Tunisia - Health Sector Loan Project

Report No. PID5795 Project Name Tunisia-Health Sector Loan (@+) Region Middle East and North Africa Sector Basic Health Project ID TNPA5746 Borrower Government of Tunisia Implementing Agency The Ministry of Public Health (MOH) Project Coordinator: Dr. Kheireddine Khaled Director of Planning and Studies Ministry of Public Health Bab Saadoun, Tunis, Tunisia Tel.# 216-1-562 917; Fax # 216-1-567 100 Date This PID Prepared November 20, 1997 Appraisal Date October, 1997 Projected Board Date March, 1998 1. COUNTRY & SECTOR BACKGROUND. Tunisia has invested heavily in human resources and progressively built up a comprehensive social system. Its health indicators have improved significantly as a result of better living conditions, greater access to education, improved nutrition, the development of both preventive and curative health care services, and lower birth rates over the last 20 years. Life expectancy has increased by more than 50 percent, infant mortality is down to 30 per thousand and population growth has declined to 1.7 percent in 1996. 2. The challenge of the Government is now to ensure the economic sustainability of this social system by improving the efficiency of the programs implemented, targeting basic services toward the most vulnerable groups and providing the framework which will enable the rapidly expanding private sector to develop its full potential (its bed capacity has doubled in the last five years and the outpatient visits are almost equal in number to those in the public sector). Over the last ten years, the Government has placed a strong emphasis on: (i) improving the provision and quality of care at the primary and tertiary health care levels: today there is universal access to primary health care services and 95 percent of the population reside within a one-hour walking distance of a health facility; at the tertiary care level, major organizational and management reforms were introduced in teaching and specialized hospitals which increased their autonomy and led to a marked improvement in their performance; and (ii) addressing health financing issues: the free and subsidized medical care schemes were revised to improve targeting of the poor; the tariffs applied in public hospitals were revised to bring them more into line with the real costs of the services; and a reform of the health insurance funds under the social security system is being developed based on the principles of basic coverage combined with optional supplementary coverage, and  equal access to all providers. 3. Conscious that the further liberalization of the economy will place even tighter pressures on public resources and constraints on the development of the public health sector, and encouraged by the success of the health reforms already implemented, Tunisia has endeavored, in its IXth 5-year Plan to: (i) ensure that regional hospitals carry out their function of initial referral and provide specialized care to their communities, thus relieving the teaching hospitals of an activity for which they are not efficient; (ii) redefine the functions of the central level and the regional directorates while strengthening the management autonomy of public hospitals; (iii) extend the billing experience and a simplified version of the management tools successfully introduced in teaching hospitals, to other facilities; (iv) introduce mechanisms for controlling costs (capitation and global budgets as possible options); and, (v) develop policy aimed at increasing the role for the private sector in delivery and financing of health care. 4. PROJECT OBJECTIVES. The Bank loan will support a program of major health reforms from 1998 to 2003 which contains four strategic objectives: i) improving the macroefficiency of investment by establishing criteria and mechanisms to ensure that public resources are invested in those activities where the State has a justifiable role; ii) improving the microefficiency of operations through management reforms; (ii) enhancing the financial sustainability of publicly supported operations by introducing policy measures to control costs; and, (iii) enhancing the quality of services through improved case management and staff training. Pursuit of all four objectives will entail strengthening the MOH's capacity to plan, prepare, implement and monitor the impact of sector investments, and to coordinate with the private sector. 5. PROJECT DESCRIPTION. The proposed loan will support the National Health Strategy as defined by the Government for the next ten years and in particular finance activities planned in the IXth 5-year-Plan. The instrument envisaged will be characterized by its flexibility to adapt to the sector's rapidly changing environment. It will focus mainly on: (i) supporting priority investments (i.e. regional hospitals, medical emergency services and information systems) while at the same time (ii) facilitating the development and implementation of key reforms; and (iii) strengthening the capacity of MOH. 6. PROJECT FINANCING. The proposed IBRD loan amounts to US$ 75 million, or 15 percent of the total new commitments for investments in the 9th Plan. The balance would be financed by the Government (70 percent), the social security system (10 percent), and other donors (5 percent). Bank's contribution would be applied to civil works, goods, studies and training. 7. PROJECT SUSTAINABILITY. The project will contribute to improving the economic efficiency of the health delivery system, particularly through regional hospitals and emergency medical services. At the same time, the health management information system - 2-  to be put in place will provide information needed for rational decision-making. The Government is developing National Health Accounts to monitor the sources and uses of funds for the sector. 8. PROJECT IMPLEMENTATION. The MOH will be the executing agency for the project. Since activities of this project are a subset of the IXth 5-year Plan, their implementation will be carried out through existing MOH channels. The Project oversight committee would mirror the ministry's management team and be headed by the Minister. The Directorate of Studies and Planning (DEP) will be responsible for overall coordination with all Departments involved. This will include responsibilities which are part of its natural mandate, such as coordination for the planning, budgeting, and programming of all planned activities and investments, with other departments and regions. The DEP which is responsible for preparation of the 5-year Plans and preparation/negotiations of annual budgets with the Government, would also lead annual discussions with the Bank to select investments eligible for Bank financing, as well as monitor progress on all these activities. 9. LESSONS LEARNED FROM PREVIOUS BANK INVOLVEMENT. Success of projects in Tunisia has been dependent upon: (i) the degree of integration of the project objectives and concept into the overall Government strategy; (ii) sufficient consideration being given to Tunisia's preference for incremental reforms rather than "big-bang approaches"; (iii) the degree of effort put into building consensus around the project's concept; and (iv) the attention given to ensuring adequate operating resources. These lessons have been fully incorporated by the Government and the Bank in the development of this project: (i) the project's objectives and activities are an integral part of the health sector strategy for the next 10 years, and are translated operationally in the IXth 5-year Plan (1997-2001) which the Government has just prepared. With regard to consensus building, the Government has proceeded with extensive consultations from all stakeholders to develop its 9th Plan. The Government has also given increased attention to ensure a level of recurrent resources commensurate with the investments envisaged by: (i) integrating recurrent and investment budgets under the same ministry; and (ii) totally separating its strategic policy formulation from its dialogue with potential financiers. In the development of this project, the Bank has fully respected the strategic formulation process of the Government by providing technical advice in the development of the Health Sector Strategy through the Hospital Restructuring Project and the PHRD Grant, and aligning the timetable for preparation of the project with the completion of the 9th Plan. 10. POVERTY CATEGORY. The project is expected to have a positive social impact. It will support the implementation of the National Health Strategy which is based on the principles of universal coverage, equity, quality and openness of the system to new developments in the field. Patients will receive better quality care in hospitals where providers and decision-makers are better trained to manage resources and to deliver quality services. The population overall will benefit from a quick response from emergency services - 3-  that are more efficient and of better quality. One of the Government's goals is to strengthen its capacity for planning, regulating and monitoring which are necessary prerequisites for improved coverage and quality. The project would support this goal by developing the national health information system and by developing the institutional capacity of the Ministry of Health. 11. ENVIRONMENTAL ASPECTS. The project is rated in Category B. Please see the Annex for details. Contact Point: The InfoShop The World Bank 1818 "H" Street NW Washington, D.C. 20433 Telephone No: (202) 458-5454 Fax No: (202) 522-1500 Note: This is information on an evolving project. Certain components may not be included in the final project. Processed by the InfoShop week ending January 16, 1998. - 4 -  Annex Environmental Aspects The only project input which could have an environmental impact would be the rehabilitation of priority public health facilities. A study of hospital solid waste disposal was carried out as part of the on-going Hospital Restructuring Project and its recommendations are being implemented by the Tunisian Government, and could be financed under the loan. This will be a covenant into the loan agreement. In addition, considerations will be given to the waste treatment/disposal capacity at health facilities during the preparation of facility rehabilitation plan which will be approved by the Bank.. The assessment of the capacity to handle and dispose properly hospital waste will be a criterion for approving the investment sub-project. No major environmental impact is expected. Tunisia has the institutional and legal framework for EA reviews, and arrangement is made so that the investment projects would be renewed by the Agence Nationale de Protection de l'Environment and an environment management plan would be prepared as requested by the Bank. - 5 -