ASIAN DEVELOPMENT BANK

ASIAN DEVELOPMENT BANK TAR: INO 34149 TECHNICAL ASSISTANCE (Financed from the Japan Special Fund) TO THE REPUBLIC OF INDONESIA FOR PREPARING THE SECOND DECENTRALIZED HEALTH SERVICES PROJECT November 2001

CURRENCY EQUIVALENTS (as of 15 October 2001) Currency Unit Rupiah (Rp) Rp1.00 = $ 0.000100 $1.00 = Rp 9,960 ABBREVIATIONS ADB Asian Development Bank AusAID Australian Agency for International Development BKKBN Badan Koordinasi Kiluarga Buencana Nasional (National Family Planning Coordinating Board) DHSP Decentralized Health Services Project GTZ German Technical Cooperation ICT information and communication technology MOH Ministry of Health NGO nongovernment organization PHP Provincial Health Project TA technical assistance WHO World Health Organization NOTE In this report, $ refers to US dollars.

I. INTRODUCTION 1. During the April 2001 Country Programming Mission, the Government of Indonesia requested the Asian Development Bank (ADB) to continue supporting decentralization in the health sector and provide technical assistance (TA) to help selected districts and provinces prepare a project proposal. The ADB Country Strategy and Program for Indonesia recognizes decentralization and support for the health sector as priorities. The Fact-Finding Mission in June 2001 reached understanding with the Government on the objective, scope, budget, and implementation arrangements for the TA. 1 II. BACKGROUND AND RATIONALE 2. In accordance with Laws 22 and 25 of 1999, decentralization of Government services and functions became effective on 1 January 2001. Substantial development and administrative responsibilities have now been devolved to local governments, particularly at the district level. The main risks of decentralization in Indonesia are linked to its fast implementation. The need to rapidly decentralize to answer social and political demands precluded a comprehensive assessment of the required structural and organizational changes, and a systematic action program. New roles and functions at all levels imply new relations and administrative mechanisms, which require agreement between the various levels, supported by training and capacity building. In this context, new regulations and guidelines are still being developed and training programs are being implemented concurrently. 3. Since most of the population and virtually all of the rural poor still rely on public health services, decentralization is a major challenge for district governments now responsible for ensuring service continuity and quality. New functions require immediate technical support and strengthening of local capacity to maintain essential health services. But decentralization also offers major opportunities. Easier involvement of the community to discuss local health issues and greater accountability of local authorities and health providers should help better address local health needs, and improve access and service quality. 4. Aid agencies have answered the Government s request to help implement decentralization in the health sector. While bilateral agencies 2 have tended to focus on specific districts, ADB and the World Bank have assisted all districts in selected provinces. 3 ADB approved the Decentralized Health Services Project (DHSP) 4 in December 2000. The World Bank approved the first Provincial Health Project (PHP) in June 2000 and the second in June 2001. 5 Traditional funding coordination by the Ministry of Health (MOH) Bureau of Planning has been strengthened with the new Decentralization Unit, which is responsible for policy issues and coordination of externally funded activities in the context of decentralization. ADB, World Bank, Australian Agency for International Development (AusAID), Canadian International Development Agency (CIDA), the United States Agency for International Development (USAID) and the World Health Organization (WHO) have 1 2 3 4 5 The TA was first listed in ADB Business Opportunities on 4 July 2001. Among them, the Australian Agency for International Development (AusAID), Canadian International Development Agency (CIDA), Japan Bank for International Cooperation (JBIC), and German Agency for Technical Cooperation (GTZ). Covering all districts in a province is technically justified since many health issues such as infectious diseases and referral networks are more cost-efficiently and effectively addressed if coordinated at the provincial level. Loan 1810-INO: Decentralized Health Services Project, for $65.0 million, approved on 14 December 2000, covers seven provinces: DI Aceh, Bengkulu, Riau in Sumatra; Bali; Central, North, and Southeast Sulawesi. PHP I covers all districts of Yogyakarta and Lampung. PHP II covers Banten, North Sumatra, and West Java.

2 met regularly since November 1999 as a group called Partners in Health. ADB, World Bank, and World Health Organization jointly support MOH s Policy Advisory Group. 6 5. MOH s priority objective is to ensure service continuity through appropriate technical support and capacity building at district and provincial levels. This support is necessary in all districts and provinces, rich and poor. Selection criteria for the DHSP provinces included a limited number of districts to facilitate project administration, and different economic environments to permit a better assessment of the needs and constraints of decentralization in various contexts and facilitate replication. DHSP adopted a process approach, with the first year devoted to capacity building followed by investments and sector reforms the later years. At the end of the first year, districts and provinces will confirm draft sector development plans will be reviewed with the skills acquired during the capacity building period. 6. The DHSP became effective on 25 June 2001. Project-related activities, such as advocacy and workshops started earlier, organized by the local governments and local health staff. Districts and provinces recognize the need for capacity building as an essential first step. Two characteristics significantly facilitate decentralization and project implementation: strong political support for health and the project, and a competent leader in the local health services. The commitment of the provincial governor is key to convincing local staff and the local parliament of the project s priorities. A technically qualified provincial leader is best able to support and convince local health professionals. Districts and provinces where committed governors are supported by qualified local health teams are much more advanced in their sector development plans than other areas. With decentralization, policy dialogue becomes as important at local levels as it is at the central level. It is relatively easy to identify and agree on physical investments (e.g., rehabilitation of health facilities, equipment, and training), but locally appropriate health sector reforms and safety net mechanisms for the poor are technically more complex and politically more challenging issues. This requires frequent field visits during implementation by MOH and aid agency staff, demanding more time and resources than conventional projects. Coordination of external funding agencies is essential not only at the central level but also in the districts and provinces. 7 7. During the economic crisis of 1997-1998, ADB successfully assisted the Government in developing a social safety net program 8 and ensuring that essential health services remained available and accessible for the poor. The design of the program provided for significant flexibility to allow local priorities to be reflected, but because of insufficient capacity and inadequate information dissemination, most districts did not exploit this flexibility. More importantly, centralized financing of the program is no longer sustainable under decentralization. 9 MOH has prepared several proposals to protect the health components of the safety net but it will now be the responsibility of the local governments to define local health priorities and to find locally appropriate solutions and mechanisms. It is essential to raise local awareness and to provide technical support to help local governments identify, develop, and implement locally sustainable safety net mechanisms. 6 7 8 9 TA-3579: Support for Health Sector Policy Reforms, for $1.25 million, approved 14 December 2000 is also assisting MOH s Policy Advisory Group. In Bengkulu for example, the Islamic Development Bank (IDB) offered assistance for civil works and medical equipment after DHSP approval. While MOH is trying to coordinate the ADB and IDB programs, transparency and coordination at the local level are inadequate, delaying and confusing local sector development proposals. Loans 1622/1623-INO: Social Protection Sector Development Program for $300 million, approved on 9 July 1998 (50.8 percent for the health sector) and Loans 1675/1676: Health and Nutrition Sector Development Program (HNSDP), for $300 million, approved on 25 March 1999. The HNSDP had a $300 million Japan Bank for International Cooperation loan linked to the implementation of the policy matrix. Project preparatory TA for sustainable social protection is included in the ADB TA program for 2002.

3 8. Because transfer mechanisms covering authority, responsibility, funding, and staff are still under discussion, there is a need for a cautious and flexible approach in developing and implementing new projects. All stakeholders local governments, local communities, and central agencies must be involved in project preparation from the very beginning. A cross-sector approach is required to address poverty reduction, governance, and gender issues. With administrative and financial rules and regulations still evolving, the project design must remain flexible, and be developed with a good understanding of the different social, political, and economic contexts in the project areas. Information and communication technology (ICT) should be developed and used to rapidly disseminate information and lessons learned. 9. Strengthening the capacity of local governments and local agencies to administer and plan for local health services remains the most urgent problem, to avoid disruption in delivery of essential health services during this transition period. Inadequate support of district governments will result in disorganized local health services, with the poor being the most affected. Greater involvement of the private health sector through, for example, managed care schemes, must be encouraged, but these reforms will take time. MOH needs to adapt to new roles and functions, which will require changes in attitudes, skills, and practices. 10. The ADB Country Strategy and Program Update emphasizes poverty reduction, and in particular the provision of basic services in the decentralized environment. ADB s health sector strategy is to help local governments protect delivery of essential health services particularly for the poor, and improve service quality and efficiency. The project proposal to extend assistance for decentralized health services will support ADB s emphasis on poverty reduction. The poor will be the main project beneficiaries. Project geographical coverage will focus on poor areas, taking into account the need for efficiency and of externally funded activities. III. TECHNICAL ASSISTANCE A. Objective 11. The objective of the TA is to develop a project proposal that will improve the health status of the population, particularly the poor and vulnerable groups, in all districts of selected provinces by improving the health system s responsiveness to local needs. The TA will follow the successful approach used for the DHSP but will focus on other geographic areas. B. Scope 12. The project proposal to be prepared under the TA will address health sector needs of all districts in selected provinces, focusing on the poor and vulnerable groups. Coordinating their efforts at the provincial level through the provincial health office, the districts will develop project proposals that include (i) sustainable mechanisms to guarantee access to essential health services for the local poor and vulnerable groups, with special attention to women s needs; (ii) investments, giving priority to primary health care; and (iii) proposals for locally appropriate health system reforms (such as financing health services and managed care, and public-private partnership). At the central level, the TA will help MOH and the National Family Planning Coordinating Board (BKKBN) assess the need for, and develop proposals in support of, policy development and training for changes in attitude and skills in a decentralized context. TA resources will be used to finance a team of consultants, participatory workshops and seminars, and limited surveys. The TA logical framework is in Appendix 1. 13. TA resources will be used to help local governments prepare health sector proposals in East and West Nusa Tengara, South Sulawesi, Bangka Belitung, and South Sumatra. To maximize

4 development inputs, ADB is moving to concentrate assistance on comparatively poor provinces with basic physical infrastructure in place developed through earlier ADB assistance. To the extent possible, ADB will provide assistance for decentralized health and education in the same provinces to achieve synergies in district and provincial capacity building. East and West Nusa Tengara are poor provinces. South Sulawesi is the only province in Sulawesi not yet covered by ADB for the health sector. An ADB health project 10 has just been successfully completed in South Sumatra. Bangka Belitung is a new province previously part of South Sumatra. 14. In the selected districts and provinces, priority will be given to the needs of the poor. This may take the form of a geographic focus on the poorest districts, a technical focus on health problems that most affect the poor, and health sector reforms that favor access to health services for the poor. This implies a systematic involvement of the poor in identifying their needs and finding appropriate solutions. The consultants will first help MOH and local governments develop an information campaign with workshops targeting all stakeholders to explain the value of investments in the health sector and the need for a sustainable program that addresses the health needs of the poor. In parallel, a group of consultants will analyze the social, political, and economic factors that may facilitate or constraint health sector activities in the project areas. A third group of consultants will rapidly develop mechanisms based on ICT to allow sharing of information and experience, and prepare proposals to strengthen sharing of knowledge. 15. Through participatory workshops, the TA team will help stakeholders identify local health needs, assess the experiences of the social safety net program, and develop locally appropriate and sustainable solutions. The technical team will consolidate data and information collected during the participatory workshops and develop draft project proposals that are technically, financially, economically, and environmentally sound. Specifically, the proposals will explain how access to essential health services for the poor will be guaranteed in a sustainable way. These draft proposals will be discussed and finalized by the local governments through participatory workshops. MOH and BKKBN will also prepare proposals to help them assume their new roles and functions in a decentralized environment. 16. The consultants report will contain four parts. The first part will review lessons learned from other projects supporting decentralization, in particular health projects. The second part will comprise the project proposals grouped by provinces, including capacity building, investments and health system reforms. The proposals will include detailed cost estimates, an economic and financial analysis, and (if appropriate) an initial environmental examination. The third part will analyze and make recommendations for institutional arrangements and financing mechanisms between the central level and the local governments for project implementation. The fourth part, poverty impact assessment, will comprise (i) a socioeconomic profile of the beneficiaries; (ii) a specific analysis of the needs and constraints faced by the poor; and (iii) recommendations to ensure that the proposed project will be a poverty intervention and will estimate the number of poor that may benefit from the proposed project. C. Costs Estimates and Financing Plan 17. The total cost of the TA is estimated at $1,250,000 equivalent, comprising $447,000 in foreign currency and $803,000 equivalent in local currency. ADB will finance $1.0 million equivalent comprising the entire foreign currency costs and $553,000 equivalent of the local currency costs. The remaining local currency costs of $250,000 equivalent will be financed by the Government in kind. The TA will be financed by ADB on a grant basis from the Japan Special 10 Loan 1299: Rural Health and Population approved 26 May 1994 for $40.0 million was completed on 31 December 2000.

5 Fund, funded by the Government of Japan. The Government has been advised that approval of the TA does not commit ADB to financing any ensuing project. Detailed cost estimates and proposed financing arrangements are in Appendix 2. D. Implementation Arrangements 18. The Bureau of Planning of MOH will be the Executing Agency for the TA, in close collaboration with the Bureau of Planning of BKKBN to ensure that reproductive health, family planning, and other BKKBN priorities are considered during project preparation. A central technical team will be established, chaired by the head of the MOH Planning Bureau and with the head of BKKBN Planning Bureau as deputy. The team will include representatives of MOH, BKKBN, Ministry of Home Affairs and Regional Autonomy, Ministry of Finance, and National Development Planning Agency. Technical inputs will be required from the MOH Policy Advisory Group, the Decentralization Unit, and the Partners in Health. The MOH will ensure coordination and collaboration between funding agencies involved in supporting decentralization in the health sector. 19. ADB will engage a team of international (15.8 person-months) and domestic consultants (41.5 person-months), in accordance with ADB s Guidelines on the Use of Consultants and other arrangements satisfactory to ADB for the engagement of domestic consultants. The consultants will be divided into three groups: a technical team to address issues specifically related to the health sector (social marketing, health system organization, human resources, health care financing, private health sector, medical equipment, food safety, reproductive health, medical architecture, health economics and financial analysis); a group of analysts to assess the local social economic and political environment; and a group of ICT experts. Consultants will prepare the poverty impact assessment. In each province, one domestic consultant will help the districts and the province to develop their proposal. Facilitators and local nongovernment organizations (NGOs) will assist participatory workshops. Outline terms of reference are in Appendix 3. Since inputs are well defined, one consulting firm will be recruited using the simplified technical proposal procedure. 20. The consultants will work in close collaboration with MOH and BKKBN. In particular, all reports and recommendations from the consultants will be submitted to and discussed with MOH, BKKBN, and ADB. The team of consultants will ensure that the project proposal reflects the priorities of MOH, BKKBN, and the local governments concerned. The bureaus of planning in MOH and BKKBN will appoint staff as a counterpart team for the TA. 21. The consulting firm in collaboration with the counterpart team will organize workshops in the districts to ensure participation of all stakeholders: local communities, members of the local governments, health professionals, and local NGOs. The consulting firm will engage local facilitators (two per workshop, for a total of 450 workshop days). There will be three types of workshops, successively: (i) advocacy and information workshops, (ii) stakeholders consultation to identify the needs and locally appropriate solutions, and (iii) workshops to discuss the draft project proposal consolidated by the team of consultants. 22. The consultants are expected to commence their work in the field in January 2002. The TA will be implemented over a period of about 4.5 months and is expected to be completed by 31 May 2002. IV. THE PRESIDENT S DECISION 23. The President, acting under the authority delegated by the Board, has approved the provision of technical assistance, on a grant basis, to the Government of Indonesia in an amount not exceeding the equivalent of $1,000,000 for the purpose of preparing the Second Decentralized Health Services Project, and hereby reports such action to the Board.

6 Appendix 1, page 1 TECHNICAL ASSISTANCE FRAMEWORK Design Summary Indicators and Targets Monitoring Mechanisms Key Assumptions Goal Health status improved in all districts of selected provinces. Infant mortality rate, maternal mortality ratio, and vaccination coverage in project area, compared to late 1990's values - After 3 years of Project: at least similar - After 6 years, improve by at least 10 percent in every district Government health information system Data collected by aid agencies in health sector (World Health Organization, United Nation s Children s Fund, United Nation s Populations Fund, and others) Purpose To implement an improved health system responsive to local needs focusing on poor and vulnerable groups, in selected provinces. Locally adapted health system Number and percentage of poor using local health services increased. Target will be determined by poverty assessment study under the technical assistance. Government health information system Data collected by aid agencies in health sector Poverty assessment study Local support for a comprehensive approach to local health services, involving public and private sectors, and traditional healers. Outputs of the TA 1. Technical project proposal consolidated at the level of each concerned provinces, and for the central level completed. a. Consolidated project proposal submitted to and endorsed by Asian Development Bank management and Indonesian Government by June 2002. a. Tripartite meeting (Government-ADB mission and Consultants at the end of TA implementation a. Continuous support for the proposed project from (i) ADB Management, and (ii) the Government. 2. Participatory workshops and seminars conducted. b. Consolidated project proposal endorsed by concerned local governments by June 2002. a. Number of advocacy workshops Number of Participants b. Field visits and meetings with representatives from local governments concerned. Consultant s reports b. continuous political will for decentraliztion, and timely publications of government regulations. a. Number of community consultation workshops Number of Participants Consultant s reports c. Number of proposal discussion workshops Number of Participants Consultant s reports Reference in text: page 3, para 11

7 Appendix 1, page 2 Design Summary Indicators and Targets Monitoring Mechanisms Key Assumptions Activities for Outputs 1 Technical Project Proposal Development a. Situation analysis in the proposed districts and provinces a. Start: Consultant's reports 1 Risk: Resource constraints may limit the extent and depth of the economic analyses and policy matrix b. Decentralization analysis c. Information technology analysis b. Start: c. Start: Indicators and targets will be completed when contract negotiations with the consulting firm have been successfully completed. d. Develop project cost estimates d. Start: e. Develop economic analysis: risks, advantages, sustainability e. Start: f. Develop policy matrix of recommended reforms f. Start: g. Poverty impact assessment, including risks and advantages. Prioritization of proposals likely to be most beneficial to the poor g. Start: h. Develop summary of proposed local safety net mechanisms to ensure access and availability of essential services to the local poor h. Start:

8 Appendix 1, page 3 Design Summary Indicators and Targets Monitoring Mechanisms Key Assumptions 2. Participatory Workshops & Seminars a. Advocacy - information a. Start: Indicators and targets will be completed when contract negotiations with the consulting firm have been successfully completed. b. Community consultation c. Discussion of proposals b. Start: c. Start: Inputs Resources 1. Consulting Services 1. 15.8 person months international 41.5 person months domestic 2. Facilitators and nongovernment organizations (NGOs) 1. Consultant s reports and field visits. 2. $35,650 2. Consultant s reports and field visits. Political and social environment will allow consultants to visit the proposed project areas, and will permit workshops and seminars to take place 3. Workshops organization 3. $109,193 3. Consultant's reports and field visits. 4. Surveys 4. $25,000 4. Consultant s reports and field visits. 5. Government representatives to contract negotiations 6. Government counterpart contribution 5. $8,000 6. $250,000 (in kind) 6. Consultant s reports, tripartite meetings

9 Appendix 2 COST ESTIMATES AND FINANCING PLAN Item Foreign Exchange Local Currency Total Costs A. ADB Financing a 1. Consultants a. Remuneration and Per Diem International Consultants 318,250 0 318,250 Domestic Consultants 0 175,250 175,250 b. International and Local travel 58,500 134,228 192,728 c. Reports and Communication 10,000 10,000 20,000 2. Training and Participatory Workshops a. Facilitators and NGOs 0 35,650 35,650 b. Workshops 0 109,193 109,193 3. Surveys 0 25,000 25,000 4. Representatives for Contract Negotiations b 8,000 0 8,000 5. Contingencies 51,764 64,165 115,930 Subtotal (A) 446,514 553,486 1,000,000 B. Government Financing 1. Ministry of Health a. Central Level Office Support 0 10,000 10,000 Travel of Counterparts 0 35,000 35,000 Communications 0 10,000 10,000 b. Provinces and Districts Office Support 0 16,000 16,000 Travel of Counterparts 0 20,000 20,000 Communications 0 23,000 23,000 Wrap-Up in Jakarta 0 21,000 21,000 c. Contingencies 0 21,250 21,250 Subtotal MOH 156,250 156,250 2. BKKBN a. Central Level Office Support 0 3,500 3,500 Travel of Counterparts 0 21,000 21,000 Communications 0 3,500 3,500 b. Provinces and Districts Office Support 0 5,000 5,000 Travel of Counterparts 0 20,000 20,000 Communications 0 7,000 7,000 Wrap-Up in Jakarta 0 21,000 21,000 c. Contingencies 0 12,750 12,750 Subtotal BKKBN 93,750 93,750 Subtotal (B) 0 250,000 250,000 Total 446,514 803,486 1,250,000 a Financed from the Japan Special Fund One representative from MOH and one from BKKBN BKKBN=National Family Planning Coordinating Board, MOH=Ministry of Health, NGO=non-government Organization Source: Staff estimates Reference in text: page 4, para 17

10 Appendix 3, page 1 OUTLINE TERMS OF REFERENCE 1. A team of consultants will be engaged to assist the Government to prepare a project proposal. Consulting services will be provided by an international consulting firm, selected in accordance with the Guidelines on the Use of Consultants of the Asian Development Bank (ADB), following the simplified technical proposal procedure. The consulting firm will provide 16.3 person-months of international and 41.5 person-months of domestic consulting services. The international consulting firm will be responsible for selecting the domestic consultants, as individuals or in collaboration with an Indonesian consulting firm. The international consulting firm will also engage Indonesian workshop facilitators for a total of about 400 workshops of 1-3 days duration. Most of the workshops will take place in the districts and provinces concerned. The consultants will be grouped into three groups dealing with (i) reforms and investments, including health services, poverty impact assessment, and advocacy; (ii) information and communication technology (ICT); and (iii) analysis of the social, political, and economic environment of the project areas. The consulting firm, with main expertise in health services, may establish agreements with an ICT firm and/or a firm with expertise in social, political, and economic analysis in Indonesia. To ensure participation and ownership of the project by important stakeholders who will both implement and benefit from the project, the consulting firm will recruit one domestic consultant in consultation with the Indonesian Medical Association for one and a half months. The team of consultants will work in collaboration with the Ministry of Health (MOH). 2. International and domestic consultants will work closely together. Each international consultant will prepare a separate report, in collaboration with his or her domestic consultant counterpart, in his or her area of expertise. This report will contain precise recommendations for the project proposal. The team leader will consolidate the report and ensure the consistency of the project proposal. A. Consulting Services 1. Team Leadership 3. The team leader will be engaged for a total of three months, during which time he or she will also cover his or her area of expertise. The specialist in health system organization should, in principle, be the team leader. As team leader, the consultant will: (i) (ii) (iii) (iv) coordinate team activities and ensure smooth implementation of the tasks; coordinate with the Government, MOH, National Family Planning Coordinating Board (BKKBN), and local governments counterparts at all levels (districts, municipalities, and provinces); ensure coordination with the other aid organizations in the Indonesian health sector, in particular with the Australian Agency for International Development (AusAID), Canadian International Development Agency; Japan International Cooperation Agency; German Agency for Technical Cooperation (GTZ); United Nations Children s Fund; United Nations Population Fund; United States Agency for International Development, World Bank, World Health Organization, brief regularly the project officer in ADB headquarters and the officer responsible for the health sector in the ADB Indonesia Resident Mission; Reference in text: page 5, para 19

11 Appendix 3, page 2 (v) (vi) (vii) ensure timely preparation and submission of the requested reports, and ensure the quality and completeness of the reports; prepare a comprehensive project framework according to ADB guidelines, in collaboration with team members; and consolidate inputs from the team members in a comprehensive project proposal, including (a) detailed cost estimates, (b) implementation arrangements, and (c) appropriate monitoring and evaluation indicators and mechanisms. 4. The team leader will be assisted by a deputy team leader selected among the domestic consultants. 2. Consulting Group for Health Services 5. One international consultant specialized in social marketing and participatory techniques will be engaged for one month. Domestic consultants will be engaged for a total of 1.5 person-months to train workshop facilitators. These domestic consultants will be engaged in collaboration with Indonesian nongovernment organizations (NGOs). Twelve Indonesian workshop facilitators will be engaged (two per province except four in South Sulawesi) to facilitate the participatory workshops. These facilitators will be selected among staff implementing the ongoing health sector projects supporting decentralization, financed by international aid agencies (including ADB, AusAID, GTZ and World Bank). Local NGOs will also provide support for the (i) training workshop for the facilitators (for an equivalent of 1.5 person- months) and (ii) facilitators in the participatory workshops in the districts and provinces (two NGO members for each workshop). 6. To address technical health sector issues, international and domestic consultants will be engaged with expertise in the following areas: 7. Health System Organization (one international consultant, normally the team leader, for 3 months). The consultant will analyze the Indonesian health system and develop appropriate recommendations to improve effectiveness, cost-efficiency, service quality, and participation of the patients and beneficiaries in identifying health needs and solutions. As team leader, the consultant will ensure consolidation of all the consultants inputs into a comprehensive and integrated proposal. 8. Human Resources Development (one international consultant for one month). The consultant will assess the needs, constraints and difficulties that exist and/or may arise for health professionals under decentralization in the proposed project areas, and make appropriate recommendations to the Government and concerned agencies and institutions. The consultant will also assess existing continued training programs for health professionals and (existing and possible) support from local universities, and make appropriate recommendations to develop and improve continued training, using local resources in the proposed project areas. 9. Health Care Financing (one international consultant for one month). The consultant will to assist local governments (provinces and districts) in the proposed project area to develop appropriate mechanisms to better finance local health services in a sustainable manner. The consultant will pay particular attention to mechanisms that maintain access for all to essential health services, and will make recommendations on

12 Appendix 3, page 5 locally appropriate managed care services based on the national managed care program. 10. Health Sector Public-Private Partnership (one international consultant for one month). The consultant will assess the characteristics of, and constraints faced by, the existing private health sector in the proposed project areas, and develop recommendations to facilitate public-private partnership in the health sector, keeping in mind the needs of the poor. Options may include (i) facilitating health services delivery by the private sector for better-off people so that public resources can be reallocate to address needs of the poor; (ii) introducing payment mechanisms that guarantee free access to private health services for the poor; or (iii) supporting qualified medical auxiliaries (e.g., qualified and trained traditional healers) that particularly care for the poor. 11. Medical Equipment (one international consultant for one month and one domestic consultant for 1.5 months). The consultant will assess the needs in medical equipment and supplies in the proposed project areas and develop related technical proposal with cost-estimates. 12. Drug and Food Safety (one international consultant for one month). The consultant will (i) assist MOH to assess drug and food safety in Indonesia in general and in the proposed project areas in particular; (ii) prepare appropriate recommendations to improve the organization and management of the drug and food safety control mechanisms, in the proposed project areas; and (iii) define the role of the central level under decentralization. 13. Reproductive Health and Family Welfare (one or two international consultants, for a total of two person-months). The consultants will work in close collaboration with BKKBN to develop appropriate strategies and a program to be implemented by BKKBN and its local branches in a decentralized context. The proposed activities will cover reproductive health (in close coordination with MOH policy and services) and family welfare (in close relation with safety net activities). 14. Health Economics (one international consultant for one month). In collaboration with the financial analysts (para. 15), the consultant will prepare an economic analysis of the proposed project. This analysis will be based on ADB s Handbook for the Economic Analysis of Health Sector Projects (August 2000). In particular, the consultant will prepare a demand analysis and determine the rationale, nature, and coverage of public interventions in the health sector in the Indonesian context, with specific reference to the proposed project areas. The consultant will also refer to ADB s Handbook for Integrating Poverty Impact in Economic Analysis of Project (July 2000) to develop a comprehensive economic impact analysis of the project proposal, in collaboration with the consultants for poverty impact assessment. 15. Financial Analysis (one international consultant and one domestic consultant for 1.5 months each). The consultants will prepare detailed project cost-estimates using COSTAB software, and assist the economist in preparing a financial and economic analysis of the proposed project. In collaboration with the health care financing analyst, the consultants will also prepare a financial sustainability analysis to assess the fiscal affordability of the recurrent costs of the proposed project, taking into consideration the various cost recovery efforts.

13 Appendix 3, page 5 16. Health Facilities Architecture (one domestic consultant for one month). The consultant will assess the needs for upgrading/rehabilitation of health facilities in the proposed project area, and to develop related technical proposal with cost estimates. 17. Local Technical Support (one domestic consultant for each province for three months). In each proposed project province, one domestic consultant will assist the district and provincial governments to prepare a comprehensive project proposal, with cost estimates, implementation schedule, and social and environmental impact assessments as appropriate. 18. Consultant Selected in Consultation with the Indonesian Medical Association (one domestic consultant for one month). The consultant will have medical or managerial expertise, and will ensure that the vision and objectives of the Indonesian Medical Association are taken into consideration when developing the project proposal. 19. One international consultant (one month) and a team of domestic consultants (for a total of 40 person-weeks) will be responsible for preparing a poverty impact assessment of the project proposal that will be developed. The consultants will follow the guidelines of ADB s Handbook on Social and Poverty Analysis. The report will contain (i) a socioeconomic profile identifying the characteristics of the target population for the project, and (ii) a specific analysis of the needs and constraints faced by the poor in the project areas (including access to health services, and ability and willingness to pay for health services). A clear definition of the poor will be presented, aiming at standardization to facilitate comparisons. Through discussions with the other consultants who will have identified medical and health needs, and based on the needs expressed during the participatory workshops, the poverty impact assessment team will assist the other consultants to prepare recommendations for specific interventions for the poor. Their final report will assess as precisely as possible the exact number of poor that will benefit from the proposed project. Data and analyses will be gender disaggregated. Funds will be provided for the consultants to organize limited field surveys and focus group discussions. With the assistance of the consultants in health economics, the consultants will incorporate an economic impact assessment in their report, based on ADB s Handbook for Integrating Poverty Impact in Economic Analysis of Project (July 2000). 3. Consulting Group for Information and Communication Technology 20. One international consultant specialized in ICT will provide the equivalent of one month of consulting services, to assess the opportunities and constraints of using ICT to improve health services in Indonesia and in the proposed project areas in particular, and establish easier communication among districts, provinces, and the central level. Domestic consultants will be recruited for a total of seven person-months to (i) assess the needs and opportunities for distance learning in the project areas, and (ii) develop and maintain a web site related to the project. This web site will establish appropriate links/hyperlinks with other web sites related to decentralization and health services, in particular with the existing web site developed for Decentralized Health Services (http://desentralisasi-kesehatan.net), and will ensure dissemination of knowledge and experience of decentralization in Indonesia and other countries, as appropriate.

14 Appendix 3, page 5 4. Consulting Group for Social, Political and Economic Assessment 21. A team comprising international and domestic political analysts and social scientists will prepare a report analyzing decentralization in Indonesia. The consultants should be based in Indonesia. The international consultant will provide the equivalent of 10 days of services, and the domestic consultants will provide the equivalent of 2.5 person-months. The report will highlight (i) successes in decentralization in general with references, if appropriate, to other sectors; and (ii) opportunities for the health sector. The report will also contain a chapter on specific issues related to decentralization in the proposed project areas. B. Implementation and Reports 22. The team leader will be responsible for providing regular reports of the consultants activities in four copies, one each for the project officer in ADB headquarters, MOH, one for BKKBN, and the officer responsible for health projects in the Indonesia Resident Mission. 23. Participatory workshops will be implemented in four consecutive phases: (i) training of facilitators, (ii) advocacy workshops, (iii) community consultations to identify local needs and options, and (iv) discussions of proposals. Based on inputs from the community consultation workshops, the team of consultants will prepare locally appropriate draft project proposals, which will be discussed during the fourth series of workshops. 24. An inception report will be submitted by 28 February 2002, including the report on the training of workshop facilitators and advocacy workshops. A second report, the midterm report, will be submitted by 31 March 2002, providing details and comments on local needs and options, based on the community consultation workshops. This midterm report will include the socioeconomic profile of the target populations and the specific analysis of the needs and constraints in the project areas. A draft final report will be submitted by 30 April 2002, including detailed project proposals for each participating project area (district and province proposals), with detailed cost estimates and economic analysis. The draft report will include the poverty impact assessment of the proposals, including the number of poor who will benefit from the proposed project. The final report, including comments from ADB, MOH, and BKKBN on the draft report, will be submitted by 31 May 2002.