Document of The World Bank IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-44240) FOR A

Transcription

1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of The World Bank Report No:ICR IMPLEMENTATION COMPLETION AND RESULTS REPORT (IBRD-44240) FOR A LOAN IN THE AMOUNT OF MILLION EUROS (US$66.0 MILLION EQUIVALENT) TO THE KINGDOM OF MOROCCO FOR A HEALTH FINANCING AND MANAGEMENT PROJECT Human Development Sector Middle East and North Africa Region September 27, 2007 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its content may not otherwise be disclosed without World Bank authorization.

2 CURRENCY EQUIVALENTS Exchange Rate Effective December 31, 2006 Currency Unit = MAD MAD1.00 = US$ 0.12 US$ 1.00 = MAD 8.3 FISCAL YEAR January 1 December 31 ABBREVIATIONS AND ACRONYMS AMO ANAM BAJ DO EC EIB FAMS GOM HR ICR ISR M&E MoF MoH PAGSS PDO PEH PFGSS PU QAE QAG QI RAMED SIG-HO TA UMER USP Assurance maladie obligatoire Agence nationale de l assurance maladie Barnamaj Al Aoulaouiyat Al Ijtimaiya/ Social Priorities Program Development Objectives European Commission European Investment Bank Financial and Accounting Management System Government of Morocco Human Resources Implementation Completion Report Implementation Status Report Monitoring and Evaluation Ministry of Finance Ministry of Health Projet d appui à la gestion du secteur de la santé Project Development Objectives Plan d établissement de l hôpital Projet de financement et de gestion du secteur de la santé Project Unit Quality at Entry Quality Assurance Group Quality Improvement Régime d assistance médicale pour les économiquement diminués Système d information et de gestion hospitalière Technical Assistance Unité de la mise en oeuvre de la réforme Unité de suivi du projet Vice President: Daniela Gressani Country Director: Theodore Ahlers Sector Manager: Akiko Maeda Project Team Leader: Jean-Jacques Frère ICR Primary Author: Sameh El-Saharty

3 Kingdom of Morocco Health Financing and Management Project CONTENTS A. Basic Information 1 B. Key Dates 1 C. Ratings Summary 1 D. Sector and Theme Codes 2 E. Bank Staff 2 F. Results Framework Analysis 2 G. Ratings of Project Performance in ISRs 4 H. Restructuring 4 I. Disbursement Graph 5 Project Context, Development Objectives and Design 6 Key Factors Affecting Implementation and Outcomes 9 Assessment of Outcomes 13 Assessment of Risk to Development Outcomes 16 Assessment of Bank and Borrower Performance 17 Lessons Learned 18 Comments on Issues Raised by Borrower/Implementing Agencies/Partners 19 Annex 1: Project Costs and Financing 21 Annex 2: Outputs by Component 22 Annex 3: Economic and Financial Analysis 24 Annex 4: Bank Lending and Implementation Support/Supervision Processes 25 Annex 5: Beneficiary Survey Results 27 Annex 6: Stakeholder Workshop Report and Results 28 Annex 7: Summary of Borrower s ICR and/or Comments on Draft ICR 29 Annex 8: Comments of Cofinanciers and Other Partners/Stakeholders 39 Annex 9: List of Supporting Documents 40 Annex 10: Status of Introduction of Hospital Management Tools and Hospital Development as of Project Closing 41

4 A. Basic Information Country: Morocco Project Name: MA-HEALTH MANAGEMENT Project ID: P L/C/TF Number(s): IBRD ICR Date: 09/27/2007 ICR Type: Core ICR Lending Instrument: SIL Borrower: GOV.OF MOROCCO Original Total Commitment: USD 66.0M Disbursed Amount: USD 30.9M Environmental Category: B Implementing Agencies: Direction des Ambulances et des soins obligatoires Cofinanciers and Other External Partners: B. Key Dates Process Date Process Original Date Revised / Actual Date(s) Concept Review: 04/22/1994 Effectiveness: 11/29/ /29/1999 Appraisal: 11/07/1997 Restructuring(s): 10/21/2003 Approval: 12/17/1998 Mid-term Review: 12/17/ /04/2004 Closing: 12/31/ /31/2006 C. Ratings Summary C.1 Performance Rating by ICR Outcomes: Risk to Development Outcome: Bank Performance: Borrower Performance: Moderately Unsatisfactory Moderate Moderately Unsatisfactory Moderately Unsatisfactory C.2 Detailed Ratings of Bank and Borrower Performance (by ICR) Bank Ratings Borrower Ratings Quality at Entry: Moderately Satisfactory Government: Moderately Satisfactory Quality of Supervision: Moderately Implementing Moderately Unsatisfactory Agency/Agencies: Unsatisfactory Overall Bank Performance: Moderately Unsatisfactory Overall Borrower Performance: C.3 Quality at Entry and Implementation Performance Indicators Implementation QAG Assessments Indicators Performance (if any) Potential Problem Project No at any time (Yes/No): Quality at Entry (QEA): Moderately Unsatisfactory Satisfactory Rating 1

5 Problem Project at any time (Yes/No): DO rating before Closing/Inactive status: Yes Moderately Satisfactory Quality of Supervision (QSA): Moderately Unsatisfactory D. Sector and Theme Codes Original Actual Sector Code (as % of total Bank financing) Central government administration 3 3 Compulsory health finance 3 3 Health Theme Code (Primary/Secondary) Decentralization Secondary Secondary Health system performance Primary Primary E. Bank Staff Positions At ICR At Approval Vice President: Daniela Gressani Kemal Dervis Country Director: Cecile Fruman Daniel Ritchie Sector Manager: Akiko Maeda Jacques F. Baudouy Project Team Leader: Jean-Jacques Frère Anne M. Pierre-Louis ICR Team Leader: ICR Primary Author: Jean-Jacques Frère Sameh El-Saharty F. Results Framework Analysis Project Development Objectives (from Project Appraisal Document) The objectives of the project and the description of the other components are unchanged. The objectives of the project are : a) Improve the efficiency and the quality of care in 14 public hospitals by strengthening strategic planning capacity and introducing organizational and management tools and quality control mechanisms; b) Mobilize additional resources, while preserving equity, by assisting the Government in introducing new financing mechanisms; and c) Strengthen MOH's policy formulation and sector management capacity by assisting MOH in adjusting and performing its mandate in the context of the Regionalization Law and provide MOH administrative staff with the management tools required. 2

6 Revised Project Development Objectives (as approved by original approving authority) The PDOs were not revised. (a) PDO Indicator(s) Indicator Indicator 1 : Value quantitative or Qualitative) Original Target Values (from Baseline Value approval documents) Number of persons trained overseas 0 45 (overseas: 36, local: N/A) Formally Revised Target Values Actual Value Achieved at Completion or Target Years -71 overseas, 824 local -training in Morocco was mainly focused on upgrading and developing the skills of professional staff (between 2003 and 2005, cumulative PFGSS and CIDA) Date achieved 12/01/ /01/ /01/2006 Comments The indicator is not robust enough to measure efficiency or quality of hospital (incl. % services. achievement) Indicator 2 : Personnel satisfaction Value quantitative or Qualitative) 0 Based on survey to be conducted at end of project Date achieved 12/01/ /01/2006 Comments (incl. % achievement) A survey on client satisfaction was planned but not conducted and a survey on personnel satisfaction was conducted in October Please refer to Annex 5 for details. Indicator 3 : Number of hospitals with medical waste systems in place Value quantitative or Qualitative) 0 5 Date achieved 12/01/ /01/2006 Comments (incl. % The five sterilization grinders were installed and functional by the end of the project. achievement) Indicator 4 : Average occupancy rate Value quantitative or Qualitative) 54.9% 70% Date achieved 12/01/ /01/2006 Comments (incl. % achievement) Average occupancy rate is a reasonable measure of hospital efficiency. The indicator, however, did not significantly increase as the construction of project hospitals was only just completed at project closing. The construction was executed 3

7 in several wards and largely affected the hospital central units (radiology, laboratory, operating rooms). The fact that the hospital staff was able to maintain the level of services during construction attests to their dedication and hard work. (b) Intermediate Outcome Indicator(s) Indicator Original Target Values (from Baseline Value approval documents) % committed funds; engaged; disbursed Indicator 1 : Value 100%; 100%; (quantitative 0,0,0 100% or Qualitative) Date achieved 12/01/ /01/2006 Comments (incl. % There was no baseline value assigned. achievement) Formally Revised Target Values Actual Value Achieved at Completion or Target Years Indicator 2 : Proportion of public hospitals are autonomous Value (quantitative or Qualitative) 38% 90% Date achieved 12/01/ /01/2006 Comments In addition to the MOH hospitals, two university hospitals became autonomous (incl. % during the project period, giving a total of 4 autonomous university hospitals. achievement) G. Ratings of Project Performance in ISRs No. Date ISR Archived DO IP Actual Disbursements (USD millions) 1 03/02/1999 Satisfactory Satisfactory /28/1999 Satisfactory Satisfactory /03/1999 Satisfactory Satisfactory /21/2000 Satisfactory Satisfactory /27/2000 Satisfactory Satisfactory /27/2000 Satisfactory Satisfactory /25/2001 Satisfactory Satisfactory /15/2001 Satisfactory Satisfactory /13/2001 Satisfactory Satisfactory /13/2002 Satisfactory Satisfactory /13/2002 Satisfactory Satisfactory /13/2003 Unsatisfactory Unsatisfactory /29/2003 Unsatisfactory Satisfactory /24/2003 Unsatisfactory Satisfactory /14/2004 Unsatisfactory Satisfactory

8 16 05/01/2004 Satisfactory Satisfactory /02/2004 Satisfactory Satisfactory /25/2005 Satisfactory Satisfactory /07/2005 Moderately Satisfactory Moderately Satisfactory /16/2005 Moderately Satisfactory Moderately Satisfactory /30/2006 Moderately Satisfactory Moderately Satisfactory /17/2006 Moderately Satisfactory Moderately Satisfactory H. Restructuring (if any) Restructuring Date(s) ISR Ratings at Restructuring Board Approved PDO Change DO IP Amount Disbursed at Restructuring in USD millions 10/21/2003 N U S 4.76 Reason for Restructuring & Key Changes Made I. Disbursement Profile 5

9 1. Project Context, Development Objectives and Design 1.1 Context at Appraisal In the early 1990s, Morocco s economic performance had slowed mainly because of unfavorable external events (droughts), which resulted in slackened growth and social inequity. In the late 1990s, Morocco was undergoing a major transition led by King Mohamed VI, which resulted in opening of the political process and stressed the rule of law. Nevertheless, the economy was still suffering from slow growth together with high unemployment and poverty rate at 14% and 19%, respectively. Moreover, the gaps and inequalities between rural and urban areas were profound. The Government, realizing that these factors might undermine the political transition if unchecked, adopted a national Social Priorities Program that covered priority health, education and social services. In the health sector, the country made steady progress as reflected by an increase in life expectancy at birth to 67 years, a decrease in infant mortality rate to 48 deaths per 100,000 live births, and an increase in immunization coverage to 94%. The World Bank (WB) supported the social program through the Basic Health Project/BAJ (Barnamaj Al Aoulaouiyat Al Ijtimaiya) ( ) aimed at strengthening preventive and basic curative care in the poorest 14 provinces. Despite the progress made and the focus on basic health services, the health system still faced major systemic challenges: o o o Government budgetary allocations for health were among the lowest compared to countries with similar income level. In 1999, health expenditures were about 4.5% of GDP which was equivalent to around US$56 per capita. Moreover, only 16.4% of the population was covered by health insurance. The hospital network received only about 56% of public resources allocated for health and suffered from the deterioration of the physical infrastructure, which led to poor quality of services. The effectiveness of the health systems was low due to weak institutional capacity as well as overly centralized management and decision-making processes. o Most of the private sector service providers were concentrated in the two largest cities (Rabat and Casablanca). Given these challenges, the Government of Morocco (GOM) requested the WB to further support the health sector in order to complement the Basic Health Project, which addressed the equity of rural access to basic health care, to ensure the sustainability of the BAJ, and support the then recently ratified regionalization law (1997) as the Government's effort to implement an articulated and sustainable Social Development Strategy. In this context, the Health Sector Financing and Management Project was developed to address for the first time central and systemic sectoral issues such as inefficiency, inequity, resource mobilization and weak management capacity, which would have a significant impact on the long term sector development and sustainability. 1.2 Original Project Development Objectives (PDO) and Key Indicators (as approved) According to the loan agreement, the Project Development Objectives (PDOs) were to assist the Borrower in: (i) improving the efficiency and quality of public hospital services, (ii) introducing new financial mechanisms for the health sector, and (iii) strengthening the Ministry of Health s (MOH) policy formulation and sector management capacities. 6

10 The achievement of the above PDOs would be demonstrated by the following key indicators: To measure the improvement of the efficiency and quality of care in project hospitals: o Percentage of personnel adequately trained and redeployed in project hospitals o Rate of client satisfaction o Rate of personnel satisfaction To mobilize additional financial resources: o Percent increase in the revenues compared with 1997/1998 o Percent increase in cost recovery (from health insurance patients and fee for services) To strengthen MOH policy formulation and sector management capacity: o Percent of the non-salary recurrent budget allocated to the basic health services network out of the total MOH recurrent budget o Percent of the non-salary recurrent budget allocated to the MOH hospital network out of the total MOH recurrent budget o Percent of the non-salary recurrent budget allocated to the administration out of the total MOH recurrent budget o Rate of commitment and disbursement of the investment budget. 1.3 Revised PDO (as approved by original approving authority) and Key Indicators, and reasons/justification The PDOs were not revised. 1.4 Main Beneficiaries At the local level, the primary beneficiary group (affected mainly by component I of the project) was the population living in the catchment areas of the hospitals originally targeted, which was estimated at 7 million persons. The project would provide this population with better access and improved quality of health care services. Also, the personnel of the project hospitals (both managerial and medical staff) would benefit from the project as a result of a better work environment, including new facilities and equipment, and training as well as adoption of new management tools that would allow efficient use of resources and hospital autonomy. At the national level, the MOH, and the population at large, were also to benefit from the project, as it would trigger nationwide hospital reform (component I), and implement and develop new financing mechanisms that would mobilize additional resources for the sector and increases health insurance coverage (component II). 1.5 Original Components (as approved) The three original components of the project were closely linked and interdependent. The new financing mechanisms would have a significant impact on hospital autonomy, and improved policy and decision-making capacity in the MOH would be essential to the long term sustainability of hospital management and sector financing reforms: Component I: Strengthening hospital management and improving service quality in 14 hospitals (total estimated cost: US$62.5 million). Improving hospital performance would be achieved by strengthening hospital strategic planning capacity and introducing organizational and management tools, procedures and information systems needed for decision-making and resource-allocation 7

11 processes. Improving the quality of health care in selected hospitals would be realized by defining and implementing norms for the organization and delivery of clinical and other services, establishing quality control mechanisms, implementing staffing norms and providing training, rehabilitating facilities, and providing medical equipment. Component II: Improving health sector financing (total estimated cost: US$1.7 million) by developing a National Health Insurance Scheme (NHIS) with mandatory enrollment for employees in order to increase health insurance coverage from 15% to 30% of the population and developing mechanisms to ensure health care for the poor. Component III: Strengthening the MOH institutional capacity (total estimated costs: US$1.8 million) by assisting the MOH in performing its new functions in the context of the Regionalization Law and implementing its sector strategy as well as providing it with the management and data tools for policy formulation and decision-making. 1.6 Revised Components In July 2003, the GOM requested the Bank to cancel 18.0 million Euros, amend the project description, and extend the project closing date by three years to December 31, The justification for this request included slow disbursement and delayed implementation of the project components, particularly the hospital reform program. The hospital renovations had to be phased in for each hospital, starting with one section and then moving to another in order to minimize disruption of services to the population, the additional time required had not been originally foreseen. Moreover, there was a need for several prerequisites such as the Hospital Development Plans (HDPs) and Management Tools, which were not completed due to the delay in selecting the technical assistance. In October 2003, the project was restructured and approved by the Regional Vice President. The PDOs, however, were not changed; only the description of the first component was modified to read: Strengthening Hospital Management and Improving Hospital Service Quality Development and implementation of a model for upgrading Project Hospitals through: (i) the introduction of new management tools and procedures in about 14 Project Hospitals; and (ii) the modernization of infrastructure and equipment in about 5 Project Hospitals. The project implementation plans for the extension phase indicated that the HDPs would be developed for the 14 hospitals and that the technical assistance (TA) would support the introduction of the core management tools in the 5 hospitals receiving infrastructure improvements and equipment. The description of the other components and the key performance indicators remained unchanged but the target indicators were refined. The project hospitals were changed from 14 to 5 hospitals. 1.7 Other significant changes There were two other changes associated with project restructuring in October 2003: The extension of the project closing date for three years from December 31, 2003 to December 31, The purpose of the extension was to provide adequate time to complete the introduction of management tools and physical renovations and equipping of the five hospitals. The technical assistance contract was extended for an additional two years to fully integrate the interventions in all 5 hospitals, and strengthen institutional capacity. 8

12 2. Key Factors Affecting Implementation and Outcomes 2.1 Project Preparation, Design and Quality at Entry The project concept note was approved in April The appraisal was conducted in November The project was approved by the Board in December 1998 and became effective in November This is more than five years from concept to effectiveness. The project appraisal document, however, captured to a great extent the changes in the political, economic and sector environments and the team was able to adapt project design to the evolving sector context and government strategic directions. Moreover, the background analysis and the rationale for the Bank s intervention were sound, and the lessons learned from the Health Development Project, the Health Sector Investment Project, and the Basic Health Project/BAJ were incorporated in the design of this project. However, many of the lessons learned from previous projects were not fully applied to this project. In terms of Quality at Entry (QAE), the project development objectives and the design of the components at the outset were in line with both the Government and Bank strategies. The improved basic health services realized under the BAJ encouraged the Government to proceed with the Bank in improving the curative services at the secondary hospital level. In addition, political commitment for the expansion of health insurance coverage was reflected through the preparation of a draft law in 1995 to increase formal health insurance coverage from 15% to 30% of the population. Moreover, a new Regionalization Law was promulgated in 1997, which provided the framework of the regionalization activities envisaged under Component III of the project. However, neither the Government nor the Bank was realistic in terms of the timeframe needed to implement such a complex reform program and such ambitious objectives; the risks were also underestimated. Improving efficiency and quality in 14 hospitals was not realistic, particularly in light of implementation readiness. At effectiveness, the implementation plan and the procurement packages for the first year were not ready. It took almost one year to select the TA for hospital reform primarily due to a lack of appreciation by the MOH of the role to be played by the TA. As a result, the contract was signed in 2001 and the TA was not mobilized until early Project management structure and implementation arrangements could have been more effective; the creation of a hospital reform unit (Unité de la mise en oeuvre de la réforme - UMER) within the Directorate of Hospital and Ambulatory Care reinforced the need for better coordination between hospitals, health district offices, and the central ministry. Similarly, the project objectives related to improving health sector financing and strengthening MOH policy and strategic planning were ambitious given the political climate at the time, particularly for expanding health insurance coverage. The objective could not have been realistically achieved with an allocation of only US$1.8 million for TA and training, which represented only 2.5% of the project budget. In addition, the TA focused mainly on supporting Component I with insufficient support to ensuring coordination between the three components. Project readiness was also affected by the lack of an Operations Manual, which was only finalized in Finally, the lack of a monitoring and evaluation plan and system was a major weakness. In retrospect, the ICR team is cognizant of the fact that many of the political economy factors were difficult to identify at appraisal. However, project readiness could have been further strengthened at the outset of the project. The QAG did a QAE review of this project and it was rated satisfactory. 9

13 2.2 Implementation The overall rating for project implementation is Moderately Satisfactory. The project was implemented at two different speeds: before and after restructuring. From November 1999 to December 2002, the project was characterized by slow implementation progress, reflected by a low disbursement rate of 6.5%. The project focused on providing high caliber TA as part of the Bank team to assist the government in the reform process, working with the government on getting the TA on board, and the creation and strengthening of the Project Unit (Unité de Suivi du Projet - USP). Following the 2003 restructuring, project implementation picked up and significant progress was made by the revised project closing date. The assessment of project implementation is summarized by component below. Implementation of Component I is rated Moderately Satisfactory. There were significant delays in the start up of this component, due to the multiplicity and complexity of the activities to be undertaken. The hospital reform unit, UMER, was created in late 2000 to coordinate this component and to serve as an interface between the central level, the regions and the 14 project hospitals as well as the TA. In addition, the selection of the TA team to provide support on the reforms took longer than expected, nearly 20 months, due to the political environment and procurement procedures. As a result, the TA team only began actual work in January Following restructuring, implementation proceeded broadly on two pillars: (i) physical improvement of hospital infrastructure through investment in building and medical equipment; and (ii) development and introduction of modern management tools. Almost all planned hospital investments in buildings and medical equipment were completed by the project closing date but the introduction of management tools was fragmented. By project closing, the project hospitals provided a potentially successful model for replication. The cost of this endeavor was about US$9.0 million per hospital for infrastructure improvements, as well as the modernization of hospital management tools for improvements in quality of care. The government agreed with the European Investment Bank to upgrade an additional 20 hospitals and to introduce the management tools developed under the Bank-financed project. Nevertheless, the sustainability of the hospital reform component remains a challenge for these hospitals, particularly in the absence of any indication that additional financial resources will be mobilized whether from a commensurate increase in the MOH budget for maintenance or from implementing the health financing scheme for the poor (Régime d assistance médicale pour les économiquement diminués - RAMED). It is to be noted that, although the MOH budget has been steadily increasing by about 10% annually since 2003, it has remained focused for the most part on improving the primary health care services and the drug supply in hospitals. Annex 10 provides additional information on the status of the implementation of management tools and the status of each hospital at project closing. Implementation of Component II is rated Moderately Satisfactory. Progress was minimal during the first couple of years of the project; however, several legal frameworks and decrees have been approved in the last 2-3 years to increase insurance coverage for the population. Progress was marked by the ratification of the Framework Law on Mandatory Health Insurance (Assurance Maladie Obligatoire AMO) in August 2002 (Loi-Cadre 65-00) that also established the National Health Insurance Agency (Agence Nationale de l Assurance Maladie ANAM). However, it took almost three years to initiate the implementation of the AMO scheme with the appointment of the ANAM Director in June 2005 followed by adoption of nine new government decrees related to the establishment of the AMO in August The publication of these decrees made the AMO effective as of September 1, Subsequent decrees were issued in 2006 that resulted in the extension of the health insurance coverage to new groups of the population. By project closing, it was estimated that the AMO was covering about 25% of the population, including the coverage of new groups of professionals and informal working groups through new schemes; implementation of RAMED was postponed in order to prepare additional studies to better assess the political, fiscal and economic implications. 10

14 Implementation of Component III is rated Moderately Unsatisfactory. The implementation of this component focused primarily on the completion of two critical studies. The study on the Organizational and Technical Audit of the MOH was completed in 2005, and the other study on the comprehensive Human Resources Strategy for the MOH, was completed in In August 2005, the MOH launched the regionalization process in the pilot area referred to as the Oriental Region by issuing the Ministerial Circular No. 3 that created a new regional health structure, which was part of the budgetary support conditionality of the European Commission (EC) project. The regionalization aspect of the reform program, however, was limited to the deconcentration of planning and management of some functions and fell short of the envisaged devolution of broader functions such as human resources management and financial autonomy. There were several factors either under the control of the Government or the Implementing Agencies that influenced the implementation of the project. These are discussed below. Factors subject to the control of the Government. The key factor that influenced the project implementation at that level was the Government commitment to the different reforms, which was not consistent over time and across the different Government agencies, particularly for health insurance and regionalization reforms. For the former, progress was only made following the creation of a working group at the Prime Minister s level in A "Committee of Experts" appointed by the PM steered the preparation of a number of studies and draft legislation on the mandatory health insurance scheme (AMO) and the health financing scheme for the poor (RAMED). However, the weak institutional capacity was another binding constraint as it took almost three years to initiate the implementation of the AMO scheme after the ratification of the Framework Law in Although the proposed laws on both AMO and RAMED were to be submitted to Parliament, the Government proceeded with only the AMO, and the implementation of RAMED was postponed in order to better assess the political, fiscal and economic implications. The coordination of donor support was another key factor as exemplified by the EC-funded project (PAGSS) that was the main vehicle to field test and implement the regionalization aspect of the reform program, which resulted in the creation of the Oriental health region. However, the pace of the regionalization reform was extremely slow and limited in scope primarily due to: (i) the political economy surrounding the balance of power between the central level and the regions in the allocation and management of resources; and (ii) the difficulty of decoupling the health sector from other sectors and the civil administration code. Factors subject to the control of the implementing agencies. The delayed implementation of the investment plan was attributed to a variety of factors, including: (i) delays in the procurement of key contracts; (ii) unexpected technical issues that delayed construction (e.g., water found below the construction site at Settat); (iii) cancellations of works with some contractors due to poor performance and re-awarding of the contracts; and (iv) lack of synchronization of the procurement of medical equipment with completion of civil works. As for the management tools, the implementation was complicated by the MOH failure to provide sufficient local counterparts to disseminate the management tools to the other 9 hospitals. Lack of qualified personnel was a key binding constraint to successful implementation and adoption of the tools. Other factors include: (i) lack of coordination between all the project hospitals; (ii) differences in the pace of progress between hospitals; and (iii) frequent changes in hospital management personnel (e.g., Settat). On the other hand, the quality of the overall TA financed under the project was high and played a key role in implementing the hospital reforms and guiding the health insurance reforms. 2.3 Monitoring and Evaluation (M&E) Design, Implementation and Utilization The rating for the Monitoring and Evaluation (M&E) system was Unsatisfactory as it was one of the weakest and most poorly implemented parts of the project. By project closing date, the M&E system provided little information on project impact, primarily as the indicators (outcome and 11

15 intermediate) were confined to Component I of the project and were inconclusive in terms of improvements that can be linked to project interventions. The M&E system at effectiveness was not clearly defined, the performance indicators were too broad, and a dedicated M&E strategy and/or system was not in place at effectiveness. The Project Appraisal Document was not clear enough about the responsibility, the mechanisms or the procedures of monitoring and evaluating the project. Many of the performance indicators were poorly defined and had neither baseline nor target values. Until project restructuring in 2003, there was no M&E system in place. Moreover, there was no project evaluation planned or conducted. Only a provider satisfaction survey was conducted for the staff of the five hospitals. There were no performance indicators monitored for components II and III. Overall, the M&E system suffered from project implementation fragmentation. As a result, the M&E focused on monitoring the progress in hospital physical infrastructure and the TA deliverables (reports and studies) and to a lesser extent on the development and institutionalization of the management tools, the expanded coverage of health insurance, particularly for the poor, and the decentralization of MOH responsibilities to the regions. The linkages and interdependence between the three project components were weak. 2.4 Safeguard and Fiduciary Compliance Environmental Management is rated Moderately Satisfactory. The project environmental rating was assessed as B due to the nature of the project design and the need for an adequate waste management plan. The hospital management tools, developed under the project, included a hospital waste management plan. In addition, an environmental analysis was carried out as part of the hospital rehabilitation/construction program. Moreover, a dedicated environmental service was established in the hospitals to manage the process of waste management. In parallel, the MOH worked closely with WHO and the European Commission on establishing guidelines to manage hospital waste, and to ensure that hospitals were accredited. The assessment concluded that waste management plans were for the most part in place, but weaknesses were noted with regard to training of staff on environmental safeguard issues within the hospital. In addition, the issue of transport of hospital waste to local community dump sites was an issue that was being discussed at the regional level in order to mitigate the risks of wider contamination. A number of sterilizing grinders were purchased under the project, but were not fully operational until the last year of the project. In addition, the MOH worked closely with the Ministry of the Environment in the last year of the project, and a specific decree was promulgated on Medical Waste Management, including the disposal of pharmaceuticals. The social aspects are rated Unsatisfactory. The project proposed a participatory approach during the different phases of the project. However, given the extensive delays in project implementation noted earlier in this report, participation was limited. One of the main methods was to carry out a beneficiary assessment. This was never carried out, except for an assessment of health personnel perceptions following the introduction of management tools in the targeted hospitals. In general, satisfaction was slightly above average, but it was also difficult to measure as the survey was taken at the time when construction had just been completed, and the services were not fully running. It is to be noted that hospital staff had to live with much disruption caused by the rehabilitation/construction program in the past two years. Moreover, dissemination of the hospital reform agenda to the public came rather late in project implementation. Financial management was Moderately Unsatisfactory. Much effort was made during the implementation phase of the project to set up a financial management system in the Project Unit (PU). However, the system was not fully utilized. In addition, Morocco pre-finances expenditures, or obtains reimbursement from the Bank into their special account, which led to difficulties for the PU in obtaining expenditure information. Disbursements were slow due to internal procedures, but 12

16 increased during the last two years of the project after Bank missions revealed a number of contracts that had not been previously claimed for reimbursements. Major efforts were made to clear backlogs and improve financial management flow. Despite the capacity building that took place during implementation, and the systems purchased, it is unlikely that the PU will be sustained for reasons of pragmatism, as the PU was set up outside of the MOH, although the personnel are now well versed in Bank procedures. The 2005 audit report was received by the Bank, and the 2006 audit report is expected to be received by end June Procurement management was Moderately Satisfactory. Post-reviews revealed some procedures contrary to Bank guidelines (one envelope system for consultants), and a lack of awareness of Bank guidelines with the result that National Procedures were applied. In addition, procurement was affected by the compartmentalization of the MOH Departments; slow implementation of procurement activities due to lengthy national procedures; review processes by the Bank; and internal payment processes. Nevertheless, the five hospitals under renovation/construction and associated equipment were delivered by the project closing date. In addition, the staff of the PU provided regular supervision in the field, and training to regional staff in management following the mid-term mission. 2.5 Post-completion Operation/Next Phase Given the limited scope and fragility of the hospital reform achievements, there will be a need to consolidate and sustain the gains, which may be attained through the new European Investment Bank (EIB) funded project that aims at expanding the reform to an additional 21 hospitals. It is important however, to focus first on the five project hospitals and formally involve the staff in the efforts to extend these reforms to other hospitals, particularly given that the experience gained from the project is both pertinent and practical. While some of the PFGSS hospital directors are involved in the new MOH project as experts, there should be a systematic plan in place. Additionally, the EIB funded project will mobilize foreign TA to accompany the reforms in the new hospitals. Given that the management tools were not fully operational, there is a risk of the EIB TA developing new tools instead of capitalizing on previous efforts. The MOH is aware of these risks and is planning to reinforce the gains of the PFGSS in the five hospitals by relying on the existing tools and improving the processes before they are put into use in the selected hospitals. Furthermore, there was little effort made to allocate Operation & Maintenance budget to ensure the sustainability of the project investments. On the other hand, in the area of health financing reform, the extension of health insurance coverage is likely to be sustained but the lack of such coverage for the poor may erode the few gains made in hospital reforms due to the fact that the poor constitute more than 70% of the users of public hospital services. As for the institutional capacity in support of the regionalization process as well as the reforms in general, the project helped in the transformation of a cadre of MOH staff at the central and hospital levels, who may be considered as a driving force for the reform but do not constitute a sufficient critical mass to sustain it. 3. Assessment of Outcomes 3.1 Relevance of Objectives, Design and Implementation The relevance of the project objectives, design and implementation is rated Moderately High. The PDOs remain relevant to the current health sector situation. Increasing the efficiency of the health system, particularly public hospitals that consume a large share of the MOH budget, and improving the quality of health services together with extending health insurance coverage and decentralizing some management functions and responsibilities, are key objectives that continue to feature 13

17 prominently in the country s national programs and the human development pillar of the Bank s assistance strategy. Moreover, the recently approved Health, Nutrition, and Population (HNP) Strategy of the Bank stresses the increasing importance of dealing with health financing systems in addressing the growing burden of diseases due to the health transition. The project design was quite strong on the TA aspects, which were covered not only through the project but also through Bank supervision missions. Most of the TA reports were of high quality and very relevant to the reform challenges that continue to face the Moroccan health system. Project implementation pace was extremely slow given the complexity of the reforms. The institutional arrangements could have been more effective; there was an overemphasis on the physical investments, and at the beginning of project implementation, the linkage of the three components was weak but improved with time. 3.2 Achievement of Project Development Objectives The overall achievement of the Project Development Objectives is rated Moderately Unsatisfactory. At the outset, it is important to stress that the project performance indicators established at project appraisal and after restructuring were not sufficiently monitored, which made it difficult to assess project achievements. In addition, given the delays in implementation, the indicators are also affected by the fact that hospital construction was not completed until the revised project closing date. An additional effort was made during the ICR preparation to collect and analyze new information in order to assess project performance, particularly for Component I, given that it constituted more than 90% of project financing. The assessment of each PDO is detailed below. The achievement of the objective of Improving efficiency and quality of public hospital services. Despite the functionality of some of the upgraded hospital services and the introduction of new management tools in the five project hospitals, the project only partially achieved the stated DO related to improved efficiency and quality in these hospitals. Since the investment program was completed by project closing and most of the upgraded services were not fully operational, it was not possible to assess the efficiency or the quality of the upgraded services. In fact, most of the utilization indicators deteriorated in 2005 (data were not available for 2006). This was expected as many of the critical services in project hospitals were affected by the ongoing civil works. For example, the average hospital occupancy rate did not improve as it remained at about 57% and the number of hospital days was significantly reduced. Similarly, the full implementation of the package of management tools was delayed and not uniform across the 5 project hospitals. In terms of provider satisfaction, a survey concluded that there was an improved perception of providers regarding the upgraded services and working conditions (64%) as well as the management system (56%). However, the ICR team did not find the survey methodology robust enough to support the survey findings. For example, some of the services surveyed were not fully operational at the time of the survey. Also, there was a planned Beneficiary Survey which was not conducted. It is worth noting that the project succeeded in improving the physical infrastructure in the project hospitals, introduced new clinical services, and increased hospital capacity. However, all could not be objectively measured at project closing. Additional information was collected during the ICR preparation in order to assess the project outcomes beyond what was provided in the M&E system. To this effect, the team visited another five hospitals outside of the project interventions (El-Jadida, Ibn Zohr in Marrakech, Ibn AlKhatib in Fès, Essalama in Kalaa Segharna, and Tétouan) and noted significant differences in the way the hospital managers and medical staff interacted, planned, and managed the hospital functions. This transformation in the culture of managing public hospitals in 14

18 Morocco was an important project outcome, which was not adequately evaluated. It is therefore highly recommended to conduct a post completion evaluation in two years to assess the actual impact of the project in terms of efficiency and quality. The achievement of the objective of introducing new financial mechanisms for the health sector. At the outcome level, the stated DO was partially achieved as there was an increase in the population covered by health insurance, mainly for the independent workers, from 15% to about 25%. The health insurance scheme covering the poor (RAMED) was not implemented at the time of project closing, which impacted the ability of hospitals to better manage costs and the provision of services. The Government passed the Law 65/00 in 2002, which established the mandatory health insurance (AMO) program and the program for the poor (RAMED) as well as the national health insurance regulatory agency (ANAM). This was followed by a series of by-laws and decrees in 2005 and 2006 to operationalize the ANAM and actually implement the first part of the AMO for independent workers. The project outputs in terms of TA and studies contributed to the critical thinking and reflections as well as the strategic considerations related to the implementation of the health insurance reform that started with an analysis of the draft law (Bitràn Associates, 2002) and ended with the series of 7 reports on establishing the ANAM (Soucy et Partenaires, 2006). In addition, the EC continues to work with the government and specifically the MOH on proceeding with health insurance issues. The achievement of the objective of Strengthening the MOH s policy formulation and sector management capacities. The achievement of this objective was extremely difficult to assess as the indicators identified at project appraisal were not systematically collected. More importantly, the indicators were inadequate to monitor strengthened policy and decision making capacity. Despite the inputs from the TA financed under the project, the products were only available late in project implementation and recommendations were not validated in time to have any clear impact. On the other hand, the government took modest steps toward regionalization, primarily through the ECfunded project (PAGSS), with the establishment of the first health region in August Subsequent regionalization is underway, albeit slowly, with other donors involved in the sector. It was noted that two more health regions were created in late Efficiency The project aimed at improving health system efficiency by gradually increasing allocations to cost effective interventions, upgrading the human capital base and improving labor productivity as a result of raising the health status of the population through expanding health insurance coverage. It is worth noting that more than 90% of the project costs were to finance hospital investments, which were completed only by the project closing date, and the full range of the health services affected by the physical infrastructure improvement was not offered. It was therefore not practical to conduct any efficiency analysis to assess whether the costs involved in achieving project objectives were reasonable in comparison with both the benefits and with recognized norms particularly in the absence of hospital utilization data. It is therefore recommended to conduct such analyses in two years (as part of the post completion evaluation) when the full range of improved services would be provided and utilization data would be available. 3.4 Justification of Overall Outcome Rating The overall outcome rating is Moderately Unsatisfactory. By the project closing date, at the outcome level, most of the staff of the five project hospitals were satisfied with the upgraded facilities and equipment. The PEH was introduced in all 14 hospitals, and budget management based on results was 15

19 introduced. On the other hand, there was little data to assess improved quality or increased efficiency (except for the qualitative data collected at the hospital level). At the output level, most of the management tools were developed and introduced in the five hospitals but were implemented unequally. Also, the utilization indicators had significantly dropped due to the fact that most hospitals were still under construction up to project closing. The project objectives, however, remain relevant and a post completion assessment of the project impact in two years may provide positive results, given the improved physical infrastructure, increased hospital capacity, and the ongoing expansion of health insurance coverage. 3.5 Overarching Themes, Other Outcomes and Impacts (a) Poverty Impacts, Gender Aspects, and Social Development. The project was expected to have a significant impact on improving social equity through better allocation and targeting of public health resources, thus increasing access of the poor to health care. Beneficiary assessments were planned to be carried out in order to assess the social impact of project activities but were not conducted. Nevertheless, it is expected that many of the poor population will benefit from improved hospital services, particularly when the health insurance coverage for the poor (RAMED) is implemented. A post completion assessment in two years would therefore be critical to assess the project social impact. (b) Institutional Change/Strengthening. The project had a positive impact on institutional development, particularly at the central level, in understanding and managing complex reforms related to public hospitals and health sector financing: preparation of hospital development plans which are mandated for all hospitals (including the recent passage of the law on Hospital Reform); the introduction of modern hospital management tools; the creation of the UMER to coordinate and manage complex hospital development projects, which will continue with the EIB funded project; and the creation of the communication units in the project hospitals, which strengthened the outreach activities and bridged the gap between hospital management, hospital staff and the community. Similarly, in health financing, the project TA contributed to the development of the organizational structure of the ANAM and in strengthening its capacity as well as supporting the MOH/DRSF in conducting complex studies, e.g., the actuarial studies. (c) Other Unintended Outcomes and Impacts (positive or negative). A positive unintended outcome of the project was the development of new health insurance schemes to cover the professional and independent workers (e.g., Inaya) under the mandatory health insurance program. In addition, the reform process engaged national stakeholders to openly debate the future of hospital reforms. 3.6 Summary of Findings of Beneficiary Survey and/or Stakeholder Workshops N/A 4. Assessment of Risk to Development Outcome The risk to development outcome is Moderate. This is explained by the fact that the project outcomes, although limited, are subject to political economy forces that are outside the program sphere of influence, particularly for health insurance coverage and regionalization. On the other hand, the hospital management tools developed by the project are likely to be institutionalized by the new Hospital Reform Law, provided this is coupled with the mobilization of significant human and financial resources, particularly for operation and maintenance for the large hospital investments made under the project. 16

20 5. Assessment of Bank and Borrower Performance 5.1 Bank Performance (a) Bank Performance in Ensuring Quality at Entry The Bank performance in Ensuring Quality at Entry is rated Moderately Satisfactory. At the outset, it is important to indicate that this project was designed as part of a wave of health sector reform projects that were undertaken in many countries (particularly LAC and ECA), with ambitious objectives, particularly on the health financing side. In general, there was little experience in reforming the health sector in the developing world and each of these projects had to navigate through its own political, economic and social environments. Inevitably, there was a learning curve. This project was no exception. Given the available information at the time, the Bank mobilized a balanced and skilled team. The project design and proposed interventions were also technically sound. However, the Bank could have better assessed the complexity of the interventions involved in introducing hospital management tools which hinged on health insurance reform and the availability of qualified and skilled human resources. The QAG assessed the Quality at Entry (QAE) in April 1999 and it was rated Satisfactory. The key areas of major concern for the QAE panel were the clarity of project development objectives and the readiness for implementation (operations manual, procurement packages for the first year, etc). In addition, the M&E was a major weakness at entry. The ICR team concurred with the QAE assessment that readiness to implement was weak, primarily due to the lack of an operations manual, procurement plan, and an M&E system, areas in which the Bank has ample experience. (b) Quality of Supervision The Bank performance in Quality of Supervision is rated Moderately Unsatisfactory. The supervision of the project focused on inputs and processes as well as fiduciary aspects. While this was reasonable in the first couple of years of the project, supervision could have focused more on development outcomes, inter-linkages between the three components and the broader health policy environment (except for the coordination with the EC) prior to and post project restructuring (2003). Given the delays encountered in implementing project activities, the focus was on launching the technical aspects of the project (management tools, infrastructure, key studies). The Bank team had a strong skills mix and included qualified experts in different areas such as hospital management and health insurance. However, the recommendations of the Bank team were not in line with the pace of governmental reforms and there was an unsustained effort to require a robust M&E system. More importantly, the candor of reporting in the early phases of project implementation was weak until the latter part of the project when progress was being made on civil works, procurement of medical equipment, and completion of key studies. Nevertheless, the mid-term review and restructuring were missed opportunities and should have been more focused on DOs and project scope given the information available at that point with regard to the time needed to complete the introduction of management tools. It was only in the last year of the project (2006) when the Bank started to examine how project interventions fit in the broader health sector strategy but it was too late to induce by that point any substantial change to the project course. The QAG assessed the quality of supervision in September 2004 and it was rated Moderately Unsatisfactory. The QAG noted that some of the early findings of the Quality at Entry QAG seemed to have become major challenges during implementation, largely centered around readiness for implementation, M&E and institutional and technical capacity of implementing agencies. (c) Justification of Rating for Overall Bank Performance The overall rating for Bank performance is Moderately Unsatisfactory. The Bank s performance during preparation was reasonably adequate with regard to the technical aspects of the project design but was inadequate in terms of readiness for implementation. The supervision, however, was weak as it focused on monitoring the inputs and managing the processes without adequate attention to the 17

21 development outcomes and the inter-linkages between the project components. More seriously, the Bank failed in proactively taking action and missed several opportunities, e.g., during the mid-term review and restructuring, to change the project course in order to achieve more realistic objectives. 5.2 Borrower Performance (a) Government Performance The Government performance is rated Moderately Satisfactory. Despite several setbacks (both political and institutional), the Government, particularly the MOF and the MOH (as the entity responsible for health policy and implementing agency for the project ), stood by its reform program. However, it underestimated the time and institutional capacity needed to introduce major changes in hospital, regional and central management, including financing of the reform. The regionalization law was issued in 1997 and the health insurance law was drafted in But it took almost 3 years between the ratification of the health insurance law in 2002 and issuing its by-laws in 2005 as well as the operationalization of the ANAM. In addition, some efforts were made to address the fundamental issue of human resources which has impeded the effectiveness of the health sector; however, more rigorous interventions are needed. In general, the enabling environment was lacking due to weak policy and institutional frameworks. All these efforts require long term commitments, and the government continues to push ahead on the reform program and has partnered with the EIB in upgrading additional hospitals and the dissemination of the management tools introduced under the project. A very recent and positive aspect is the issuance of the decree on Hospital Reform which stipulates the requirement for a PEH in all national hospitals as well as other important aspects that will further enhance the hospital reform process. The one aspect that is still not resolved is the health insurance scheme for the poor (RAMED) which is needed to reduce poverty and inequity. (b) Implementing Agency or Agencies Performance The performance of the implementing agencies is rated Moderately Unsatisfactory. The key implementing agency of the project was the MOH, including the different departments responsible for the three components and the project-created units (USP and UMER). Despite the commitment of the MOH departments and project units to the reform process, implementation readiness was weak, and efforts fragmented. There was lack of coordination between the three project components, which required a higher convening MOH authority to support the USP. While there was some consultation with local authorities regarding hospital reform interventions, there was little consultation with the broader stakeholders and the public until much later in project implementation. Also, it took a long time to resolve implementation issues, particularly with regard to the management of the hospital civil works. On the other hand, the management of the fiduciary aspects was adequate and project covenants were realized but with delays. The performance, however, improved in the last year of the project, particularly with regard to the UMER, as the learning curve increased. (c) Justification of Rating for Overall Borrower Performance The overall performance of the Borrower is rated Moderately Unsatisfactory. The proposed reforms and project interventions constituted uncharted waters for the Government and MOH personnel. The learning curve was steep, and momentum was slow, particularly due to the lack of skilled human resources and the lack of effective coordination between the different departments of the MOH, despite the government s commitment. In addition, two years were lost (2000 and 2001) due to government inaction in launching project activities. 6. Lessons Learned The project provides good lessons for similar future operations, which are summarized below. Health sector reform is complex and long-term in nature. It is becoming increasingly recognized that the objectives of the health sector reforms envisaged in the mid 90 s were overly ambitious and could not possibly be achieved in the life of a five-year project. A more incremental approach with a clear roadmap and benchmarks may be more practical. 18

22 Government commitment is necessary but not sufficient for engaging in a health sector reform program. Despite Government commitment, it took a long period for actions to materialize because of weak institutional capacity to carry out the reforms, which was coupled with an acute shortage of adequately qualified personnel. This should have required an in-depth institutional analysis and an organizational development plan to accompany the reform. The institutional arrangements are critical in the success of complex projects. The coordination of the project components and activities was a key challenge. The cooperation between the different MOH departments, the regions and project units was suboptimal. The institutional arrangement in general led to project fragmentation. The office of a higher convening authority would have been more effective in ensuring this level of coordination. Investment lending may not be the best instrument for inducing major sector reforms. Using an investment lending instrument for a project with both huge physical investments as well as ambitious reforms would inadvertently lead the implementers to focus on the physical investments. Other approaches and instruments such as a Development Policy Lending, in combination with technical assistance lending, could be more appropriate. Hospital construction and/or rehabilitation is very complex and takes a long time. Experience from this and other similar projects has demonstrated that hospitals are complex construction projects, particularly when they are rehabilitated, as services continue to be provided while civil works are going on, which usually slows the pace of implementation. For hospital rehabilitation, it is judicious to have the architectural drawings ready before project effectiveness. Project readiness is a good predictor of successful project implementation. The weak project readiness in terms of lack of a good M&E system, relevant performance indicators with baseline values, procurement packages, and operations manual should have signaled major readiness issues. Given the Bank focus on results, the test for a potentially successful project would be to have performance indicators with measurable baseline values at appraisal. Proactive interventions are critical in correcting the course of the project. The mid-term review and project restructuring were missed opportunities and could have been used more effectively in changing the course of the project by intervening earlier and more strategically to revise the PDOs and the implementation scope of the project. 7. Comments on Issues Raised by Borrower/Implementing Agencies/Partners (a) Borrower/implementing agencies The MOH has commissioned its own external evaluation of the project achievements and impact, and this evaluation report is expected to be completed in the fall of In the meantime, the Government submitted its initial comments on the French version of the ICR, which are attached as Annex 7. While noting the importance of the ICR, the Government indicated that it would be premature to evaluate the outcomes of the project at this time, and emphasized the need to undertake further in-depth examination of the project by the different central and regional MOH departments. The Government therefore requested to postpone their submission of more comprehensive comments on the project achievements until the external evaluation is completed. (b) Cofinanciers N/A (c) Other partners and stakeholders The European Investment Bank is supporting the hospital reform program with a new project that is starting in 2007 and targeting 17 hospitals. The EIB indicated that all the three original components of the WB financed project (PFGSS) were highly relevant to the country and sector. Although Component I had the most direct bearing on the EIB's project, the other two components clearly had a wider beneficial effect, as well as providing important support to Component I. 19

23 Some of the key hospital management tools developed under the PFGSS included: (i) the Hospital Development Plan (PEH), (ii) the financial management accounting model, (iii) the costing and billing, (iv) the management and technical hospital reorganization, (v) the planning and management of human resources (GRH), (vi) the quality and clinical audit, and (vii) the routine maintenance programs. The EIB assessment is that the first five tools have been developed and implemented in one of the five project hospitals, some of them were implemented in more than one, and all five were implemented in Agadir. Moreover, the quality aspects were somewhat less developed. Finally, there will be a need for further work to integrate all these tools and scale them up to other hospitals. Given the availability of these tools, the EIB is planning to provide TA to support the scaling up of these seven tools in all or a subset of the 17 hospitals in the EIB project in parallel with the physical improvement. 20

24 Annex 1. Project Costs and Financing (a) Project Cost by Component (in USD Million equivalent) Components STRENGHTENING HOSPITAL MANAGEMENT AND IMPROVING QUALITY OF SERVICES Appraisal Estimate (USD millions) Actual/Latest Estimate (USD millions) Percentage of Appraisal IMPROVING HEALTH SECTOR FINANCING STRENGTHENING POLICY AND DECISION-MAKING CAPACITIES Physical Contingencies Total Baseline Cost Price Contingencies Total Project Costs Project Preparation Fund Front-end fee IBRD Total Financing Required (b) Financing Source of Funds Type of Cofinancing Appraisal Estimate (USD millions) Actual/Latest Estimate (USD millions) Borrower International Bank for Reconstruction and Development Percentage of Appraisal 21

25 Annex 2. Outputs by Component Component I: Hospital Reform Output type Management tools introduced in the project hospitals Introduction of maintenance plans in project hospitals Improvement of utilization rates of the project hospitals Physical rehabilitation and provision of equipment in project hospitals Output indicators Development and implementation of a management information system (SIGHO) [percentage implemented] Number of hospitals where a PEH has been setup and validated Number of hospitals with human resources management units Number of hospitals with an accounting and financial management system Percentage of hospital budgets allocated to maintenance Percentage increase in patients in the five project hospitals Values at end of Comments project 100% This percentage was reported by the MOH on the basis that the MIS was planned in only one hospital. The MIS was developed and implemented in the pole of excellence at Hospital Hassan II in Agadir. 14 The PEH was developed and actually implemented in the five project hospitals and developed for the remaining 9 hospitals. This was the basic management tool to be introduced in the target 14 hospitals. 5 The new organizational structure of the project hospitals included newly developed human resources units. The staffing and activities of these units varied across hospitals. 5 The new accounting and financial management system was introduced in the five project hospitals. However, the actual implementation and use varied across hospitals. 6.71% The ICR team found it difficult to comment on this indicator as there was neither a baseline nor a target value % Project hospitals were under construction and therefore services and levels of utilization were significantly reduced. Average occupancy rate 57.69% Baseline was 59% and the target value was 70%. The indicator showed no improvement as the project hospitals were under construction and therefore services and levels of utilization were significantly reduced. Percentage increase in number of imaging exams in the project hospitals Percentage increase in the number of lab tests in the project hospitals Safi (first phase): surgery rooms, central sterilization, kitchen and administration. Safi (second phase): radiology, intensive care, ER, external work Agadir (first phase): surgery rooms, central sterilization, ambulatory surgery clinic, radiology. Agadir (second phase): ER, intensive care, pediatric clinic Meknes (first phase): radiology, surgery, sterilization, intensive care % Project hospitals were under construction and therefore services and levels of utilization were significantly reduced % Project hospitals were under construction and therefore services and levels of utilization were significantly reduced. Completed 100%. Completed 100% Completed 100%. Completed 100% Completed 100%. The two phases were fully executed except for the biology and the intensive care units, which were not operational by project closing date. The incinerator was operational. The total cost of investments in Safi was about US$ 10.6 million. The impact of hospital improvements on service utilization or quality was not possible to assess. The two phases were fully executed by project closing date at a total cost of about US$ 11.5 million. Most services started to operate right before closing except for the operations/surgery rooms and the central sterilization unit, which were not operational. The incinerator was fully operational. Improved services started in late 2006, which did not permit an assessment of project impact on utilization and quality of services. The two phases were fully executed almost by project closing date at a total cost of about $13.1 million, however not all services and equipment were fully operational such as the intensive care unit and biology 22

26 Meknes (second phase): labs, ER, burnt unit, administrative unit, external work Beni Mellal (first phase): logistics unit, central pharmacy, hemodialysis, radiology. Beni Mellal (second phase): ambulatory medicine& surgery, intensive care, ER, maternity, medical archives, administrative unit. Settat (first phase): surgery, sterilization, and radiology. Settat (second phase): radiology, intensive care, ER, biology laboratories, external work Component II: Health Sector Financing Completed 100% Completed 100%. Completed 100% Completed 100%. Completed 100% laboratory. The impact on improved service utilization was not therefore possible to assess. The two phases were fully executed at a total cost of about $9.4 million, and almost all services started to become fully functional by project closing date. The impact on improved service utilization was not therefore possible to assess. The two phases were fully executed at a total cost of about $9.4 million and all units were operational but barely by project closing date. The impact on utilization was not therefore possible to assess. Output indicators were not monitored. However, the following outputs were noted by the ICR preparation team: A Framework Law on mandatory health insurance scheme (Assurance maladie obligatoire AMO) ratified in August 2002 (Loi-Cadre 65-00). Nine Government Decrees related to the establishment of the AMO were published in August These nine decrees covered a wide range of areas, including the reimbursement modalities and the medical control, contributions to the CNSS (Caisse nationale de sécurité sociale) and the CNOPS (Caisse nationale des organismes de prévoyance sociale), the medical coverage rates for health services under the CNSS and the CNOPS, eligibility criteria for the AMO, categories of affiliation daily workers covered under the AMO, the financial organization of the AMO, and the contributions to the CNSS for family coverage. The TA financed by the project contributed to a series of technical studies (7 in total), which benefited the ANAM. A number of studies were prepared for the RAMED, including an actuarial study that covered important elements concerning the definition of the eligible population and its size, the cost of coverage, and financing mechanisms. Component III: Health Sector Capacity Output indicators were not monitored. However, the following outputs were noted by the ICR preparation team: A study on the Organizational and Technical Audit of the MOH was completed in A study on a comprehensive Human Resources Strategy for the MOH was completed in A Ministerial Circular No. 3 was issued in August 2005, in order to create a new regional health structure in the pilot area of the Oriental. 23

27 Annex 3. Economic and Financial Analysis (including assumptions in the analysis) The project aimed at improving the health system efficiency by gradually increasing allocations to cost effective interventions, upgrading the human capital base and improving labor productivity as a result of raising the health status of the population through expanding health insurance coverage. It is worth noting that more than 90% of the project costs were to finance hospital investments, which were completed only by project closing date, and the full range of health services affected by the physical infrastructure improvement was not offered. It was not therefore practical to conduct an economic or financial analysis to assess whether the costs involved in achieving project objectives were reasonable in comparison with both the benefits and with recognized norms particularly in the absence of hospital utilization data. It is therefore recommended to conduct an economic and financial analyses in two years (as part of the post completion evaluation) when the full range of improved services would be provided and utilization data available. 24

28 Annex 4. Bank Lending and Implementation Support/Supervision Processes (a) Task Team members Names Title Unit Lending Responsibility/ Specialty Ferid Belhaj Manager MNCMA Team member Sherif Arif Regional Environmental and Safeguards Advisor MNACS Team member Rafika Chaouali Financial Mgt. Spec. OPCFM Team member Claudine Kader Senior Program Assistant MNSHD Team member Maryse Pierre-Louis Health Lead Specialist AFTHD Task Manager Daniel Kress Health Economist MNSHD Task Manager Christian Rey Adviser, Quality and cofinance EACIF Team member Supervision/ICR Meryem Benchemsi Consultant MNCMA Team member Mbaye Mbengue Faye Consultant AFTU2 Team member Jean-Jacques Frère Task Manager MNSHD Project Leader Claudine Kader Senior Program Assistant MNSHD Team member Monique Kamphuis Consultant MNSHD Team member Daniel Mercier Consultant MNSHD Team member Axel Rahola Economist (Health) HDNHE Team member Eileen Brainne Sullivan Operations Analyst MNSHD Team member Eric Andre Tkint de Roodenbeke Sr. Health Specialist. AFTH2 Team member (b) Staff Time and Cost Staff Time and Cost (Bank Budget Only) Stage of Project Cycle USD Thousands (including No. of staff weeks travel and consultant costs) Lending FY FY FY FY FY FY FY FY FY FY

29 FY FY FY FY FY Total: Supervision/ICR FY FY FY FY FY FY FY FY FY FY FY FY FY FY FY Total:

30 Annex 5. Beneficiary Survey Results There was a beneficiary/client satisfaction survey planned but it was not conducted. However, a survey on personnel satisfaction was conducted towards the end of the project (October 2006). A summary of the key findings is presented below. Even though the selected survey themes were relevant, the survey structure and methodology were not robust enough to support the survey findings. For example, some of the questions, such as the staff perception of the quality of services, were irrelevant since most of the upgraded services were not operational as the civil works and the full installation of the new medical equipment were not completed in the project hospitals in October Nevertheless, the most significant results of the survey were the high satisfaction among all categories of hospital professionals with the acquisition of new equipment and material as well as improved working conditions (67.3% satisfied or highly satisfied). Also, the new work dynamics (participative approach) induced by the project were well perceived (56% satisfied or highly satisfied). Moreover, all categories of personnel, except for the physicians, were aware of the project s objectives and activities. Forty percent of the physicians reported that they were not well informed about the project s objectives and activities in their hospitals. On the other hand, the majority (56%) of the personnel were not satisfied with the transfer of skills and competencies in management and planning as well as the new hospital organigram and created committees. Physicians were the least satisfied with the project interventions (except for the acquisition of new equipment). 27

31 Annex 6. Stakeholder Workshop Report and Results (if any) 28

32 Annex 7. Summary of Borrower's ICR and/or Comments on Draft ICR 29

33 30

34 31

35 32

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39 36