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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Human Development Unit South Asia Region Document of The World Bank FOR OFFICIAL USE ONLY PROJECT PAPER ON A PROPOSED ADDITIONAL CREDIT IN THE AMOUNT OF SDR 16.3 MILLION (US$24 MILLION EQUIVALENT) TO THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA FOR A HEALTH SECTOR DEVELOPMENT PROJECT JUNE 18, 2009 Report No: LK This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENTS (Exchange Rate Effective (March 2009) Currency Unit = Sri Lankan Rupee SLR 115 = US$1 US$ 1 = SDR FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS AI AIDS CAS DHS FC FM HIV HSDP IBBS IDA IP IUFR MOHN MTR MTEF MS NCD PDO PHM PMS PMT QAG SDR TERP Avian Influenza Acquired Immune Deficiency Syndrome Country Assistance Strategy Demographic Health Survey Finance Commission Financial Management Human Immuno-deficiency Virus Health Sector Development Project Integrated Bio-behavioral Surveillance International Development Association Implementation Progress Interim Unaudited Financial Report Ministry of Healthcare and Nutrition Mid-Term Review Mid-Term Expenditure Framework Moderately Satisfactory Non-Communicable Diseases Project Development Objective Public Health Midwife Project Management Secretariat Project Management Team Quality Assurance Group Special Drawing Rights Tsunami Emergency Recovery Project Vice President: Isabel Guerrero Country Director: Naoko Ishii Sector Director: Michal Rutkowski Sector Manager: Julie McLaughlin Task Team Leader: Sundararajan Srinivasa Gopalan

3 SRI LANKA Additional Financing of Health Sector Development Project CONTENTS Page I. INTRODUCTION... 7 II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING... 7 III. PROPOSED CHANGES... 9 IV. CONSISTENCY WITH COUNTRY ASSISTANCE STATEGY V. ECONOMIC ANALYSIS VI. APPRAISAL OF RESTRUCTURED/SCALED-UP ACTIVITIES VII. EXPECTED OUTCOMES VIII. BENEFITS AND RISKS IX. FINANCIAL TERMS AND CONDITIONS Annex 1: Revised Project Development Objective And Results Framework Annex 2: Conflict Analysis Framework & Assessment... 19

4 Date: June 16, 2009 SRI LANKA ADDITIONAL FINANCING OF HEALTH SECTOR DEVELOPMENT PROJECT PAPER SOUTH ASIA SASHD Country Director: Naoko Ishii Sector Manager/Director: Julie McLaughlin Project ID: P Lending Instrument: Specific Investment Loan Project Financing Data [ ] Loan [X] Credit [ ] Grant [ ] Guarantee [ ] Other: Team Leader: Sundararajan Srinivasa Gopalan Sectors: Health (100%) Themes: Health system performance (P) Environmental screening category: Partial Assessment For Loans/Credits/Others: Total Bank financing (US$m.): Proposed terms: Standard IDA terms with 20 years maturity, including 10 years grace period Financing Plan (US$m) Source Local Foreign Total BORROWER/RECIPIENT International Development Association (IDA) Total: Borrower: Government of Sri Lanka Sri Lanka Responsible Agency: Provincial Councils / Health Authorities Sri Lanka Ministry of Health Care and Nutrition Suwasiripaya, 385 Rev. Mawatha Sri Lanka Tel: The Finance Commission Sri Lanka

5 Estimated disbursements (Bank FY/US$m) FY Annual Cumulative Project implementation period: Start July 1, 2009 End: December 31, 2010 Expected effectiveness date: July 1, 2009 Expected closing date: December 31, 2010 Does the project depart from the CAS in content or other significant respects? Does the project require any exceptions from Bank policies? Have these been approved by Bank management? Is approval for any policy exception sought from the Board? Does the project include any critical risks rated substantial or high? Does the project meet the Regional criteria for readiness for implementation? Project development objective [ ]Yes [X] No [ ]Yes [X] No [ ]Yes [ ] No [ ]Yes [X] No [ ]Yes [X] No [X]Yes [ ] No To contribute to improvements in efficiency, utilization, equity of access to, and quality of public sector health services in Sri Lanka, with a particular focus on district and provincial level services (This has been revised from the original project's Development Objective, in line with QAG recommendation - to simplify it and make it more focused) Project description [one-sentence summary of each component] Component 1: Support to decentralized service delivery. This component finances provision of health care services by the Provinces at the district and provincial level. Component 2: Strengthening the stewardship function of the Ministry of Health Care and Nutrition. This component finances the development of evidence-base for policy and planning, as a contribution to the stewardship role played by the Central Ministry of Health care and Nutrition. This is a revised set of project components, as part of restructuring. The only change is the amalgamation of components 2, 3 and 4 of the original project into component 2, which is significantly scaled down and simplified. Which safeguard policies are triggered, if any? Environmental category: B. The original project included a Health Care Waste Management Plan, which is being implemented satisfactorily. The Additional financing does not propose any new activities and therefore does not trigger any new Safeguard policies. Significant, non-standard conditions, if any, for: Board presentation: No non-standard conditions. Loan/credit effectiveness:

6 No non-standard conditions Covenants applicable to project implementation: In addition to standard conditions applicable to IDA credits, all covenants similar to and harmonized with the original grant agreement. The following obligations are ongoing: 1. The Finance Commission and the Ministry of Healthcare and Nutrition will ensure that throughout the project period, a satisfactory financial management system is maintained, in respect of the Component 1 and 2 respectively. 2. The borrower will implement the project in accordance with the Operations Manual. 3. IDA funds are additional to the regular Government / Provincial financing of the health sector as measured by the average budget of the previous three years 4. Each Provincial Council shall make available in a timely manner, to the Districts under its jurisdiction the Grant proceeds and the associated domestic funds 5. Each Provincial Council receiving funds under the project shall ensure that throughout the project period a satisfactory financial management system is maintained.

7 I. INTRODUCTION 1. This Project Paper seeks the approval of the Executive Directors to provide an additional Credit in the amount of SDR 16.3 million (USD 24 Million equivalent) to the Sri Lanka Health Sector Development Project (P050740/P113489; H0950 / IDA CE) 2. The proposed additional credit will help finance the costs associated with originally planned project activities, facing a financing gap due to reallocation of USD 19 million of the original IDA Grant amount to Tsunami relief efforts and USD 3.5 million to avian influenza prevention. No new activities are proposed. However, restructuring is proposed at this time in terms of (a) simplification of the component that supports the Central Ministry of Healthcare and Nutrition (MOHN), and allocation of proportionally more resources to the provincial/district level; (b) revision of the Project Development Objective (PDO) making it more specific and realistic and of the results framework linking indicators more directly to the project activities; and (c) improvement of project management arrangements. II. BACKGROUND AND RATIONALE FOR ADDITIONAL FINANCING Background information on the original project 3. The original IDA grant for the Sri Lanka Health Sector Development Project was SDR 40.2 million. It was approved by the World Bank Board of Executive Directors on June 15, 2004 and made effective on October 20, The project development objective (PDO) of the original project was: to improve efficiency, equity, and quality of health care by strengthening planning, management, and monitoring capacity at the district, provincial and central level with specific focus on supporting preventive care services at the district and divisional level. The project covered all nine provinces and twenty-five districts in Sri Lanka, as well as central level functions. It had four components as follows. Component 1. Support to district level authorities to improve service delivery and outreach (USD 40 Million) Component 2. Support to Central Programs and Hospital (USD 16 million), which included: Family Health Program and Nutrition; Immunization; Non-communicable Diseases (NCD) and Mental Health; and Hospital Efficiency and Quality. Component 3. Support to Policy Making, Budget Formulation and Monitoring and Evaluation (USD 8.9 Million), including: Strengthening Public Expenditure Management & Consultation; Monitoring & Evaluation for the Health System; and Other Institutional Strengthening. Component 4. Project Management (USD 6.3 million) 4. In response to the Asian Tsunami and to the threat of Avian Influenza, the project has had two amendments affecting its resource base. In February 2005, the following PDO was added through an Agreement Amending Selected Legal Agreements (Part Z): A further objective of the Project is to assist Sri Lanka in carrying out the first phase of an emergency recovery and reconstruction program in the Affected Areas as a consequence of the massive destruction and devastation following the tsunami and tidal waves in December 2004 and other similar incidents. As part of this amendment, an amount of SDR 13 million (USD 19 million equivalent) was reallocated from the HSDP to the Tsunami Emergency Recovery Program (TERP) Phase I (P094205). Another amendment was made on August 30, 2007 to reallocate USD 3.5 million equivalent to Avian Influenza (AI) prevention (human health). 5. The reallocations of the IDA grant to national emergencies left SDR million of the grant funds for the originally planned activities (SDR 27.2 million including AI prevention). The current undisbursed balance is SDR 4.94 million (including the Avian Influenza activities), which is expected to be spent by June 2009, a full year before the current closing date. 7

8 Table 1: HSDP, IDA Grant disbursement status as of January 30, 2009 Allocated Disbursed Undisbursed XDR USD XDR USD XDR USD % million million million million million million Original amount (a) % Tsunami Rehabilitation (b) % Avian Influenza (c) % Available for HSDP (a-b-c) % 6. Tables 2 and 3 show the status of PDO indicators as at June Three out of five targets have been achieved or are on track to be achieved. Indicators 3 and 4 are either unrealistic or not directly relevant to the specific project interventions. Target 2 will need additional effort, but remains achievable within the project s life. However, as recommended by the mid-term review (MTR), a new results framework has been developed (see Annex 1) Table 2: Status of PDO indicators as at June 2008 Indicator Baseline Target for 2010 Latest value 1 % districts with IMR 12.2/1,000 (national 56% 72% 84% average) or lower 2 % districts with MMR of 46.9/100,000 (national 48% 70% 53.8% average) or lower 3 % of pregnant women with anemia (Hb of less 29.7% Reduce by 25% 41% than 12 g / dl) 4 % districts with injection-site abscess rate of 0% 80% 3.8% 10/100,000 doses of DPT or less 5 % of institutional deliveries in teaching / specialist hospitals 50% 40% 33.9% Table 3: Status of Intermediate indicators as at June 2008 Indicator Baseline Target for 2010 Latest value 6 % pregnant mothers screened for anemia in field 1.3% 70% 57% clinics 7 Number of women over 35 yrs. Screened for 53, ,000 83,757 cervical cancer by PAP smear / year 8 % mothers receiving post-partum care in first 10 67% 80% 75% days after delivery 9 Number of best practice guidelines developed % districts with less than 70% mothers getting post-partum care 58% 10% 32% 7. Overall progress towards PDO was rated Satisfactory by the October 2008 supervision mission. HSDP has been contributing to improvements in quality of health services, health information base, and service delivery capacity in Sri Lanka. At the central level, achievements have been in hospital quality improvement, development of the evidence base, i.e., strengthening of the national vital statistics and execution of the Demographic and Health Survey, and increasing coverage of maternal and child health services. The decentralized component supporting all 25 districts has put in place a process of evidencebased planning. Some progress has been made with regard to the technical assistance provided by the center to the provinces on results-based planning, though more work is needed in this area. Limited progress has been made so far in strengthening monitoring and evaluation and in addressing curative care, non-communicable diseases and malnutrition. Furthermore, the health sector continues to face financial gaps to further improve the provincially-managed curative care sector. 8

9 8. Project implementation suffered from the complex design of the central component, which caused difficulties in coordination, management and monitoring. The coordination between the central and provincial components was also poor. Progress was slow with respect to the NCD sub-component. Overall, the central component has been slow to absorb funds, while the provincial component has been on track. 9. The project made significant progress since the completion of the MTR. All project components were showing satisfactory progress, except for two minor sub-components with MS progress and one subcomponent with moderately unsatisfactory rating. These sub-components are part of the central component, which, although important, is not the major component of the project. The project s main focus is on the decentralized management of health services through the provincial component, which is performing satisfactorily. 10. MOHN has made steady progress in improving fixed asset management and internal audit arrangements, the two Financial Management (FM) issues which hampered implementation of the central component. On this basis the project s FM rating has now been upgraded to Satisfactory. There are no outstanding audit reports or unaddressed serious audit observations. 11. The additional PDO related to TERP, which was legally added to the IDA grant for HSDP was being monitored as part of a separate operation (P094205), closed on September 30, The final ISR ratings for the TERP were MS for both IP and PDO. The draft ICR rates project performance as satisfactory. Rationale behind the request for additional financing 12. The project is facing a financing gap due to reallocations amounting to USD 22.5 million equivalent of the original grant for unanticipated national emergencies. Achieving the PDOs will be hampered by the shortfall in the planned resources beyond March-June The provincial component has absorbed almost 100% of its allocation and the resource constraints faced by the provinces pose a risk to service delivery at the decentralized levels. Most of the additional funds will be allocated to the provincial component (USD 23 million out of the proposed USD 24 million), which also enhances the probability of their full absorption. The additional funds will also enable the conflict-affected provinces (the Northern and the Eastern) meet their special health needs. III. PROPOSED CHANGES The project is proposed to be restructured in three respects, as recommended by the MTR and the Quality Assurance Group (QAG) Panel in 2008: 13. The design of the central component to be simplified: At the MTR, the project had eight centrallymanaged subcomponents under three components, in addition to the Avian Influenza sub-component which was added in August The eight sub-components were in turn managed by 15 different departments, three of which were outside MOHN de facto resulting in 15 sub-components. This complex design was difficult to implement and monitor; some of the directorates performed better than the others and coordination amongst them was a challenge. The restructured component will be significantly trimmed down from the original design, and focus on the development of evidence-base for policy-making, and on planning and monitoring. This does not entail any new activities; but it does entail paring down of several originally envisaged activities. Such paring down will not have a significant impact on the achievement of the project development objectives, most of which will be achieved through the component 1. Component 2 on strengthening the stewardship functions of the Ministry of Healthcare and Nutrition will have an allocation of USD 1 million from the Additional Financing. The currently undisbursed funds under the parent project will be utilized to honor contracts and commitments already made and to implement the recently introduced component on Avian Influenza control (subject to the realism of the relevant plans). At the end of 2009, a further review will be undertaken to determine whether any further reallocations are warranted for the final year of implementation. 9

10 14. Implementation arrangements will be streamlined: This applies particularly to the central component. A Project Management Secretariat (PMS), external to MOHN, while helpful with the operational and fiduciary functions, made it difficult to mainstream the project activities in a sustainable and coordinated way very important in a sector development project. Therefore, a Project Management Team (PMT) chaired by the Additional Secretary, MOHN was established to strengthen the project management by providing essential oversight. In addition, the process of absorbing the PMS into the Ministry is under way. In the Provincial component, efforts are also underway to institutionalize the stewardship role of the Provincial health office through the Provincial planning units initiated in 2005 with support from HSDP. 15. Results Framework has been revised: The MTR observed that some of the indicators in the original Results Framework needed revision to make them more directly relevant to the project-specific investments. The revised new results framework is attached as Annex In addition to the above three changes, the project proposes to apply some of the good principles of program approach - already being adopted in its provincial component - to the central component as well, with a view to building a platform of such approach for possible future support to the sector. It is to be emphasized that this does not necessarily entail pooled financing or a sector budget support mechanism; it does mean that the Bank s support will focus on the national plan, the project will promote greater country ownership and leadership, and that the Bank will work in enhanced partnership with other stakeholders in the sector. In this context, the fact that MOHN has embarked on a Medium Term Expenditure Framework (MTEF) for the sector is a significant positive development. Project development objective and key indicators 17. The PDO is revised as follows:: To contribute to improvements in efficiency, utilization, equity of access to, and quality of public sector health services in Sri Lanka, with a particular focus on district and provincial level services. The Tsunami-related PDO, which was added to the original IDA grant remains unchanged. The new key performance indicators are: Bed occupancy rate disaggregated by higher level hospitals (general hospitals and above) and lower level hospitals (base hospitals and below). Proportion of lower level hospitals (base hospitals and below) with emergency treatment units. Proportion of women over 35 years screened for cervical cancer. Proportion of pregnant women screened for anemia. The restructured project will have two components: a) Component 1. Support to Decentralized Health Service Delivery at the Provincial and District Levels (USD 23 Million). This component will continue to support the activities originally included in component 1 of the parent project, with a geographical scope that covers all nine provinces and 25 districts. These activities include: strengthening district and provincial capacity for planning and implementation, improvements for service delivery, training, provision of medical supplies and equipment, renovation of health facilities, preventive services such as immunization, and health education. The specific items of support will vary from district to district, based on their annual plans which will be discussed and agreed upon with the Bank. These plans present the overall needs and available resources for Health for the district in question. The Bank s financial support will be led by the district plan and be directed to those areas where an investment gap is identified. The allocation for this component includes $12 million (50% of the total additional credit amount) for the conflict-affected Northern and Eastern Provinces, to help address their additional health needs arising from the recent conflict. While approving the annual plans for financial support from the project, the Bank team will ensure that 10

11 these plans for the Northern and the Eastern Provinces take account of the special health needs consequent to the conflict situation in an appropriate manner, and will take measures to withhold the use of IDA resources to finance permanent health facilities in temporary, long term or short term welfare centers or camps. The Finance Commission (FC), which channels funds to the provinces, will ensure additionality of project funds, and avoid displacement of government resources for the recurrent costs. The FC will also intensify field supervision to make sure that the project funds are used only for the intended purposes. The provinces will also be encouraged to increase their focus on the control and prevention of malnutrition particularly among mothers and children. An activity financed by an AusAID Trust Fund has been recently initiated to design and develop appropriate community-based interventions to tackle the stubborn problem of malnutrition particularly among the estate and rural populations. Funds from HSDP could be leveraged to pilot-test these interventions for subsequent scale-up if found effective. b) Component 2. Strengthening the Stewardship Functions of the Central Ministry of Healthcare and Nutrition (USD 1 Million). The central component under the additional financing will be simplified and trimmed down by limiting its focus to strengthening the stewardship functions of MOHN, and moreover, the undisbursed funds from the parent project will be reallocated to cover the shortfall in the component 1. However, such reallocation will be done in a manner that honors commitments already made, i.e. contracts awarded and procurement that had reached an advanced stage by December Similarly, the recently added component on Avian Influenza control will be financed from the current undisbursed amount, subject to the realism of the proposed plans, which will be critically reviewed before making reallocations of the parent project funds. The additional financing, will focus, within the rubric of stewardship, on the development and more effective use of evidence base and information systems for policy, planning, monitoring and management. Examples of such activities are: further strengthening vital statistics and medical statistics systems, an integrated bio-behavioral surveillance (IBBS) system for HIV/AIDS, nutritional surveillance and pilot studies on hospital quality. MOHN is encouraged to include special emphasis on the coordination of nutrition activities both amongst its various units and with development partners, so that the provincial component can be more effective in this regard. The decision on distributing the USD 1 million for this component across specific activities will be left to MOHN in consultation with the Bank in the spirit of program approach. But it is likely that all activities that do not fall into the category of stewardship functions will not be financed under this component from the Additional Financing. Examples of original project activities not likely to be financed by the Additional Financing include service provision by the centrally managed facilities, construction of buildings, purchase of vehicles or equipment or foreign training that does not fit into a comprehensive human resource plan. 18. No changes are proposed in the project s financial management, disbursement or procurement arrangements, except a simplification of the disbursement schedule. Procurement will be according to the Bank guidelines published in May 2004 and revised in October, A brief FM capacity assessment has been done of the restructured unit and staffing arrangements for FM found to be satisfactory. The three existing special dollar accounts will continue to be used for undisbursed balance under the current IDA grant. For the additional financing, two new special dollar accounts will be opened, one for component 1 and another for component 2. The special account for component 1 would be used for two disbursement categories: one for the Northern and Eastern Provinces (to track more easily their increased allocation) and the other for the remaining 7 provinces. As there are no additional funds being allocated for the FC s own expenditures, the third Special Dollar Account, i.e., for FC, will not be replicated for the Additional Financing. Extending the Closing Date of the existing IDA grant until December 31, 2010 will enable FC to utilize the unspent balance in that grant towards its requirements while the Additional Financing supports the rest of the project activities. Disbursements for the Component 1 will be report-based and for Component 2 they will be transaction-based. The existing 11

12 Interim Unaudited Financial Report (IUFR) will continue to apply. IUFRs will be submitted quarterly, 45 days after the end of each quarter. Extension of Closing Date 19. In view of start-up delays, this request proposes a six-month extension of the closing date to December 31, 2010 to complete. As a follow-on project is being planned for 2011, an extension of the current project will provide more predictable resources to the sector, especially at the decentralized levels which face serious resource constraints. Such predictability of resources is critical to the effectiveness of sector development projects and the achievement of the health-related Millennium Development Goals. The extension, which would apply to the existing IDA grant and to the new Credit, will also synchronize the project closing with the Sri Lankan fiscal year. IV. CONSISTENCY WITH COUNTRY ASSISTANCE STATEGY 20. The project is consistent with the Country Assistance Strategy (CAS), which had been built on three pillars: peace, growth and equity. The original project had been designed to contribute to the pillar of equity by transferring more resources for health to poorer areas with worse health indicators and to the pillar of growth by reducing the direct and indirect costs associated with inefficiencies in the health system and increasing productivity especially for the poor through a healthier population. These points remain valid in the context of the more recent CAS (2008), which re-framed the Bank s assistance in alignment with the Mahinda Chintana 1, wherein the three pillars are: equitable development, accelerated growth and strengthening public service delivery. While the first two pillars remain relevant as they originally were, the third one makes the case for this request for additional financing even stronger. V. ECONOMIC ANALYSIS VI. 21. As no new activities are being proposed, the original economic analysis holds. APPRAISAL OF RESTRUCTURED/SCALED-UP ACTIVITIES 22. As no new activities are being proposed and the project performs satisfactorily, the original appraisal holds. The proposed restructuring is only in terms of simplification of the central component, trimming down activities in it that could not be completed and are no longer considered necessary to achieve the development objectives. The other aspects of restructuring are to refine the statement of PDO and the results framework. 23. The Additional Financing does not trigger any new safeguard policies and hence the original Integrated Safeguards Data Sheet is still valid. The original project was under Environment Category B, and had accordingly prepared a Health Care Waste Management Plan. Supervision missions have noted the satisfactory implementation of this Plan. No other safeguard policies were applicable to the original project. 24. However, the project will take account of the new political context in Sri Lanka and, in line with GOSL policy, increase its support to the conflict-affected areas, i.e., the Eastern and Northern Provinces. This enhanced support will be based on a health needs assessment to be carried out specifically for these provinces. The assessment will ensure outreach and consultations with the local population and a stocktaking of the conditions of the health facilities, and status of health service delivery. The needs assessment will be completed by July 31, Annex 2 shows the Conflict Analysis Framework and Assessment with respect to this Additional Financing, identifying the specific risks posed to the project / health sector by the conflict, and the mitigation measures proposed to manage these risks. The process of approving Provincial Annual Plans 1 Mahinda Chintana refers to the broad policy and strategy direction set out by the current President of Sri Lanka. 12

13 and subsequent performance reviews will be used to ensure that the conflict-related issues are addressed appropriately. VII. EXPECTED OUTCOMES 26. The expected outcomes of the project remain unchanged. They have been stated more precisely in the new PDO, and the indicator set made more directly attributable to the project activities, as recommended by the MTR and QAG Panel reviews of VIII. BENEFITS AND RISKS 27. No significant changes are envisaged in the project s benefits and risks. If anything, the overall risks will be reduced, in view of the proposed simplification of the central component. However some of the original risks and mitigation measures remain valid. Though ownership of the project within MOHN has increased, and MOHN is playing a more active role in providing guidance and capacity-building for the provinces, there is still room for improvement in this area. Districts in the conflict-affected areas require significant technical support for preparing and implementing their plans; the project provides for a greater emphasis on providing such support. In view of the recent developments and additional demand for health services, special care will be taken to mitigate the risk of inappropriate use of project funds for the establishment of permanent health facilities in temporary, long term or short term welfare centres or camps. Such measures include the Bank withholding approval of project funds for such activities as well as vigorous field-level supervision by the FC. The conflict-affected areas also run a greater risk as some of those areas are not yet open to field visits by the Bank personnel and, in some cases, by MOHN personnel. However, the FM systems under the provincial component have been functioning satisfactorily, even in respect of the conflict affected areas and the project is emphasizing the importance of paying special attention to the fiduciary risks associated with project activities in these geographic areas, to the extent permissible by the security situation. IX. FINANCIAL TERMS AND CONDITIONS 28. While the original project is being financed by an IDA grant, the additional financing will be an IDA Credit. The Credit will have a 20 year maturity with a 10 year grace period. 13

14 ANNEX 1: Revised Project Development Objective And Results Framework SRI LANKA: Additional Financing of Health Sector Development PDO Outcome / Output Indicators Use of information To contribute to improvements in efficiency, utilization, equity of access to, and quality of public sector health services in Sri Lanka, with a particular focus on district and provincial level services Bed occupancy rate (%) disaggregated by higher level hospitals (general hospitals and above) and lower level hospitals (base hospitals and below) Proportion (%) of lower level hospitals (base hospitals and below) with emergency treatment units decentralization. Proportion (per 100,000) of women over 35 years screened for cervical cancer Proportion (%) of pregnant women screened for anemia This is a measure of the efficiency and utilization of the curative care system. A shift from the disproportionate use of higher level facilities toward a greater use of lower level hospitals also might indicate an increase in efficiency and greater A measure of equity of access to emergency care. This focuses on equity of geographic access and not income or other dimensions. A measure of coverage and utilization of services and of care seeking behavior. An indicator of the quality and coverage of antenatal care, and a measure of efforts to address maternal malnutrition. Intermediate Results Results Indicators for each component Use of results monitoring Component 1: Support to Provincial health system to improve health service delivery Proportion (%) of provincially managed health facilities practicing 5S approach* to quality improvement. from the public sector. Component 2: Support to Central MOHN to strengthen the role of stewardship and Monitoring and Evaluation functions in a decentralized health service delivery system Proportion (%) of districts conducting at least ten well women screening clinics** Provincial and district expenditures as a proportion (%) of total Project expenditures Proportion (%) of districts presenting annual financial and physical progress report within 6 months after financial year. Proportion (%) of hospitals in the Colombo Municipal area with a functioning Health Care Waste Management system Proportion (%) of the selected Divisional Secretariat Areas producing monthly the Nutrition surveillance reports No of clinical care guidelines developed (out of the planned 93) Proportion (%) of influenza surveillance centers preparing quarterly reports regularly A measure of the efforts to improve quality of services provided to people seeking health services Information on public sector services for women over 35 to prevent non-communicable diseases (NCD)**. A measure of the extent to which the project supports decentralized health service delivery Information on the fiduciary and governance functions related to the decentralized component. Indicator of compliance with agreed plan for environmental safeguards related to the project. A measure of a functioning national nutrition surveillance system in the selected 30 Divisional Secretariat Areas. A measure of the stewardship function on quality assurance of the curative services A measure of the effectiveness of the influenza surveillance system helpful as a warning sign for potential avian influenza outbreaks. * 5S is a system of quality assurance that is being used by the corporate sector in Japan. The system has been introduced in the health sector with support from HSDP. ** Well women clinics are specialized NCD preventive health clinics conducted by the public preventive health services to screen for Hypertension, Diabetes Mellitus, Cancer of the Cervix and Breast cancer on women over 35 years 14

15 Rationale for Changes to the Key Performance Indicators Indicator Old or New Rationale behind the change % districts with IMR 12.2/1,000 (national average) or lower Old Dropped Higher order indicator, affected by factors beyond the project control % districts with MMR of 46.9/100,000 (national average) or lower Old Dropped Higher order indicator, affected by factors beyond the project control % of pregnant women with anemia (Hb of less than 12 g / dl) Old Dropped Higher order indicator, affected by factors beyond the project control % districts with injection-site abscess rate of 10/100,000 doses of DPT or less Old Dropped Data not available and the indicator is not directly affected by project interventions % of institutional deliveries in teaching / Old Dropped Not highly relevant to project interventions. specialist hospitals Bed occupancy rate disaggregated by higher level hospitals (General Hospitals and above) and lower level hospitals (Base hospitals and below) New Better and broader measure of efficiency and utilization of different tiers of care and the referral system than the institutional deliveries Proportion of lower level hospitals (base hospitals and below) with emergency treatment units Proportion of women over 35 years screened for cervical cancer Proportion of pregnant women screened for anemia New Measure of geographic equity of access, for which there was no indicator in the earlier set New An gender-sensitive indicator of access to / utilization of NCD services New More proximate measure than the prevalence of anemia. Also shows the quality of antenatal care. 15

16 Health Sector Development Project New Results Monitoring Table Indicator Definition Baseline (at start of project) 2003/4 Outcome level Bed occupancy rate disaggregated by higher level hospitals (General Hospitals and above) and lower level hospitals (Base hospitals and below) % of lower level hospitals (base hospitals and below) with emergency treatment units Proportion of women over 35 years screened using PAP smears (for cervical cancer) per 100,000 % of pregnant women screened for anemia N: No of in-patient days during the period D: Number of beds x No of days during the same period N: No of lower level Health institutions (BH and below) with ETUs D: Total No of lower level health institutions (BH and below) N: Number of women over 35 years screened using PAP smears D: Mid year population of women over 35 years *100,000 N: No of pregnant women screened for anemia D: Total Number of pregnant women registered with the public sector GH and above: 97.8 BH and below: 36.7 Values Yr GH and above BH and below: 35.7 Yr GH and above: 88.8 BH and below: 42.2 Yr GH and above: 87.8 BH and below: 42.8 Yr Data awaited Yr Target Yr Target 85% and 45% Freque ncy and reports Annual Data collection instruments Indoor morbidity and mortality return 13.3%* 16.4%* 20.3%* 25.6%* 35.3%* 50% Annual Provincial statistics reports 1011 per 100, Annual FHB statistics 14.3% 15.8% 18.2% 70% 73% (using 3 rd quarter 2008 data) 85% Annual FHB statistics Responsibili ty for Data collection Medical Statistics Unit, MOHN 9 Provincial Health offices Family Health Bureau, MOHN Family Health Bureau 16

17 Intermediate Results Component 1: Support to Provincial health system to improve health service delivery Proportion of provincially managed health facilities practicing 5S approach to quality improvement % of districts conducting at least 10 well women screening clinics % of Project expenditures incurred by the Provincially managed health sector N: Amount in US$ spent by the provinces in a given year D: Total project expenditure in the same year N: No of districts submitting a report on time D: Total no of districts 2.2%* 6.2%* 15.1%* 22.3%* 27.1%* 40% Annual Provincial statistics 47.8% 57.5% 57.5% 57.5% 61.9% 75% Annual Provincial statistics % 66.9% 76.6% 70.8% 80% Annual FC and MOHN % of districts presenting annual financial and physical progress report within 6 months after financial year % 12/ % 22/ % 23/26 100% Annual FC annual evaluation report for HSDP Component 2: Support to Central MOHN to strengthen the role of stewardship and Monitoring and Evaluation functions in a decentralized health service delivery system Proportion of hospitals in the Colombo Municipal area with a functional Health Care Waste Management system Proportion of the selected Divisional Secretariat Areas producing quarterly Nutrition surveillance reports % 80% Annual DDG MS HCWM data % 80% Every 6 months NCD data 9 Provincial Health offices 9 Provincial Health offices FC and MOHN FC DDG (MS) MOH Nutrition Coordination Unit of the MOH 17

18 No of clinical care guidelines developed Percent of influenza surveillance centers preparing quarterly reports regularly *Provisional data only DDG (MS) MOH % 80% Once MRI Medical in 6 Virology Research months section data Institute, MOH 18

19 ANNEX 2: Conflict Analysis Framework & Assessment Conflict filter Situation at present Rating of conflictrelated risk Were broad stakeholder consultations conducted sufficiently? Is impartial grievance mechanism established? Broad stakeholder consultations were not done at the time of project preparation in HSDP provides program support to the health sector in all 9 provinces including Northern and Eastern. There may be perceptions that services and facilities are not distributed equitably across ethnic groups. Only in hospitals that have set up 5S quality system, there are grievances mechanisms but they are less effective because they are not independent. Moderate Moderate Mitigation measures A Special Health Needs Assessment for conflict-affected areas is proposed under the Project through the Additional Financing. This will include stakeholder consultations to assess perceived needs and gaps. Such needs are for communities with conflict-related vulnerabilities including internally displaced persons and returnees to the Northern and Eastern Provinces. An improved mechanism would be piloted and scaled up after learning lessons. One such improvement could be reactivating Hospital committees with inclusive membership. Rating of residual risk Low Low Is project management & administration sensitive to inter ethnic issues? Are conflict generated needs adequately identified? Are opportunities to strengthen reconciliation and inter ethnic trust adequately identified? The program approach of this project ensures that it supports the health needs of each province as identified by the respective Council. This minimizes the risk of ethnic inequities in service coverage. However, certain parts of the country may have special issues relating to ethnic equity. The PAD identifies special health needs related to the conflict. The project finances health services to vulnerable population groups also as part of the general health system The health sector has staff from all three major ethnic groups, which fosters tolerance, trust and better understanding. The interactions between provincial health authorities in the project planning and review exercises provide opportunities to enhance understanding. III. Overall Conflict Risk Rating Moderate Moderate Moderate Low Resource allocation would be based on need and regardless of ethnicity, but with consideration for factors associated with the conflict. Further efforts will be made to ensure that the services cater to all linguistic groups by employing health workers with sufficient language proficiencies. Merit-based recruitment policies blind to ethnic origin would be promoted. The needs assessment mentioned above would yield the necessary evidence-base to address this risk. Regular field visits and monitoring to ensure that the special needs are addressed. Further merit-based staff recruitment of a balanced mix of ethnicities and different languages. Increased exchange of views and experiences between district health authorities as well as the provincial authorities.. Low Low Low 19