IMPLEMENTATION COMPLETION RESULTS REPORT (IBRD 7199/AR) ON A SECTOR ADJUSTMENT LOAN IN THE AMOUNT OF US$750 MILLION DOLLARS THE ARGENTINE REPUBLIC

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank IMPLEMENTATION COMPLETION RESULTS REPORT (IBRD 7199/AR) ON A SECTOR ADJUSTMENT LOAN IN THE AMOUNT OF US$750 MILLION DOLLARS TO THE ARGENTINE REPUBLIC FOR A PROVINCIAL MATERNAL-CHILD HEALTH SECTOR ADJUSTMENT LOAN (PMCHSAL) September 25, 2007 Human Development Sector Management Unit Argentina, Chile, Paraguay and Uruguay Country Management Unit Latin America and the Caribbean Region Report No: ICR

2 CURRENCY EQUIVALENTS Exchange Rate Effective 9/25/2007 Currency Unit = Argentinean peso (AR$) AR$1.00 = US$ 0.32 US$1.00 = AR$ 3.20 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS APE CAS COFESA ESW FESP FSR GOA HIV/AIDS HSRP IBRD IDB ICR IMR MCHIP MOH NEA NOA NGO Obras Sociales PAD PAHO PCU PMCHSAL PMO PSR QAG SAL UFI-S Administration of Special Programs Administración de Programas Especiales Country Assistance Strategy Federal Health Council Consejo Federal de Salud Economic Sector Work Essential Public Health Functions and Programs Project Funciones Esenciales de Salud Pública Solidarity Redistribution Fund Fondo Solidario de Redistribución Government of Argentina Human Immune-Deficiency Virus / Acquired Immune-Deficiency Syndrome Health Sector Reform Program International Bank for Reconstruction and Development Inter-American Development Bank Implementation Completion Results Report Infant Mortality Rate Maternal-Child Health Insurance Program Programa de Seguro Materno Infantil, or Plan Nacer National Ministry of Health - Ministerio de Salud de la Nación North-Eastern Region of Argentina North-Western Region of Argentina Non-Governmental Organization National Health Insurance Entities Project Appraisal Document Pan American Health Organization Project Coordinating Unit Provincial Maternal-Child Health Sector Adjustment Loan, or the Project Mandatory Medical Package Programa Médico Obligatorio Project Status Report Quality Assurance Group Sector Adjustment Loan Unit for International Financing in Health Unidad de Financiamiento Internacional en Salud Vice President: Country Director: Sector Manager: Task Team Leader: Primary Author: Pamela Cox Pedro Alba Keith Hansen José Pablo Gómez-Meza Juan Pablo Uribe

3 ARGENTINA Provincial Maternal-Child Health Sector Adjustment Loan (PMCHSAL) CONTENTS DATA SHEET A. Basic Information B. Key Dates C. Ratings Summary D. Sector and Theme Codes E. Bank Staff F. Results Framework Analysis G. Ratings of Program Performance in ISRs H. Restructuring (if any) 1. Program Context, Development Objectives and Design Key Factors Affecting Implementation and Outcomes Assessment of Outcomes Assessment of Risk to Development Outcome Assessment of Bank and Borrower Performance Lessons Learned Comments on Issues Raised by Borrower/Implementing Agencies/Partners Annex 1. Bank Lending and Implementation Support/Supervision Processes Annex 2. Outputs by Component Annex 3. List of Supporting Documents Annex 7. Map... 29

4 A. Basic Information Country: Argentina Program Name: Provincial Maternal- Child Hlth Sector Adjustment Ln. (PMCHSAL) Program ID: P L/C/TF Number(s): IBRD ICR Date: 09/28/2007 ICR Type: Core ICR Lending Instrument: SAD Borrower: Original Total Commitment: Implementing Agencies: National Ministry of Health Cofinanciers and Other External Partners: B. Key Dates REPUBLIC OF ARGENTINA USD 750.0M Disbursed Amount: USD 750.0M Process Date Process Original Date Revised / Actual Date(s) Concept Review: 07/03/2003 Effectiveness: 11/06/ /06/2003 Appraisal: 08/20/2003 Restructuring(s): Approval: 10/28/2003 Mid-term Review: Closing: 12/31/ /31/2007 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Satisfactory Low or Negligible Satisfactory Satisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Highly Satisfactory Government: Satisfactory Quality of Supervision: Satisfactory Implementing Agency/Agencies: Satisfactory Overall Bank Performance: Satisfactory Overall Borrower Performance: Satisfactory i

5 C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Program at any time (Yes/No): Problem Program at any time (Yes/No): DO rating before Closing/Inactive status: No No Satisfactory Quality at Entry (QEA): Quality of Supervision (QSA): Rating: Highly Satisfactory None D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 5 5 Compulsory health finance Health Sub-national government administration 5 5 Theme Code (Primary/Secondary) Child health Primary Primary Health system performance Primary Primary Indigenous peoples Secondary Secondary Law reform Secondary Secondary Population and reproductive health Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Pamela Cox David de Ferranti Country Director: Pedro Alba Axel van Trotsenburg Sector Manager: Keith E. Hansen Evangeline Javier Program Team Leader: Jose Pablo Gomez-Meza Cristian C. Baeza ICR Team Leader: ICR Primary Author: Jose Pablo Gomez-Meza Juan Pablo Uribe ii

6 F. Results Framework Analysis Program Development Objectives (from Project Appraisal Document) The Provincial Maternal-Child Health Sector Adjustment Loan (PMCHSAL) aims to: (a) respond to the urgent health needs of the poor, particularly uninsured mothers and children; and (b) simultaneously, assist the Government to modify the incentive framework for financing and delivery of health care services, starting in Argentina's poorest provinces. Revised Program Development Objectives (if any, as approved by original approving authority) The original objective of the PMCHSAL, its PDOs and other key indicators were not revised during project implementation. (a) PDO Indicator(s) Indicator Indicator 1 : Value (quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Improving National-Provincial coordination for Health Policy and revitalizing the role of COFESA. (Number of COFESA sessions) At least 3 times a Annual average of year with a ten (10) sessions One (1) session a year quorum of at least ( ) with 75% quorum above 90% Date achieved 06/30/ /31/ /31/2006 Comments (incl. % achievement) Indicator 2 : Implementation of the Sexual and Reproductive Health Law and Program. Value (quantitative or Qualitative) Ministerial Sexual and reproductive resolution services were not mandating the mandatory for Obras obras sociales Sociales system to include these services. Ministerial Resolution No. 310 including sexual and reproductive services in the PMO issued (04/15/2004) and fully effective Date achieved 04/15/ /31/ /31/2006 Comments (incl. % achievement) Indicator 3 : Infant mortality rate (IMR) in Argentina Value (quantitative or Qualitative) IMR of 18 per 1,000 live births Lower than 18 per 1,000 live births National IMR for 2006 estimated at 12.9 per 1,000 live births (MOH iii

7 source); NOA and NEA regions have reversed their increasing trends. Date achieved 12/31/ /31/ /30/2007 Comments (incl. % achievement) (b) Intermediate Outcome Indicator(s) Indicator Indicator 1 : Value (quantitative or Qualitative) Baseline Value Original Target Values (from approval documents) Formally Revised Target Values Control of vertical transmission of HIV in the country Less than 5% 4.2% vertical vertical transmission of HIV transmission of during 2002 HIV during 2004 Actual Value Achieved at Completion or Target Years 3.4% in 2004, 2.97% in 2005 and 2.73% in 2006 Date achieved 04/15/ /31/ /31/2006 Comments (incl. % achievement) Indicator 2 : Measles prevention Value (quantitative or Qualitative) Zero (0) cases of measles in the country during the year No cases of measles in the country during 2004 Zero (0) cases of measles in the country during Date achieved 12/31/ /31/ /30/2007 Comments (incl. % achievement) Indicator 3 : Protecting essential priority public health programs (EPHP). Value (quantitative or Qualitative) AR$583 million for protected programs AR$583 million for protected programs AR$631.8 million in 2007; average annual budget of AR$ during Date achieved 01/01/ /31/ /30/2007 Comments (incl. % achievement) Indicator 4 : Number of mothers and children enrolled in the MCHIP Value (quantitative or Qualitative) None; the program did not exist at least 4,000 enrolled and receiving services 33,227 eligible beneficiaries enrolled in 3 iv

8 in at least 2 eligible provinces. provinces at the end of 2007; 457,185 eligible beneficiaries enrolled in the 9 provinces at the end of June 2007 Date achieved 04/15/ /31/ /30/2007 Comments (incl. % achievement) Indicator 5 : Implementation of a risk-adjustment mechanism for the FSR Value (quantitative or Qualitative) Does not exist Presidential decree implementing risk adjustment issued and effective Presidential Decree No implementing riskadjustment in the FSR issued 12/20/2006) and effective Date achieved 04/15/ /31/ /31/2006 Comments (incl. % achievement) G. Ratings of Program Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 12/17/2003 Satisfactory Satisfactory /01/2004 Satisfactory Satisfactory /02/2004 Satisfactory Satisfactory /16/2004 Satisfactory Satisfactory /28/2005 Satisfactory Satisfactory /23/2005 Satisfactory Moderately Satisfactory /09/2006 Satisfactory Moderately Satisfactory /21/2006 Satisfactory Moderately Satisfactory /28/2006 Satisfactory Moderately Satisfactory /22/2007 Satisfactory Satisfactory H. Restructuring (if any) Not Applicable v

9 1. Program Context, Development Objectives and Design 1.1 Context at Appraisal The Strategic Rationale for PMCHSAL. The Argentina Provincial Maternal-Child Health Sector Adjustment Loan (the PMCHSAL or the Project) was discussed, designed and approved within a very difficult context. At the time of appraisal (mid-2003), Argentina was trying to emerge from a deep economic and political crisis that had significantly negatively impacted its social sectors (particularly health indicators such as infant mortality and malnutrition) and its relations with the international community. Macroeconomic uncertainty and an acute negative resource transfer situation were elements in an intense ongoing dialogue between the Borrower and the Bank. At that critical moment, the Bank and the Government of Argentina (GOA) agreed on an operation (the PMCHSAL) that would, simultaneously allow for: (a) supporting GOA efforts to sustain critical health programs (e.g. reproductive health, vaccination) that otherwise would have to be acutely reduced; (b) introducing significant legal and administrative reforms that would set the framework for the introduction of a results-focused policy and financial aid dialog between the national and the provincial governments. This new legal/administrative framework aimed at allowing for the introduction of a Maternal and Child Insurance Program that would become the spearhead for changes in financing and management in the health sector, both national and provincial; (c) supporting GOA efforts to mitigate effects of the acute negative resource transfer. These three were all essential to mitigating and reversing the deterioration of key health indicators. As soon as the economic crisis began, during the previous two years, efforts had centered on how to confront such a crisis and mitigate its deleterious effects. A thorough review of the existing Bank portfolio and its projected pipeline had led to urgent adjustments in order to best support the response of the Government of Argentina (GOA) in addressing the country s mounting needs, in particular in health. The PMCHSAL responded then to the need for scaling up the support ensuring that longer term structural issues of the sector (made even more evident by the crisis) would be addressed. The Health Sector Context In this difficult context, Argentina s health sector experienced the combination of historical structural challenges compounded by acute difficulties brought by the crisis. Rapidly increasing poverty levels aggravated well-known regional disparities in key health status indicators (for example, in maternal and infant mortality). The financing of essential public health programs was compromised, affecting the effectiveness levels of critical interventions such as immunizations and control of infectious diseases. Even in major urban areas, access to basic health services and medications were affected, especially for the poor. Meanwhile, the national, provincial and local capacity to address these increasing needs remained low. Traditionally, the federal structure of Argentina s health sector has posed a tremendous challenge for any attempt to agree on and implement coordinated national programs. This coordination weakness further subtracts from the resulting performance of a highly fragmented health sector, composed of multiple subsystems that hide inefficiencies and undesired cross-subsidies. Simultaneously, the provincial capacity to deliver quality services widely varies, contributing to persistent inequities. Prior to and during the crisis, the Bank had maintained close dialogue and intense involvement with

10 Argentina s health sector. A diverse portfolio during the 90 s had supported the GOA s efforts to improve various sector dimensions, including the national and provincial health insurance systems, public hospital management, primary care, HIV/AIDS prevention and control, and infant and maternal services. Loans had been approved at the national and provincial levels. Once the crisis unfolded (end of 2001), the Bank redirected its collaboration to support the Borrower s efforts to mitigate its effects, including financial and technical assistance to the national Ministry of Health (MOH) in implementing a health emergency response plan. With the purpose of better understanding the unfolding situation and proposing alternative policies, economic sector work (ESW) was conducted with ample participation from diverse sector stakeholders. Within this challenging context and as cited later, the PMCHSAL was correctly designed as part of the Bank s overall response to the crisis in Argentina. The response in health was clearly poverty oriented, responsive to the Borrower s efforts and needs, and coherent with the Bank s capacity. It helped resolve urgent crisis effects while supporting the MOH in advancing much needed structural reforms. Although it was not a loan considered in the then-existing Country Assistance Strategy (CAS), it was fully aligned with the vision and strategy of what was to become the new CAS for Argentina. 1 This new CAS identified three pillars for the Bank s collaboration in the country: sustained growth with equity, social inclusion and improved governance. The Project s design was strongly aligned with the second pillar social inclusion by reaching out to poor and vulnerable populations in the provinces with improved access to essential health services. While doing so, it would also contribute to progress in obtaining equitable growth and strengthening sector governance through enhanced federal-provincial coordination. 1.2 Original Project Development Objectives (PDO) and Key Indicators: The main objective of the PMCHSAL was to respond to the urgent health needs of the poor, particularly the uninsured mothers and children, while simultaneously assisting the Government to modify the incentive framework for financing and delivery of health care services starting in Argentina s poorest provinces. 2 To achieve its objective, the Project supported the implementation of the GOA s Health Sector Reform Program (HSRP). This reform program, solidly presented and justified by the Borrower in a detailed Letter of Development Policy (dated September 5, 2003), was structured on five pillars: (i) implement the Maternal-Child Health Insurance Program; (ii) revitalize and improve national-provincial coordination of health policy; (iii) protect essential priority health programs; (iv) implement the Sexual and Reproductive Health Law and Program; and (v) consolidate social health insurance regulation to ensure better targeting of public subsidies to the poor. 3 In each of these five pillars, the Project would support the Borrower in advancing the following policy actions: (i) Maternal-Child Health Insurance Program (MCHIP). This core policy reform in the HSRP was to guarantee the delivery of a pre-defined health services package to uninsured mothers and children. The Program would start in the northeast (NEA) and northwest (NOA) regions of the country, where the poorest provinces and the worst infant and maternal health indicators co-existed, and in a posterior phase would then be extended throughout the country. Eligible provinces, which had to sign umbrella agreements with the national government in order to participate, included Jujuy, Salta, Tucumán, Catamarca and Santiago del Estero (in the NOA), and Chaco, Misiones, Formosa and Corrientes (in the 1 The then-existing CAS for Argentina was approved by the Board on June 2000 and later on updated, on October The new CAS was discussed and approved on April 15, 2004 (Report No AR, dated January 29, 2004). 2

11 NEA). An innovative federal provincial financing arrangement would link payments to local health care providers with effective performance on agreed targets, changing the traditional historic budgeting into a more results-oriented model. (ii) (iii) (iv) (v) National-Provincial Health Policy Coordination. The role of the Federal Health Council (COFESA) was to be revitalized and strengthened to serve as an effective coordinating instrument for health policy across the country, better aligning the national MOH policies with the provincial ministries of health efforts. Essential Priority Health Programs. Essential public health programs threatened by the crisis were to be protected throughout Included here were critical programs such as those addressing HIV/AIDS, tuberculosis, immunizations and nutritional supplements for children and mothers. Sexual and Reproductive Health. The long-awaited law in this area was to be fully developed as a national program, and its services and interventions were to be implemented by individual provinces and included in the mandatory medical package (PMO) delivered by the obras sociales to their affiliates and beneficiaries in the national health insurance system. National Health Insurance Regulation. Progress made during the past years in reforming the national health insurance system would be sustained and further consolidated, including the reduction of undesired cross-subsidies that affected the finances of provincial public hospitals, and the inclusion of more equitable redistribution mechanisms in its Solidarity Redistribution Fund (FSR), enhancing transparency and reducing incentives for adverse risk-selection and/or shifting of high-cost insured patients for treatment in the public hospital network. The PMCHSAL main objective was complemented with a detailed set of output and outcome indicators related with each one of the above reform pillars. These indicators facilitated monitoring and evaluation of the Project throughout implementation (see Annex 1 and 4). The following table summarizes these indicators: Program Expected Results Medium-Term Objectives (by the end of 2004) (Reform Pillars) Output Indicators Outcome Indicators Strengthening the Maternal and Child Health Program, including the start-up of its insurance Improve national provincial coordination of health policy formulation (COFESA) At least 4,000 uninsured eligible beneficiaries affiliated to the MCHIP in two provinces Increase in the proportion of eligible pregnant women with at least one prenatal visit before week 20 in the 2 eligible provinces starting the MCHIP (compared to 2002) 80% of total national budget for milk and essential drugs allocated via COFESA agreements Decreasing IMR as compared to 2002 Reversion of the increasing trend in IMR observed in the northern regions 2 In the Program Document for a proposed Provincial Maternal-Child Health Sector Adjustment Loan to the Argentine Republic, September 24, Ibid. 3

12 Protecting essential priority public health programs Implementation of the Sexual and Reproductive Health Law and Program. Consolidation of the obras sociales regulation and elimination of undesired public subsidies to the non-poor COFESA meets at least three times a year with more than 75% quorum Budget and actual expenditures foe essential programs of at least AR$548 million Budget and actual expenditures for the MCHIP of at least AR$20 million At least 87% measles vaccination coverage nationally for 1-year old children At least 70% of provinces with vaccination coverage for 1-year old children above 87% 90% treatment to prevent HIV vertical transmission nationally Nutritional milk supplements delivered to 300,000 children 10% of eligible women are enrolled in the Sexual and Reproductive Health Program in the 2 eligible provinces 20% increase in cost-recovery for the 3 largest hospitals in 4 eligible provinces (compared to baseline of previous 12 months) Less than 45 days average payment time from the national obras sociales to the public hospitals The SRF includes a risk adjustment redistribution mechanism No cases of measles in the country during 2004 Less than 5% vertical transmission of HIV in the country in Revised PDO (as approved by the original approving authority) and Key Indicators, and Reasons/Justification: The original objective of the PMCHSAL and its output and outcome indicators were not revised during project implementation. 1.4 Original Policy Areas Supported by the Program (as approved) The Project was structured as a set of 30 policy actions committed by the GOA in the legal loan agreement and distributed in three tranches over a 26-month implementation period (12 actions in the first tranche, 10 in the second and 8 in the third). Its total lending amount was US$750 million, financed by a loan from the International Bank for Reconstruction and Development (IBRD). The loan was distributed as follows: US$450 million at fulfillment of first tranche conditions, US$150 million at a second tranche and the remaining US$150 million with the third tranche. This loan distribution structure reflected expected progress in policy development as well as the Borrower financing needs. Loan resources supported and recognized progress made by the GOA in advancing its HSRP. In addition, the Borrower and the Bank agreed on a parallel investment loan that would secure needed technical assistance and implementation capacity, in particular for the MCHIP. This operation, an Adaptable Programmatic Loan (APL) for a Provincial Maternal-Child Health Investment Project (Loan No AR or APL-I) was approved for US$135.8 million on April, Its objective was to 4

13 support the scaling up of the MCHIP in the nine northern provinces (NOA and NEA), including its close monitoring and evaluation. The adaptable program framing this effort, envisioned initially as a set of three flexible APLs over a 10-year period but then condensed in two APLs, would help consolidate the Government s health reform program in the longer-term. Following is a description of policy actions committed in each tranche of the PMCHSAL, as detailed in the Program Document and reflected in the corresponding Legal Loan Agreement (dated October 31, 2003). First Tranche. US$450 million, equivalent to 60 percent of the loan, subject to meeting the following loan conditions: Implementation of the MCHIP: (i) a Presidential Decree creating the provincial MCHIP, (ii) a national ministerial resolution launching the initiative, and (iii) evidence of interest to participate in the MCHIP from at least eight of the nine eligible provinces in the NEA and NOA. COFESA: (i) evidence of a consensus accord over its role in coordinating national-provincial health policy and supporting the creation of the MCHIP, and (ii) a national ministerial resolution mandating the use of COFESA-agreed rates for distributing resources within national public health programs (such as milk supplements, medications and others). Protection of essential public health programs: evidence of the inclusion of at least AR$548.3 million allocated in the 2004 budget for financing such programs, including AR$20 million for launching and testing the MCHIP. Sexual and Reproductive Health Law and Program: publishing of the national Sexual and Reproductive Health Law and full development of corresponding regulations, including the creation of a national program in this area. Maintenance and completion of national health insurance regulations: evidence of existing norms related to (i) mechanisms and obligations for maintaining an updated beneficiary database; (ii) per-capita distribution of the FSR; (iii) permanent elimination of the institutional subsidies to obras sociales by the Administration of Special Programs (APE); (iv) application of established crisis procedures in the national health insurance system, and (v) a system in place for expediting cost recovery by public hospitals for services delivered to affiliates and beneficiaries of the national health insurance system. Second Tranche. US$150 million, equivalent to 20 percent of the loan, subject to fulfillment of the following loan conditions: Implementation of the MCHIP: (i) a national ministerial resolution approving the final operation manual for implementing the insurance program, (ii) organizational arrangements in place for implementing the insurance program in at least four of the nine eligible provinces, and (iii) approval and pilot implementation of an identification and affiliation system. COFESA: first tranche conditions in place and being implemented. Protection of essential public health programs: the agreed protected budgets have been included in the National Budget law for 2004 (to be approved by Congress). Sexual and Reproductive Health Law and Program: services included in this Law have been included in the PMO of the national social health insurance system. Maintenance and completion of national health insurance regulations: (i) previous changes made in regulation are in place; (ii) a presidential decree permanently eliminating the institutional subsidies by APE has been issued and is effective; (iii) at least three out of the five largest hospitals in four eligible provinces have a functioning and updated beneficiary database for the national and provincial health insurance systems, and (iv) the system for expediting cost recovery by public hospitals to the national health insurance system is fully functional in at least five of the eligible provinces. 5

14 Third Tranche. US$150 million, equivalent to 20 percent of the loan, subject to fulfillment of the following loan conditions: Implementation of the MCHIP: (i) organizational implementation and staffing of management units (for the insurance program) in at least five of the eligible provinces and (ii) fully functional operation of the MCHIP in at least two of the eligible provinces, including the enrolment of at least 2,000 beneficiaries in each province (for a minimum total of 4,000 beneficiaries). COFESA: assurance that actions compromised in the first tranche remain fully implemented. Protection of essential public health programs: evidence that budgeted funds have been released to the MOH, including the resources for piloting the MCHIP. Sexual and Reproductive Health Law and Program: proper implementation of the national program in this area. Maintenance and completion of national health insurance regulations: (i) changes made in regulation are in place, including (a) an updated beneficiary database, (b) per-capita distribution of the FSR and (c) permanent elimination of APE s institutional subsidies ; (ii) at least three out of the five largest hospitals in at least five of the eligible provinces have a functioning and updated beneficiary database in their admission points; (iii) a system to expedite charges from provincial hospitals to the national health insurance system is fully functional in at least six of the eligible provinces and (iv) introduction of a risk-adjusted per capita system in the FSR. In addition to the above specific policy actions, at all moments of the Project and prior to each one of the tranche disbursements, an appropriate macroeconomic performance by the Borrower needed to be in place. The Project, through its support of the Government s HSRP, would directly benefit millions of Argentine citizens, in particular the poorer and more vulnerable. By the end of 2011, it is expected that the HSRP will have reached, among others, more than 2.3 million uninsured poor mothers and children with secured and improved access to health services via the implementation of the MCHIP throughout all provinces. Among these beneficiaries will be indigenous populations in NEA, NOA and other regions, for whom culturally-sensitive health services have been considered and implemented. In the shorter-term (during its effectiveness), the Project was able to reach more than 400,000 uninsured poor mothers and children enrolled in the MCHIP in the nine eligible provinces. Additionally, during the years 2004, 2005 and 2006, it helped protect essential public health programs that effectively served 1.3 million children under 2 years of age with nutritional supplements (milk), 4.7 million children under 6 years of age with immunizations, and 12,000 tuberculosis patients and over 23,000 HIV patients with their respective medical treatments. Project policy actions supporting the full implementation of the Sexual and Reproductive Health Law and Program and improving cost-recovery by provincial public hospitals had an additional positive effect on broader populations, in particular on women and uninsured citizens. The same was the case for efforts to improve the regulatory framework for the national health insurance system, in this case benefiting lower-income employees and their families and, indirectly, all the uninsured populations served by public hospitals. Lastly, the improvement of the COFESA has led to enhanced health sector institutional capacity and coordination, with an overall benefit for the country as a whole. 1.5 Revised Policy Areas: The original set of policy actions compromised in the PMCHSAL was not amended or revised during its 6

15 effectiveness. As discussed later, there was no need for partial or total waivers for any of the agreed policy actions, as all of them were finally fully met by the Borrower as it advanced its health sector reform program. 1.6 Other significant changes: The only significant change on the original project structure happened with its timetable. The Project was initially envisioned to close on December 31, 2005, that is 26 months after its date of effectiveness (November 6, 2003). However, two extensions were needed for completing the implementation of the third tranche, as one out of the 30 policy actions had not been completed by the original closing date. The first extension was for one year, with a new closing date agreed for December 31, The second and final extension (processed retroactively), for three more months, set the new and final closing date on March 31, All conditions had been met and all tranches released by the closing date. A discussion on the causes of these extensions is presented in Section Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry: The preparation, design and quality at entry of the PMCHSAL are highly satisfactory as judged by this review and by a Quality of Entry Panel, as discussed below. The Project s contents were appropriate and its approval well-timed given the then unfolding economic and social crisis in Argentina. In this difficult context, the GOA had initially responded via the MOH with actions intended to immediately secure basic health care, in particular access to essential medications. The Project supported further efforts by the MOH to effectively protect priority public health programs. In addition, it went one step ahead by adding a focus on structural reforms, including launching the MCHIP (seen as an initial phase leading to the consolidation of provincial health insurance schemes), advancing sexual and reproductive health policies, institutionalizing a federal harmonization space (in the COFESA) and further consolidating regulatory measures linked to provincial health sector performance in the national health insurance system. The Borrower and the Bank worked under intense pressure to prepare the project. Nonetheless, they were able to reach a timely agreement on substantial contents. This positive result was only possible thanks to the pre-existing working relationship between the MOH and the Bank. In effect, Project preparation denoted deep understanding of Argentina s complex health sector, of lessons learned from previous projects and of the ongoing difficult circumstances the country was going through. A recently concluded ESW that captured input from a wide range of sector stakeholders and intense ongoing dialogue with the MOH provided the basis for quick identification of and agreement on the proposed reform program. Coordination with the IMF and with the Inter-American Development Bank (IDB) was also permanent during preparation. On June, 2005, the PMCHSAL was the subject of a retrospective Quality at Entry Assessment. The Quality Assurance Group (QAG) final report defines the overall quality of the Project as highly satisfactory. This Implementation Completion Results Report (ICR) agrees with this assessment: the Project was well conceived and properly designed to respond to the Borrower s needs and achieve meaningful objectives. As expressed in the QAG report, the Project was appropriately structured, well targeted and, most important, fully owned by the Borrower as a support of the Government s HSRP. Elements in the PMCHSAL s design worth being highlighted include the following: 7

16 - A balanced set of meaningful policy actions. The designed Government s health sector reform program, as well as the Bank s support to it through the Project, presented an appropriate and well-balanced two-tier intervention: on the one hand, short-term actions that immediately responded to critical social issues in the wake of the crisis and contributed to the country s transition out of it; on the other, longer-term policies that initiated reforms and provided direction and momentum to resolve structural health sector weaknesses. - Poverty focus at the provincial level. Given Argentina s federal structure, the delivery of health services to the poor is to a great extent a responsibility of provincial governments. Recognizing this, the Project supported an innovative program (the MCHIP) that effectively transformed the relationship between the national government and the provinces, providing incentives to the latter to improve health services and outputs. Other policy components, such as the implementation of the Sexual and Reproductive Health Law and the protection of essential public health programs, were also clearly targeted on improving the health status of the poor. - Emphasis on infant, maternal and women s health. Previous analytical work, as well as close monitoring of the unfolding crisis, had signaled infant and maternal morbidity and mortality as one of the major sector issues, in particular in the northern regions of the country. Project design included a thorough technical analysis that ratified the convenience of focusing efforts in infant and maternal health in NOA and NEA. Launching an innovative MCHIP was a correct answer to this need. Adding support to the implementation of the recently enacted national law in sexual and reproductive health was a logical complement for the Project s objectives, securing valuable synergies. - Institutional development. The PMCHSAL also supported policy actions intended to strengthen the institutional capacity at the macro level via the COFESA, and that of public provincial hospitals at the local level via a more balanced relation with the national health insurance system. Both efforts were justified within Argentina s federal structure and will become core elements for future sustainability of ongoing reforms. - Conjunction with an APL. Although the selection of a sector-specific adjustment loan triggered some concerns and discussions during preparation within the Bank, this ICR highlights the appropriateness of combining this instrument with an adaptable program that brought financing and technical assistance for core changes being implemented at the provincial level. This arrangement provided the reform champion (the MOH) with ongoing support during a longer-time span needed to consolidate structural changes. - Flexibility throughout design. Throughout an intensive project preparation phase, the Bank and the Borrower maintained a flexible attitude toward the final design of the operation, while at the same time firmly defending its development objectives. This attitude allowed the Project to take into account many of the comments and suggestions received from peer reviewers, benefiting its final design. Most important of all, the PMCHSAL was realistic and fully owned by the Borrower, since it responded to the Government s HSRP. Instead of attempting to work out doubtful agreements on theoretically-correct but unfeasible reforms, or to push for immediate implementation of complex policy actions, the Bank worked closely with the leadership and commitment of a strong and highly dedicated MOH in supporting what made sense, what was doable and what would be sustainable. The distribution of specific policy actions across the three-tranche structure reflected this dose of realism, facilitating a gradual implementation sequence for the reform program. 8

17 Finally, during preparation and appraisal, risks that could affect implementation of the HSRP were correctly identified as high, and ensuing mitigating actions were anticipated. Among the risks identified and the mitigating measures incorporated were the following: (i) fiscal considerations brought by the fragility of Argentina s macroeconomic situation at the time; (ii) uncertainties surrounding the nationprovince dialogue, compounded by possible changes in leadership at the provincial levels, to be mitigated with a COFESA accord and by umbrella provincial agreements for the implementation of the MCHIP, and (iii) weak institutional and technical capacity of the provincial ministries of health responsible for reform implementation, addressed with the anticipation of a parallel investment operation (the APL-I) that brought in needed technical assistance and resources. The PMCHSAL was qualified at entry as a C category operation regarding environmental issues. Nonetheless, during project preparation, the Bank team anticipated the inclusion of a Strategic Environmental Analysis as a component of the parallel (APL) investment operation supporting the reform program. Such environmental study with emphasis on infant and maternal health was already done (October, 2006) and is being reviewed by the MOH to define an environmental strategy. Likewise, it was planned that the first APL would include a financial management assessment at the provincial level. As for the Project, the Borrower successfully complied with all fiduciary aspects, including flow of funds and financial management. Although this ICR agrees with the final design, it retrospectively identifies one element where further discussion at the moment of entry could have occurred. This element was the inclusion of a robust subset of policy actions regarding the national health insurance system. Critics here could point out that such actions were not closely linked to the PDO, implied complex political considerations and difficulties and forced the reform program to spread across the health sector, reaching stakeholders and decision-makers different from those involved with its core provincial objectives. A similar situation had happened during project preparation, when a subset of much needed policy actions regarding the pharmaceutical sector were initially identified but later correctly excluded from the Program, in consideration of its scope and focus. Nevertheless, in the case of the obras sociales regulatory framework, three strong arguments defend the final project design: (i) there was a high risk of backtracking on key structural reforms - initiated by the MOH early during the crisis and before- if such conditions were not included; (ii) progress made on these would directly benefit the MCHIP and the public services at the provincial level (for example, with the beneficiary database and the cost-recovery on public hospitals, inconvenient cross subsidies would be reduced), and (iii) most important, the MOH and the Health Superintendency were strongly committed to its implementation. 2.2 Implementation (including any project changes/restructuring, mid-term review, Project at Risk status, and actions taken, as applicable): Project implementation was, overall, satisfactory. The PMCHSAL achieved its objectives while fully implementing all the agreed policy actions. In some of the expected outputs and outcomes, the Project clearly surpassed the expected goals. More relevant, the GOA, through its MOH, demonstrated permanent interest, leadership and commitment in advancing its health reform program. Its ownership of the reform program is the best guarantee of its future sustainability. The loan agreement was signed on October 31, Based on solid preparatory work and strong leadership by the MOH, first tranche policy actions were all met one week after approval, enabling the immediate disbursement of the agreed fraction of the loan on November 6, 2003, which was critical for both immediate support for critical health programs and immediate support for government efforts to mitigate the acute negative transfers problem. To support this expedite disbursement, the Bank had 9

18 previously worked with the Borrower in gathering all needed documentation that proved the satisfactory fulfillment of all conditions. Afterwards, the MOH continued its effective leadership of the HSRP. Efforts toward fulfillment of second tranche conditions progressed well. During this phase, only three conditions proved a greater degree of difficulty, threatening to cause delays. These were the final implementation of the enrollment system for the MCHIP, the conclusion of operational systems (including the operational manual (also for the MCHIP) and the certification of an expedite cost-recovery mechanism in 12 public hospitals in eligible provinces. In spite of these challenges, a satisfactory implementation pace of the reform program, supported by the initial execution of the parallel investment health operation supporting the MCHIP (the APL-I) and combined with a positive macroeconomic policy performance, provided the basis for the second tranche approval and the corresponding disbursement of the agreed fraction of the loan by June, Until then, all project ratings evaluated by the Bank were satisfactory and the Project s timetable was heading toward original closing date. Project implementation faced challenges for fulfillment of two conditions for third tranche release. In effect, during the first semester of 2005 all (8) but two of the policy actions had been fulfilled. The first action facing difficulties was external to the health reform process itself but critical for loan disbursement: the assessment of an acceptable macroeconomic framework. The second was within the direct scope of the health sector but proved to have complex technical and political challenges: the introduction of a risk-adjustment methodology in the FSR, one of the conditions related to the national health insurance system. As soon as difficulties with this latter condition became apparent, the Bank team offered technical assistance to achieve a solution at the same time as it closely followed progress made. The MOH responded by working on the elaboration of initial draft proposals to reform the FSR. However, no satisfactory progress was made. Lack of advancement in this specific policy (one out of 30) forced the Bank, in June 2005, to downgrade the Project s overall implementation progress at that time from Satisfactory (S) to Moderately Satisfactory (MS). Simultaneously, as the MOH realized that the number of stakeholders was larger than expected for the discussion of the risk adjustment methodology for FSR, the Bank continued to provide technical assistance and to seek transitional agreements and gradual ways in which steps forward could be made. Unfortunately, the Health Superintendency directly responsible for this condition- could not deliver at original closing date. As a result of this pending action, the Project needed to be extended for the first time, for one year, until December 31, During this first extension, at the beginning of 2006 monitoring and evaluation conducted by the Borrower was lagging behind expected levels. Specifically, a slow pace by the MOH in implementing a baseline study and in progressing with the overall evaluation strategy was evidenced by the Bank s missions. Consequently, the Project s rating for monitoring and evaluation was also downgraded from Satisfactory (S) to Moderately Satisfactorily (MS). This deficiency would later on be resolved, but difficulties regarding the agreed FSR reform persisted throughout the initial project extension. No waivers were requested or processed and the Bank team prepared to close the loan with the third tranche left pending. The proximity of the new closing date with an un-disbursed third tranche was finally met by a positive development: on December 20, 2006, Presidential Decree No was signed introducing a satisfactory risk-adjustment (by age and gender) in the FSR. With this, the single pending condition was met and project implementation progress was immediately upgraded back to Satisfactory (S). This positive development paved the way to a second (and final) closing date extension, until March 31, 2007, which was processed retroactively given that evidence of the fulfillment of the last condition 10

19 reached the Bank too late as to allow for a timely extension. The Bank determined that the general condition regarding macroeconomic performance had been met, on the basis of a strong track record of four straight years of high growth. The third tranche was disbursed on March, This consolidated a Satisfactory (S) rating for the Project s development objectives, always assessed positively throughout implementation. Likewise, it justified rating Satisfactory (S) the Project s overall implementation progress. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization: In addition to compliance with the defined policy actions for each tranche of the loan, the PMCHSAL design included a set of intermediate and final output and outcome indicators that facilitated monitoring and evaluation of the supported reform program (see Annexes 1 and 4). Output indicators focused on the coordination role of the COFESA, maintenance of budgetary levels and effective coverage rates by protected public health programs, increasing coverage of the MCHIP, enrollment in the Sexual and Reproductive Health Program and improvement of cost-recovery by provincial public hospitals. Outcome indicators included measles and vertical HIV transmission prevention (via the protected public health programs) and reduction in the IMR in NOA and NEA (a result of the whole health reform effort). The Project properly identified and used existing national and provincial information systems to define baselines and monitor progress of the various conditions and reform pillars. Some of these information sources came from ongoing Bank-financed health sector investment projects (for example, the Public Health Surveillance and Disease Control Project and the Second Maternal and Child Health Nutrition Project). Others came from existing public systems (for example, from the Health Superintendency). With this, the Project prevented further duplication or fragmentation of information systems in Argentina s health sector. Monitoring of the Project was permanent. Close communication between the Borrower and the Bank, including regular supervision missions with field trips to provinces, helped keep track of progress made. Documentation of advancements being achieved was correctly done. Likewise, the Bank and the MOH identified possible difficulties in pending conditions, anticipating needed actions to try to overcome such obstacles, as in the case of the regulatory modification in the FSR. In spite of this detailed plan and close supervision, difficulties with securing proper levels of monitoring and evaluation of the supported reform program were encountered during its later stage. As stated above, these difficulties forced the Bank to downgrade the corresponding monitoring and evaluation ratings of the Project during its last tranche. The response from the MOH to this situation was positive, as efforts were strengthened and monitoring and evaluation later on improved, in particular thanks to the implementation of the parallel investment operation (APL-I) for the MCHIP. Finally, some could argue that the selected set of output and outcome indicators may have been too limited to properly reflect the full extent and reach of the reform program, especially in terms of impact. However, taking into consideration the original short project timetable (of only 26 months), the inclusion of additional outcome-oriented indicators could have proven troublesome and non-realistic, as implemented reforms would only be incipient and still far from having measurable impact. As a pragmatic and effective response to this structural limitation, some key outcome indicators related with the HSRP (for example, those measuring improved access to health services for mothers and children in the provinces) were correctly included in the two APL investment operations that followed the implementation of the MCHIP. These indicators are being closely monitored and will provide additional evidence of the impact of the ongoing reform process. In addition, these investment operations will fund 11