 15, 1992, for start-up activities under the institutional development and policy development and evaluation components, to a limit of US$2.0 million. Disbursement from the Bank's loan would be made retroactively for municipal subprojects, based upon advances made by the FIS. Disbursements for contracts for other items would be made through direct payments, or through the Special Account. 2.52 Accounts and Audits. The MOH, the FIS and the respective municipalities would keep separate accounts for project expenditures in accordance with internationally accepted accounting procedures. Audits for ongoing health and education projects have suffered delay due to scheduling difficulties of the National Controller as well as difficulties encountered in auditing the accounts attributable to inadequate systematization. To overcome these difficulties under the proposed project, independent auditors would be financed under the project to carry out the audit function and a system of accounts is being developed by consultants to the MOH in conjunction with the preparation of the project operations manual. During negotiations agreement the Government agreed that the accounts will be audited annually by independent auditors acceptable to the Bank, and that copies of the audited statements would be sent to the Bank within six months of the end of each fiscal year (para. 3.1e). The auditor's report would include an opinion and comments, as necessary, on the project accounts and on methods employed in compiling statements of expenditure, including comments on accuracy, relevance of supporting documents, eligibility for financing in terms of the project's loan agreement, and standards of record-keeping and internal control. It would also include comments on the appropriateness of procurement procedures used. - 31 - G. Project Benefits and Risks 2.53 Benefits. The project would contribute directly to human resources development in Colombia by providing improved basic health services for approximately 8 million existing and potential users in the project area, with priority given to reaching the 6 million persons classified as poor. It would introduce an improved model for the provision of primary health care at the municipal level, focussed on provision of a standard package of services, and provide the experience required to replicate the model effectively and on a national basis over the next decade. Community involvement in provision of these services, to be achieved through municipal health boards, health facility committees and local promotion and education activities, should contribute to sustainable gains in service relevance and quality. Local participation should also increase municipal accountability for the health care provided. The project would further strengthen policy development and management within the public health system, with a focus on effective use of resources and development of municipal planning and implementation capabilities. 2.54 Risks. The main implementation risks relate to institutional weaknesses. To reduce these risks and mitigate the complexities of evolving decentralized management and financing practices and procedures, the project will incorporate and build upon the ongoing process of decentralization but not depend upon the outcomes of that process. Rather, the project would focus on developing effective management and implementation capacity for delivery of primary health services at the municipal level. The implementation risks will be reduced by the limited geographic scope of the project, the application of criteria to ensure adequate institutional and financing capabilities of municipalities before launching municipal investment projects, and the heavy focus on provision of technical assistance and supervisory support for project implementation. An additional risk is that municipal interest in participating in the project would fall short of expectations. This risk has been minimized by selecting departments committed to project objectives that would promote and support municipal participation. A final risk, that municipal cofinancing demand and capacity would be insufficient, has been reduced by establishing limits for subproject size which consider municipal revenues, and by the incentive provided through grants for subproject cofinancing. In addition, cofinancing guidelines would be monitored and adjusted as necessary to adapt to any changes in the Government's revenue transfer formulas and to ensure the adequacy of the grant mechanism as an incentive for municipal investment. III. AGREEMENTS REACHED AND RECOMMENDATION 3.1 During negotiations, the Government provided assurance that: (a) the four project studies would be carried out in accordance with terms of reference and schedules satisfactory to the Bank, results be reviewed with the Bank, and, for the cost recovery study, Bank comments be considered and changes introduced in the project operations manual to ensure that standard provisions for cost recovery are included in each subproject agreement (para. 2.23); (b) the evaluation of project impact be carried out in accordance with terms of reference, and incorporating key indicators, satisfactory to the Bank (para. 2.24); - 32 - (c) a central Project Coordinator and Technical and Administrative Subcoordinators, satisfactory to the Bank, be maintained throughout the implementation period (para. 2.31); (d) an annual review of project implementation be carried out jointly with the Bank by September 30, and that the proposed budget, financing and implementation plans for the following calendar year be prepared for that review; and a mid-implementation review, assessing overall progress towards project objectives and incorporating key impact indicators, be carried out in 1997 (para. 2.41); and (e) project accounts be audited annually by independent auditors acceptable to the Bank, and the copies of the audited statements would be sent to the Bank within six months of the end of each fiscal year (para. 2.52). 3.2 Conditions of effectiveness would be: (a) appointment of a minimum of 12 technical, administrative and legal staff to the Central Project Coordinating Office (para. 2.31); (b) signing of three MOH-departmental contracts for project start-up activities (para. 2.38); and (c) submission, for Bank review, of the final project operations manual, including prototype bid documents and procurement procedures, and a detailed plan and system for financial reporting, accounting and auditing under the project, satisfactory to the Bank (para. 2.40). 3.3 A condition for disbursement under the institutional development component, for activities directly affecting the departments or municipalities, would be the signing of corresponding agreements between the MOH and the departments, and the departments and the municipalities (para 2.38). Conditions for disbursement under municipal subprojects would be the operational ization of the FIS, including appointment of a Director General and a Board of Directors, issuance of by-laws, and signing of a contract between the MOH and the FIS; and the signing of contracts among the FIS, fiduciaries and municipalities (para. 2.39). 3.4 Subject to the above conditions, the proposed project constitutes a suitable basis for a Bank loan in an amount of US$50.0 million equivalent to the Government of Colombia. Annex 1 - 33 - Table 1 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT HEALTH STATUS IN COLOMBIA NEONATAL, INFANT, AND UNDER 5 MORTALITY RATES FOR DIFFERENT GROUPS IN COLOMBIA Characteristic Neonatal Infant mortality Under S mortality mortality AREA Urban 16.3 *** 29.1 36.0 Rural 13.0 22.8 33.0 REGION Atlantic 11.3 22.9 34.0 Eastern 22.6 27.9 33.7 Central 9.3 24.2 30.7 Pacific 19.7 39.5 47.3 Bogoti 17.7 22.6 31.4 SUBREGION * Subregion 1 11.2 30.8 50.0 Subregion 2 6.1 10.0 20.7 Subregion 3 13.1 20.2 26.9 Subregion 4 26.9 29.0 36.4 Subregion 5 18.8 26.8 31.3 Subregion 6 7.5 23.3 24.6 Subregion 7 13.4 22.6 35.3 Subregion 8 8.9 26.4 36.0 Subregion 9 22.7 43.4 57.1 Subregion 10 16.9 35.0 37.1 Subregion 11 17.7 22.6 31.4 Subregion 12 14.8 24.6 27.3 Subregion 13 13.4 22.4 28.4 EDUCATION LEVEL * No education 28.5 60.5 74.4 Primary school 14.3 27.2 36.5 Secondary school 14.4 21.9 26.5 Higher education 10.8 11.5 19.0 MCH CARE No care during pregnancy or delivery 187.5 187.5 187.5 Some care 15.2 21.9 33.5 Full care 9.5 14.5 20.5 TOTAL 15.2 26.9 34.9 * Subregions: 1 Guajira, C6sar, Magdalena, 2 Adidco, 3 Bolivar, Sucre, C6rdoba, 4 Norte do Santander,Santander, 5 Boyaci, Cundinamarca, Mets, 6 Andoquis, 7 Caldas, Risaralda, Quindfo, 8 Tolima, Huila, Caqueti, 9 Choc6, Cauca, Nariio, 10 Vallo do Cauca, 11 BogotA, 12 Medellin metropolitan area, 13 Cali metropolitan area. ** Education level of the mother. Source: Tables 1-4 of Annex 1 are taken from Colombia, Demographic and Health Survey (data from 1990), Profamilia and Institute for Resource Development, BogotA, 1991. *** The lower mortality rate in the rural area likely reflects under-reporting. - 34 - A ex Table 2 COLOMBIA MUNICIPAL IIEALTH SERVICES PROJECT DISTRIBUTION (IN %) OF MALNUTRITION AMONG CHILDREN <5 YEARS IN DIFFERENT REGIONS GENERAL MALNUTRITION * CHRONIC MALNUTRITION REGION at risk light mod/ total at risk light mod/ total sev** sev** Atlantic 16.4 10.9 1.6 12.5 16.7 14.3 4.3 18.6 Eastern 12.6 11.4 1.7 13.1 14.8 22.4 4.5 26.9 Bogota 11.6 11.5 0.9 12.4 14.4 14.3 2.6 16.9 Central 14.6 8.3 4.4 12.7 17.2 13.0 5.4 18.4 Pacific 17.2 12.7 2.0 14.7 13.6 13.5 8.3 21.8 Total 14.8 10.8 2.3 13.1 15.6 15.6 5.2 20.8 * General malnutrition: The relation between the observed and the expected weight for age. ** Moderate to severe malnutrition. - 35 - Annex 1 Table 3 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT GNAL AN CHRON MAIU TRITIONar; #OOX NOMIC VAMALEs General Malnutrition % Chronic Malnutrition FAMILY SIZE Less than 4 members 9.6 15.9 6 or more members 15.1 24.2 NUMBER OF CHILDREN 1 child 10.9 18.9 2 or more children 15.3 32.9 LEVEL OF URBANIZATION Disperse or <2500 inhabitants 17.4 27.8 2500 -99.999 inhabitants 10.7 8.7 > 100.000 inhabitants 11.5 13.5 EDUCATION OF THE MOTHER No education 20.8 33.2 Primary school 10.8 24.0 Secondary school 9.8 12.7 University 5.8 5.8 FAMILY INCOME 5 Minimum salary 16.2 28.1 1.1-2.5 x minimum salary 10.5 15.2 3.6-4.5 x minimum salary 8.1 11.0 > 4.6 x minimum salary 2.5 6.5 BASIC SANITATION Piped water 9.6 15.4 No piped water 17.5 27.7 Sewerage 9.8 14.7 No sewerage 18.3 30.3 Water treatment 11.2 19.6 No water treatment 15.7 21.8 -36- Annex I COLOMBIA Table 4 MUNICIPAL HEALTH SERVICES PROJECT Table 8. TOTAL FERTILITY RATES FOR TEE PERIOD 1987-1990 AND 1984-1985 PER REGION AND SUBREGION AND EDUCATIONAL LEVELS Period 1987 - 1990 * Period 1984 - 1985 * Characteristic Total Urban Rest Total Urban Rest RPEGION Atlantic 3.5 3.0 5.4 3.7 3.2 5.0 Eastern 2.8 2.6 3.3 3.4 2.9 4.4 Central 2.6 2.4 2.9 3.0 2.5 4.3 Pacific 2.9 2.4 4.2 3.1 2.6 4.5 Bogota 2.4 2.4 . 2.5 2.5 -.- SU3REGION **M Subregion 1 4.4 4.4 5.2 4.1 3.6 5.0 Subregion 2 2.4 2.3 4.7 3.0 2.9 4.S Subregion 3 3.8 3.0 5.5 3.8 3.2 5.0 Subregion 4 3.1 2.7 4.1 3.5 2.9 4.9 Subregion 5 2.5 2.4 2.7 3.5 2.9 4.1 S.-bregion 6 2.3 2.1 2.5 2.9 2.4 4.3 SubregLon 7 2.5 2.6 2.4 2.7 2.4 3.7 Subregion 8 3.5 2.9 4.4 3.6 2.9 4.6 Subregion 9 3.1 1.9 4.1 4.3 3.2 4.6 Subregion 10 2.8 2.6 4.3 2.6 2.4 3.7 Subregion 11 2.4 2.4 -.- 2.5 2.5 Subregion 12 2.1 2.1 -.- 2.2 2.1 Subregion 13 2.1 2.1 -.- 2.3 2.3 EDUCATION No education 4.9 4.5 5.4 4.7 3.8 5.4 Priary 3.6 3.1 4.2 3.8 3.3 4.7 Secondary 2.4 2.4 2.1 2.5 2.4 3.5 Higher ed. 1.6 1.6 0.7 1.6 1.6 2.0 TOTAL 2.9 2.5 3.8 3.2 2.7 4.5 DKS.LwO. Colombia. Cansus data 1985 *** Sdo Table 1 for explanation. - 37 - Annex 2 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT HEALTH SYSTEM ORGANIZATION AND MANAGEMENT (EXISTING AND PROPOSED) CURRENT SYSTEM (In Transition to Decentralization) PROPOSED CHANGES Law 12, 1986; Decree 77, 1987; Law 10, 1990 Law 10, 1990; Draft Law on Reponsibilities and Resources, 6/1992 NATIONAL Ministry of Health (MOIH: Except in Manizales and Cali, manages NATIONAL direct delivery of public health services throughout Colombia. The M-.H: Transfers operational functions to departmental and local MOH funds and operates 27 specialty hospitals, 124 general Direcciones de Salud (DSs). Functions: 1) certifying capacity of hospitals, 500 local hospitals, and 4,000 health centers and posts. subnational governments to administer health services; 2) providing Departmental and municipal services are administered through its technical assistance to localities: 3) establishing effective information departmental offices, the Servicios Departamentales de Salud (DSs). systems; 4) macro-level policy-making; and 5) reviewing subnational Services are intended to reach the 65% of the population whose needs health service plans. are not met by private providers or social security. DN: Compiles data to improve revenue transfer formulas; reviews National Plannina Degartment (DNP): Formulates MOH investment departmental budgets, and; coordinates MOH planning. budget. Sets intergovernmental revenue transfer formulas. Channels Ministry of Finance: Channels situado fiscal (current revenue) and national transfers to departments and municipalities. National social investment transfers to departments. A minimum of 15% of transfers account for half of health service funding. situado fiscal must be devoted to health. Social Security Institute (ISS): Will not be decentralized. ECOSALUD: Instituted under Law 10, but operationalized in June National Hosital Fund (FNH):Primary source of co-financing for 1992, manages the national lottery and gambling monopoly, local government investments. Dismantled in December 1992. channeling proceeds to cover recurrent costs. Social Investment Fund (PIS): (a) Established in December 1992, DEPARTMENTAL replaces FNH. Responsible for co-financing investments in health and DSs: Located in every department. Responsible for delivering MOH education. services and channelling funds to departments and municipalities. The directors are appointed by the governors, but the staff work DEPARTMENTAL under the MOH. DSs oversee the boards of public specialized and Governors: Receive situado fiscal transfers and decide upon the total general hospitals, and income from hospital services is redirected into amount to be transferred to the munic4lities (no prescribed DS accounts. formula); select directors of the DSs and the boards of specialized DepartmentalTreasurie: Provide 25% of funding for public health and general hospitals; and, assume burden of providing wages and services through lotteries and taxes on alcohol and gambling. benefits to transferred departmental personnel. Departmental Assemblies: Set formulas for disbursing situado cal MUNICIPAL among localities once governors determine total amount to be Law 10 mandates the municipal administrative structure described transferred. below and in the next column. MuDiojRA B.a : Oversee the Deoartmental Planning Offices: Oversee municipal adherence to management of health centers and posts under the mayor. MOH guidelines, review municipal health plans and the progress of Health Committees: Provide input regarding health needs, capital projects, and compile data. investments, and management of local health facilities. DSs: Once certified by the MOH 1) absorb departmental personnel; 2) provide health services to municipalities that cannot provide their own; 3) formulate and execute departmental health plans 4) administer funds and 5) set prices for services within MOH guidelines. MUNICIPAL Ma: Responsible for personnel management and compensation at municipal level. Former DS employees must receive at least the same salaries and benefits as they earned before decentralization and are protected under civil service statutes. Mayors select directors of local hospitals and municipal boards, and submit health plans to municipal councils for approval. COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Pubilc Health Financing Percent of Direct Public Health Funding 60 - 50- 40- 30- 20 10- 0 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 National Government - Earmarked Taxes Sub-National Approp. --- Cost Recovery X Note: ExcLudes ISS and ICBF expenditure. COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Table 1: Municipal Revenues and Expenditures by Population Size, 1988 000 >tp 2,000 oto 20 000 to 3,000to ,5000to. 100,000 to Oe .. ........~ .-x ..... 00 .000 . 1000 ......... 000 5000 S314.3 15,6 199.9 1~ 32.2 6 6.510.04.5 2...39 46 . .2........ 3 254 » .'02 03 014 07 0.5S. j~ ~ 2' 23 I9 09 '~...v~ 33 00 .T220.9 2 2 6 0.5 ____ ~ -52, .55,7 . . 55. 53,4 *8439.3** ~ 4~«,»~1~'< 4~ ~ 42-.....40 42.0 31.2 50.1 ............ ~iq~ qd<qp éinø(TrM" mo 77.Cs1W~aéI Dc;pWorld Bank ~m ÷ . . . ............ . . . 2ýi - 40 - Annex 3 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Table 2: The Situado Fscal*, 1986-1992 (Billions of Current CoI$) . ..... . 1347~~ .S .:..Ø... . Q -.............. .' .2 v « tv< 4 .. . .~ .~ .'/~e . . .... % 3 * Current revenue transfer from central Government for health and education Table 3: Distribution of Value - Added Tax by Size of Municipality, 1990 S .. ....... ..cte P.C.Ø. ... dbuho. .::: ou..E : ÷ : :: . . . . . :::::..: *Nowalled.Scial Invet F . . . ~ .. .. ... . ............P *~~~ ~ No ca.e Socal.n..t.nt.un - 41 - Annex 3 Table 4 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Table4: Public Health Expenditure - 1966-1990 (Current Col.$ millions) CENTRA GOVNMT.J jANL 0 - Grand as % Recurat Cal'tat (4} Total Rc-ttått CUia4 Total: R4eret CKitaI Total Total oDP 1966 387 387 1967 423 423 1968 537 537 1969 878 878 1970 1,332 1,686 241 0 242 3.260 2.46 1971 1701 2,081 146 3 149 3,930 2.52 1972 1,728 1,537 206 22 228 3,494 1.84 1973 2,816 2,031 325 37 362 4,579 1.88 1974 3.218 2,315 382 19 401 5,934 1.84 1975 3,712 3,161 472 19 491 7,363 1.82 1976 5,138 4,019 497 31 528 9,685 1.82 1977 7,195 5,658 746 0 746 13,599 1.90 1978 8,747 7,721 808 5 814 17,282 1.90 1979 12,331 10,149 1,461 0 1,461 23,941 2.01 1980 8,959 9,085 18,045 15,409 583 15,992 1,820 0 1,820 35,857 2.27 1981 12,254 9,747 22,001 19,625 1,258 20,883 2,385 244 2.629 45.513 2.42 1982 15,260 13.144 28.404 23,342 1,932 25,774 3,120 631 3,751 57,928 2.32 1983 19,547 14,491 34,038 31,197 1,512 32,710 4,034 489 4,523 71,271 2.33 1984 26,639 18,137 44,776 37,440 2,513 39,953 4,946 442 5,389 90,118 2.34 1985 31,211 21,897 53,108 44,308 2,123 46,432 7.368 725 8,093 107,632 2.17 1986 40,612 30,577 71,190 59,205 2,398 61.603 7,612 980 8,592 141,384 2.08 1987 54,094 34,604 88,699 81,359 6,533 87,893 11,037 1,255 12,293 188,884 2.14 1988 70,953 47,311 118,263 104,025 5,882 109,906 14,002 2,447 16,449 244,619 2.10 1989 106,252 91,182 197,434 144,159 7,234 151,392 16,608 2,937 19,545 368,372 2.44 1990 135,017 120,873 255,890 199,627 12,204 211,832 22,927 3,303 26,230 493,951 2.44 (1): Governh inaluding ICBF (2) and (3): Hokh mxpedure only (4) Two-thds of inem is attributable to dh ICBF. Source: 1966-1979, Colombia: La Deuda Social e Ls Oa#has. Tomo 2, p. 235 1980-1990, Coyflun Social No. 6, May 1992 Cotraloria General de La Republica. W ~emu Pmanieos Lay-s de Prupuetc, ISS, Cajanal FEDESARROLLO - 42 - Annex 4 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Bank Involvement in the Health Sector in Colombia Sector Work in Health 1. The Health Sector Review, completed in 1982, identified issues related to the equity, efficiency and effectiveness of organizing and delivering health care services. Regarding equity, the report points to the wide disparity in health status across the country due partly to coverage of primary health care and sanitation services. Regarding efficiency and effectiveness of organization of services, the review concludes that improvements would derive from better use of existing resources, cooperation between the Ministry of Health (MOH) and the Institute of Social Security (ISS), decentralization of service delivery, improved maintenance of plant and equipment, and more emphasis on and support for preventive health services. 2. The Social Security Review, completed in 1987, primarily analyzed the private and public sector social insurance funds which are based on employment and financed through employer and employee contributions and central government transfers. The report covers both health care and income maintenance benefits and points out shortcomings of the social security system: low coverage and inequity in contribution rates; heavy burden on employees and payment evasion; inequalities in benefits; declining investments and increasing government subsidies; high administrative costs and deficient management systems; and financial and actuarial imbalances. The report formulates a series of recommendations including the harmonization of social security and MOH policies, plans, programs and activities; the expansion of the ISS family health program; and the implementation of user fees to contain costs. 3. The Bank's 1989 assessment of the Government's Poverty Alleviation Program, Social Programs and Poverty Alleviation: An Assessment of Government Initiatives, covered the areas of health, education, housing and nutrition. It supported the Government's medium- to longer-term objectives to expand and improve primary health care. The report provided the basis for Bank support of the Community Child Development and Nutrition Project (para 7.). 4. The Decentralization Study, completed in late 1989, reviewed the legal, organization and fiscal implications of the decentralization process across sectors, and formulated recommendations for implementing decentralization in small, relatively underdeveloped municipalities, and centering on the need for improved institutional structure and capacity, strengthened local fiscal performance and increased national transfers. -43 - Annex 4 Investment Operations in the Health Sector 5. The Integrated Nutrition Project, assisted by Loan 1487-CO of 1977 for US$25.0 millions, supported the Government's integrated program in the areas of nutrition, health and rural development. Components included rural health facilities and training of staff, rural water supply and sanitation, nutrition education, input packages for family gardens, food technology and quality control, a Government-financed food coupon program and related monitoring and evaluation, program management, and technical assistance. The project met or exceeded most physical targets originally agreed upon but fell short in other areas. Most notably, the direct benefits of the food coupon program (calories delivered) were low. The main lesson from the experience of this project relates to the need to establish an effective monitoring and evaluation system early on, to support adjustments in the course of implementation. 6. The Health Services Integration Project, assisted by Loan 2611-CO of 1986 for US$36.5 millions, centered on support for a decentralized model of health care, integrating health, nutrition, water supply and sanitation. The project met with little progress owing to fragmentation of project management responsibilities among several agencies, and more generally to weakness in institutional and financial support. As a result, the project was substantially restructured during 1990; US$19 millions were cancelled and the project was reoriented to provide support to the Government's efforts to restructure the health sector (culminating in Law 10 of 1990). Outcomes point to the advantages of maintaining simplicity and flexibility in project design and management, especially in early operations in the social sectors. 7. More recently, the Bank has extended support through Loan 3201-CO of 1990 for US$24.0 millions to the Colombian Institute of Family Welfare (an agency of the Ministry of Health) in the implementation of a Community Child Care and Nutrition Project. The broad objectives of the project, which supports a six-year expansion of a home-based, day-care program, are to enhance and maintain the quality and effectiveness of the program. Training, monitoring and evaluation are designed to facilitate achievement of these objectives. The program is currently covering over 1 million children under the age of 5 in poor urban and peri- urban areas. 8. The Municipal Development Project, assisted by Loan 3336-CO, of 1991, for US$60.0 millions, aims to improve municipal services and strengthen municipal institutions. The project is expected to have a positive economic effect on a large number of municipalities by addressing infrastructure bottlenecks, and promoting the execution of cost-effective investments and higher self-reliance by local governments on local resource mobilization. A line of credit supports subloans to subnational governments and municipal enterprises for about 300 subprojects to rehabilitate, improve and expand urban infrastructure and local services in sectors under municipal responsibility, including primary health care facilities. -44- Annex 5 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Characteristics of the Project Area Introduction This annex summarizes information on demographics, poverty, health and health services in the project area. The data were obtained by the Ministry of Health through a survey carried out during December 1992. The survey sample comprised 20% of the 220 municipalities. In each department the capital was sampled. This annex also makes use of available information for the project area drawn from DANE, DNP, FNH and MOH sources. The information is presented in Tables 1-5, with comments. Table 1: Demographic Characteristics Table 1 summarizes the demographics of the project area. Total population and key subgroups are presented. In most departments the distribution by age is typical for a population in demographic transition. The number of children under 5 is just above 10%, ranging from about 11% to 16%, and the population over 60 years of age is still low (about 5%-6% with a range from 2% to about 6%). Cordoba, El Choc6 and Vaup6s have a percentage of children under 5 which is typical of a pre-transitional pattern. The very low percentage of people over 60 years in Vaups is indicative of the low life expectancy at birth in this department. Table 2: Indicators of Poverty in the Project Area The data in the first two columns of Table 2 are based on DANE statistics and methodology for estimating the incidence of poverty. The data presented in DANE indicators include three measures related to shelter and two related to income. Households with less than satisfactory conditions in one of the five indicator areas are classified as poor (40% nationally); households with less than satisfactory conditions in two or more of the areas are classified as critically poor (20% nationally). Data on poverty were available for all project departments except Bolfvar. The MOH survey identified the proportion of households which had piped water and which lacked all basic services. The capitals, which were always sampled, generally have better conditions than the rest of the department. For BogotA the data are especially overly optimistic. The subdistricts which form the project area lie mainly above the line where piped water and sewerage systems are provided, and were not sampled separately from the rest of Bogotd. Life expectancy at birth is provided in the last column of Table 2 as an indicator of quality of life. Life expectancy is averaged for both sexes, because the gender-specific life expectancy was not always available. In general the life expectancy is 3-5 years more for women than for men. - 45 - Annex 5 Table 3: Departmental Infant Mortality Rates and Morbidity Patterns The infant mortality rate (IMR) is the incidence of death among children below one year of age per 1,000 live births per year. Table 3 presents the IMR for the capital of each department and the range of IMRs for municipalities in the department. Excepting Sucre, Cordoba and Cauca, the IMR is lowest in the capital. The last 2 columns of Table 3 give the proportion of consultations for the two most frequent diseases among infants. The diseases were almost universally diarrheal diseases and acute respiratory infections. Skin infections were sometimes mentioned as the next most important cause for consultation. The high proportion of diarrheal diseases and respiratory infections together with the high- to medium high IMRs, make special efforts to combat these diseases a priority for the project. Table 4: Selected Output Indicators of the Health Sector The data in Table 4 show relatively wide ranges in the output indicators. Interpretation is difficult. Although all data refer to first level health facilities, the complexity of the diseases managed likely varies substantially among departments, depending, i.a., on the availability of higher level health facilities. The long duration of hospitalization in Vaup6s, for example, might be explained as follows: 1) higher level hospitals are not available in the department, 2) patients often come from distances which preclude follow-up after dismissal from the hospital, and 3) admitted patients arrive at a facility only in comparatively advanced stage of a disease. The bed occupancy rate averages around 60%, which is not high but acceptable. The low bed occupancy rate in El Choc6, combined with the high [MR identified in Table 3, suggests a need for improved community education and outreach services, and accessibility to services. The number of medical consultations per hour, in half of the departments below three, indicates low productivity. Table 5: Availability of First Level Health Services in the Project Area The data provide an incomplete picture by showing only the availability of first level services. Primary care facilities are often not available or may be replaced by higher level facilities, in particular for BogotU (for which data are not provided). And, where a second level hospital bed is available, patients tend to occupy that bed, even when their illness can be treated with a hospitalization at the first level. An indication that this is the case is the trend that the number of consultations per population is lowest where the number of people per facility is highest. An exception is El Choc6, where a relatively low population per facility is combined with a low utilization figure. In general the data show a shortage of first level health care services, measured by number of people per facility or bed. Annex 5 - 46 - Table 1: Demographic information in the project area. Department Total # 0-4 years # females # over 60 Population (% of total 15-44 years years (%) population) (%) Atlantico 1,704,090 202,396 471,822 101,062 (11.9%) (27.7%) (5.9%) Bolivar 1,451,482 168,802 420,620 82,850 (11.6%) (29.0%) (5.7%) Sucre 611,159 78,140 162,631 32,183 (12.8%) (26.6%) (5.3%) Cordoba 1,114,815 147,029 299,271 53,898 (13.2%) (26.8%) (4.8%) El Choc6 351,039 49,993 88,462 17,318 (14.2%) (25.2%) (4.9%) Cauca 933,601 110,783 256,144 52,025 (11.9%) (27.4%) (5.6%) Narifto 1,163,384 136,215 313,871 71,142 (11.7%) (27.0%) (6.1%) Vaup6s 34,484 4,895 10,620 679 (14.2%) (30.8%) (2.0%) BogotA 4,918,613 501,098 (11.1%) Total 12,282,667 1,975,429 (16.1%) -47 - Annex 5 Table 2: Indicators of poverty in the project area. Department % of % of % % life population in population households households expectancy poverty in acute with piped with no (years) poverty water basic services AtlAntico 41.5 19.4 76.0 5.0 65.2 Bolivar 31.0 40.0 65.9 Sucre 73.6 54.3 42.2 28.5 68.7 C6rdoba 74.1 54.0 42.9 35.6 67.7 El Choc6 82.8 42.0 36.0 51.6 62.0 Cauca 61.1 30.9 43.5 49.0 68.8 Narifio 60.9 30.8 45.0 36.1 62.2 Vaup6s 93.1 71.2 19.0 BogotA 23.5 6.2 96.0 0.7 71.2 -48 - Annex 5 Table 3: Departmental infant mortality rates (IMRs) and infant morbidity patterns in the project area. Infant mortality (per 1,000) Most frequent reasons for Department medical consultations In Dept. Range of Diarrheal Acute Capital Dept. IMRs Diseases Respiratory Infection AlAntico 20 20-58 30% 26% Bolivar 20 20-57 25% 29% Sucre 28 21-46 30% 29% C6rdoba 42 23 -49 26% 23% El Choc6 36 36-77 21% 17% Cauca 38 8-70 27% 30% Narifto 47 47-94 23% 17% Vaup6s 19 19 28% 17% Bogotd 18 18 13% 19% - 49- Annex 5 Table 4: Selected output Indicators of the health sector In the project area. Department Number of Average Occupancy # of # of dental patients/bed/ duration rate of medical consul- year of hospital consulta- tations/hour hospita- beds tions/hour lization AtlAntico 32 4 0.62 2.4 0.7 Bolfvar 38 5 0.60 5.0 0.8 Sucre 58 4 0.61 4.6 0.6 C6rdoba 47 4 0.49 2.1 0.2 El Choc6 39 4 0.46 2.4 0.5 Cauca 39 5 0.56 3.6 2.8 Narifio 29 10 0.74 5.9 2.0 Vaup6s 29 8 0.64 1.9 0.5 BogotA 40 6 0.68 3.0 2.6 - 50 - Annex 5 Table 5: Availability of first level health services in the project area. Department # primary # # consultations/ care population/ population/ year/ facilities facility bed population AtlAntico 48 24,335 23,361 7.0% Bolfvar 49 16,587 47,809 6.5% Sucre 35 8,799 5,219 15.4% C6rdoba 42 10,142 106,486 10.7% El Choc6 98 1,857 3,193 8.9% Cauca 39 8,287 2,965 18.4% Nariflo 18 26,767 12,679 7.2% Vaup6s 20 1,724 183 20.6% Bogoti - 51 - Annex 6A COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Project Subcomponents Municipal Health Information System, Monitoring and Evaluation Indicators 1. The Municipal Health Information System (MIS) to be introduced under the project would be designed as a management tool to enable municipalities to plan and monitor health services. The proposed MIS would provide a flexible database to serve this need. The MIS would be based in municipal health facilities; a common set of data will become part of the departmental and national base. 2. The data to be maintained by each facility would include: (a) Resources Data: Human resources by facility, professional category, duration in post, type of contract and number of hours contracted and delivered Physical resources (facilities, equipment, supplies, pharmaceuticals) by type, status and availability (b) Service Data: Service data should be available by patient and by encounter and should include: Age and sex distribution of patients/encounters Number of patients enrolled in programs (maternal and child, tuberculosis, leprosy, chronic diseases, etc.), number of encounters, number of defaulters and number visited to encourage continued treatment Number of encounters by type of health care provider and by type of encounter (first time visit or subsequent) Number of prescriptions per encounter and by type of pharmaceutical Morbidity encounters/patients by age and sex - 52 - Annex 6A Mortality by age and sex Number of pregnant women receiving prinary health care, trimester begun, number of encounters per pregnancy, type of delivery, delivery place, breastfeeding practices, immunization coverage, postnatal visits, family planning acceptors and type of contraceptive method Number of emergency visits by age, sex and type of health problem Number of patients referred to other institutions, reasons for referral, referral mechanism Number of outreach services by type of health professional Number of school health activities by type of health professional and number of beneficiaries Number of community education activities by number of beneficiaries Bed occupancy rate Average in-patient stay by type of health problem Productivity indicators: number of encounter per hour by type and professional category Number of in-patients per type of health care professional (c) Financing data: Amount and source of revenue (including cost-recovery) Expenditures by category Cost per encounter by type of professional category Cost per in-patient by category (drugs and supplies, meals, personnel) Annex 6A 3. Each municipality should also maintain data in the following categories: Demographic and socioeconomic information of each health facility's catchment area Employment and income indicators School enrollments (including day and infant care) Environmental health (availability of piped water, sewerage, garbage disposal, contaminant industries, quality of housing, availability of recreational facilities) Ical health practices 4. From the Municipal Health Information System key monitoring indicators have been selected. These indicators would form part of the regular system and would be maintained monthly and consolidated at the end of each year. The key indicators include: Number of encounters per health provider by professional level Number of encounters per person per health provider and by type of health problem Hours of health care delivery provided versus contracted Number of patients referred by type of health problem Number of prescriptions per encounter Distribution of pregnant women by trimester begun prenatal care Bed occupancy rate Number of emergencies by type Percent of the population benefitting from community health education activities Percent of school children benefitting from school education activities - 54 - Annex 6A 5. Several key indicators have also been chosen to measure the impact of the Municipal Health Service Project. These include: Percent of the catchment population served at the health facility Fatality rates of children with diarrhea/upper respiratory infections Percent of deliveries attended at health facility Number of women seeking prenatal care in the first trimester of pregnancy Delivery fatality rate Immunization coverage - 55 - Annex 6B COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Staff Development The Municipal Health Services Project is to be implemented within the context of a decentralized system of health care. Therefore, in addition to preparing health workers for the implementation of the basic package of services, it is important to provide municipal authorities, health care workers and the community at large with the skills needed to undertake their new responsibilities. OBJECTIVES. The objectives of the staff development subcomponents included under the institutional development and service development components are the following: 1. Strengthen the capacity of the Departmental Health Services (DSs) to assist municipalities in the implementation of the project. 2. Train municipal authorities and community leaders in the principles of primary health care the appropriate use of health services and health services management. 3. Educate communities on the concepts of health and health promotion, the appropriate use of health services and medications, and the community's role within the municipal health system. 4. Respond to training needs of health personnel for the appropriate implementation of the basic package of services. 5. Train teams responsible for managing local health systems, including private sector providers. There are municipalities that will have special units managing the health delivery system, and others (mainly type 4 and 5 as classified by the DNP, or less developed municipalities) that will delegate this task to health care providers. All health care system managers will be trained according to project guidelines and standards. STRATEGIES 1. Establish an implementation support team in each DS consisting of four persons in the following areas of expertise: a) competency based training and on-the-job supervision; b) management, information systems and financing, c) community development and communication and (d) primary health care. Each DS will recruit consultants for this purpose. The consultant teams will optimize the use of departmental resources to ensure the continuity of the project and enhance implementation. 2. Strengthen the links with universities and training centers. This strategy will allow municipalities to benefit from the expertise of training institutions in the department. Training institutions will also benefit from the exposure to tasks and problems that their graduates have to face. - 56 - Annex 6B 3. All staff development activities will be based on solving problems growing out of everyday practice. Training packages will be adjusted to the needs of each particular audience. The achievement of staff development objectives will require a continuum of activities. Initially, training materials will be prepared; DS authorities will recruit personnel; and the national team will assist in training departmental teams; municipal authorities, health personnel and managers of the health system will be briefed on the project and training and assistance with implementing the new responsibilities will be provided. Subsequent activities will consist of follow-up training and technical support and supervision. While formal courses would be included, on-the-job support and supervision would be emphasized. NATIONAL RESPONSIBILITIES I. Present the project to DS departmental governments, NGOs, municipal authorities, and health personnel. One, one-day seminar per region (about 40 persons per seminar). 2. Develop detailed job descriptions for each member of the departmental team responsible for the implementation of the project (project coordinators) and their relationship with the National Project Coordinating Unit and with universities, NGOs and training institutions in the department. Selected universities, NGOs and training institutions would work as consortia to support DSs in several departments, e.g., institutions in Valle could support Nariflo and Cauca; institutions in Antioquia could assist Cdrdoba, Chocd and Sucre. 3. Develop task-specific manuals for implementation of the project at the municipal level. The manuals should include the following items: a) description of the management information system and instructions; b) guidelines to health planning and monitoring; c) description of the basic package of services, including the category of personnel who will perform each type of activity; diagnosis and treatment protocols; and guidelines for referral; d) community participation enhancing techniques; e) acceptable alternatives for health care financing, including types of contracts with secondary level health institutions and the private sector; f) reporting responsibilities; and g) a list of resources available at the national level. The appropriateness of the manuals should be assessed and revisions made as needed in year three of the project. This would require a one-week evaluation workshop for about forty persons at the end of year two of the project. 4. Organize annual two-day seminars to allow for exchange of experience among departments and municipalities (fifty persons per seminar). 5. Train departmental teams. Two-week seminars, twice a year, for the first two years of the project. After the third year of the project, two two-day seminars each year. 6. Produce health education materials for mass-media, focusing on the appropriate use of the primary health services, on the use of pharmaceuticals, on health and health promotion. - 57 - Annex 6B 7. Coordinate with Universities selected to participate in the Project and with other schools and training centers existing in the area. A series of a maximum of ten, one-day seminars will be conducted to: a) discuss primary health care and the strategy to enhance primary health care in the curricula of health care professionals, and b) the role of the universities and training centers in the supervision of health professionals during their year of social service. 8. Coordinate with the "Centros Departamentales de Desarrollo del Recurso Humano" training centers that, under the decentralization process, have been absorbed by the DSs to discuss their role in the implementation of the project. A series of seminars will be conducted to approach this issue. Levels of participation would differ among the centers in view of varying capacities. 9. Define training curricula for community health workers and auxiliary nurses. Technical assistance will be needed to cooperate with experts from the regional training centers, revise training curricula, make necessary adjustments and produce appropriate training materials. 10. Administer scholarships to train personnel in public health, including the of areas of management, epidemiology, planning, community participation and communication. 11. Organize a one-week seminar each year to assess the progress made by the project departments and to make appropriate adjustments to plans for staff development. DEPARTMENTAL RESPONSIBILITIES 1. Analyze the needs of personnel and resources of each DS for the implementation of the project. Recruit candidates for consultant regional teams. 2. Identify and contact departmental resources: universities, training institutions, NGOs, and municipal health workers. Conduct a one-day seminar to introduce the project and enlist cooperation. 3. Provide initial training for municipal authorities, NGOs and community leaders. 4. Provide initial training for health personnel. During this training the regional team will make an effort to identify groups (e.g., NGO's, universities) which could work together to develop specific community education packages, deliver specialized services, conduct research studies, or provide leadership in any aspect of the project implementation process. 5. Provide on-the-job training and continuing education for municipal teams. Each municipality should be visited at least twice a month during the initial stages of the project (during the first six months of project implementation) and once a month thereafter. 6. Train community health workers. 7. Organize one seminar a year for health and municipal authorities to report on the advances of the project and to encourage exchange of experiences among different municipalities. - 58 - Annex 6B 8. Two seminars a year for health personnel to discuss innovations in health care, problems in the delivery of health services, or primary health care management. 9. Organize a yearly seminar to assess progress in the implementation of the project. This seminar should be conducted before the national seminar. The conclusions and recommendations of the national seminar should be widely distributed within all departments. Seminars to discuss the recommendations reached at the national level could be organized as needed, however the conclusions and recommendations will be provided to all municipalities through the project coordinators. MUNICIPAL RESPONSIBILITIES 1. Organize health committees and participate in their meetings. 2. Educate the community in health-related issues through mass-media and community events. Note: Supervision and technical support would be continuous. The number and duration of training sessions/seminars above is notional. Refinements in details would be made annually and by department. Annex 6C - 59 - COLOMBIA MUNICIPAL SERVICES PROJECT THE BASIC PACKAGE OF SERVICES The basic package of services includes basic health interventions addressing health conditions highly prevalent in Colombia and for which there are effective preventative, curative or palliative solutions. The package would not be offered in each health facility but would be available to all residents in a municipality. Municipalities would be encouraged to complement the package with additional services targeting other prevalent health problems in the community provided that: 1) such services could be provided more efficiently through the municipal system than through contracts with the private sector or at the departmental level, and 2) the human and economic resources required to deliver the service according to established quality standards are available. All services included in the package will be delivered according to standard protocols. These protocols would include the corresponding instructions for referral. All municipalities should have a vehicle and a working communications system to facilitate transport of emergencies. All municipalities should have an outreach service to follow-up clinic defaulters and patients who for different reasons do not seek needed attention. This is a important service to increase coverage for maternal and child services and for the elderly. Most diseases and injuries are age-specific and a few are sex-specific. For this reason the services included in the basic package of services have been classified by age group (mothers and infants, children, adolescents and young adults, adults and older adults). Issues which span several age groups are discussed for the age group at greatest risk for the problem addressed. Additionally activities, that would benefit the entire community, are also noted. Healthy mothers and healthy infants A large proportion of maternal and infant health problems are due to delivery problems. Some of these problems can be anticipated during prenatal care visits, others are unidentifiable beforehand and require prompt management and treatment. All municipalities should have appropriate transportation so that emergencies can be appropriately attended. Another source of maternal problems, including death, is unsafe abortion. Although abortion is not legal in Colombia, informal information suggests that the number of abortions is high. Health personnel should be - 60- Annex 6C trained to manage incomplete abortions, should educate the community on the risks of such procedures and should provide broad access to family planning information and practice. Prenatal care: Important components of prenatal care include reproductive personal and family history, hemoglobin measurement and correction of anemia, Rh determination, blood pressure measurement, diagnosis and treatment of reproductive tract infections and urinary tract infections, immunization with tetanus toxoid, and risk assessment of delivery complications. Depending on local prevalence levels, it may also be necessary to prevent, screen for, and treat for malaria, and other infectious and parasitic diseases (i.e. syphilis and gonorrhea). During prenatal care visits it could be important to identify and refer high risk pregnancies and women at risk of presenting obstructed delivery. All pregnant women should make at least three prenatal care visits. Health workers should extend efforts to stress on the importance of these visits beyond pregnant women to include the broader family and partners, who may influence the woman decision regarding prenatal care. Prenatal habits: Counseling on nutrition (during pregnancy there is an increased need for more calories, iron, calcium, phosphorus and protein), smoking, alcohol drinking, use of drugs, exercise, and sexual behavior. Delivery: Hygiene is the most important aspect to consider when attending a normal delivery. Women in prolonged labor (more than 12 hours) have to be attended by a specialized midwife or a physician and require referral to the local hospital. To the extent possible, first level services need to be strengthened to treat complications of pregnancy and delivery. Postnatal consultation: Education on breastfeeding, weaning practices and family planning should be provided during the pregnancy and should be reinforced during postnatal visits. All women should at least have one control visit after delivery. Growth monitoring: Monthly growth monitoring for children under two years of age is important to detect nutritional and growth problems. Special growth and development "clinics" should be used to detect existing or potential health problems. Immunizations: Health personnel should use all opportunities to ensure that children are fully and appropriately immunized, and that women of child- bearing age are immunized against tetanus toifoid. Family planning: Counseling on family planning and reproductive health should be available to all those that are sexually active, including teenagers. - 61 - Annex 6C Healthy children Identification of vision and hearing problems: Visual and hearing problems should be identified among children to enhance development and school performance. Early diagnosis and treatment of childhood infections: Including diarrhea, parasites, respiratory infections (including tuberculosis). In some areas mass administration of parasites treatment is justified. Growth monitoring should be carried out every two months for children over 2 years of age. Malnourished children and children who fail to gain weight should be screened to identify the underlying causes of their nutritional problems and appropriate remedial measures to be taken. Healthy habits: Children should learn early in life appropriate nutrition and hygiene habits. Including personal and dental hygiene, and the avoidance of smoking, alcohol drinking and drugs. The promotion of healthy lifestyles could be successful if implemented through school and day care health programs, including health education activities. Healthy adolescents and young adults The health status of early adulthood is threatened by smoking, alcohol and drug abuse, injuries and unsafe sex (teenage pregnancy and sexually transmitted diseases). Smoking, alcohol and drug abuse are linked to factors not usually addressed by health programs (including lifestyle and socioeconomic factors) but have a substantial impact on health status. The abuse of these substances contributes to high rates of injuries, homicides, suicides and chronic diseases, especially respiratory and cardiovascular problems. Injury prevention. Injury prevention strategies should be designed, included in municipal, departmental and national policies and enforced. Sexually transmitted diseases. Health professionals, social and youth organizations should ensure that information, counseling and treatment to prevent the transmission of venereal diseases is available to teenagers. In addition, they should ensure that young people of both sexes know and have access to birth control. Healthy adults Chronic diseases affecting the adult population can be reduced by: high blood pressure detection and control, reduction of smoking, prudent diet and increasing exercise. - 62 - m 6C Smoking. Health professionals should encourage people to quit smoking. Those who are unable or unwilling to quit smoking ought to smoke brands low in tar and nicotine and ought to smoke their cigarettes only half way. Alcohol. Misuse of alcohol leads to accidental injury, family disruption, and chronic disease. Health professionals should provide information on health problems associated with alcohol abuse and refer patients with alcohol problems to appropriate services. Chronic diseases: Diabetes and high blood pressure. All adults contacting the health system should be screened for high blood pressure and diabetes. When a chronic disease is diagnosed, health professionals should prescribe the appropriate treatment, and insist and monitor patients' compliance with the prescribed treatment regime. Nutrition. People should adopt prudent dietary habits, consuming: only sufficient calories to meet body needs, less saturated fat and cholesterol, less salt, less sugar, more whole grains, cereals, fruits and vegetables. Health professionals should take the lead in educating the community in appropriate nutrition habits. Exercise. All adults should engage in exercise at least three times a week for about 15 to 30 minutes each time. Health professionals should encourage this practice in all their encounters with patients and through community activities. Healthy older adults Conditions that are amenable to early detection and treatment include: hypertension, diabetes, some types of anemia and over-medication. Exercise and fitness for older people need emphasis. Social activity. Health personnel should encourage older adults to maintain an active social life. Exercise. Regular physical activity for older adults can provide physical and psychological benefits, as well as help maintain flexibility and balance important for preventing falls. Health professionals could organize exercise sessions for the elderly. Preventive services: High blood pressure should be checked every time an adult contacts the health system. The medical history should screen for diabetes and urinary infections. - 63 - Annex 6C Medication: Older people receive too much medication. Physicians should regularly review the type and amount of pharmaceuticals that elderly patients are taking and assess their appropriateness. Other health problems affecting the entire community In the case of Colombia political, drug-related and family violence constitute overwhelming social and health problems. In the case of Colombia is important to train health professionals and to equip health establishments to be able to cope with these problems. The health sector can substantially improve the quality of life of the victims of violence by providing timely and good emergency services; and family violence can be reduced through community outreach and education, and referral. Water and sanitation are the source of many communicable diseases. Health professionals should encourage municipalities and other agencies to solve environmental problems that have an impact on the health of the community. People have a tendency to believe that there is a medicine for every ill and they tend to request medicines from each medical encounter. It is important to educate the community on how to use pharmaceuticals and the health delivery system. This should be done at the municipal and at the national level through mass media education campaigns. It is important to establish a drug delivery system that does not preclude access to medicines for people that need them. Programs for endemic diseases such as tuberculosis and leprosy, should continue to be delivered. In some areas prevention of leishmaniasis and dengue will be appropriate. Other desirable services The services included in these category are examples of additional services that could be provided by the municipal health service depending on the availability of resources. They include: Education for parenthood: people who are well informed about the care required by infants can better plan and prepare for parenthood. Health personnel could offer education for parenthood to teenagers and adults. Early childhood development. A stimulating and healthy environment during the early part of life can enhance a child's growth and development. Programs providing comprehensive health services for children, including day care, health care, nutrition, education and counseling, can produce - 64- Annex 6C important gains in child development, particularly for families with low income. Special support services. Special sources of support should be available through community agencies and health care providers to assist children under particular stress. Mental health: To a great extend many of the adulthood problems represent failures to help young people acquire the skills and infbrmation needed to solve problems and make sound decisions during years of rapid change. The municipality should promote recreational and sport activities for their young adult population and, to the extent possible, should give them a role in public events. It is important that young adults feel accepted and needed by their communities. Early detection of cancer. These services should only be provided if there is some evidence that cancer patients will have access to appropriate treatment or support services. Pap smears, breast examinations and a questionnaire screening for cancer signs, including: changes in bladder or bowel habits; a sore that does not heal; unusual bleeding or discharge; change in a wart or a mole; or nagging cough or hoarseness, could be part of the personal clinical history. Fluoridation. The most effective and efficient way to prevent tooth decay is through fluoridation of community water supplies. If the water supply is not fluoridated alternative fluoride sources can be provided through school-based fluoride mouth rinse or tablet programs. Environmental health. Toxic agents in the environment can present health hazards which may not be detected for years. The health sector should encourage the monitoring of industrial, agricultural and mining production processes to reduce exposure to potentially toxic agents. Worksite health and safety. The occupational setting is important both as a source of potential health hazards and a site for health promotion activities. Health programs at the workplace can provide information and protection related to all potential health hazards for employees, as well as offer activities and services to promote healthier lifestyles. Minimum package of support services An appropriate information system should be develop to manage, monitor and evaluate the municipal health delivery system. Essential drugs have to be available in needed amounts and at an affordable cost. -65- Annex 6C All health centers should have weighing and measuring instruments for infants and children; autoclave; refrigerator for immunizations; first-aid supplies; high blood pressure machine, stethoscope, otoscope, and emergency medicines; and basic laboratory equipment. First-level hospitals should also have all necessary drugs and supplies (including V-fluids, suture kits, sufficient dressings and disposable materials) and they should be able to obtain them at reasonable prices (lower than commercial rates). All first level hospitals should have a minimum clinical laboratory, X- ray, electrocardiogram, stethoscope, otoscope, ophthalmoscope, thermometer, high blood pressure machine, appropriate small surgery equipment, appropriate delivery instruments, autoclave, adequate medical waste disposal system, transportation and a good communication network among all health facilities in the municipality. Transportation for patients who need referral to higher levels of care should also be accessible. Appropriate instruments to detect visual and hearing problems should be available at the municipal level. In addition all municipalities should have: health education materials, an emergency manual, a PDR or a book on appropriate use of pharmaceuticals, and guidelines on how to administer and manage the health facility and the patients (including standardized diagnosis, treatment and referral protocols). -66- Annex 6D COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Study on Pricing of Primary Health Services Terms of Reference Objective. The objective of the study would be to establish parameters for costing and pricing of health services in the public sector, based upon provision of the basic package of services to be provided under the proposed project. To this end, it will be necessary to disaggregate the basic package of services by subcategory. It is also expected that costs would vary by regions and epidemiologic conditions. Methodology i) Determine the factors which contribute to service costs: personnel, physical inputs, transport, administration, etc. ii) Determine unit costs per person served, unit costs per type of service, and aggregate costs, to determine total costs of the package. Schedule The study will be conducted over 12 months, beginning in the middle of 1993, in the following phases: i) review of cost studies and infbrmation available in the country, as well as international information on costs. ii) based on available information, refine study methodology. iii) execute study and present results and recommendations. Executing Entity The executing entity should have experience in the quantification of costs of social services, in the arta of health development projects and in related research. Budget The cost of the study would be of the order of US$100,000 equivalent to cover the costs of a half-time senior consultant, a full-time junior consultant, and administrative costs. - 67 - Annex 6D COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Study on Cost Recovery Terms of Reference Objectives Colombia has national and regional guidelines for cost recovery and user fees in the public health service. However, their interpretation and use has not been systematic. The objective of this study would therefore be to develop an appropriate system of fees based on the following principles: correspondence with user income levels, such that the fee schedule is progressive, favoring the poor; rationalization of use of services by level of complexity and facility; and support for priority services, such as preventive activities. Desired results of application of the system would be to increase available resources for financing health and improving efficiency of resource use. Specific objectives are to develop criteria and mechanisms to operationalize them in respect of introducing differential fees by income level and type of service. Included would be clear measures to systematically collect fees, and related incentives or sanctions. Methodology Differential fees would be prepared on the basis of unit costs of services by level of service. Such fees would need to consider differences in complexity, both technical and in terms of human resources involved in provision of services. Emergency services would be treated separately, with fees designed to reduce abuse of these services. The objective would be to strengthen the quality and efficiency of basic services, and the referral system, without ignoring true emergencies. Development of the system would evolve as follows: i) review of existing guidelines and criteria and problems encountered in their application. ii) review of international practice and experience. iii) operationalization of an improved system, with initial emphasis on first level and emergency services, including systematic review and updating of fees. Schedule The study would be carried out over a year's time, beginning in late 1993. Executing Agency A firm or group of individuals composed of economists, financial analysts and sociologists/health care providers with relevant experience. Budget The estimated cost of the study is US$100,000. - 68 - Annex 6D COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Study on Accreditation Terms of Reference Background Trwo subdirectorates of the MOH are currently responsible for quality control and accreditation in the health sector: 1) the Subdirectorate for Institutional Development (administratvie aspects), and 2) the Subdirectorate for Assistance Services (quality aspects). Certificates are given by the Minister of Health. However, quality control and certification are not systematically carried out; and norms for accreditation at the first levl are incomplete. In view of the ongoing process of decentralization, in particular, the quality control function requires strengthening at the central as well as departmental and municipal levels. Objectives The study will assess alternatives for the accreditation of health facilitites and services, beginning with the first level. Emphasis will be given to establishment of a national quality control commission either in or outside the MOH. The study will also investigate appropriate forms for departmental and local inputs into the process, and establish a set of quality standards for health facilities at the first level. The standards could vary by region and category of municipality. The study will suggest an appropriate interval for accreditation visits to a particular health facility and recommend measures to be taken if a facility does not meet minimum required standards. The study will further recommend timing for the introduction of revised qality control mechanisms and practices. Methodology The study would be based on a review of existing practices for quality control and accreditation in the health sector and on a review of the relevant literature and international experience. Schedule, Expertise Required and Costs The study would be carried out during a ten-month period during 1994 by an interdisciplinary team. Composition of the consultant team would be detailed during late 1993. Cost of the study is estimated at US$200,000, equivalent. - 69 - Annex 6D COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Study on Development of Human Resources in the Health Sector Terms of Reference Objective The objective of the study would be to propose a personnel policy which promotes stability and adequate quality and experience among staff in the health sector, especially at the municipal level. Methodology The review of the current situation would draw on available information at the central, departmental and municipal levels. This would be supplemented by case studies in departments and municipalities selected to represent variations by level of development and income. Fields of concentration would be: demand for personnel by type; trends in stability of personnel; and incentives offered by administrative level. Recommendations, including recommendations for incentives (salary and non-salary), would need to consider affordability, and possibly, subsidization by the central government for poorer departments and municipalities. The proposed study would also draw on relevant experience, particularly in other countries in Latin America. Schedule The detailed requirements and areas of focus for the study would be elaborated during late 1993. The study would take about a year to complete and would be initiated in early-1994. Expertise Required A team of consultants would be retained with expertise in personnel management, staff development and benefits, and costs and financing of public service systems. Costs The costs of the proposed study are estimated at US$100,000 equivalent. COLOMIA MICIPAL NEALTH SERVICES PROJECT Cotl Sumary Accounts by Year Ease Costs Foreign Exchange ....................................................................... .................. 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 Total % Amount I. INVESTMENT COSTS A. Technical Assistance 588.5 1358.3 1358.3 1343.5 1181.2 557.9 6387.6 0.0 0.0 S. Training 540.6 696.1 1057.8 934.1 781.9 147.7 4158.2 11.4 473.7 C. Fetlouships/Internships 786.5 671.8 914.7 654.8 411.2 0.0 3438.9 11.4 391.8 D. Civil works 0.0 5531.3 5685.9 2574.4 1545.6 772.8 16110.0 33.2 5340.8 E. Equipment 52.9 5042.5 4960.5 2353.7 1756.9 0.0 14166.5 86.8 12292.0 F. Furniture 0.0 825.6 825.6 772.8 386.4 0.0 2810.4 33.2 931.7 G. Vehicles and Boats 0.0 106.7 12.0 0.0 0.0 0.0 118.7 100.0 118.7 H. aterials and Supplies 58., 1154.4 1627.1 1290.9 1266.7 974.9 6372.6 27.8 1773.9 1. Studies 295.2 221.4 295.2 664.2 590.4 369.0 2435.4 0.0 0.0 J. Project Management 187.9 375.8 375.8 375.8 375.8 375.8 2066.8 0.0 0.0 Total BASELINE COSTS 2510.3 15983.9 17112.8 10964.2 8296.0 3198.0 58065.2 36.7 21322.6 Physical Contingencies 66.4 68.4 98.6 79.4 59.7 7.4 379.9 11.4 43.3 Price Contingencies 286.1 4960.6 9965.1 10046.2 10601.0 5533.2 41392.2 25.2 10440.0 Total PROJECT COSTS 2862.7 21012.9 27176.5 21089.8 18956.7 8738.6 99837.2 31.9 31805.9 Taxes 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Foreign Exchange 224.4 8655.7 10304.3 6183.6 5207.5 1230.3 31805.9 100.0 31805.9 Values Scaled by 1000000.0 4/12/1993 17:01 COLUIA IIICIPAL EALTi SERVICES PROJECT Summary Accounts by Tear Totals Including Contingencies Totals Including Contingencies CoMS aSS 1993/94 1994/95 1995/96 1996/97 1997/96 199/99 Total 1993/94 1994/95 1995/96 1996/97 1997/96 1996/99 Total I.- INVESTYME COSTS I. .IIIV STt. l CO5T = . ..... . .. . .. ........ . .......... . .. . . A. Technical Assistance 659.1 1869.5 2280.8 2727.6 2851.4 1574.7 1193.1 0.8 1.9 2.0 2.1 2.0 1.0 9.7 1. Training 62.0 993.3 1834.6 1951.0 1939.3 427.6 74.9 0.7 1.0 1.6 1.5 1.3 0.3 6.5 C. Felloushir/Internships 915.1 958.6 1586.4 1367.6 1019.7 0.0 5847.4 1.1 1.0 1.4 1.1 0.7 0.0 5.2 S. Civil Wart s 0.0 7333.0 9093.9. 4919.7 3497.3 2036.2 26880.0 0.0 7.3 8.0 3.8 2.4 1.2 22.8 E. Equipment 54.5 6271.6 7293.3 4044.2 3545.3 0.0 21208.9 0.1 6.3 6.4 3.2 2.4 0.0 18.3 F. Furniture 0.0 1094.5 1320.4 1476.8 874.3 0.0 4766.0 0.0 1.1 1.2 1.2 0.6 0.0 4.0 G. Vehicles and Boasts 0.0 130.6 17.2 0.0 0.0 0.0 147.8 0.0 0.1 0.0 0.0 0.0 0.0 0.1 N. taterials and Supplies ".0 1539.8 2623.2 2491.5 289.9 2597.9 12213.4 0.1 1.5 2.3 1.9 2.0 1.6 9.4 1. Studies 330.6 304.7 495.7 1348.4 1425.3 1041.5 4946.3 0.4 0.3 0.4 1.1 1.0 0.6 3.8 J. Project Management 210.4 517.2 631.0 762.9 907.2 1060.7 4069.5 0.2 0.5 0.6 0.6 0.6 0.7 3.2 Total PROJECT COSTS 2862.7 21012.9 27176.5 21069.8 18956.7 8738.6 99637.2 3.4 21.1 23.9 16.5 13.0 5.4 83.1 Values Scaled by 1010600.0 4/12/0.0 17:00 -4 - 72 - Annex 8A COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Organization IBRD MOF MOH FIS Pco Fiduolaries Departments DpartmentalPCO Municipalities Municipalities MOF - Ministry of Finance MOH Ministry of Health PCO - Project Coordinating Office FIS - Social Investment Fund - 73 - Annex 8A COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Responsibilities Functions Entity Responsible Provide Loan funds and monitor and a a IBRD) evaluate the project. Obtain Loan funds from IBRD and transfer them to the MOH. Ministry of Finance Transfer to MOH budget allocations as counterpart funds to the Loan. Submit project to CONPES for approval. Review and approve the annual budget. DNP Monitor the loan disbursement and repayment. General management and coordination of the project. Maintain accountability for project Ministry of Health resources. Establish the policies to be implemented. - 74 - Annex 8A Functions Entity Responsible Implement institutional development and studies and evaluation components. Finance the above. Define criteria, norms, techniques and Ministry of Health (continued) procedures for the subprojects. Channel loan funds to the FIS for the cofinancing of municipal subprojects. Assist territorial entities participating in the project. Monitor and supervise the implementation of the project. Cofinancing of municipal subprojects. Obtain financing from MOH. Submit implementation reports to MOH. FIS Select and supervise the fiduciaries for the management of the funds. Administer project resources at the municipal level and maintain control Fiduciaries over resources. - 75 - Annex 8A Functions Entity Responsible Approve the departmental health plan. Departments Assign department resources to the municipalities for technical assistance and training. Enter into project contracts with MOH. Prepare and manage the departmental health plan. Coordinate departmental and municipal activities at the departmental level. Departmental Health Authority Provide technical assistance and training to the municipalities. Monitor and assist the MOH to evaluate the project. Submit project reports to the MOH. Exercise ex-post control of subprojects submitted by the municipalities and financed under the project. Social Investment Fund: Special Departmental Unit Monitor fiduciary accounts and approve financial Implementation reports. Present Implementation reports to the National FIS. - 76 - Annex 8A Functions Entity Responsible Create local Health Authority. Approve the Municipal Health Plan. Municipalities Assign municipal funds to the municipal health system. Prepare and administer the Municipal Health Plan. Develop an administrative structure and the organization needed to provide basic health services. Municipal Health Authority Identify, prepare and approve health subprojects through municipal boards and committees. Co-finance and execute subprojects. Report on activities to the departmental health authority. Annex 8B - 77 - COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Guidelines, Criteria and Implementation Procedures for Municipal Subprojects CATEGORIES OF EXPENDITURES ELIGIBLE FOR INVESTMENTS Eligible categories of subproject investment to be financed under the Municipal Health Services Project include: i) civil works: construction, rehabilitation and upgrading of local hospitals, health centers and health posts; ii) medical equipment, supplies and furniture for local hospitals, health centers and health posts. ELIGBILITY CRITERIA FOR INVESTMENT PROJECTS Investment subprojects eligible for financing under the MHSP would have to comply with the following requirements: GENERAL REQUIREMENTS Eligible projects should be part of the approved municipal health plan. Subprojects should follow the technical norms established by the MOH (Operations Manual) for the construction and equipment of local hospitals, health centers and health posts. Project descriptions should include evidence of economic, institutional and social sustainability, and evidence that they will not cause environmental damage. The format for municipal subproject presentation should follow MOH guidelines (Operations Manual). TECHNICAL REQUIREMENTS Proposed investments in infrastructure would be based on demand and supply studies that include the following priorities: Complete unfinished civil works. Use existing infrastructure to full capacity, including private health establishments. Rehabilitate and upgrade existing infrastructure rather than construct new buildings. Construct local hospitals only if included in the departmental plan and if the possibility of using the local hospital of a neighboring municipality has been studied and found inappropriate. - 78 - Annex SB GUIDELINES TO ESTIMATE THE NEEDS FOR CONSTRUCTION, REHABILITATION AND UPGRADING OF PRIMARY HEALTH CARE ESTABLISHMENTS MINIMUM NUMBER OF BENEFICIARIES The minimum number of beneficiaries per facility should be as follows: 500 persons per health post; 3,000 persons per health center, and 10,000 persons per local hospital. TECHNICAL NORMS FOR CIVIL WORKS All civil works would follow the Operations Manual and MOH Technical Norms for the Design, Construction and Equipment of Local Hospitals, Health Centers and Health Posts. EQUIPMENT Investments in equipment for the implementation of the Project, including medical equipment, supplies and furniture, would be based on: maximizing the use of existing equipment, and complementing or completing provision of equipment and supplies based on the MOH List of Equipment for Primary Health Care Establishments as a guide to ensure the appropriateness of particular items for a given category of health establishment. LOCATION AND ACCESS New construction of health establishments (local hospitals, health centers and health posts) will be based on increasing access and minimizing the distance to the communities in the catchment area. Health establishments should be under one hour's distance from the communities by available means of transportation, as feasible. To the extent possible, access should be by road or boat. CIVIL WORKS All new, rehabilitated or upgraded health establishments must have potable water, electricity, appropriate sewerage systems, and appropriate ways of dealing with medical waste and a communications system. INSTITUTIONAL REQUIREMENTS All subprojects have to include evidence that the municipality has the managerial, administrative, financial, technical and operational capacity to ensure the implementation and maintenance of the project. If capacity is lacking, municipalities would receive additional support from the DS or would directly contract the necessary skills to implement and maintain the subproject according to acceptable standards. Investment projects have to include evidence that the municipality can provide the human resources needed for the development of health promotion, and the provision of curative and rehabilitation services as defined in the basic package of services and by health faculty. - 79 -Annex B TECHNICAL CRITERIA FOR FIRST HEALTH CARE LEVEL ESTABLISHMENTS Requirements Health Post Health Center Local Hospital Location Dispersed population Municipalities, Urban Municipalities, Comunas neighborhoods (submunicipalities) Population <3,000 persons 3,000 to 10,000 8,000-30,000 in the persons urban center Hours of service 8 hours during the day 8 hours during the day 24 hours a day Basic Human Auxiliary nurse, General physician, General physicians, Resources health promotor, dentist, nurse Dentist and auxiliary physician, dentist auxiliary nurse, dentist, Bacteriologist, environmental health Radiologist, promotor, family and Administrator, Nurses, community health Auxiliary nurses, teams Anesthesiologist, Auxiliary for General services, Technicians Basic Services Immunizations, General medicine, Outpatient care, in- injections, first aid, general dentistry, patient care, training and home visits, health home visits, first aid, research, health education and health preventive medicine, promotion, diagnosis and promotion environmental health, treatment in the four pharmacy, clinical basic specialty areas: laboratory, health pediatrics, OBGYN, promotion surgery and internal medicine through a general physician Infrastructure Nursing room, Rooms for medical Room for medical administrative area, encounters, room for encounters, room for outpatient area, first dentistry, area for dental encounters, aid area, housing environmental health, administrative area, X- (optional), community nursing room, first aid Ray room, laboratory, meeting room, Public room, pharmacy, surgery and delivery and private toilets waiting room, public room, sterilization area and private toilets, emergency room, housing (optional), kitchen and clothes laboratory, community washing area, storage meeting room room, morgue, housing (optional), community meeting room Total construction 40 to 80 square 100 to 300 square 1200 to 3000 square area meters and an meters and 45 square meters and 45 for additional 30 for meters for housing housing meetingroom housingroom,morgue,hou Annex 8B - 80 - METHOD These criteria are based on the "Categorizacidn Municipal para efectos del establecimiento de los sueldos de los alcaldes municipales" (DNP-UDRU-DU Bogott, July 1988) and the corresponding Decrees (2940 form 1988 and 2911 from 1992) and the Index for Basic Needs that are not satisfied (NBI) indicators included in the "Estudio de la Pobreza en Colombia", First Volume, DANE 1989. The categorization used by DANE combines population and income an the index of economic importance. The resulting index reflects proxies for managerial capacity and the economic status of each municipality, with Category 1 representing the largest, most developed and wealthiest and Category 5 representing the opposite end of the operation. The Table below provides the breakdown of municipalities by category and the estimated priority target populations. Population with unsatisfied needs Category * Municipalities in the Project (MiIs) 1 3** 1.6 2 10 0.9 3 16 0.7 4 56 1.3 5 135 1.4 TOTAL 220 5.9 Categories 1-3 have 50 of the population in the project area. Cartagena, Barranquilla and Bogoti. BASIC CRITERIA Based on consideration of institutional and revenue capacity, as well as poverty, the following guidelines were determined. The largest share of resources is directed to categories 2, 3 and 4, which account for about half of the poor in the project area, possess institutional potential and have substantially lower revenues than category 1 municipalities. It is expected that these guidelines would be revised, with experience, and, as warranted in terms of implementation capacity, a greater share of resources would be shifted to the poorer municipalities. Distribution of Resources No. of Categories Municipalities US$ Limit US$/Mulcipality 1 3 10,000,000 3,300,000 2 3 4 68 28,600,000 420,600 5 105 8,500,000 81,000 Totals 176 47,100,000 Based on 80 percent participation of the eligible municipalities; limits are maximums. ** For priority target population. - 81 - Anne 8B All projects must establish a system for referral of patients to regional and university hospitals and from the hospitals back to the Arst level of care, in accordance with MOH standards, which are being refined under the project. FINANCIAL REQUIREMENTS All municipalities will have to prove that they have the capacity to cover co-financing costs, and that they are able to finance the implementation and maintenance of municipal health services. Municipalities will also have to agree to introduce systematic cost-recovery practices, as prescribed by the project. ECONOMIC JUSTIFICATION The economic justification of the project will be based on the needs for infrastructure construction and/or rehabilitation, and will include cost-efficiency analysis of the proposed investments. These indicators will be reviewed on an annual basis and will be adjusted for local inflation in the costs of construction and other costs. The indicators to be used will be: the cost per square meter of basic construction (excluding the cost of the land, access and public works), and cost of running the system per beneficiary. The following indicators are a rough guideline. Variations of up to 20% will be accepted. Proposed subprojects that are below or above the projected cost will have to include a detailed justification prior to been accepted. The following tables include initial costs indicators. COST INDICATORS PER SQUARE METER (US$) Type of health establishment Health Post Health Center Local Hospital New construction 245 270 325 Upgrading 245 270 325 Rehabilitation 145 160 195 COFINANCING LIMITS PER MUNICIPALITY Ceilings on the amount of grant financing per municipality have been established at the rates indicated in the following Table. MAXIMUM FINANCING PER MUNICIPALITY Municipal category US$ per municipality 1 3,300,000 2, 3 and 4 420,600 5 81,000 - 82 - Annex OC COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Flow of Funds Functions Organization Provides funds to the Ministry of Finance based on the loan agreement. Channels loan funds and funds from the Ministry of Finance national counterpart to the MOH. Expends funds designated for the general management of the project and for central institutional development, policy development and evaluation. Expends or channels funds designated for financing technical assistance and training in the departments. Ministry of Heafth Enters into contracts with, and channels funds to FIS designated for cofinancing municipal subprojects. ............................... Selects and contracts fiduciaries and channels funds to them for cofinancing FIS municipal subproiects. - 83 - Annex 8C Functions Organization Enter into cofinancing contracts with municipalities, receive cofinancing Fiduciaries support from the municipalities, and finance municipal subprojects. Produce physical and financial implementation reports for the FIS special units. Enter into contracts and request payments and technical assistance services from the MOH/management Departments servies firms based on plans approved by the MOH. Transfer counterpart funds assigned for subprojects to the departmental Municipal Goverments fiduciaryfies selected by the FIS. Requests the fiduciary/es selected by the FIS to process subproject contracts and payments wit municipal approval and FIS supervision. - 84 - Annex 8D COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT Supervision Schedule Annual Supervision Two supervision missions per year are planned for this project. They should take place in March and September (the joint annual review) each year. The total annual number of staff/consultant weeks required are estimated at: Staff/Consultant Weeks Task Manager 3.5 Operations Assistant 3.0 Health specialist 1.0 Facilities Specialist 1.0 Procurement Specialist 1.0 Other* 2.0 * Including evaluation, information, health financing and training specialists. In addition, the first supervision mission after project effectiveness (expected for September 1993) would be the project launch workshop, requiring an estimated four staff/consultant weeks of time. The composition of this mission would include: Task Manager Operations Assistant Disbursement Officer Procurement Specialist Mid-term Review A mid-term review would replace the annual review in 1997. It should comprise a comprehensive assessment of the project as designed and reflected in this Staff Appraisal Report, against actual progress to date. It should also take into account issues arising during implementation or supervision in the early years of project execution, and serve as the basis for introducing adjustments as may be required, particularly in respect of subproject implementation procedures, approval criteria subproject financing limits by type of municipality, and co- financing arrangements. Emphasis would also be given to measuring outputs, reflected in monitoring indicators, and initial results, reflected in key indicators of impact (the monitoring indicators and key impact indicators are listed in Annex 6A). -85- Annex 9 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT ESTIMATED SCHEDULE OF LOAN DISBURSEMENTS (US$ million) IBRD FY DISBURSEMENTS Distmrsements Blance Semester Ending Amount % Amount % Amount % FY9 December 31 0 0 0 0 0 100 June 30 3.0 6 3.0 6 47.0 94 FY95 December 31 2.0 4 5.0 10 45.0 90 June 30 6.0 12 11.0 22 39.0 78 FY96 December 31 4.0 8 15.0 30 35.0 70 June 30 6.0 12 21.0 42 29.0 58 FY97 December 31 6.0 12 27.0 54 23.0 46 June 30 4.0 8 31.0 62 19.0 38 FY98 December 31 6.0 12 37.0 74 13.0 26 June 30 4.0 8 41.0 82 9.0 18 FY9 December 31 4.0 8 45.0 90 5.0 10 June 30 2.0 4 47.0 94 3.0 6 FY00 December 31 1.0 2 48.0 96 2.0 4 June 30 1.0 2 49.0 98 1.0 2 FY01 December31 1.0 2 50.0 100 - - Project Completion Date: June 30, 2000 Project Closing Date: June 30, 2001 - 86 - Annex 10 COLOMBIA MUNICIPAL HEALTH SERVICES PROJECT List of Documents Available In the Project File (1) Draft Operations Manual. MOH, April 1993. (2) Project Preparation Document: Sistemas Municipales Descentralizados de Salud (December, 1992 (and earlier versions). (3) Staff Development. Detailed Schedule for Training and Support. (4) MOH - Standard Lists for Construction, Equipment, Supplies and Furniture for Primary Health Facilities. (5) Colombia - Towards Increased Efficiency and Equity in the Health Sector - Can Decentralization Help?, draft, [BRD, March 1993. (6) Terms of Reference for Developing the MIS. (7) Municipal Revenues in the Project Area (1992). (8) Legislation and Decrees Regulating Fiduciary Agents, Government of Colombia. MAP SECTION  IBRD 24769 JAMAICA HAITI DOMINICAN MEP. C O L O M B l AHO A MUNICIPAL HEALTH SERVICES PROJECT - 1LI1N1 ECUA ATLANTIC carmtt BRAZIL CÉS PERU CEuv BOLIVIA. PANAMA \ A 1GEN NORTE 0 DE jo /COR SANTANDER* c"c.t A N T IOQUIA ANTANDER . ARAUCA VENEZUELA CH O ALDA A ICASANARE ALDADA .A CU A VI C H A D A A A MFE IBOGOTA CAUCA HUIL GUA IN A ýU A V 1A R E C A Q U E T A *z * E C U A D O R 0 ,X MILES Urban Population of Center Towns Elevations (meter.lis M0 lE0 5,000,000 persons 0 50 100 150 200 250 2,000,000 3P00 KILOMETERS ,,000000 AAMAZONAS 00 10 B R A Z l L CAUCA Project Departments * National Capital - o Cities and Towns with Population Over 40,000 b P Tl Ih dd .W s %. f - Main Highways P E ! I Rivers P d oE w r a Roen~~~~~ t R -nvro snIlTh. WorId Boink - Department Boundaries i th boond.d.,s o -* - nterntiono Bounaniesi I.n thi, rr-p do n-t -ply, n- Ih. Inentoa Bonartl port .1 Th. W.dld B.rdk G-op, f B orr ýY u5rrnt n th. 1.9.1.. 78 ARh b.v.dcr19 APRIL 1993