Turkey - Primary Health Care Services Project

Document of The World Bank Report No. 16374 TU STAFF APPRAISAL REPORT Republic of Turkey Primary Health Care Services Project June 3, 1997 Human Resources Operations Sector Division Southeastern Europe Department Europe and Central Asia Region  CURRENCY EOUIVALENTS (as of February 28 1997) Currency Unit = Turkish Lira (TL) AVERAGE EXCHANGE RATES Project Years March 97 May 16, 1997 Appraisal Negotiations 1997/98 1998/99 1999/00 US$ 120,000 137,440 283,630 356,220 392,310 WEIGHTS AND MEASURES Metric System ABBREVIATIONS AND ACRONYMS BHSM - Basic Health Statistics Module CAS - Country Assistance Strategy CHRMS - Core Health Resources Management System DMO - Turkish Govemment State Supply Office EU - European Union FY - Fiscal Year GMW - Gross Minimum Wage HITT - Health Informatics Task Team IBRD - lntemational Bank for Reconstruction and Development KPI - Key Performance Indicator MCH/FPU - Mother and Child Health and Family Planning Unit MIS - Management Information System MOH - Ministry of Health PCU - Project Coordination Unit PHC - Primary Health Care PHD - Provincial Health Directorate PHCSIS - Primary Health Care Services Information System PIP - Project Implementation Plan PUCH - Public Health Center SAR - Staff Appraisal Report SOE - Statement of Expenditures SPO - State Planning Office SSK - Social Insurance Organization UNICEF - United Nations Children's Fund REPUBLIC OF TURKEY FISCAL YEAR January I - December 31 Vice President: Johannes Linn, (ECAVP) Director: Kenneth Lay, (EC I DR) Division Chief: Ralph Harbison, (ECI/2HR) Responsible Staff: Brad Herbert, Task Manager, (EC 1/2HR) Chris Lovelace, Sr. Health Specialist (EC I/2HR) Patricia Kleysteuber, Operations Officer (EC I/2HR) Craig Neal, Information Specialist (EMTPM) Loraine Hawkins, Health Economist (Consultant) Edith Santos, Sr. Staff Assistant (ECI/2HR) Peer Reviewers: Arrnin Fidler, Public Health Specialist, (LASHD) Teresa Ho, Sr. Health Specialist, (EC3HR) John Langenbrunner, Health Specialist. (EC3HR)  STAFF APPRAISAL REPORT Republic of Turkey Primary Health Care Services Project Contents Loan and Project Summary ...................................................................i 1. BACKGROUND ..................................................................1 A. Country Context ........................................................................lI Demographic and Health Status Background .....................................................................1 B. Sectoral Context ........................................................................1I The Current Health Care System ........................................................................1I Financing Health Care .........................................................................2 Recognition of the Need for Change ......................................................................... 3 Turkish Health Reform Program .........................................................................4 Law on the Establishment and Organization of Health Financing Institutions .................5 Basic Law on Hospitals and Health Enterprises .................................................................5 Primary Care Services and Family Physician Services Law ..............................................6 C. Justification for the Primary Health Care Reform .....................................................................7 D. Rationale for World Bank Involvement and Linkages to Existing Loan Projects .....................7 2. THE PROJECT ..................................................................9 A. Introduction .........................................................................9 B. Project Objectives and Rationale ........................................................................ 10 C. Project Description ........................................................................ 10 Component 1: Primary Health Care System ..................................................................... 11 Development of Family Physician and Referral System ..................................... 11 Family Physician Training ........................................................1................ I Upgrading Primary Health Infrastructure ............................................................ 12 Primary Health Care Services Information System ............................................. 12 Component II: Monitoring and Evaluation ...................................................................... 13 Pilot Monitoring and Evaluation ........................................................................ 13 Project Management ........................................................................ 14 Component III: Institutional Development, Health Economic Analysis ......................... 14 D. Cost and Financing ........................................................................ 15 E. Project Justification ........................................................................ 17 Foundation for Future Economic Evaluation of PHC System .......................................... 17 Consideration of Cost-Effectiveness of Pilot Project Alternatives ................................... 18 Numbers and Selection of Pilot Provinces ........................................................................ 18 Consideration of Cost-Effectiveness of Family Physician and Public Health Center Infrastructure ..................................................................... 19 Consideration of Cost-Effectiveness of Family Physicians Training Alternatives .......... 19  Consideration of Cost-Effectiveness of PHC Information System Alternatives .............. 20 Financial Impact to the Public Sector ................................................................ 20 Private Sector Financial Impact and the Financial Incentives which Support the PHC System ................................................................ 20 Rationale for Government Involvement ................................................................ 21 Impact on Poverty ................................................................ 21 F. Environmental Impact ................................................................ 22 G. Participation ................................................................ 22 3. PROJECT IMPLEMENTATION ................................................................ 23 A. Implementation Schedule ...................................................................... 23 B. Implementation Management ................................ 23 C. Procurement Arrangements ................................ 26 D. Disbursements and Financing ................................ 27 E. Accounts, Audits and Progress Reporting ................................ 29 F. Supervision and Monitoring ................................ 30 4. PROJECT BENEFITS AND RISKS ................................... 31 A. Benefits ...................................... 31 B. Affordability ...................................... 32 C . R isks ...................................... 32 5. RISKS AND BENEFITS ................................... 33 TABLES Table 2.1: Summary of Project Cost Table 2.2: Summary of Project Components by Expenditure Category Table 2.3: Summary of Financing Plan Table 3.1: Procurement Arrangements Table 3.2: Disbursement Categories Table 3.3: Summary of Disbursement Schedule ANNEXES Annex 1: Project Design Summary and Key Performance Indicators Annex 2: Project Monitoring and Evaluation Annex 3: Project Implementation Plan - Table of Contents Annex 4: Schedule of Procurement Arrangements MAP IBRD 28709  Republic of Turkey Primary Health Care Services Project Loan and Project Summary Borrower: Republic of Turkey Implementing Agency: Ministry of Health (MOH) Beneficiary: MOH line departments, provincial health directorates, health care units in the project provinces, selected hospitals Poverty: Although this project is not a poverty-focused operation, as a primary health care project it expands services to the poorer segments of the population who use public primary care facilities. As such, it channels resources to the beneficiary population in the lower socio-economic brackets. Loan Amount: US$14.5 million Terms: Standard amortization term, grace period and interest rate for fixed-rate US Dollar single currency loans with an expected disbursement period of three years. Commitment Fee: 0.75% on undisbursed loan balances, beginning 60 days after signing, less any waiver. Financing Plan: See Table 2.3 Net Present Value: N.A. Staff Appraisal Report: 16374 TU Map: IBRD 28709 Project ID Number: TR-PE-9095   Republic of Turkey Primary Health Care Services Project STAFF APPRAISAL REPORT 1. BACKGROUND A. COUNTRY CONTEXT Demographic and Health Status Background 1.1 Turkey's population in 1990 was 56 million. The estimated mid-year population for 1996 is about 64 million with an average density of 73 inhabitants per square kilometer. The country is administratively divided into 80 provinces. There are considerable geographical variations: eastern and south-eastern regions are less developed compared to other parts of the country. 1.2 The demographic profile of Turkey is relatively young compared with other European countries. Health status in Turkey, as measured by a range of indicators, is not satisfactory given its level of socio-economic development. The most important causes of mortality in the country are: in infancy, perinatal/neonatal, pneumonia and diarrhea; in children aged 1-5, infectious diseases and their complications, mostly associated with malnutrition; in adolescents and young adults, various types of accidents; in those aged 25-44, heart disease and accidents; and in those aged 45-64, heart disease and respiratory disorders. 1.3 Infant mortality is one of the most significant health problems in Turkey at 42.2 per 1,000 live births. For the country overall, the under-five mortality rate is 52 per 1,000, with significant regional and urban/rural variations. The maternal mortality rate is estimated by SPO at around 100 per 1 00,000. 1.4 A major National Burden of Disease study is being undertaken under the Health 1I Project which should provide an important basis for setting priorities and targeting scarce health care resources at effective interventions likely to improve health status. B. SECTORAL CONTEXT The Current Health Care System 1.5 Health services in Turkey are provided mainly by the Ministry of Health (MOH), the Social Insurance Organization (SSK), universities, the Ministry of Defense, and private physicians, dentists, and pharmacists.  - 2 - 1.6 The MOH is the major provider of hospital care and primary care and the only provider of preventive health services. At the central organization level, the MOH is responsible for the country's health policy and health services. At the provincial level, health services provided by the MOH are administered by Provincial Health Directorates (PHDs). The PHDs are accountable to the Provincial Governors, who are under the jurisdiction of the Ministry of Interior. 1.7 The MOH operates 4,927 health centers and 11,888 health posts (at the village level) which are the basic units of organization of existing primary health services. In accordance with legislation, health posts are staffed by a midwife and serve a population of 2,500-3,000 in rural areas. Health centers serve a population of 5,000-10,000, and are staffed by a team consisting of a physician, a nurse, a midwife, a health technician, and a medical secretary. The main functions of health centers are the prevention and treatment of communicable diseases; immunization; maternal and child health services, family planning; public health education; environmental health; patient care; and the collection of statistical data concerning health. 1.8 Hospital services are provided by the MOH, the Ministry of Defense, the Ministry of Labor and Social Security (SSK), some State Economic Enterprises, universities, and the private sector. There is a total of 151,972 hospital beds in Turkey, or about 2.4 beds per 1,000 of population. Bed ratios to population vary markedly across the country. Of a total 1,051 hospitals, 677 are run by the MOH. These provide 50.7 percent of the hospital beds in the country, with an occupancy rate of 55 percent. 1.9 There is not a well established referral chain in the Turkish health system. Patients are able to self-refer to secondary care. Hospitals are used heavily as out-patient clinics, with patients by-passing primary level services in health centers and health posts. 1.10 The estimated number of health service personnel in Turkey are: 929 people per physician, 5,340 per dentist, 3,331 per pharmacist, 1,087 per nurse, 1,718 per midwife, and 1,986 per health officer. Ratios of population to medical personnel vary greatly among regions. The eastern part of the country and rural areas have fewer personnel of all categories per unit of population. The Ministry of Health is the largest health services provider in Turkey, employing about 195,000 staff. 1.11 A high proportion of doctors, pharmacists and specialist doctors are employed in the private sector, while other health personnel are employed mostly in the public sector. Many specialist doctors work part-time in public hospitals in addition to having their own private practice. Financing Health Care 1.12 The annual growth rate of GNP in Turkey is currently about 5 percent. Since 1963, total health care expenditure has accounted for between 3.0 and 4.3 percent of GNP. The allocation to the Ministry of Health from the national budget has been between 3 and 4 percent. One hundred and five trillion TL was from public sources and 58.0 trillion TL from private sources (including 53.0 trillion TL out of pocket charges). Since 1988, additional funding has been available from earmarked taxation on fuel, new car sales, and cigarettes. Inflation has been a major complication in controlling and planning public expenditure in recent years.  - 3 - 1.13 The financing of health care in Turkey is quite complex because of the large number of agencies involved in providing and/or financing health care services. Approximately one-third of the total expenditure is financed by taxation, 17 percent by social insurance funds, and the remaining 50 percent by direct out-of-pocket payments. Only 67 percent of the population currently has coverage under existing social insurance schemes, leaving approximately 21 million people without coverage. 1.14 There are three major sources of funding for public hospitals: state budget allocations (83 percent), revolving fund revenues (12 percent), and special funds (5 percent). State budget allocations are prepared through simple adjustments, taking into consideration the previous year's inflation rates, and are sent then to the MOH. Revolving fund revenues are basically fees paid for service payments from individuals or third party insurers. 1.15 Fees paid for health services are determined by a commission consisting of MOH and Ministry of Finance representatives without reference to the actual cost of the services, and so are not likely to provide appropriate rewards and incentives. Recognition of the Need for Change 1.16 The Turkish Government, in its National Health Policy Document (1993), and subsequent documents, recognizes the following key problems with its current health system: 1.17 First, health indicators in Turkey are not satisfactory given its level of socio- economic development. The most common causes of mortality are preventable or controllable. 1.18 Second, the health care system experiences equity problems. Although all MOH hospitals are subsidized up to the amount of 60 percent of the actual costs, only insured people are entitled to free access at the point of use. Equity problems occur in the utilization of health services, as well, because the distribution of hospital beds and health professionals favors urban and western areas of the country. Correspondingly, people living in urban settlements of a western province utilize more health services as compared to people living in rural areas in the eastern part of Turkey. 1.19 Third, there are major problems with the organization of current health services. Highly centralized decision-making along programmatic lines and rigid control of service providers makes effective coordination and delivery of services difficult. Recruitment and placement of staff for all state health facilities is carried out by a Personnel Directorate within the Ministry of Health. Remuneration is in accordance with the Law of Civil Servants, which establishes a pay scale based mainly on education, duration of public service and job title. There are automatic cost-of-living raises during the year, but the basic salary is not supplemented by incentives for performance. Public employees are granted lifetime employment. Individual hospitals or provincial health managers have little autonomy to recruit, fire or manage their own staff. 1.20 Fourth, there is no effective referral system operating between primary care and hospitals. Patients bypass health centers and health posts and use hospital out patient clinics and accident and emergency facilities as first contact for non-emergency services while cost effective primary care is underutilized.  - 4 - 1.21 In response to this need for change, the Government has embarked on an ambitious health reform program, which is strongly supported by the World Bank through the first two health projects, together valued at over $320 million. Turkish Health Reform Program Overall context of Reforms: 1.22 The aim of the Turkish Health Reform Program is to reduce inequality in health status and in access to basic health services. The key strategies include: (a) introducing health insurance to provide coverage to the approximately 21 million of the population presently uninsured under the existing health insurance schemes, and introducing provisions for block contracting for services to replace fee-for-service; (b) reforming primary care, including establishing a family physician system to improve the access to and quality of the care; (c) reforming secondary and tertiary hospital care, through the establishment of autonomous health enterprises to promote efficiency and effectiveness; (d) introducing systematic, organizational, management and human resources reforms; and (e) improving infrastructures, including development of health information systems to facilitate decision-making, accountability and efficiency. 1.23 The National Health Policy Document (1993) and subsequent Turkish Government documents outline the strategy of the Turkish Health Reform Program. The Program has multi-party support, and is supported by health insurers and health sector personnel. 1.24 Three major pieces of draft legislation (prepared under the Health I Project) provide the cornerstone for the fundamental reforms, namely: (i) Law on the Establishment and Organization of Health Financing Institutions; (ii) Basic Law on Hospitals and Health Enterprises; and (iii) Law on Primary Care Services and Family Physicians Services. Indications from the MOH and Treasury are that this legislation is likely to receive high priority in the current Parliamentary session. All three pieces of legislation provide for piloting and specify Bilecik and Eskesehir as initial pilot provinces, followed by extension of piloting to two other provinces in the same region, followed by nationwide implementation within four years of passage of legislation. These two provinces were chosen by virtue of their representative social and economic profiles and their proximity to the national project management coordination (see paragraphs 2.27 and 2.28). Significant political consensus was developed over the selection of the provinces.  - 5 - Law on the Establishment and Organization of Health Financing Institutions 1.25 The purpose of this law is to extend to the approximately 21 million people without health insurance comprehensive coverage of a basic package of insured benefits, and to introduce new methods of contracting for these services in order to ensure efficient and effective care. 1.26 The underlying principles of the draft health insurance law are that the HFI should be actuarially sound, adequate in its revenue capacity to provide the basic package of health services, and based on premiums with a targeted state subsidy of those premiums to ensure effective 100 percent coverage (i.e., anyone who wished coverage would be able to obtain it). 1.27 The targeted premium structure will be based around five categories, with approximately 1/3 of the targeted population requiring a 90 percent subsidy and 1/3 of them requiring no subsidy. In each category, estimates have been calculated on multiples of gross minimum wage (e.g., those earning 1.2*gmw or less receive 90 percent subsidy, and those at or above 2.4*gmw receive no subsidy). 1.28 Using the above premium structure, basic benefits and cost structures were calculated (at US$50/capita) by existing social and insurance institutions. Estimated cost of 100 percent coverage (in year five of reform implementation) is US$1.2 billion gross. This represents a US$200 million (net) increase above current spending projections, as these targeted subsidies would replace existing low-income subsidies for the uninsured (the "green card" program) and the social assistance fund. It would also replace insurance for the employees of the proposed largest 140 health enterprises. 1.29 Reform under this law would be the first phase of the overall three-phase strategy for social insurance reform. Because progress on the larger social insurance reform agenda is only slowly progressing, the Government has determined initially to pursue health financing reform separately. By separating this phase, the Government can prioritize providing coverage to the presently uninsured. In the second phase, health and pension funds would be separated to address the issue of cross-subsidies between the funds. All health insurance (e.g., including SSK) would be integrated into a common system in the third phase, addressing issues of fully integrating health insurance where there are opportunities for efficiencies. This three- phase approach is supported by the Bank. Basic Law on Hospitals and Health Enterprises 1.30 This draft law will establish the legal framework under which the larger public hospitals (including MOH, SSK and university hospitals) will be turned into publicly owned but autonomous health enterprises. The major features of the law are to (i) clarify the relationship between primary care and secondary/tertiary hospital care by developing an effective referral system; (ii) introduce competition in secondary care through the creation of a managed or internal market; and (iii) create incentives to promote efficiency, effectiveness and quality in the provision of secondary care, through both autonomous decision-making and rigorous contracting. Key features of the new enterprises will include:  -6 - (a) Governance. Public ownership will be retained but the enterprise will operate under a governing Board of Directors. The Board will include three members from the province and four members from the senior management structure. The board structure may not be ideal, particularly given the strong presence of management on the board, but is limited by current Constitutional and public service legislation. The senior management will be nominated by the Board and is subject to ministerial approval. (b) Provision for oversight . This will include establishment of independent audit and audit under the control of the Prime Minister's Department. (c) Incentives to efficiency. Up to 50 percent of any profits generated by the enterprise may be distributed to the employees, and 50 percent can be added to the reserves of the enterprise. If an enterprise operates three consecutive years at a loss, the enterprise will be put on "sale", unless there is no need for the service, or there is no buyer, in which case the enterprise may be liquidated. 1.31 Of the approximately 825 public hospitals (including MOH, SSK and university facilities), it is estimated that by the fifth year of reform implementation, 140 of the largest and most complex enterprises will be established as health enterprises based on criteria developed by the MOH. The timeframe and the criteria were developed to maximize the potential for success given the current institutional capacity for managing change. Primary Care Services and Family Physician Services Law 1.32 In addition to making small changes to the populations, functions and relationships in the existing network of primary care posts and health centers, this law will provide for private family physician practices. These practices will be able to provide primary health care services under a capitated contract. Key provisions include: (a) Family physicians will be approved (licensed) based on prior training as a family practitioner specialist, or as a general practitioner with certified additional primary health care training. (b) Family physician contracts will combine a base operating grant with a capitation payment for each registered person. They will have a maximum patient roster of 3,000, and will be contracted to provide a defined set of preventative and curative services (as defined in the basic health package) free to the user, regardless of the patient's source of insurance. Patients will be able to change family physicians every six months. A new institution, the Public Health Center, will be established in each district and will provide laboratory diagnosis and x- ray services on referral by the family practice physician. Public Health Centers will coordinate and support primary health care services and provide public health services (health promotion and education, environmental health, etc.) in their districts. (c) Access to secondary care will require a referral from either the family physician or a health center. If no referral is made, the patient will be liable for personal payment of the costs of secondary care under the health insurance law. This is  - 7 - an example of the interrelationship between the laws and the importance that they be viewed as a package. C. JUSTIFICATION FOR THE PRIMARY HEALTH CARE REFORMS 1.33 In the context of the Health I and 11 Projects, Turkey's health reform strategy has been assessed as appropriate for advancing the health sector's long-term development objectives. Reforms are designed to achieve health care financing standards comparable to the EU, and eliminate regional and gender disparities in coverage and health status, while increasing efficiency and effectiveness of health care services. As outlined above, an essential component of the health care reform program is the restructuring of primary care services by introducing private family physicians into primary care. Development of an effective primary health care system is a key strategy for furthering one of the three priorities in Turkey's development agenda identified in the Seventh Five Year Plan (1996 - 2000): namely, reducing regional and gender disparities in human development status and alleviating poverty. 1.34 Turkey is experiencing continued high levels of infant mortality (44.4 per 1000), maternal mortality from preventable or treatable causes (100 per 100,000), and low life expectancy due to chronic diseases associated with life style factors (67.9). Substantial international evidence exists which supports the cost-effectiveness of primary health care and preventative public health services in addressing these health status problems, therefore further studies to justify the primary health care and public health policies in the Turkish health reforms are unwarranted. The implementation strategies for primary health care changes in Turkey prioritize the development of primary health infrastructure for the less developed eastern parts of the country, and are consistent with the objective of reducing regional disparities in health status, and investing first in areas most likely to produce the greatest health return. D. RATIONALE FOR WORLD BANK INVOLVEMENT AND LINKAGES To EXISTING BANK PROJECTS 1.35 The proposed project is consistent with the Country Assistance Strategy (CAS) discussed by the Board of Directors during the presentation of the Bursa Water and Sanitation Project, Report No. P-5897-TU, on March 11, 1993. It is also consistent with the new CAS which is being finalized for submission to the Board of Directors in July. In keeping with the priorities outlined in the previous and the new CAS, our support for the sector is intended to help raise overall health indicators to levels more in line with Turkey's income level. Equally important, we would help reduce disparities in the health status, support health finance reforms aimed at universal health coverage, and strengthen health care management. 1.36 Funding has been provided under the two on-going health projects to support the piloting of key activities for two of the three pieces of legislation, namely, the Law on the Establishment and Organization of Health Financing Institution, and the Law on Hospitals and Health Enterprises. However, when these two projects were designed and appraised, the need to provide funding to pilot the Law on Primary Care Services and Family Physicians Services was not identified. As a result, there is a financing "gap". Funding is now urgently needed to develop a project for the proposed primary health care system. The gap would be filled by the proposed Primary Health Care Services Project.  - 8 - 1.37 The two existing World Bank-financed loan projects (Health I and II) provide strong support to the reform program. These projects are progressing well, both in terms of implementation and the likelihood of meeting the development objectives. Health I is scheduled to close December 1997 and Health 11 is scheduled to close in December 2001. These two projects have major components supporting the development of (i) primary health care services (particularly basic services in eastern Turkey); (ii) health management information systems (at a national level), investments in civil works and equipment in some hospitals; (iii) development of management and decision support skills and planning support; and (iv) the development of the overall health reform program. There are strong linkages among all three projects. On a pilot basis, the proposed project's components address gaps in primary care in the reform program which are not filled in by Health I or II. In particular, this Project is directed toward piloting development of the role of the family physician as care provider and gatekeeper to secondary and tertiary care within an integrated primary health care system. 1.38 Moreover, a proposed major follow-on operation encompasses nationwide implementation of the health reforms, including the key elements of the reforms contained in the draft legislation outlined in paras. 1.22-1.35, and other measures, such as the reorganization of the MOH. This Project is explicitly a trial for the critical primary health care component of the national health reforms and therefore is an important building block for achievement of the overall health reform design objectives.  - 9 - 2. THE PROJECT A. INTRODUCTION 2.1 A draft Project Implementation Plan (PIP) was reviewed by the Bank and is being finalized by the MOH/PCU and appraised by the mission. The PIP which complies with the Bank's requirements, includes a detailed description of each component and how the Project will be implemented. The Table of Contents of the PIP is attached as Annex 3, and a copy of the full PIP is available in the project files. This chapter, therefore, provides only a summary description of the project objectives and project activities. A concise project design summary, including key performance indicators, is attached as Annex 1. During negotiations the MOH presented the PIP and provided assurances that the project will be implemented in accordance with the PIP. B. PROJECT OBJECTIVES AND RATIONALE 2.2 The overall goal of the Primary Health Care (PHC) Services Project is to improve the access to and quality of primary health care within the two provinces (Eskisehir and Bilecik) and to serve as the basis for extending the primary care health reforms nationwide. The specific objectives of the Project are; (a) to develop a PHC system based on the family physician and an effective referral system supported by financial incentives and improved infrastructure; (b) to evaluate the developed PHC system for nationwide replication; and (c) to develop a capacity for health economic analysis within the MOH. 2.3 The rationale for the proposed PHC system, which forms part of the health reform program in Turkey, has already been considered in the context of the Health I and 11 Projects, and is outlined in Chapter 1. There is compelling international evidence that primary health care and primary-level public health services provide the most cost-effective means of reducing the major health status problems that Turkey faces, particularly in the rural and eastern provinces. There is also international evidence that gate-keeping by family physicians with an effective referral system, and a capitation compensation system, helps to constrain health care costs and to foster a focus on population health status and preventive care at the primary level. 2.4 The principal justification for developing a project for the proposed PHC system on a small scale under this Project is to reduce the risks and improve the quality of a proposed major follow-on operation which will support nationwide implementation of health reform. This phased project will also reduce the lead times for nationwide implementation of the PHC reforms by six months to one year, by developing training programs that can be replicated rapidly and by building up a pool of trained family physicians ready to be deployed to other provinces. It will thus bring forward realization of the benefits of the PHC reforms, in improved health status and more cost-effective use of health resources.  - 10 - Rationale for Phasing 2.5 The PHC Services Project will consist of two phases. The first phase will make the necessary investments in training, equipment and civil works, including the development of the primary care and referral network which will ensure coordination in the delivery of primary care and referral to higher levels of care. This phase of the Project will allow the evaluation of the impact of these investments on improving the utilization of primary care services and the consequent changes in the utilization of secondary care services. The second phase will involve the piloting of family physician contracting and the introduction of financial incentives. The main reasons for this two-phased approach are: (i) to allow for the separation of the effects of the project investment on improving the capacity and efficiency of the referral system from the introduction of financial incentives and physician contracting; and (ii) to allow additional time for the passage of legislation for the financial reforms for the national health care system. A draft description of these incentives and terms of employment for contracting physicians are included in Annex 1 of the PIP. The draft Legislation is now before Parliament, and it specifies that financial incentives and the physician contracting system will be piloted in four provinces including the two Project provinces; consequently, the MOH will be mandated by law to implement financial reforms under the Project. It is expected that the legislation will be passed within 24 months, i.e., June 1999; however, if there are unforeseen delays in the passage of the legislation, this will not affect the viability of the project, but implementation of the financial reforms will be postponed accordingly. During negotiations the Government provided assurances that no later than August 30, 1999 the Government will discuss with the Bank a detailed plan for the financial system of incentives and physician contracting in the Project provinces. C. PROJECT DESCRIPTION 2.6 The proposed Project will provide training, fellowships, technical assistance, computer hardware and software, medical equipment, office furniture, teaching materials, civil works, and incremental recurrent costs (US$18.6 million equivalent total cost). Project implementation will be managed over a three-year period by the PCU, in coordination with MOH line departments, and in collaboration with Provincial Health Directorates and health care personnel in the project provinces. The Project, which will focus on two selected provinces, Bilecik and Eskisehir, consists of the following three components: (a) Improvement of PHC Services (US$ 17.2 million total cost) will include the following four subcomponents: (i) Development of Family Physician and Referral System (US$0.6 million) (ii) Family Physician Training (US$2.8 million) (iii) Upgrading PHC Infrastructure (US$10.9 million) (iv) PHC Services Information System (US$2.9 million)  -11 - (b) Monitoring and Evaluation (US$1.1 million) will include the following two subcomponents: (i) Monitoring and Evaluation (US$0.5 million) (ii) Project Management (US$0.6 million) (c) Institutional Capacity Development, Health Economic Analysis (US$0.3 million) Component I: Improvement of PHC Services (US$17.2 million) 2.7 This component will develop a comprehensive PHC system in Bilecik and Eskisehir provinces to test implementation and make any modifications necessary before nationwide implementation. A proposed major follow-on project, planned for 1999, will provide assistance for nationwide implementation of the PHC system as well as other elements of the health reforns during 1999. Development of Family Physician and Referral System (US$0.6 million) 2.8 This subcomponent will provide technical assistance and training to develop a family physician and referral system in Bilecik and Eskesehir provinces to ensure an integrated approach to primary care and referral to other levels of care. Local consultants will be used to provide technical assistance on the design of the system. A communications campaign will be financed to educate public and health sector personnel about the need for changes in the use of health services in accordance with the referral system. The component will also finance a training workshop for 20 persons from the central MOH and 10 persons from each project province to introduce them to the operation of the new system. Family Physician Training (US$2.8 million) 2.9 This subcomponent will provide technical assistance and training materials to: (a) assess training needs, (b) design training programs, (c) develop curriculum and training materials, (d) develop selection criteria for an initial group of trainees adequate to staff primary health services in the project provinces, and (e) deliver training. In total, approximately 350 physicians are required for primary health services in the two project provinces. A larger number (1,500) will be trained under this Project to reduce lead times for nationwide implementation, to take advantage of the marginal costs of training and to demonstrate commitment to nationwide reform of primary care. 2.10 Training programs include: (a) inservice training for health personnel in PHC positions in the project provinces, including orientation training to introduce new personnel to the provinces and to PHC services, and development training in family health, environmental health, and control of common health problems; (b) a four-week training program for current trained family physicians to introduce them to the new primary health system, primary health care concepts and basic public health issues; (c) transition training consisting of a two-week induction course, and six months of rotations in appropriate departments in training hospitals (without family physician training) to upgrade the skills of 1,500 general practitioners; and (d) a  - 12 - six-month distance-based training program in primary health care and public health issues for groups (b) and (c). 2.11 The training programs and selection criteria will be developed by a working group consisting of representatives from universities, professional unions and the MOH. The working group will assist the PCU to select a university with both family physician and public health departments to develop and deliver the training. Upgrading Primary Health Care Infrastructure (US$10.9 million) 2.12 This subcomponent will improve access to essential primary health care services, create Public Health Centers (PUHCs) in each district to provide diagnostic and other support for family physician practices and a range of local public health services, and complete the referral chain in the project provinces. In particular, it will provide: (a) upgrading and renovating of existing PHC units; (b) procurement of basic diagnostic equipment, other appropriate medical equipment and furniture for PHC facilities; and (c) a limited, but essential, amount of medical equipment for one hospital in Bilecik Province to complete the referral chain from secondary to tertiary care. The civil works will upgrade, renovate, furnish, and equip health posts for use as family physician offices (33), rural health centers (35), urban health centers (21), public health centers (26). Primary Health Care Services Information Systems (PHCSIS) (US$2.9 million) 2.13 The PHCSIS Subcomponent provides basic computerized information systems for the expected approximately 350 family physicians located in offices and in the Public Health Centers in Bilecik and Eskisehir Provinces. These systems will: (a) automate and extend the current paper-based information systems employed in the PHC facilities for statistical compilation and reporting, MCH/FP scheduling, patient records, and inventory management; (b) provide new tools for managing the patient care and financial information required to operate a PHC practice in a reformed PHC environment, including a patient registry suitable to support a capitation payment system, a referral and drug prescription tracking system, as well as basic accounting and personnel systems; (c) record any additional data required to carry out the project monitoring and evaluation activities envisioned under the Monitoring and Evaluation Component. 2.14 For the sake of simplicity, no networking is envisioned under the PCHSIS Subcomponent and all report submissions (i.e., to the Provincial Health Directorates - PHDs) will be conducted through diskette exchange. The statistical and resource-related reporting information will directly feed the Basic Health Statistics Module (BHSM) and Core Health Resource Management Systems (CHRMS) which are in the process of being implemented nationally in all 80 PHDs in Turkey and in the central MOH (under the Health I and II Projects). The design of the PCHSIS also builds on some preliminary analysis of a single primary health care facility, which is currently being financed by the Health II Project. Looking towards the  - 13 - next major lending operation (Health FY99), the PCHSIS will provide a basis for nationwide deployment, complete with updates for the necessary linkages to support the prospective health finance reforms. Component II: Monitoring and Evaluation (US$1.1 million) 2.15 The purpose of this component is to provide a basis for evaluating the Improvement of PHC Services Component and fine-tuning the design of the PHC system prior to nationwide implementation. This will be achieved by testing implementation strategies on a small scale, putting in place a monitoring and evaluation system, and ensuring good project management during the first phase. The Monitoring and Evaluation component consists of the following two subcomponents: (a) Monitoring and Evaluation; and (b) Project Management. Monitoring and Evaluation (US$0.5 million) 2.16 This subcomponent will provide the necessary technical assistance (i) to set up a monitoring and evaluation system for both the first and second phases of the Project; (ii) to conduct the evaluation on the impact of the changes to the primary health care system; (iii) prepare an evaluation report; and (iv) to disseminate and discuss the evaluation results in a symposium. The purpose of the symposium is to obtain feedback from appropriate national experts and stakeholders on the results of the evaluation and recommendations for modifications to the PHC system. The symposium should therefore be attended by stakeholders and experts in the central MOH, representatives of other key government departments such as the SPO, PHDs, universities with family physician and public health departments, etc. 2.17 The monitoring and evaluation program includes the following elements: (a) monitoring whether the PHC system produces the desired increase in consultation rates in primary care, and relative shifts away from use of secondary care in the two provinces; (b) estimating the cost per primary and secondary care to evaluate whether the PHC system is more cost-effective than secondary care; (c) surveying the workload of family physicians and Public Health Center staff at the end of the project period to evaluate whether the network of PHC facilities is appropriate in the light of actual demand for its services; (d) surveying changes in use of health information by Provincial Health Directorates, Public Health Centers and family physicians' offices, as a result of implementation of PHCSIS; in particular, evaluating whether the more accurate and timely information is used to improve planning, resource allocation and primary and public health practice; (e) surveying participants in family physician training programs at the end of the training program and after a subsequent period in primary health care practice, to assess the value of the training and suggested changes to future training programs;  - 14 - (f) surveying Provincial Health Directorates, Public Health Centers, family physicians, and hospital outpatients and Accident and Emergency service doctors regarding their perceptions of benefits and shortcomings of the PHC services; and (g) surveying changes in user-satisfaction with primary health services by surveying users of health centers and users of family physician offices at the beginning and end of the project period to evaluate whether improvements in training and infrastructure in PHC services are reflected in greater user satisfaction. Details of the monitoring regime and key questions to be answered about the PHC system through the evaluation component are set out in Annex 2. Project Management (US$0.6 million) 2.18 Based on the successful administrative and management arrangements under the Health I and II Projects, the MOH has decided that the existing Project Coordination Unit within MOH will be responsible for project management. This subcomponent will provide funding for the necessary technical assistance and staff required to successfully manage project implementation. In order to support the management of the PCU, the MOH may obtain administrative and logistical support in the form of a management support services contract. Component III: Institutional Capacity Development, Health Economic Analysis (US$0.3 million) 2.19 The objective of this component is to strengthen the capacity for health economic analysis in the central MOH, as part of a wider strategy to develop the MOH's skill set for policy development. This component of the Project will establish the nucleus of a health economic analysis capacity in the MOH, and encourage the MOH to build up this capacity over time. The Project will provide training and mentoring for four health economists to be located initially in the PCU, where their skills can be applied to evaluation and development of the health reforms, including the PHC system. A number of aspects of the reforms require input from health economists, including development of financing reforms, design of new reimbursement mechanisms, measures to improve financial management, and measures to improve planning and resource allocation. 2.20 Specifically, this component will provide technical assistance to train and mentor four health economists. The component will finance a one-year fellowship for two persons with an undergraduate economics qualification to undertake nine months overseas training in health economics at Masters Degree level, followed by three-months of job- shadowing experience in a health economics unit in a foreign Health Ministry (or other health policy institution) with system characteristics or reform experience relevant to Turkey. The Project will also finance a short-term fellowship for training of two assistant health economists, to participate in a six-month shadowing experience and distance-based course work, or part-time training in health economics. The four fellowship candidates will serve as core members of a health economic analysis unit. The Project also includes some limited consultancy services to support the establishment of the unit and to nurture the staff in a twinning arrangement.  - 15 - D. COST & FINANCING Project Costs 2.21 Total project costs, including contingencies, are estimated at US$18.6 million. Total base costs, including recurrent costs, are estimated at US$17.6 million. Physical contingencies calculated on investment costs are US$1.6 million, or 9 percent of base costs. Price contingencies on base costs and physical contingencies are negative US$0.5 million, and are based on most recent projections of local inflation and devaluation. I Price estimates for investment costs are based on current prices for goods and works as invoiced recently for similar expenditures incurred under the Health I and II Projects. Prices for consultant services are based on current local and international rates in the respective areas of expertise. Recurrent costs are based on current local government salaries and local costs for maintenance and supplies. The foreign exchange component of the Project is estimated at US$8.5 million or 46 percent of total project costs. Taxes and duties are estimated at US$2.8 million and are calculated at 15 percent of all goods and services, and 18 percent of construction costs. 2.22 The Project investment costs include expenditures for construction, equipment, furniture, consultancy services, production of training materials, and local and foreign training. Project incremental recurrent costs include a maintenance and operating budget for the primary health care facilities included in the project, plus the necessary maintenance and support contract for the operation of the computers for the PHCSIS system for family physicians. Summary tables of total costs by component and expenditure category are shown in Tables 2.1 and 2.2. Detailed project cost tables for each component are included in Annex 2 of the PIP. Local and international inflation rates are based on Bank estimates as of February 1997. Local annual average inflation rate estimates respectively for 1997-2000 are 105%, 58%, 35%. and 19%. International inflation rates respectively for these years are 2.0%, 2.4 %, and 2.6%. Average exchange rates respectively for these years in Turkish Lira are TL283630, TL356220, and TL3923 10. The negotiations exchange rate is TL137,440.  - 16 - Table 2.1 Summary of Project Cost (T.Lira '000) (tSS '000) % % Total % % Total Foreign Base Foreign Base Local Foreign Total Exehang Costs Local Foreign Total Exchang Costs A. Pilot Primary Health Care Syste Dev'tofFamilyPhysician& Ref S 76.509.740.5 11.122.463.9 87,632.204.5 13 4 556.7 80.9 637.6 13 4 Family Physicians Netvork 369,794.210.4 9,840.693.0 379.634.903.4 3 16 2.690.6 71.6 2,762.2 3 16 UpgradingPHClnfrastructure 691,578.102.5 712.166.955.8 1.403,745.058.3 51 58 5.031.9 5,181.7 10,213.5 51 58 PHC Management Information Syst 77.285.483.6 273.489.948.9 350.775.432.5 78 14 562.3 1-989.9 2.552.2 78 14 Subtotal PilotPrimary HealthCare 1.215.167.537.0 1.006.620.061.7 2.221.787.598.7 45 92 8.841.4 7.324.1 16.165.5 45 92 B. NMonitoring and Evaluation Pilot Monitoring and Evaluation 62.681.377.0 2.108.719.9 64,790.097.0 3 3 456.1 15.3 471.4 3 3 Project Management 86.726.250.0 - 86.726.250.0 - 4 631.0 - 631.0 - 4 Subtotal Monitoring and Evaluation 149,407.627.0 2.108.719.9 151,516,347.0 1 6 1,087.1 15.3 1,102.4 1 6 C. Institutional Development Health Economic Analysis 20.992.588.1 26.358.999.1 47.351.587.2 56 2 152.7 191.8 344.5 56 2 Subtotal Institutional Development 20.992.588.1 26.358.999.1 47.351 .587.2 56 2 152.7 191.8 344.5 56 2 Total BASELINE COSTS 1,385.567,752.2 1.035,087,780.7 2.420,655.532.9 43 100 10.081.3 7,531.2 17,612.5 43 100 Physical Contingencies 118.696,858.9 100.273.353.9 218.970.212.8 46 9 863.6 729.6 1,593.2 46 9 Price Contingencies 1.893.910.108.5 L.728.147.031.3 3.622.057.139.8 48 150 -810.2 239.4 -570.8 -42 -3 Total PROJECT COSTS 3,398.t74,719.6 2.863.508.165.9 6.261,682.885.5 46 259 10.134.7 8,500.2 18,634.9 46 106 Table 2.2 Summary of Project Cost Components by Expenditure Category (US$'000) Pilot Primary Health Care System Development Monitoring and of Family Evaluation Institutional Physician PHC Pilot Development and Family Upgrading Management Monitoring Health Physical Referral Physicians PHC Information and Project Economic Contingencies System Network Infrastructure System Evaluation Management Analysis Total % Amount 1. Investment Costs A. Civil Works - - 3,013.8 . 3,013.8 10.0 301 4 B. Equipment - 5,051.4 2.312.5 - - - 7,363.9 10.0 736.4 C. Materials 400.0 - . 400.0 10.0 40.0 D. Fumiture . 623.9 - - - - 623.9 10.0 62.4 E. Technical Assistance I. Consultancv Services 236.1 476.9 365.5 - 447.7 607.4 76.2 2,209.7 9.2 202.7 2. Fellowships - 30.1 - - - - 153.4 183.5 10.0 18.4 3. Local Training 1.6 2.255.2 23.7 - 39.5 2,320.0 10.0 232.0 Subtotal Technical Assistance 237.6 2762.2 365.5 471.4 6074 269.1 4,713.2 9.6 453.0 Total Investment Costs 637.6 2,762.2 9,054.6 2,312.5 471.4 607.4 269.1 16,114.8 9.9 1,593.2 11. Recurrent Costs A. Incremental Staff - - - - - 23 6 75.4 99.0 B. Maintenance - - 231.4 239.8 - - - 471.2 C. Operating Materials & Supplies - - 927.5 - - . 927.5 Total Recurrent Costs 1 - 1.158.9 2398 - 23.6 75.4 1,497.7 - - Total Baseline Costs 637.6 2762.2 10,213.5 2.552.2 471.4 631.0 344.5 17,612.5 9.0 1,593.2 Physical Contingencies 638 276.2 887,2 231.2 47.1 60.7 26.9 1,593.2 - Price Contingencies Inflation Local 440.9 3,862.2 5,170.3 516.9 537.2 1,005.5 31.5 11,564.5 Foreign 1.7 1 0 162,4 67 7 0.2 . 6.4 239.4 Subtotal Inflation 442.5 3,863.2 5,332.7 584.6 537.4 1,005.5 37.9 11,803.9 Devaluation -556.8 -4,059.0 -5.577.3 -465 1 -594.8 -1,032.9 -88.8 -12,374.7 . - Subtotal Price Contingencies -114.2 -195.7 -244.6 119.6 -57.4 -275 -50.9 -570.8 8.1 -46.1 Total Project Costs 587.2 2,842.7 10,856.1 2,903.0 461.2 6643 320.5 18,634.9 8.3 1,547.1 Taxes 88.1 426.4 1,718.6 435.5 69.2 982 44.0 2,879.9 8.3 240.3 Foreign Exchange 90.7 79.8 5,841.1 2.254.1 17.1 217.4 8,500.2 8.8 750.5  - 17 Project Financing 2.23 As shown in Table 2.3 below, the proposed Loan of US$14.5 million will finance 78 percent of total project costs, or 100 percent of foreign costs for all direct and indirect expenditures and 83 percent of local expenditures, excluding taxes. The Government will finance 100 percent of incremental recurrent costs and 17 percent of total investment expenditures, excluding taxes. Government funds will also finance 100 percent of national taxes. All project counterpart funds are expected to be secured through the Government's central budget for the Ministry of Health. The Project does not envisage retroactive financing. During negotiations the Government agreed that as a condition of Loan Effectiveness the Project has been included in the Borrower's 1997 investment program. Table 2.3 Summary of Financing Plan (US$'000) Local The Government IBRD Total (Excl. Duties & Amount % Amount % Amount % For. Exch. Taxes) Taxes A. Pilot Primary Health Care System Development of Family Physician and Referral System 88. 1 15.0 499.1 85.0 587.2 3.2 90.7 408.4 88.1 Family Physicians Network 426.4 15.0 2,416.3 85.0 2.842.7 15.3 79.8 2,336.5 426.4 Upgrading PHC Infrastructure 2,695.6 24.8 8.160,5 75.2 10,856.1 58.3 5,841.1 3,296.4 1,718.6 PHC Management information System 674.7 23.2 2.228.4 76.8 2.903.0 15.6 2.254.1 213.4 435.5 Subtotal Pilot Primary Health Care System 3,884.8 22.6 13.304.2 77.4 17.189 0 92.2 8,265.7 6,254.7 2.668.6 B. Monitoring and Evaluation Pilot Monitoring and Evaluation 69.2 15.0 392.0 85.0 461.2 2.5 17.1 374.9 69.2 Project Management 107.8 16.2 556.5 83.8 664.3 3.6 - 566.1 98.2 Subtotal Monitoring and Evaluation 177.0 15.7 948.5 84.3 1.125.4 6.0 17.1 941.0 167.4 C. Institutional Development Health Economic Analysis 71.3 22.3 249.2 77.7 320.5 1.7 217.4 59.1 44.0 Total Disbursement 4,133.1 22.2 14,501.9 77.8 18.634.9 100.0 8.500.2 7,254.8 2.879.9 E. PROJECT JUSTIFICATION Foundation for Future Economic Evaluation of PHC System 2.24 Consideration was given to the feasibility of evaluating each of the PHC system components as part of the evaluation of this Project. However, it is not possible to estimate, with currently available data, the cost of primary care consultations under the proposed infrastructure of family physician offices and Public Health Centers compared to the present cost of meeting primary care needs at secondary care facilities. Nor is it possible to forecast with any accuracy the extent of the shift of resources from secondary to primary care that might be achieved under the PHC reforms. The Project itself will make this information available by the end of the Project. The monitoring indicators and evaluations required under the second component of this Project ensure that relevant data and economic evaluation will be carried out for both the first phase of the project, and the second phase when the contracting and financial incentives are introduced following the passage of the necessary legislation. 2.25 The evaluation component of the Project also provides for evaluation of the financial viability of private family physician practice in urban and rural settings. The National  - 18 - Burden of Disease Study supported by the Health 11 Project will allow for further evaluation of the impact of the PHC reforms on a range of health status measures. 2.26 A major part of the return on investment in this Project, then, is the benefit of testing whether the proposed PHC reforms do indeed meet the expectations of more cost- effective use of resources through a shift to use of primary care, and the resultant opportunity to modify the design of the PHC system before nationwide implementation, in the event that evaluation of the project indicates any shortfall relative to expectations. Component II (Monitoring and Evaluation) and Component III (Institutional Development) of the Project will ensure that these benefits are realized. Consideration of Cost-Effectiveness of Project Alternatives 2.27 Evaluation of the sub-components of the project at this stage is confined to assessing whether consideration of the cost effectiveness of alternatives has occurred, and in light of this, whether the project design represents a reasonable basis for piloting. Numbers and Selection of Provinces 2.28 Alternative numbers and choices of project provinces were considered. Additional project provinces would increase representative significance, but would add to cost. The two project provinces represent rural and urban areas, and so constitute the minimum number of provinces required to achieve statistical significance. Criteria used to select the provinces for the Project were: (a) accessibility (to economize on project management, monitoring and evaluation costs); (b) appropriate population characteristics and size (to achieve statistical significance at smallest feasible scale and hence cost); (c) a manageable number of people to be covered by the health financing institution (those currently uninsured) to ensure later piloting of the health financing reforms in these provinces is possible at low fiscal cost; and (d) completion of management and infrastructure development and strategic plans for implementation prior to commencement of the project period. 2.29 The two provinces selected are relatively accessible from Ankara. Total population in the project provinces is small (889,000, or around 1.4 percent of Turkey's total population), but includes a growing urban area of around 500,000 in Eskisehir, and a rural area of around 400,000 in western Turkey. The percentage of currently uninsured in the project provinces is manageable at 11 percent in Eskesehir, and 14 percent in Bilecik. The two project provinces are receiving management and information systems development under the Health I and 11 Projects. Limited upgrades of PHC capacity in Bilecik and Eskesehir will be financed with Government funds.  - 19 - Consideration of Cost-Effectiveness of Family Physician and Public Health Center Infrastructure 2.30 The network of family physician offices has been planned on the basis of one physician for around 3,000 people, and on group practices of 2-5 physicians (except in sparsely populated areas). This ratio is at the lower end of developed country norms, but represents an increase over current actual ratios (one physician per 3,500 in the two provinces). Employment of nurses and midwives in the family physician practices will provide a means of delivering services to relatively high population ratios cost-effectively. The planned staffing of PHC services thus appears to be lean, by developed country benchmarks. The Project will provide an opportunity to assess workload for family physician practices as a basis for reviewing these ratios. 2.31 The network of Public Health Centers is based on existing district boundaries, which cover populations of around 20,000 on average in Bilecik and around 50,000 on average in Eskesehir. That is, this network has not been designed on the basis of an explicit analysis of the optimal distribution of these types of services. For this reason, evaluation will examine workload at Public Health Centers and review scope for rationalization. 2.32 Physical infrastructure and equipment purchases for family physician offices and Public Health Centers are to be determined by studies under the Health II Project, the range and levels of services appropriately provided at these levels of care, and by Needs Assessment Studies of existing premises in the project provinces. Upgrading of existing facilities will be carried out, rather than construction of new facilities. The Project will increase utilization of currently under-utilized PHC capacity in health posts, by converting them to properly equipped and staffed family physician offices. 2.33 As part of the evaluation, the costs of the primary health care system, including staff, premises, equipment and PHCSIS, will be compared to secondary care outpatient and Accident and Emergency services between the provinces, in order to provide a check on the cost- effectiveness of the network and infrastructure of PHC services. Consideration of Cost-Effectiveness of Family Physician Training Alternatives 2.34 Alternatives were considered for the training of family physicians. The option of adapting and using the existing three-year family physician training programs in universities in Turkey was considered, but rejected as less cost-effective and as having too long a lead time for the statutory implementation time frames for the PHC Services Project. In addition, these programs do not have the capacity to train the 20,000 or more family physicians that will be required for nationwide implementation of the PHC system reforms within four years of passage of the health reforms legislation. The alternative of developing a shorter family physician training program, which makes maximum use of cost-effective distance-based training methods was therefore adopted. Consideration was given to training the 350 family physicians required for the project provinces under this Project. Because of the lead times involved in training family physicians for nationwide implementation of the PHC system, the marginal costs for training additional numbers and the demonstrated commitment to extending the training as part of the overall reforms, it was decided to train a larger number of doctors as family physicians under this Project.  - 20 - Consideration of the Cost-Effectiveness of PHC Information System Alternatives 2.35 It was not possible to meaningfully quantify the costs and benefits of the PHCSIS with available data, and, in any event, information systems tend to be a hard-to-assess intermediate input in the provision of health services. 2.36 Nevertheless, the PHCSIS is expected to generate savings in the time of health professionals and the public. Experience with the BHSM, however, suggests that any efficiency gains in processing are typically absorbed in efforts to raise the low level of information quality in the MOH. The realizable benefits of this sub-component are thus expected predominantly to be improvements in the quality (accuracy, relevance and timeliness) of information, largely as a result of dramatically reduced errors in data entry, compilation and communication. The PHCSIS will also create a platform for analysis and comparison of medical practice, epidemiological information and resource use. The benefits are likely to accrue at all levels of the health system: (a) the individual practitioner, through more efficient practice management and the use of presentation and query tools to investigate connections between health interventions and outcomes; (b) the group practice, or Public Health Center level, through the use of comparison and benchmarks to address performance outliers; (c) the Provincial Health Directorate level, through more efficient planning and allocation of resources across health facilities and areas in the jurisdiction; and (d) the national MOH level, through more evidence- based, outcomes-oriented health policies, planning and priority-setting. 2.37 During the Project, the PCU will monitor closely the impact of the PHCSIS for lessons learnt and critical success factors. The project evaluation component includes provision for a survey of changes in the use of information and user-feedback on the PHCSIS. Financial Impact to the Public Sector 2.38 The project investment generates minimal incremental recurrent costs of US$420,000 per annum for operating the enhanced PHC facilities in the project provinces. This would be equivalent to around US$30 million per year if this expenditure increase per capita were incurred nationwide, which is less than 1.5 percent of annual state budget expenditure on health, or less than 0.02 percent of GNP. As well, the PHC reforms being studied have the potential to generate some offsetting fiscal savings through reductions in numbers of secondary care consultations and reductions in the need for future investment in additional hospital beds. It is not considered feasible to realize such savings during the life of the Project. Firstly, the project time-frame is too short relative to adjustment lags. Secondly, because of continuing fiscal austerity, secondary care capacity utilization and new hospital investment are currently below the levels likely to be required to meet population needs efficiently. The benefits of the PHC investment in the project provinces are therefore expected to take the form of substitution of more for less cost-effective forms of service delivery, within a resource constraint. However, in the context of full-scale implementation of health reform in the longer term, some offsetting savings from increased primary care expenditure should be feasible. Private Sector Financial Impact and the Financial Incentives which Support the PHC System 2.39 The PHC Services Project will not change the out-of-pocket costs for primary care (which is already free to the user and will remain so). In the second phase, it will result in  - 21 - significant increases in out-of-pocket costs for secondary care outpatient consultations for patients without referrals from primary care. This financial disincentive is a critical part of the strategy for achieving an effective referral system; it will create a desirable rather than undesirable deterrent to access to secondary care. Emergency hospital attendances will be exempt from this requirement. 2.40 The PHC Services Project will not change the average compensation to family physicians and health center physicians. In the first phase of the Project, the physicians will remain salaried employees. Once the necessary legislation is in place, in the proposed second phase the new mixed compensation system, combining a base operating grant and capitation for registered patients, introduces a desirable financial incentive for physicians to attract and register patients. It does not reward them for consultations or any particular outputs, however. Given that primary care consultation rates are currently very low (less than one consultation per capita a year in health centers in the project provinces, excluding immunization and maternity care), and that state hospitals receive a fee-for-service for each outpatient attendance (either from out- of-pocket payment or third party insurance), there must be some doubt about whether the financial incentives regime under the Project will be sufficient to produce the desired shift from secondary care outpatient services to primary care. The Project provides an opportunity to assess and review this, prior to nationwide implementation. Rationale for Government Involvement 2.41 Consideration of the role of govemment in the design of health reforms in Turkey led to the conclusion that the Government should regulate, finance (via health insurance funds) and contract for family physician services, but that the Government does not need to provide these services. The health reform legislation therefore provides for private family physician practice. This will create financial incentives for family physicians to choose a cost- effective mix of inputs in their practice, although their freedom to choose this mix will remain somewhat constrained by MOH regulation under the health reforms legislation. 2.42 This Project, however, involves public provision of (private) family physician premises and equipment. The rationales for this are: firstly, to provide an initial incentive to attract family physicians into the project provinces rapidly in order to meet the time frames of the Project; and secondly, to ensure that practice facilities are developed in rural areas where family physicians may be unwilling to invest because of lower practice income and risk of capital loss on property investment. Once the health reforms are fully implemented, rentals will be levied to family practitioners on premises and equipment. Impact on Poverty 2.43 Development of an effective primary health care system is a key strategy for furthering one of the three priorities in Turkey's development agenda identified in the Seventh Five Year Plan (1996 - 2000): namely, to reduce regional and gender disparities in human development status and alleviate poverty. Turkey is experiencing continued high levels of infant mortality and maternal mortality from preventable or treatable causes, and low life expectancy due to chronic diseases associated with life style factors. These problems are more severe in the poorer rural and eastern parts of the country. Substantial international evidence exists which supports the effectiveness of primary health care and preventative public health services in addressing these health status problems. The implementation strategies for primary health care  changes in Turkey (alreadV underway in the Health I and 11 projects) give priority to developing primary health infrastructure in less developed, rural and eastern parts of the country, which is consistent with the objective of reducing regional disparities in health status, and investing first in areas likely to produce the greatest health gain withi incremental resources. The PHC structure and services increase the resources and training of staff in the areas of child health, maternal health and family planning services. I-he strategy is thus well-targeted at reducing gender disparities in health and wsell-belin. F. ENVIRONMENTAL IMPACT 2.44 This is a Category C Pro ject: -'No appreciable environmental impact". Civil works will be Iimited to small family physician offices and renovationi of existing health facilities and this will not result in any significant impact on the environment. G. PARTICIPATION 2.45 The quality and sustainabilitv of'the PHC reforms studied in this Project will be supported by the participationi of key stakeholders in the design, implementation and evaluation of a number of the componienits. Senior MOH and Provincial Health Directorate staff will participate in a workshiop as part of developmenit of'the family physician and referral system. A public communication campaign will educate the public about the changes to PHC services and the referral chain. Universities, professional unions and MOH staff will participate in the design and implementation of the family physician training programs. Stakeholders from the MOH, other key government agencies such as the State Planning Office, universities, professional bodies, health insurance organiizations and health sector personnel will participate in the symposium on the evaluation of the Project. UNICEF, which is actively working on community participation in eastern T'urkev. will contribute to and participate in the symposium. This symposium. supported by Component II of the Pro ject. will seek feedback on the evaluation and develop recom-imenidationis for anv chaniges to the PF1IC system that may be desirable when it is implemented nationwide  - 23 - 3. PROJECT IMPLEMENTATION A. INIPLEMENTATION SCHEDULE 3.1 The Project is scheduled to be implcmented in two and a half years plus a three- month evaluation period which is included to allow for data analysis and the preparation of recommendations for the feasibility of a national expansion of the primary health care system. The Loan would close November 30, 2000, six months following the completion date. The implementation schedule takes into consideration that there will be no delays in start-up, due to the fact that the PCU is well-established and the project is sufficiently prepared to start implementation in September 1997. A detailed implementation schedule is included in the PIP. B. IMPLENIENTATION MANAGEMENT 3.2 Management of the implementation of this Project is inextricably linked to implementation of an agenda of health reforms under the I lealth 11 project. Thus, the overall responsibility for management of this Project, jointly with Health I and 11, lies with the General Coordinator of the MOH/PCU. who is directly accountable to the Undersecretary. The PCU/MOH may obtain management support services to facilitate effective implementation of overall project activities. Responsibilities for implementation of specific activities for the three components and subcomponents are detailed in Section IV.C of the PIP, and are summarized below. Component I: Improvement of Primary Health Care Services 3.3 The MOH line departments for Primaryf Healtlh Care (PHCD) and for Maternal and Child Health/Family Planning (MCH/FPD) have the main responsibility for overseeing implementation of the activities under this sub-comiiponient. These departments also have responsibility for working closely with the two Provincial Health Directorates (PHDs) to ensure that the proposed network of family physicians has the required resources and support. particularly, human resources, training, and operating budgets. The MOH/PCU will be responsible for managing the investment program for construction, equipment, and MIS to be put in place in the two provinces for the operation of the PHC system. A core management team would be formed to oversee and guide the implementation of this subcomponent, and would be composed of representatives from each of the concerned parties PHCD, MCH/FPD, PHDs, and MOH/PCU. These five representatives would meet on a monthly basis to assess progress in implementation, and to define an action plan to address any issues which may be affecting implementation progress. The MOIHl/PCU representative w ill act as the Secretary for the management team and will prepare minutes of the monthlv meetings and keep the General Coordinator well-informed on progress and issues. The PCU w ill retain general responsibility for project coordination and implementation, X\orking in close coordination with line departments in the MOH and other agenicies.  - 24 - Development of Family Physician and Referral System 3.4 The management team outlined above will be responsible for overseeing the contracting of local consultants to assist with design of the system, the training workshop for MOH and Provincial Health Directorate personnel, and the contracting of public relations consultants to develop and conduct a public communications campaign. Family Physician Training 3.5 The management team outlined above will also be responsible for coordination and oversight of this component. However, this component will be carried out through the General Directorate for Health Education under the supervision and guidance of a Family Physician Training Advisory Committee working in close coordination with the PCU. This committee would include representatives from the MOH, experts from Family Physician and Public Health Departments of universities, and from professional unions. The Committee will oversee the design, implementation and monitoring of the training programs and development of training materials. Upgrading PHC Infrastructure 3.6 Responsibility for implementation of this component rests on the MOH/PCU. Upgrading/renovation of facilities will be undertaken through the Ministry of Public Works in cooperation with the PCU. The Infrastructure Unit of the PCU which already exists and is well staffed will manage this subcomponent. However, the Unit will contract an additional four staff to assist specifically on the implementation of the Project. The Unit is headed by a manager accountable to the MOHlPCU General Coordinator, and will work in close collaboration with designated staff in the Provincial Health Directorates, the Ministry of Public Works, and with the departments of the MOH responsible for infrastructure. The Unit will be specifically responsible for: (i) managing and overseeing all aspects of development of the infrastructure, including subcontracting of construction design and supervision of works; (ii) conducting procurement according to World Bank Guidelines, and (iii) overseeing the installation of equipment and furniture. PHC Services Information System 3.7 The implementation of this subcomponent will be coordinated by a Health Informatics Task Team (HITT) established in the MOH/PCU, working in close cooperation with the Information Processing Department and the PHC Department of the MOH. The Task Team includes staff appointed from the two relevant MOH departments, who will work closely with the informatics staff in the two Provincial Health Directorates as well as with the turn-key systems supplier. The PCU General Coordinator will appoint a Task Team Leader (TTL) who will be responsible for planning and managing the work of the Task Team, and who will also be the main counterpart to the contractor responsible for the development and implementation of the system. The TTL is accountable to the PCU Director, and is responsible for keeping him informed of progress and issues that need prompt resolution. As the PHCSIS is put in place, an important task of the HITT will be to oversee the acceptance of the system at the provincial level, and obtain user feedback while taking corrective action when needed, to avert problems and ensure the success of the system. During negotiations the Government agreed as a condition of effectiveness of the Loan Agreement that a Core Management Team, a Family Physician  - 25 - Training Advisory Committee, and a Health Informatics Task Team (HITT) will be established under terms of reference, staffing, functions and resources satisfactory to the Bank. Component II: Monitoring and Evaluation Monitoring and Evaluation 3.8 A Monitoring and Evaluation Specialist will be appointed under the Project to be responsible for implementing this subcomponent. This person will be directly accountable to the MOH/PCU General Coordinator and will work very closely with all the teams in implementing the various subcomponents of the Project, and with the Monitoring and Evaluation System already established for Health I and II. The Specialist will be responsible for; (i) data collection for the specific Key Performance Indicators (KPIs) agreed for the Project Outputs and Development Objectives (see Annex I); (ii) providing input into the semi-annual progress reports on achievement of the indicators; (iii) overseeing the preparation of the Final Evaluation Report which will address the feasibility of implementing the Project nationwide; and (iv) organizing the national symposium to discuss the recommendations of the Final Evaluation Report and to gain feedback and recommendations from key stakeholders, including high level officials outside the MOH. Project Management 3.9 The Project will be managed integrally with the Health I and II Projects which are currently under the responsibility of the MOH/PCU General Coordinator. The MOH/PCU will continue to function successfully as a fully integrated Unit of Ministry staff with short- and long-term consultants. The MOHIPCU will be guided by the Project Implementation Plan and will be responsible for coordinating and facilitating the work of the various teams in charge of implementation of subcomponents, and for the day-to-day administration of the Project. The MOH/PCU is also responsible for inter-agency coordination and for overseeing all contract tendering and contract negotiations in the name of the MOH. The MOH/PCU will work closely as needed with the technical and administrative line departments of the MOH and Provincial Health Directorates. Administratively, the MOH/PCU's responsibilities are, among others: producing timely and informative progress reports focusing on issues and progress towards achieving KPIs (PIP, Section V); maintaining project accounts and records in a separate and orderly manner, meeting intemational accounting standards to ensure clean audits; administering contracts and monitoring and supervising the performance of contractors to ensure that deliverables are met on a timely basis; and ensuring that all national budgetary provisions are programmed and received. The PCU may contract management support services as in practice under the ongoing Health I and Health 11 projects. Component III: Institutional Capacity Development, Health Economic Analysis 3.10 The Project envisages the creation of a Health Economics Unit, initially housed in the MOH/PCU, under the leadership of the General Coordinator of the MOH/PCU. The Unit will be initially staffed with two consultants, who will be joined in the second project year by two MOH staff who would come on board after an initial period of foreign training and job- shadowing. The Unit will be supported by an experienced foreign Health Economist who will be drawn from a partner organization which will mentor and develop a partnership with the MOH in this field beyond the life of this Project. The MOH/PCU General Coordinator will guide the  - 26 - work program of the Unit to ensure close collaboration and input into the development and evaluation of health care reform initiatives. The Unit will, in the long run, become part of a strengthened health policy capacity of the MOH. C. PROCUREMENT ARRANGEMENTS 3.11 A detailed procurement plan has been prepared which identifies all contracts to be tendered for goods, works, and services under the Project. All tenders are expected to be launched within immediate approval of the Loan, or within the next few months after Project Effectiveness. A Procurement Schedule for each tender to be carried out under the project for works, goods, and services is included as Annex 4. Procurement arrangements by expenditure category are shown in Table 3.1 below: Table 3.1: Procurement Arrangements (US$'Thousands) Procurement Method International National Competitive Competitive Consulting Bidding Bidding Other Services N.B.F. Total CIVIL WORKS - 3,007.1 - - - 3,007.1 (2,465.8) (2,465.8) EQUIPMENT 6,792.1 959.2 580.2 - - 8,331.5 (5,773.3) (815.3) (493.2) (7,081.8) MATERIALS - 250.3 134.8 - - 385.0 (212.7) (114.5) (327.3) FURNITURE - 677.6 - - - 677.6 (576.0) (576.0) TECHNICAL ASSISTANCET - - - 4,766.0 - 4,766.0 (4,051.1) (4,051.1) INCREMENTAL STAFF - - - 36.9 36.9 MAINTENANCE COSTS - - - 509.7 509.7 OPERATING MATERIALS & SUPP - - - - 921.1 921.1 Total 6,792.1 4,894.1 119.4 4,766.0 1,467.8 18,634.9 (5,773.3) (4,069.8) (607.7) (4,051.1) - (14,501.9) Note: Figures in parenthesis are the respective amounts financed by IBRD. Other Procurement Methods: Equipment: Direct Contract from UNICEF US$119,400. National Shopping for US$460,800 for small quantities of medical equipment and reagents and for small office equipment. Materials: National Shopping, US$134,000 for small contracts for the production of training materials. Tech Assistance: QCBS for five contracts (US$4.28 million) and competitive selection of about eight individuals (US$556,000) over three years.  - 27 - Procurement of Construction (US$3.0 million) 3.12 The construction program will provide for upgrading and renovating of existing primary health care facilities, and this work will be procured through National Competitive Bidding (NCB) in accordance with World Bank Guidelines, using procedures and bidding documents agreed with the Bank. It is expected that a total of four construction contracts will be tendered, ranging from $500,000 to $1.3 million. There are no contracts expected above $1.3 million. Procurement of Equipment and Furniture (US$8.6 million) 3.13 (i) International Competitive Bidding (ICB): Medical Equipment for the larger facilities (US$4.2 million) and the PHCSIS system (US$2.6 million) will be procured through ICB, respectively in two ICB tenders, in accordance with the Bank's "Guidelines for Procurement Under IBRD Loans and IDA Credits " published by the Bank in January 1995 and revised in January and August 1996. Equipment procured under ICB procedures accounts for 45% of Loan expenditures. Contracts estimated to cost less than US$300,000 will be procured through NCB or NS; (ii) National Competitive Bidding (NCB): Locally manufactured furniture and small medical equipment will be procured through NCB up to an aggregate of US$1.8 million, in accordance with the Bank's Guidelines, using procedures and bidding documents agreed with the Bank; (iii) National Shopping (NS): Smaller medical supplies (US$460,800) which are locally manufactured will be procured through NS, in accordance with the Bank Guidelines, and on the basis of comparison of three price quotations from different local suppliers. Much of the equipment is small breakable laboratory equipment and reagents which are not economical to purchase through ICB; and (iv) UNICEF: Medical Equipment for small facilities will be procured from UNICEF (US$0.1 million). Training Materials (US$0.4 million) 3.14 The printing of training materials, and acquisition of other training materials including video cassettes, will be procured through National Competitive Bidding (US$0.25 million) and through National Shopping (US$0.13 million) depending on the size of the contract. It is expected that there will be several small contracts to be let as training materials are developed. Technical Assistance (Consultancy Services, Foreign Fellowships, and Local Training) (US$4.8 million) 3.15 Technical Assistance will be procured according to the "Guidelines for the Use of Consultants by World Bank Borrowers and by the World Bank as Executing Agency" dated January 1997. It is envisaged that about five TA contracts will be tendered and awarded on a quality- and cost-based selection (QCBS), totalling US$4.3 million in aggregate. In addition, it is expected that about eight individuals would be contraced (US$556,000 in aggregate) over three years, based on competitive selection procedures and comparison of at least three curricula vitae.  -28 - Recurrent Costs (US$1.4 million) 3.16 All recurrent costs generated by the project and taxes and duties will be financed entirely by the Government. Contract Review Provisions 3.17 (1) Contracts estimated to cost more than $100,000 equivalent for goods and works procured under ICB and NCB would be subject to prior review. Contracts below this threshold would be subject to post review. (2) All contracts for technical assistance for both firms and individuals would be subject to prior review. D. DISBURSEMENTS AND FINANCING 3.18 The proposed Project is expected to be implemented over a period of two and a half years, and will be disbursed over a period of three years. The short implementation period is essential for a project which is well-focused on a specific program of interventions in primary health care. The tight schedule is possible because of the limited geographical scope and the well-established expertise and capacity of the MOH/PCU in implementing Bank-financed activities and conducting procurement of works, goods, and services. The Loan Closing Date will be November 30, 2000. The summary disbursement schedules by category and by semester are as follows: Table 3.2: Disbursement Categories Percentage of Amount Expenditures to be Category (US$M) Financed 1. Construction 2.3 82% 2. Equipment and Furniture 6.7 100% ex-factory cost, or 85% local expenditure 3. Training Materials 0.3 100% ex-factory cost, or 85% local expenditure 4.. Technical Assistance (a) Consultant Services 2.0 1 (b) Fellowships 0.1 ] 100% (c) Local Training 1.9 ] 5. Unallocated 1.2 Total 14.5  - 29 - Table 3.3: Summary Disbursement Schedule Bank Fiscal Year: 1997/8 1998/99 1999/00 2000 Disbursements (US$ million): Annual 2.1 4.1 5.9 2.4 Cumulative 2.1 6.2 12.1 14.5 Cumulative % of Total: 14.8% 43.7% 85.2% 100.0% 3.19 To facilitate the timely flow of payments for project expenditures, the MOH/PCU will establish, maintain and operate a Special Account in the Central or a commercial bank on terms and conditions acceptable to the World Bank. The authorized allocation for the Special Account would be $1.4 million, representing the estimated average expenditures for a four-month period for items financed under the project. At the beginning, the Special Account deposit will be limited to $300,000 and the remaining portion of the authorized allocation will be available for release when cumulative disbursements reach a level of $1.4 million. 3.20 Withdrawal applications for the replenishment of the Special Account should be sent to the Bank on a quarterly basis, or when the balance in the Special Account is equal to half of the initial deposit or the authorized allocation, whichever comes first. These applications will be supported by appropriate documentation including a copy of the monthly bank statement of the Special Account as well as its reconciliation with the Special Account transactions. All other applications for direct payment or Special Commitments must be for an amount not less that 20 percent of the Special Account deposit. E. ACCOUNTS, AUDITS, AND PROGRESS REPORTING Project Accounts 3.21 The MOHIPCU will maintain, in accordance with Turkish and International Accounting Standards, accounts and records to reflect all project resources, expenditures and liabilities. Supporting records and documents will be available to Bank supervision missions which will conduct random reviews, in particular, of those supporting withdrawal applications made on the basis of Statements of Expenditures (SOEs). The financial management system will allow timely and reliable monitoring of the cost of each component of the project in comparison with its physical implementation and of the utilization and availability of loan funds by category of expenditure and in the currency of the loan. Project Audit 3.22 Annual financial statements of the project will be audited in accordance with Turkish and International Standards on Auditing by the Government's Treasury auditors. Audit reports will be submitted within six months of the end of each accounting period. The first audit report would be due to the Bank before June 30, 1998.  - 30 - Progress Reporting 3.23 The MOH/PCU have agreed to report on a semester basis on the achievement of Key Performance Indicators defined for project outcomes and for project development objectives, as defined in Annex 1. Semester progress reports would be submitted to the Bank within one month after the completion of each semester, and would include a concise summary of progress and issues under each subcomponent, as well as progress on procurement, Loan disbursements, and national counterpart expenditures in PHC facilities. The first semester progress report would be due to the Bank on January 31, 1998. F. SUPERVISION AND MONITORING 3.24 The Project will on average require fourteen staff-weeks per year for supervision. The Project will be supervised to the extent possible jointly with the other two health sector projects and this will achieve substantive savings. The role of supervision missions will be primarily to assess progress towards achieving the objectives of the Project and to serve as a catalyst to resolve issues and lobby for the achievement of the long-term development objectives of the Project.  - 31 - 4. PROJECT BENEFITS AND RISKS A. BENEFITS 4.1 The principal benefits of the Project are to reduce the risks and improve the quality of implementation of the primary health care system to be established under Turkish health reforms legislation, by piloting the PHC system on a small scale and evaluating it prior to nationwide implementation. The Project thus has the benefit of reducing the risks of the much larger lending program proposed for FY99 (Health FY99) in Turkey, which will support full implementation of health reform. Component I: Improvement of PHC Services 4.2 The Project will provide the opportunity to evaluate and better plan implementation. The Project will be implemented in two phases, with the second phase being triggered by the passage of the necessary legislation to allow the introduction of capitation contracts and financial incentives. This component of the Project will also provide the benefits of reduced lead times for nationwide implementation of the PHC reforms, by developing training programs and building up a pool of trained family physicians ready to deploy in the project's and other provinces. The Project will realize the benefits of the PHC reforms, in improved health status and more cost-effective use of health resources in the project provinces and bring forward realization of these benefits in other areas of the country. Component II: Monitoring and Evaluation 4.3 This component will ensure that evaluation is comprehensive, supported by appropriate technical assistance, and disseminated, so as to achieve greatest benefits from the pilot. The two phase project will allow the investments in infrastructure, training and equipment, as well as the development of the primary health care system to be evaluated separately from the introduction of capitation contracts and financial incentives, thus allowing for the measurement of the impact of each. The component will also ensure that there is sound project management during the first phase. Component III: Institutional Capacity Development, Health Economic Analysis 4.4 This component will strengthen the capacity for health economic analysis in the central Ministry of Health, to help develop the MOH's skill set for policy development. It will achieve benefits through application of economic analysis to evaluation and development of the health reforms, including the PHC system.  - 32 - B. AFFORDABILITY 4.5 The project investments generate minimal incremental recurrent costs of US$418,000 per annum for operating the enhanced PHC facilities in the project provinces. This would be equivalent to around US$30 million per year if this expenditure increase per capita were incurred nationwide, which is under 1.5 percent of annual state budget expenditure on health (or less than 0.02 percent of GNP). As well, the PHC reforms being piloted have the potential to generate some offsetting fiscal savings through reductions in numbers of secondary care consultations and the need for future investment in additional hospital beds. C. RISKS 4.6 There is a risk that the Project will not have sufficient time or adequate instruments to succeed in changing the public's behavior sufficiently to shift utilization from secondary to primary care. In particular, the training and infrastructure improvements in primary health care services may not make it sufficiently attractive, or the public may not be sufficiently aware of the changes in quality, or the financial disincentives for use of secondary care included in the second phase may not be sufficiently powerful to achieve this shift. There is a risk that the health reform legislation will not proceed on a timely basis, and that the piloting of the second phase of the family physician and primary health care reform, i.e. capitation contracting and financial incentives, will not proceed as planned. 4.7 There is also a risk that it may not be possible to recruit sufficient numbers of family physicians trained, in the programs financed by the project, into positions in the project provinces, particularly in rural areas. Finally there is a risk that the piloted system will not be adequately supported with consumable supplies (e.g. pharmaceuticals) to maximize the potential contribution of the new training and infrastructure. This latter issue, though provided for with the estimates in recurrent costs, will be closely monitored. 4.8 Nevertheless, the express purpose of the Project is to assess these risks on a small scale, and create the opportunity for modification to the PHC system, including strengthening the array of incentives introduced under the PHC reforms, if necessary. The monitoring indicators and evaluation requirements set out in Annexes I and 2 provide for these risks to be monitored and for appropriate remedial action to be taken. The sustainability of the Project will be enhanced and implementation risks reduced by the participation of key stakeholders and national experts in the design of the referral system, the family physician training component, and in the symposium on evaluation of the Project which will recommend any changes required to the PHC system in the light of lessons learned in the project. Implementation risks are also reduced by the skills and experience of the PCU in project management and implementation, developed and demonstrated in the course of the Health I and Health 1I Projects.  - 33 - 5. AGREEMENTS AND RECOMMENDATIONS 5.1 During negotiations the Government provided assurances for the following: (a) the MOH will implement the project in accordance with the PIP (para.2. 1); and (b) no later than August 30, 1999 the Government will discuss with the Bank a detailed plan for implementation of the financial system of incentives and physician contracting in the Project provinces (para. 2.5). 5.2 During negotiations the Government agreed as a condition of effectiveness of the Loan Agreement that: a Core Management Team, a Family Physician Training Advisory Committee, and a Health Informatics Task Team (HITT) will be established under terms of reference, staffing, functions and resources satisfactory to the Bank (para. 3.6); and the project has been included in the Borrower's 1997 investment program (para. 2.23). 5.3 As a condition of Board Presentation, the 1997 Budget proposal would be submitted by the State Planning Organization to the High Planning Council.  - 34 - Annex 1 Republic of Turkey Primary Health Care Services Project Staff Appraisal Report Project Design Summary Narrative Summary Key Performance Indicators (KPI)' Monitoring and Critical Assumptions and Risks Supervision CAS Objective (CAS OBJECTIVES TO BANK MISSION) Achieve sustainable health 1. Implementation of National Ongoing supervision of It is assumed the reform of the health coverage and financing Health Reforms Health 11 Project (Ln.3802) sector and in particular primary standards comparable to the EU health care will lead to a reduction in and reduce regional and gender 2. Passage of legislation: regional and gender disparities and disparities in coverage and Establishment and Organization of an overall improvement in human health status, and increase Health Institution Law, Hospitals and development status. efficiency and effectiveness of Health Enterprises Law, and Primary health services (Development Care Services and Family Physicians Plan Matrix) Services Law Project Development MONITORING AND (DEVELOPMENT OBJECTIVES Objectives SUPERVISION TO CAS OBJECTIVES) To improve the access to and 1. 95% immunization rate by end of All KPIs will be monitored It is assumed that the Government quality of primary health care CY 1999. Develop targets for by the PCU in accordance will extend the pilots nation-wide and within the pilot regions to serve contraception prevalence and home with the monitoring and will ensure the necessary resources as the basis for extending the delivery to hospital delivery (either evaluation program outlined are directed to health to successfully primary care health reforms for all births or for first births) to be in Annex 2, to be reviewed implement the health reform nationwide. achieved by end of CY 1999, once periodically by supervision program. A risk is that if the overall baseline rates are established. missions. health reform agenda does not go forward the resources necessary to A. Pilot PHC System A. l. 50% of population registered implement primary health care with family physicians or health reform on a nation-wide basis will The pilot will be done in two centers by end of CY 1998, and of not be available. phases. Phase I will see the 90% of population registered by end PHC network established and of CY 1999. Nevertheless, it is expected that the will provide the necessary target population will benefit from traning, equip and infrastructure A.2. increase rate of general primary higher quality health care and to improve the capacity to care consultations to at least 2 improved health status. In addition, provide for compehensive consultations (excluding the Monitoring and Evaluation primary and referral immunization/ well child checks and system should provide the basis for matemity consultations) per capita an informed decision. Phase 2, which is contingent on per year by end of CY 2000 Note: legislation, and may fall outside this proposed target was suggested It is assumed that the necessary the term of this project, will on the assumption that current legislation will be passed in CY 1998 introduce capitation contracting consultation rates in health centers to allow the begining of the piloting and financial incentives are less than I per capita per year at of phase 2 in CY 1999 and the a present, based on the rates reported comparative evaluation of phase I in the health centers visited by the and 2 will be possible within the life appraisal team. of the project. If not phase I will be evaluated alone and phase 2 A.3 50% of family physician offices subsequently. and health centers staffed by trained family physicians by end of CY 1998, and 90% staffed by trained family physicians by end of CY 1999. I Baseline and targeted values should be shown, with the latter divided into values expected at mid-term, end of project and full impact.  - 35 - B. Monitoring & Evaluation B. l. develop targets for the change in the ratio of referred to self-referred state hospital secondary care outpatient and Accident and Emergency consultations to be achieved by end of CY 1998, CY 1999 and CY 2000 (of at least 25% improvement during the pilot period) once baseline rates are established. B.2. develop targets for the change in rates per family physician per year of general consultations, immunization/ well child contacts, and matemity contacts, to be achieved by end of CY 1998, CY 1999 and CY 2000B.3. develop targets for the change in rates of workload measures for Public Health Center physicians and other staff (e.g. rates of family planning contacts and of school health contacts per physician per year) to be achieved by end of CY 1998, CY 1999 and CY 2000. B.4 95% compliance by family physicians, health centers and Public Health Centers with reporting of BHSM to Provincial Health Directorates within x weeks of end of reporting period by end of CY 1999. B.5 Evaluation report (completed in accordance with Project Output KPIs below) makes specific recommendations for modification of design and implementation plans for the PHC system, based on evaluation of the pilot, and PCU/MOH assigns responsibility for taking action on these recommendations. C. Institutional Development C.l The Health Economic Analysis Unit established in the PCU completes a quantitative cost- effectiveness analysis of the pilot PHC system, and an analysis of the financial viability of family physician practice as part of the Unit's input to evaluation of the pilot by end of CY 2000. PROJECT OUTPUTS: MONITORING AND IOUTPUTS TO DEVELOPMENT SUPERVISION (V S A. Pilot PHC 1. Design Referral System 1.1 Model teferral system in place PCU management of project It is assumed that improved primary by July 1, 1998. implementation and Bank health care facilities, and trained 1.2 Population of two Provinces supervision missions. primary care physicians will result in fully aware of PHC program due to increased appropriate attendance at mass media awareness campaign by health centers and improved health January 31, 1999. status. The financial incentives being put in place to encourage use of 2. Infrastructure 2. 1 Fully upgraded and equipped primary care, and discourage use of facilities (33 Hps, 35 RHCs, 21 1 secondary care, would reduce the risk  - 36 - UHCs, 26PHCs. I Hosp.) by June 30, that this objective might not be 1999. achieved. 2.2 315 Family Physician Offices functioning by June 30, 1999 depending on the passage of legislation. 2.3 Operating and Maintenance Budget available to all PHC facilities 3. Family Physician Training by January 1998. 3.1 Up to 350 family physicians and 1500 health center physicians receive four weeks adaptation training by end CY 1997. 3.2 Up to 350 family physicians receive distance based education by July 1998. 3. 3 1500 health center physicians receive 12-month transition training 4. PHC Management by end CY 1998. Information System 4.1 Complete procurement of hardware and software for PHCSIS by end CY 1997. 4.2 Install PHCSIS and train users by end CY 1998. B. Monitoring & Evaluation 5. M&E System 5.1 Pilot evaluation report completed by end CY 2000. 5.2 Symposium discussing and C. Institutional Development disseminating evaluation results 6. Health Economics conducted by end CY 2000. 6.1 Health economic analysis unit with at least four trained local economists in place by end CY 1998. 6.2 Health economic analysis unit together with foreign health economist consultant complete input to evaluation report and symposium by end CY 2000. PROJECT COMPONENTS: INPUTS AND COSTS: (US$'000) MONITORING AND (COMPONENTS TO OUTPUTS) SUPERVISN A. Pilot PHC System 1. I Technical Assistance and Involvement of MOH staff It is assumed counterpart funds will 1. Development of Family Training for development of system from PHC and MCH/FP be available. Treasury is committed Physician and Referral System (USS21.5) Departments of the MOH to the availability of project funds and MOHIPCU management and the MOH is committed to allocate supplementary funds for the project. 2. Family Physicians Network 2.2 Production and dissemination of Close monitoring of course It is assumed that the MOH/PCU will System mass media information (US$475.0) design and delivery by involve closely and ensure the 2.1 Technical Assistance for PHCD and CH/FPD of the participation of provincial development and management of MOH and the MOHIPCU management and local staff which training programs (US$435.5) Management will guarantee ownership of the 2.2 Delivery of Training Courses, program. seminars, and workshops Field visits and site (USS2,388.6) inspection by MOH/PCU It is assumed that the mass media information campaign will be 3. Health Services Infrastructure 3.1 Construction for upgrading and Construction supervisory successful to encourage the public to I refurbishing PHC Facilities in the engineers and architects to use PHC facilities, and that the  - 37 - two pilot provinces (US$3,007. 1) monitor construction physician training and developed 3.2 Equipment and Fumiture for progress. infrastructure will improve the above PHC Facilities + Bilecik quality of services. Hospital (US$6,387.5). 3.3 Technical Assistance for design It is assumed that an appropriate and supervision of works (US$540.6) operating budget will be provided to 3.4 Recurrent Budget for operation PHC facilities to improve the and maintenance of PHC facilities efficiency and quality of services. (US$1,149.4). 4. PHC Management 4.1 Software and hardware for 3 50 Close management oversight Information System family physicians to operate a PHC by Informatics Department MIS system (US$2,456.9) of MOH and PCU Task Team Leader B. Monitoring and Evaluation 5. Pilot Monitoring and 5.1 Technical Assistance for Oversight by MOH/PCU Evaluation System conducting surveys, the final impact management evaluation report for the pilot, and dissemination of results through a symposium (US$461.2) 6. Project Management 6.1 Technical Assistance for project Oversight by MOH/PCU management and implementation General Coordinator monitoring and supervision (US$383.5) 6.2 Salaries for MOH staff for project coordination (USS9.6) C. Institutional Development 7. Health Economic Analysis 7.1 Technical Assistance for support Oversight by MOH/PCU of development of National Health General Coordinator for Reforms (US$87.0) close cooperation with 7.2 Foreign Fellowships for activities under the Health 11 development of health economics project and National Health capacity (US$86.3) Reforms 7.3 Salaries for incremental MOH staff for health economists (US$220.6)  Annex 2 Republic of Turkey Primary Health Care Services Project Staff Appraisal Report Component II - Project Monitoring and Evaluation 1. Because the project is to pilot the PHC system proposed under the health reforms prior to nationwide implementation, the second Component of the project provides technical assistance for monitoring and data gathering as a basis for evaluation of the pilot. 2. While improvements in health status are a major rationale for the PHC reforms, it is not realistic to expect to see significant changes in health status outcomes during the two-year life of the pilot as a result of the new PHC system. As a result, proposed monitoring and evaluation of the pilot is confined largely to intermediate process indicators, changes in health services utilization, relative costs of alternative services, and stake-holder perceptions. Three outcome- related indicators have been included (monitoring item (e) below). 3. Beyond the life of this pilot, however, it will be possible and important to monitor changes in health status that should be able to be achieved with effective primary health care. The National Burden of Disease Study, financed through the Second Health Project, establishes systems which gather this data. As well, the PHC reforms create a system of roles and responsibilities which includes monitoring of health outcomes and coordination of PHC and public health services by Public Health Centers and Provincial Health Directors. Thus, beyond the life of the pilot, the MOH will have the capacity to evaluate the impact of the new PHC system on health status. The pilot project builds in process indicators related to this ongoing monitoring and evaluation of health status. Monitoring Indicators 4. In addition to monitoring of whether project outputs are achieved, Component II of the project will monitor the following indicators to assess the success of the pilot project in achieving objectives of the new PHC system. These monitoring indicators are also listed in the table in Annex I to the SAR. For each of these monitoring indicators, baseline data will be established by the beginning of the pilot period (end of CY 1997), and there will be regular (generally semi-annual) monitoring throughout the pilot period (through to end of CY 1999 and in some instances CY2000 for those likely to be impacted by phase 2). (a) Establish baseline rates of population registration with family physicians or health centers by end of CY 1997, monitor changes in population registration semi-annually by family physician practice thereafter, achieve targets of 50% of population registered by end of CY 1998, and of 90% of population registered by end of CY 2000. (b) Establish baseline rates of general primary care consultations per capita per year (excluding immunization/well child checks and maternity consultations) by end of CY 1997, monitor changes in consultation rates semi-annually by family physician practice thereafter, achieve targets of at least 2 primary care consultations per capita per year by end of CY 2000. Note: this proposed target  - 39 - was suggested on the assumption that current consultation rates in health centers are less than I per capita per year at present, based on the rates reported in the health centers visited by the appraisal team. (c) Establish baseline volume and rates per capita per year of referred and self- referred state hospital secondary care outpatient and Accident and Emergency consultations for each state hospital by end of CY 1997, monitor changes in the volumes, per capita rates and the ratio of referred to self-referred consultations semi-annually thereafter. Develop targets for the change in the ratio to be achieved by end of CY 1998, CY 1999, and CY 2000 (of at least 25% improvement during the pilot period) once baseline rates are established. (d) Survey the workload of family physicians and their staff, by establishing baseline rates of general consultations, immunization/well child contacts, and maternity contacts per family physician per year by end of CY 1997, and monitoring semi-annually thereafter. Develop targets for the change in rates to be achieved by end of CY 1998, CY 1999 and CY 2000. (e) Survey the workload of Public Health Center staff throughout the pilot period, by establishing baseline rates of consultations or other patient or community contacts appropriate to measure workload of Public Health Center physicians and other staff (e.g. rates of family planning contacts and of school health contacts per physician per year) by end of CY 1997. Develop targets for the change in rates to be achieved by end of CY 1998, CY 1999 and CY 2000. (f) Establish rates of immunization, contraception prevalence and home delivery to hospital delivery (either for all births or for first births) in the pilot provinces by end of CY 1997, monitor semi-annually thereafter. Achieve target 95% immunization rate by end of CY 1999. Develop targets for contraception prevalence and home delivery to hospital delivery for end of CY 1999 once baseline rates are established. (g) Establish baseline rates of percentages of family physician offices and health centers staffed by trained family physicians by end of CY 1997, monitor changes in percentage of trained staff semi-annually thereafter, achieve targets of 50% staffed by trained family physicians by end of CY 1998, and 90% staffed by trained family physicians by end of CY 1999. (h) Establish baseline rates and timeliness of compliance with reporting of Basic Health Statistics by family physicians and Public Health Centers to Provincial Health Directorates by end of CY 1997, monitor changes in percentage compliance and timeliness of reporting thereafter, achieve targets of 90% completeness of reporting of BHSM within 6 weeks of end of each reporting period by end of CY 1999. Additional Data Collection to Support Evaluation 5. In addition to regular monitoring, some additional elements of data collection are required to enable evaluation of the success of the pilot in achieving the objectives of the PHC  - 40 - system, and to obtain feedback about any aspects of the pilot PHC system that should be modified before nationwide implementation. (a) Monitor changes in rates of inpatient admissions from polyclinics and Accident and Emergency attendances by hospital semi-annually throughout the life of the pilot. The purpose of this monitoring is to obtain a measure of whether the mix of secondary care consultations shifts to those more appropriate for specialist services. A higher ratio of admissions to outpatient and Accident and Emergency consultations would be expected if the project succeeds in establishing an effective referral system. (b) Produce an estimate of the average cost per primary care consultation (including allocation of the costs of Public Health Centers attributable to support of family physician practice) and per secondary care outpatient and Accident and Emergency consultation at the end of the pilot. The purpose of this estimate is to assist quantification of the benefits of the PHC system in producing a more cost-effective first-contact health service at primary level. (c) Obtain a profit-and-loss statement (modified to include estimates of annualized full costs of inputs that were subsidized in the pilot project, such as facilities and equipment) for a sample of rural and urban family physician practices under the second phase of the pilot project, to assess the financial viability of family physician practices. (d) Survey changes in use of health information by Provincial Health Directors, Public Health Centers and family physicians as a result of implementation of PHCSIS. The purpose of this survey is to assess whether the PHCSIS achieved the benefits expected. (e) Survey participants in family physician training programs at the end of the program and after a subsequent period in primary health care practice, to obtain feedback on the value of the programs and any recommendations for modification. (f) Survey Provincial Health Directorates, Public Health Centers, family physicians, and hospital outpatient and Accident and Emergency service doctors regarding their perceptions of benefits and shortcomings of the pilot new PHC system and any recommendations for modification. (g) Survey changes in user-satisfaction with primary health services by surveying users of health centers at the beginning of the pilot period and users of family physician offices at the end of the pilot period. The purpose of this survey is to assess whether the improvements in training, facilities, equipment and diagnostic support in PHC services are reflected in higher user satisfaction. (h) Establish data collection and a regular monitoring process (coordinated with the National Burden of Disease study) for a set of primary care outcome indicators to be collected during and after the pilot period, as a basis for producing an  - 41 - evaluation report on the impact of the PHC system on health status within five years of the end of the pilot period. Elements of the Evaluation of the Project 6. Using the above information, at the end of the life of the project, evaluations will be carried out at the end of the project period to answer the following questions: (a) whether the project achieved the objectives of establishing a comprehensive network of family physicians and an effective referral system, and if not, what changes may be required to achieve this; (b) whether the project PHC system increased utilization rates of primary health care and reduced rates of utilization of secondary health services, and if not, what changes may be required to achieve these objectives; (c) whether the patient mix of referrals and self-referrals to secondary care outpatients and Accident and Emergency services shifts under the pilot PHC system to a mix with a larger share requiring specialist or hospital services; (d) whether the project PHC system provides lower cost first-contact health services than secondary care outpatients and Accident and Emergency services and if not, what changes to the PHC system or use of this system may be required to increase cost effectiveness; (e) whether family physician practices are financially viable in urban and rural settings, and in more and less developed provinces, and if not, what changes to family physician cost structure or reimbursement regimes may be appropriate; (f) whether the family physician (and other PHC staff) ratios to population are appropriate in the light of actual workload experienced in the project; (g) whether the numbers of Public Health Centers, their staff levels, and functions are appropriate in the light of actual workload experienced in the project; (h) whether changes to training, PHCSIS, infrastructure or equipment would reduce the costs or increase the benefits of the PHC system; (i) whether the PHC system is likely to be replicable in urban and rural areas, and in more and less developed provinces, and whether modifications to the system or its implementation are required in different settings (this will require analysis of monitoring and survey information by district characteristics within the pilot provinces). 7. An evaluation report will be produced within a year of the end of the initial two-year period with a follow up evaluation within a year of the implementation of the second phase of the project. The project provides for technical assistance with evaluation, and assistance for presentation and discussion of the evaluation results in a symposium. The purpose of the  - 42 - symposium is to obtain feedback on the results and recommendations for responses to the evaluation findings from appropriate national experts and stake-holders. The symposium should therefore be attended by stakeholders and experts in the central MOH, representatives of other key govemment departments such as the SPO, provincial health directorates, universities with family physician and public health departments, etc.  - 43 - Annex 3 REPUBLIC OF TURKEY / MINISTRY OF HEALTH PRIMARY HEALTH CARE SERVICES PROJECT PROJECT IMPLEMENTATION PLAN TABLE OF CONTENTS: PRIMARY HEALTH CARE SERVICES PROJECT ......................................................,.4 I. BACKGROUND AND RATIONALE ..4 A. Background .4 B. Rationale .12 DESCRIPTION OF THE PROJECT ..17 A. Project Objectives .17 B. Project Descriptio . 18 C. Project Conponents .19 D. Detailed Economic Analysis .29 EFFICIENCY GAINS ..30 EFFECTIVENESS IMPROVEMENTS ..30 A. Main Risks 32 ESTIMATED COST AND FINANCING ARRANGEMENTS . .32 IMPLEMENTATION ARRANGEMENTS 35 A. Project Organization .35 B. Relations wit/h Other Bodies of MoH and External Organizations .37 C. Implementation Arrangements b!y Project Components: .38 D. Procurement Arrangements by Project Components: .43 ROLE OF THE WORLD BANK DURING IMPLEMENTATION ..44 PROVISION FOR PROJECT ACCOUNTING AND AUDITING .44 IMPLEMENTATION PLAN ..45 MONITORING & EVALUATION ..46 List of Figures: Figure I Simlplified Model of Organization of State Health Sector in Tuirkey S Figure 2 Struclure of Health Care Financing in Turkey 7 List of Tables: Table I Costs b!y Components 33 Table 2 Financing 34 List of Annexes: Annex I Financial Incentivev & Terms of Emplovmnent for Contracting Phi sicjiens (Draft) Annex 2 Detailed Cost Tables by Project Components Annex 3 Organization Chart of Project Coordination Unit Annex 4 Draft Termns of References Annex 5 Proc ur einen t Sc hedule Annemx 6 I,nplemleitation7 Schedulc Annex 7 Equipmenit List (Draft) Annex 8 Progress Report Oiutline ('Draft) Annex 9 Priminar Heialthl Car e Services Iniormation Sstem.s Technical TOR  - 44 - Annex 4 Republic of Turkey Primary Health Care Services Project Staff Appraisal Report Schedule of Procurement Arrangements Total Procure- Contract Implemen- Procurement Package Cost ment Adver Responsible Award tation (US$000) Method tisement- Unit Expected Period General Procurement Notice 05/15/97 Procurement Workshop N/A a/ A. Civil Works - Refurbishment and Building Expansion 1. Health Posts/Rural Centers 544 NCB 06/30/97 PCU 10/15/97 11/97-05/99 2. Health Posts/Rural Centers 545 NCB 06/30/97 PCU 10/15/97 11/97-05/99 3. Urban Health Centers 618 NCB 09/30/97 PCU 01/15/98 02/98-12/99 4. Public Health Centers 1,300 NCB 09/30/97 PCU 01/15/98 02/98-12/99 Subtotal NCB, Civil Works 3a007 B. Equipment 1. Health Posts/Rural Center 119 DC 01/15/98 PCU 05/30/98 07/99 From UNICEF Purchasers 2. Health Posts/Rural Center 30 NS 01/15/98 PCU 05/30/98 07/99 From State Supply Office (DMO) 3. Public Health Centers and 4,170 ICB 02/15/99 PCU 07/30/99 12/99-02/00 Bilecik Hospital Medical Equipment 4. Public Health Centers and 1,390 NCB/NS 03/15/99 PCU 06/30/99 12/99 Bilecik Hospital - Small laboratory equipment and reagents 5. MIS Software and Hardware 2,623 ICB 10/24/97 MIS-TF 05/08/98 06/98-07/99 Turnkey Contract Subtotal Equipment .32 C. Furniture: Primary Care 677 NCB 01/15/98 PCU 05/30/98 06/98-07/98 Facilities D. Production of Training Materials 3 NCB/NS 11/30/97 PHC-MOE 01/30/98 Ongoing and Mass Media Department Communications.  - 45 - Total Procure- Contract Implemen- Procurement Package Cost ment Adver Responsible Award tation (US$000) Method tisement- Unit Expected Period E. Technical Assistance I. Design of Family Physician 203 Firm/QCBS 07/31/97 MOE-PHC 10/3197 11/97-10/98 Referral System Dept. 2. Design and Delivery of Training 2,843 University/ 07/31/97 MOE-PHC 10/31/97 Ongoing Program for Family Physicians QCBS Dept. 3. Architechtural Designs, 312 Firm/ 07/01/97 PCU 09/15/97 10/97-12/00 Engineering and Supervision of QCBS Works 4. Monitoring & Evaluation 461 Firm/ 08/01/97 MOE- 10/15/97 Ongoing Expert (1), including QCBS administration of National Symposium 5. Project Management Services 655 Firm-QCBS/ 07/01/97 PCU 09/15/97 Ongoing Individuals 6. Health Economics Consultants (4) 173 Individuals 07/01/97 MOE- 09/15/97 Periodic 7. Health Economics Fellowships 119 University/ 07/01/97 MOE- 09/15/97 01/98-06/99 QCBS Subtotal Technical Assistance 4766 F. Incremental Recurrent Costs 1,468 NBF TOTAL PROJECT COSTS: 1835 a/ As the MOH/PCU is experienced in Bank-financed procurement and has conducted all ICB tenders and other procurement, there is no need for a procurement workshop. Procurement Methods: ICB: International Competitive Bidding NCB: National Competitive Bidding NS: National Shopping DC: Direct Contract   MAP SECTION   30 30 0 .5< BULGARIA. . Sinop GEORGIA a. Edirne S N,{