Uganda - District Health Services Pilot and Demonstration Project

DOC== of The World Bank FORt OFFCLAL USE ONlY CR4- 26 79 - 4 Rest NO- P-6421-UG IORAND AND REATION OF THlE PRESIDENT OF THE INTENATIONAL DIEVELOPNMNT ASSOCIATIO'I TO HE EECUTIVE DIRECTORS ON A PROPOSED CREDIT IN THE AMOUNT OF SD 30.9 MILLION TO THE REPUBLIC OF UGA POR A DISTRICT REALTPT SERVICES PILOT AND DED)NSTRATION PROJECT DECEMBER 28, 1994 MICROGRAPH ICS Report No: P- 6421 UG Type: MOP This docmnent has a restricted distibution and may be used by recipie only in dte perforniaoe of th officia duties ts contents may not otherwise be disclosed witdou World Bak autborization.  CURRENCY EQUIVALENTS Cufrency Unit = Uganda Shilling (Ush) US$ 1.00 = Ush 940.0 lUsh = US$ 0.106 SDRI = US$1.45924 WEIGHTS AND MEAsuRES Metric System GOVERNMENT FLSCAL YEAR July 1 - June 30 ABBREVIATIONS AND ACRONYMS AIDS Acquired Immune Deficiency Syndrome CBO Community Based Organizations DANIDA Danish International Development Agency ICB International Competiive Bidding IDA Intenational Development Association K-W Kreditanstalt ftir Wiederauf bau MOLI Ministry of Health NGO Non Governmental Organization ODA Overseas Development Admnistration (UK) PCU Project Coordination Unit SIDA Swedish International Development Authority TFR Total Fertility Rate  FOR OFFICIAL USE ONLY CREDIT AND PROJECT SUMMARY Borrower Republic of Uganda Implementing Agencies: Mfmistiy of Health (MOH); Non Govermment Organizations (NGOWs); and Community Based Organizations (CBOs) Beneficiaries: Grady increasing to about 4 million people in approximately 10 disticts with approximaely 2 million of them women Poverty: Program of targeted interventions. Credit Amount: SDR 30.9 million (US$ 45 million equivalent) Terms: Standard, with 40 year murity Financing Plan: See Schedule A Staff Appraisal Report: 13515-UG Net Present Value: Not applicable. Map: IBRD No. 25052R rIs docomet has a resicftd dis_uta and may be used by recipients only in the pennn of fcl dti Is cont may n otwise be dosed tut World Bank auorza  MEMORANDUM AND RECOM ATION OF THE PRESIDENT OF THE ITERNATIONAL DEVELOPMENT ASSOCIATION TO THE EXECUlVE DIRECTORS ON A PROPOS1D CREDIT TO THE REPUBIC OF UGANDA FOR A DISRCr HEALTH SERVICES PILOT AND DEMONSTRATION PROJECT 1. I submi for your approval the folowig report and mn atono a proposed developmet credit to the Republic of Uganda for SDR 30.9 million, the equivaleti of US$ 45 million, on standard IDA tenis with a matity of 40 years to help finance a Distict Heath Services Pilot and Demo Project. The following Govemndowr agences have agreed to co-finance this project an a grant basis: ODA, U.K. (US$ 2.2 million); SIDA (US$ 7.0 million); DANIDA (US$ 5.0 millimon); and KfW, Gmany (US$ 9.0 million). 2. Sector Background TIe healt stats of Ugan's 17.5 million people is poor. Life expectancy at birth is only 47 years; the crude death rate is 19 per 1000 population; the under-S mortality rate is 185 per 1000 live births; and about 45% of chd under-S in a survey wee found to display low weigt-for-age, reflectg nutritional deficiencies. The leang caus of death ae AIDS, tbecosis, and malaria, for aduls; and malaria, pneumoia, and dihea for children. The leadig causes of illness and death are all prventable, although with varying degrees of difficulty. Uganda's health problems are md by a igh total f*rtility rate (CMR) of 7.1, reflectig a conacetve prealence rate of only SYO, and yieldig a high popuation growt rate of 2.8%. 3. The Government sector accounts for 62% of hospital beds and 58% of registered outae clinics. Government health fcilites suffer fiam a shortage of fiuids, particlarly for essential supplies and phm cals, stsalaries and mcentvs, and routine maintace of equipment and facilities. Althoug the non gvem_ sector accounts for only 38% of hospital beds, it povides 54% of bed-days, eflectin greater capacity utilization and staff productvity. Non Goverment Organizat (NGO) pay their staff significanty more ftan the govenment Health fties are well-distributed thouo th country, except for the North wich is under- served and existing facilites are in a state of dipair. 4. The health sector will be affected in a major way by the Govermnenfs ongoing decentration program, which transfer corl of most Governt serices from Central Govemment ministries to Distict ovem s. Miistry heaquares will be stemlind to a core of policy makers, plas, and inspectors. The Local Governmen Statute, 1993, provides the legal fiamework for dn, including changes in (a) persmonel manageent; (b) budget and financial managcmet; and (c) actr fimcton, powers, and es 5. Total heal spendig (public plus prvate) in Uganda stands at only $ 7.73 per capita (Goverunent health expenditure, $ 2.82 per capita; household health exenditu, $ 4.91 per capita), as compared with $ 11-19 per capita in most Sub-Saharan Afnican countries, and an esfimated cost of $ 12.0 per capita in low-income countries to provide a mini_m packge of the healh services whih are most cost-effective m avertig the Burden of Disease.' Analysis done for h Burd of Di and te vyg Ceffiveneofiffenh t irvans are elaed in Worfd Developmt Repot 1993: bwest in HealtL  the BaWs Social Sgctor Strate report fimud that Govemuent health expenditure was skewed toward subsidization of curative servces in hospit Is, with pubhc halth and pvetive serces seriously under-fimded32 6. Project Objectives. The objective of this project is to pilot-test and demonstrate the feasibility of deliverig an essenta health services package to dtrict populations, within a prudent financial policy framework for the sector. These objectives will be pursued through an integrated program of policy, institutional and financi improvemn nts, with close montoring. 7. Accordingly, the proposed project would (a) pilot and test new sector policies and staties which will fiitate e imple of esseial heat service; (b) strengthen management and plame ig capacity at district levels so that they are prepared to provide essental healh services; and (c) restucture the MOH so as to build its apcity to provide health policy leadership and to support the Govermens decaon policy. 8. Project Description. Pilot Acivities ( 8.2 million). This component would conbute to the ongoing pilot activities in 3 decenalied districts where the delivery of an esseal healt package to district popuations is being iutroduced. Tlis piloting phase wil essentially consist of meaurng te absorptive capacity at the district level, testing diffrent ways of deliverng the essential package to the populaoan and refining the package itself in lght of expeinces gained. The operation of an APEX function witn the MOH for the proiion of mnagrial and technical support to the 3 disticts woud also be part of the pilot pbase. This componet will be carefully monitored by defining measurable indicators which will produce tangble results. Based on these results, the project will move to th demonstion phase. 9. Demonstration Activities ($ 19.1 million). Ihis component woud consist of the implementation of a refined essential healffi services package il 7 addito disticts and the original 3. The number of districts to be selected for this ont is indicative and will greatly depend on the success of the initial pilot phase. Progess of the demonstraton actvies, with emphasis on the admistative logistical aspects of service delivery would be reviewed periodically (at least once a year) and the pace of exansionrplication in each distict would be d_etmnd on the basis of appropriate perfomanc indicators. 10. Capacity Building for District Health Administrations ($ 36.7 million). This component which would be implemented in al districts would conist of sbtg planning, managemn and evaluion capacity of district health adminiaon, rehabilitation and equipment of healh units, tr g and selective cou on for budgeting, acconting, and healt infonnation systms, and introduction of a Quality Assumance Program. This compnent woudd also support the devisingof admistraive mechansms for sub contracting of sevices, promotng private sector involvement and self govenua. 11. Restructring and Capacity Building for MOH ($ 8.0 mmion). To implement the Goverments dentralization policy, the prqject will help eorgze MOH. It will strengthen its policy, planning and inspection fimctions emphasizing monitoring and evaluation, and improve intemal efficiency. 2 Report No. 10765-UG, Uganda Socal Sect Stategy.  3 12. Monitoring and Evaluation (US$ 1.2 milion). The program monitoringevaluation activities will seek to determine the impact and cost effectiveness of the Heal programs as well as to draw lessons fom the imple ion of programs to improve the manaemen and deivey of all health services m Uganda. In addidion, both the monitorng and evaluation activities will provide in aion to the project management during implementation diat will help in idetfy necessary adjusents in progm design. 13. Project ImplemeIn (US$ 2.0 minion). The Minstry of Health wil be responsible for overall project coordinto. The Pennmaent Secrety, MOH will be the Project Director. The exsting Project Coordinaton Unit (PCIU) fol IDA fiuded projects will be responsible for the coordinaton of this project as well. It is headed by a senior Public Health Specialist who has been designated the Project Coordinator. The PCU includes 1 project manager, 1 project admistator, 3 accountat, 1 procurent specialist, I eineer and 3 secreares. Short-term technical assisace (preferably local) wil be engaged as necessary. Smce the bulk of the activities of the project will be in the districts, SIDA has financed two district support teams comprising of imlemenaon, fiancial and prmary health care specialists. These teams have been provided with a vehicle each to travel to project districts on a monly basis. 14. A Project Steering Committee chaired by the PS, MOK with representatives fom the MOH, MOLO, and MOFP has been established to act as an advisory body. NGOs and other 3inerested parties will be imited to participate in the Committee on an ad hoc basis. The Project Coordiator will be the Secretary to the Steering Committee. The Committee is expected to meet quarterly. 15. At the district level, the District Medical Officer will be responsible for coordinating project activities. He will work closely with NGOs active in the district as well as with members of the District Heth Teams and communty groups to ensure that srvices are provided to the largest group of people within the framework ofthis project 16. The total project cost of US$ 75.1 million equivalent will be financed as follows: a proposed IDA Credit of US$ 45.0 million; the Govanment will finance US$ 6.9 million; ODA, SIDA, KfW (Genmany), and DANIDA will provide parallel financing totalling US$ 23 2 milion. Details of project costs and financing plan are provided in Schedule A. Procemet arrgments and credit allocation and disbursents are given in Schedule B. The timetable of key evens is given in Sdule C. The status of Bank Group operations is summarized in Schedule D. The Staff Appraisal Report No. 13515-UG is being distributed separately. A map is also attached. 17. Project Sustaiabty. As set out in the ter of Sector Policy it is epect that there will be increases in the real ,alue of: (a) Treasury resources flowing to the health sector; (b) user charges; and (c) donor financig, eflecig the ilization of more rapid disbursement methods. The Govermnent will provide an annual report on sectoral endthu and financing, no later tan November 1 each year, beg in 1995. This will be reviewed by IDA and discussed between the IDA staff and the Government, with the objective of ensuring that domestic resources mobilization efforts do not lag. Increased cost recovery for the less cost-efibtive health serices will enable a greater share of Treasy fundx for the health sector to be devoted to the most cost- effective ("essential") health srvices. There is no commimet to havmg lower donor funding over the medium tmen, either m absolute levels, or as a share of health financing, bae such a commit"in would be in istnt with the objective of providing the package of essential health services to the Ugandan ppulaton. Over the long tenn, imprwed health aising from increased  4 provion of essetal hea services will conbute to productvity. The capacity budi coponent will stengthen fte district level administaion structues to deliver deenalized health sevices. New management ysms for financial mana ntr, poumnt and monitoring wil be establishd, both at district and cetr levels. The activitis wil complement the ongowig capacity building program of the Miisties of Local Govemment and the Decentlized Secretaria. By pret completion, it is expected that Ugads health sysm would be much more decentalzed and responsive to local needs, and would thus be more sustainable over the long tem. 18. Lessons from Previous IDA Ivolvement IDA is financing an ongoing First Health Project which becme effcive in 1988. In the early years implementon was slow but has recenty picked up considerably and is expected to be completed on schedu by June 30, 1995. Ih desig of the First Health Project was too ambitious in scope, based on good prior sector analysis, but not fully anticipating te coaining effects of known risks, paticularly efficts outside the health sector. It is therefe important to carefully assess the overall risks that could hamper project impltion and to build sufficient safeuards and flexibilty into the project to mite potel risks. This project takes the lessons learned into account by piloting activities in limited number of districts thereby allowing a ijustmets to be made before replicatig them to a larer number of districts. Anmnal work plans and reviews will enable modifleatios to project dsi to be made promptly thereby reducing the risks of poor implemention. 19. Rationale for IDA Involvement The health policy white paper was discussed in 1992/93 with the Bank and has since been approved by te Cabinet It provides the basis for poliy refirm. Following the 1993 World Developamt report "Invesin in HeaW, the Goverments of Uganda, Kenya and Tanzia with the assista of the Bank embarked on an ambitious exercise to put into practice some of the thories in the report. The teams developed health system profiles for their counies, mcluding an analysis of the couies burden of disease, and the cost of effecti ss of common commity, pmventi and curative healt care interventions to combat these diseases. Tbe teams also cstimatd amnnal health careexnditur by the Govemnt, donors and the prvate sector broke down by disease and type of intervention, and made ec ans based on their findigs concerig how resources could be realocated and the estimated gain in life years saved that would relt if these reallocatons occured. The proect is largely based on the findins of the Ugandan Report By actively participatig in this exercise fte Bank has developed an exellet dialogue with the Government on healti sector reforms; the Govemmen of Uganda has requested Bank support to carry the reforms thrugh. 20. The Comtry Assistance Strategy was dicussed at the Board on May 10, 1994 in conjunction wifth the Second Structural Adjustment Credit. The prmary objective of the Bank Group assistance to Uganda is to help te country lay the foundations for rapid, sutained and equimble growth as an instument for poverty reduction. Ihe elements of this stategy are the development of human capital, creation of a strong financial system, raising agricutural prodacivity and buildg strong institutions. This project, through its focus on the poor is an integral part of te Country Assistance Strategy. It will play a significant role in poverty reduction and will result in the development of human capitl in the project disticts. 21. Agreed Actions. Actions, which have been completed, include Goverment's submission of an approved Letter of Sector Policy; the establishment of a high level Implementaion Committ fobr efcting m tand onizal fms; an implem an plan for mnagemn and organizadona refms for the first year of the project; the appointnt of a  S project coordito, the establishment of a Project Steering Committee; and the submission of a draft manual for all project components. 22. Ihe folowing would be a condiin of effecdves: the submission of a final ihpaentatio mamual for all proect componens. 23. Duing negotiions, assrnces were obtained that: (a) only districts whose recurrent budgets hmve been decentralized by the central governmt be included in the prct; (b) progress of the demonstration actives, wit emphasis an the adm is and logincal aspects of susainig sce deliveiy wil be reviewed periodically (at least onw a year) and the pace of exan/replication in each district will be deemined on the basis of appropte perfonmac indicators; (c) formal proposals from NGOs would be a proondon for project funding and ta ammal reviews of all NGO actvites under the prqect would be carred out; (d) the pr- isin of equipment fiom a pro-approved lst to privae health units be lihmted to those m under-served areas and at a cost not exceedig US$ 25,000 per health unit; (e) only NGO units with satisfactory management capabilities be conacted to supvi nearby Govement health units and commuity based actiities and that for each such conrc a dma evp d met plan for the Goverment health umt with a set of monitorable indicators be prepared focusing on financing sustainability and service use, (t) a traig instiaons supported under the proact would be given the necessary a and financial autoomy (except for the policy on admiions, which sal be retaned by MOH), and ensure that, while the trang instiutions sball contiue to be accountable to MOH for al tecnical matters, MOH will provide them with fundig tbr a period of at least five years; ( studies and contactg out of services be completed no laterthan the end of the first year ofthe project and hat the findings, together with a plan for imIple Ofthe r ens, be submitted to IDA for review and comment; (h) all changes to the essal p of health services be submied to IDA for review and commaent before implementtion; (i) a mid-term ealuation of the project be held in 1997 and that the implemeation evaluation report be prepared by the Goverment witbin 6 months of the project closing date; (j) (i) the annual work programs be prepaed at the same time as the prepaation of the annual national budget; (ii) relevant line items be inuded in the national budgt aimed at providing adequate countepart fundig each year, and (in) the Goverment produce, on an aanua basis, evidence that resources thus allocated in the previous year's budget were used for the inteded purpose; (k) the Goverment would have the records and accounts of the Project, including those for the Special Accounts and SOE's, audited for each fiscal year by idependent auditrs acptable to IDA, and that it would submit the audit reports to IDA withi six months of thie end of every fiscal year, with a separate opinion by the auditors on SOEs. Similarly, MOH would have its accouns and those accounts of the vanous Districts, inclding SOEs, audited for each fiscal year by idependent auditors acceptable to IDA and submit audit eports to IDA witi six months of the end of every fiscal year with a separate opinion by the auditors on SOEs; and (1) the project coordinator be acceptable to IDA during the entire imple aion period. 24. A condition of disbursement for the demstatn component would be the succsful completion of the pilot phase ofthe project. 25. Poverty Category. The paage of essenal healh serices will be delivered to aR Ugndan people, including the poor. The proposed shif twwd greater spending on preventive and protve health will improve the heath stas of all people. Wtthin the curative budget, spending will be shifted towards healtf centers and away from district hospits. Hence, the per visit subsidy at health centers would increase and since the poor use health centers two to ee times  6 more ofken than the non-poor, the would be the mam beneficies of such reallocation. Approximately 2 nillion women would direcfly benefit frem the project. 26. Participatory Approach Ite project was prepared by the Govermment with assistnce from outside consuln. In addiion, SIDA has financed thee districts m which pilot activites are being arried out. he objectives and wctivies of the project have been formulated within the framework of health plans prepared by district officials. In adion, N s and CBOs are proiding continuous feedback on project impact. 27. Environmental Aspects. The Project is classified as catgory C, wvith no adverse impact on th evf ime 28. Program Objective Categories. The program objectives which will be mpacted by this project are: Primary: Health, Nutrition; and Seconary: Povety Alleviation. 29. Benefits. The project will help reduce te burden of disease and thus improve the health status of the population in the project districts through the mple ion oCsectoral poicy, exendit and insutonal reforms and through the introduction of the concept of essenal public health and clinical pacages. It wil also serve as a vital pilot project for effctive decetaliaon, ths conibuting thlough an evolvmg leanmg exercise to institution and capacity building and overall susinabiity. 30. Risks. Although the Govermnent is committed to d lizan, the imp ion capacity of the MOH and district level insttutions might prove inadea despit the reforms proposed. The project is seeldng major changes in the way health servces are deivered, and implementation will require the use of approaches (e.g. contracng out) which are at present unfiamii to district organizations. The project is designed to support distict administraion though strong technical backstoppmg by the MOH and by proving traig in manage_me; pLanning, accounting stock inventoly, drug supply mment, health infomation systems, training and supervision of staff and monitoring and evaluation. 31. Recommendation. I am satisfied that the proposed Credit would comply with the Articles of Agreemnt of the Associaton and recommend that the Executive Directors approve it. Lewis T. Preston President Attacbments Washigton, D. C. Decmber28, 1994  7 Schedle A ESTMATED COST, FINANCING PLAN AND MA DISBURSEMENTS Estimated Costs (USS million) Project Component Local Foreigl Total Pilot Activities 2.7 4.7 1.4 Demonstration Activites 6.6 10.2 16.8 Capaciy Building for District Health Administions 17.5 14.5 32.0 Restucturing & Capacity BildingfortheMOH 3.4 3.7 7.1 Monitring&Evaluation 0.4 0.7 1.1 Project Orgizadon& Managm_t 0.7 1.1 1.8 Total Base Cost 31.3 34.9 66.2 Contingencies 4.9 4.0 8.9 Total Project Cost 36.2 38.9 75.1 Finacin Plan (US$ milon) Expenditure IDA SIDA KfW ODA DANIDA Govt* Total Category Civil Works 12.2 1.0 13.2 EquiPment 12.0 5.1 17.1 Materials 0.3 0.3 Vehicles 1.4 1.4 Medical Supplies 3.0 3.2 6.2 Furniture 0.2 0.2 Local Trii 6.0 4.6 2.2 1.4 14.2 Technical Assistance 0.5 0.4 0.9 Reseach/Studies 1.0 2.5 3.5 Monitoring/Evahution 3.0 0.3 0.1 3.4 Supevision 1.7 2.4 4.1 Recuntent Costs 5.1 5.5 10.6 Total 45.0 7.0 9.0 2.2 5.0 6.9 75.1 * It is expected that communities will provide an additional US$ 15.0 milliorn in contributions of cash and ldnd. Community contnbutions are not included in the project costs.  8 Schedule B Page I of 2 PtROCuREMNT ARRANGY AEWNS (US$ MLLION) (IDA contfibutions shown in brackots) Project Element ICB LCB Other NBFa Total CIVIL WORKS: Civil Works 2.0 11.2 13.2 (2.0) (10.2) (12.2) GOODS: Equipment/Materials/ 11.3 1.0 0.2 5.1b 17.6 Furiture (11.3) (1.0) (0.2) (0