Argentina - Health Insurance Technical Assistance Project

The World Bank FOR OFFICIAL USE ONLY Report No: 24326 IMPLEMENTATION COMPLETION REPORT (SCPD-4004S; CPL-40040; SCL-4004A) ON A LOAN IN THE AMOUNT OF US$ 25.0 MILLION TO THE ARGENTINE REPUBLIC FOR A HEALTH INSURANCE TECHNICAL ASSISTANCE PROJECT 06/30/2002 Country Management Unit for Argentina, Chile and Uruguay Human Development Sector Management Unit Latin America and the Caribbean Regional Office This dnoament has a restricted diqtrihiition and may be iiued by recinientq only in the perfarmance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization. l  CURRENCY EQUIVATLE-NTS (Exchange Rate Effective As of May 30, 2002) Currency Unit = Argentine Peso (AR$) AR$3.7 US$ L00 US$ 1.00 = AR$3.7 FISCAL YEAR January 1 through December 31 ABBREVIATIONS AND ACRONYMS ANSSAL: Administraci6n Nacional de Seguros de Salud (National Health insurance Administration) APE: Administraci6n de Programas Especiales CAS: Country Assistance Strategy CBA: City of Buenos Aires DGI: Direcci6n General Impositiva (Federal Tax Collection Agency) FROS: Fondo de Reconversion de Obras Sociales (Restructuring Fund for National Health Insurers) FSR: Fondo Solidario de Redistribuci6n (Solidarity Redistribution Fund) IBRD: International Bank for Reconstruction and Development ICR: Implementation Completion Report INSSJP: Instituto Nacional de Servicios para Jubilados y Pensionados (National Social Service Institute for Retirees and Pensioners) MOE: Ministerio de Economia y Obras y Servicios Piblicos (Ministry of Economy and Public Works) MOH: Ministry of Health O(S:. Obras Sociales (Health Insurance Fund) PAMI: Instituto Nacional de Servicios para Jubilados y Pensionados PCU: Prnpect Corrdlination Unit PMO: Programa Medico Obligatorio (Standard Health Benefits Package) DlDVVAT P-,n, -nAL Pre dfn,-na de1 Sector Soeal u (Provincia! T-T eath SePt^r Thev1pu niment Prnipr-1t PRESSS: Programa de Reconversi6n del Sistema de Seguro Social k1waGDUULU UIg 17lUrla VI Ul 11;aldu Illaw auw, 3IADa%1lJ PROMIN: Programa de Salud Matemo-Infantil y Nutrici6n (Matemal and Child Health and Nutrition Project) SSS: Superintendencia de Servicios de Salud (Health Services Superintendency) UEC: Unidad Ejecutiva Central del Proyecto de Desarrollo del Sector Salud en las Provincias UEP: Unidad Ejecutora Provincial UNDP: United Nations Development Program Vice President: David de Ferranti Country Manager/Director: Myrna Alexander Sector Manager/Director: Evangeline Javier Task Tearn Ledr!T2k Manager: Daniel Cotlear  FOR OFFICIAL USE ONLY ARGENTINA HEALTH INSURANCE TECHNICAL ASSISTANCE CONTENTS Page No. 1. Project Data 1 2. Pprfnrmnne, Rptinag 1 3. Assessment of Development Objective and Design, and of Quality at Entry 2 4. Achievement of Objective and Outputs 5 5. Major Factors Affecting Implementation and Outcome, 10 6. Sustainability 12 7. Bank and Borrower Performance 13 8. Lessons Learned 14 9. Partner Comments 15 10. Additional Information 17 A,nex l. KTe Perfonrmnance indicatr%/Tl na Frnmp. Mntriy 18 Annex 2. Project Costs and Financing 19 Annex 3. Economic Costs and Benefits 21 Annex 4. Bank Inputs 22 Annex 5. Ratings for Achievement of Objectives/Outputs of Components 24 Annex 6. Ratings of Bank and Borrower Performance 25 Annex 7. List of Supporting Documents 26 Annex 8. Summarv of the Evaluation Status of Participating OSS in PROS 27 Annex 9. Summary of Studies Under the Policies Component 28 This document has a restricted distribution and may be used by recipients only in 'he per.forfm ance of their offir4a! duties. Its contepts mnv nnt hi ntherwiqe disclosed without World Bank authorization.   I Pro,iect ID: P0A4567 IPr-j,ecl-t,,A,T AD - e AT17\ T ID ALTI-rT H .S C' TA Team Leader: Daniel Cotlear TL Unit: LCSHH ICR T-ype: C'o-r-e ICR' 'Report Date: June 27, 2002 1. Project Data Ab.ame: AP.-HELTtATH rTUTTTD ANTrC TA If1 Number f':T% AACAADI. CPL-40040; SCL4 004A Country/Department: ARGENTINA Region: Latin America and Caribbenn Region Sector/subsector: HR - Reform and Financing KEY DATES Origi.nnlRviedAta PCD: 04/17/1995 Effective: 07/12/1996 07/12/1996 Appraisa. 0611! 9/195 ,,MTR: Approval: 04/25/1996 Closing: 12/31/1999 06/30/2001 Borrower/lmplementing Agency: REPUBLIC OF ARGENTINA/MINISTRY OF HEALTH Other Part ners: STAI7 F Currnt At Appraisal Vice President: David de Ferranti Shahid Javed Burki Country Manager: Myrna Alexander Go' in' T. Nakani Sector Manager: Evangeline Xavier Alain Colliou Team Leader at iCR: Daniel Cotlear Rooert Hecht ICR Primary Author: Luis Perez; Sati Achath; Ruth E. Levine 2.. Prrincipal 'Per,'urmrance Ratiings (HS=Highly Satisfactory, S=Satisfactory, U=Unsatisfactory, HL=Highly Likely, L=Likely, UN=Unlikely, HUN=Highly Unlikely, HU=Highly Unsatisfactory, H=High, SU=Substantial, M=Modest, N=Negligible) Sustainability: L Institutional Development Impact: SU Rank Perfnrmanrpe S Borrower Performance: S QAG (if available) ICR Quality at Entry: S Project at Risk at Any Time: No  3 Asescsmane f nflg opa1nw%rnjt hiajofivD anti Daesin, and of (u.va,lfi a+ Ent JY 3.1 Original Objective: The US$25 million Argentina Health Insurance Technical Assistance Project accompanied two adjustment operations (Health Insurance Reform loans 4002-AR and 4003-AR, totaling US$350 million), each of which sought to improve the efficiency and long-term financial solvency of the country's major health insurers (known as Obras Sociales - OS). The loans were designed to support several objectives of the Government: to introduce competition in the health insurance market, while avoiding risk selection; to create a fund that would on-lend to health insurers - many of which ran chronic deficits - conditioned on their implementation of organizational and administrative reforms that would lead to long-term solvency; to reallocate money in the existing insurance redistribution fund to insured individuals on the basis of their income and health risk profile; and to develop an effective regulatory framework for health insurance that would promote competition, while at the same time ensuring transparency and accountability, and protecting consumers' rights. The reform was expected to benefit a total of 18 million people covered by the national social insurance providers. Historically, both the OS and the National Social Services Institute for Retirees and Pensioners (Instituto Nacinnal de Servicios Sociales nara Jubiladns v Pensionados -INSSJP also known as PAMI) had operated as monopolies, with captive, employer-based beneficiary populations. Many of the insurers nperated in inefficient and non-transparent ways, c-hronically nrnning large debts; a large share had such small risk pools that the chances of solvency were small. Through the introduction of competition among the OS, ad tbe tm,rnv,ed rmj1a^tion of the healtt,h ina-,"nce systemn A-,ln of ins,ed Argent,,.es were expected to obtain higher quality of service, resulting in better health outcomes and higher user satisfaction. Lil adlUkition, uhIVe.JILA reforj. ;cue (z)le,ilr, corLLJL.petiti UVLWe bLrAO ar.d rger,tMUr in'Laa's pivt peVLL -pa health plans (Pre-Pagas) in the market for voluntary health insurance; (b) implementation of a Standard TT__I.t Tm __ _C^_nI__ _ X r%_ V_ _M _:_L:_.:_n or_:___ _ ___.__J "- t_ . nHaeUI DBlenefit rPacIkag krrugrurnu iV1tfUIGu LIU JugULtU(JFLC riv I'J) lUl UIbUjwu Pulbul, aUu ku) lul redirection of Redistribution Fund (FSR) resources to OS with the lowest levels of revenue per beneficiary. ese,aV chJLanges wer expcte to substr.ia"y Ui..p. ~-ov h equity of th e W.f nsw-a sy-tem. Th reform was also expected to reduce waste and misuse of funds, eliminating the estimated US$150 million in cominUdu opeULUirar UViWi>L (J JpererL Uo dLUIUi LrVVr1Ues) dL UIV LfIL1r. Ul applaisa:. rULuUVI, 'ule hea LU insurance reforms were expected to improve health outcomes for a large segment of the country's formal work force, ieading to iower absenteeism and higner producuivity. The technical assistance (TA) loan reviewed in this report was designed to provide the Government with the necessary technical resources to meet the important policy conditions attached to the health insurance reform loans (as well as a later Social Sector Adjustment Loan), and to strengthen the public sector institutions charged with designing, implementing, and monitoring the planned reforms of the social insurance system. The specific objectives of the project were to: (a) design and put in place a set of key reform policies such as competition, standard benefits package, and automatic distribution from the Solidarity Redistribution Fund (Fondo Solidario de Redistribuci6n, or FSR); (b) develop the regulatory framework and institutions for the future system; and (c) formulate and implement organization and management changes in the PAMI. The project's objectives were consistent with the Bank's Country Assistance Strategy (CAS) during a period of fiscal crisis in the mid-1990s. In particular, they corresponded to the Government's interests in restoring and maintaining a fiscal balance through improvements in the efficiency of public expenditures; - 2 -  and supporting investments in human resource-. esneciallv educationn nutritionn and health= On the fiscal side, the sector adjustnent and TA loans were aimed at eliminating the operating deficits and improving the effirien.y of ent:tis nrovidancy social health insirnne. In tonig en nd in ml-ny ndditinml char.e in the "rules of the game" under which social insurance was organized, it also sought to improve access and -lith, nf hpoltb rcare fnr Argentis in tha fnrnml oat'tnr - Lh s r Anonngm to h . ar. -lo,p-rnant concerns. The Bank was well placed to develop this operation, given its involvement in Argentina's health sector It___ -L r . _1 2 LlJ L.-.l.L InflT)I f ITT