Updated Project Information Document (PID) Report No: AB102. UZBEKISTAN - Health II Project Region. Project Name

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1 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Updated Project Information Document () Report No: AB102 Project Name UZBEKISTAN - Health II Project Region Europe and Central Asia Region Sector Health (100%) Theme Health system performance (P); Child health (P); Other communicable diseases (P); Population and reproductive health (P); Injuries and non-communicable diseases (P) Project P Borrower(s) Implementing Agency(ies) Ministry of Finance Address: Mustallik Square 6, Tashkent, Uzbekistan Contact Person: Mr. M. Normuradov, Minister of Finance Tel: Fax: Environment Category C (Not Required) Date Prepared August 18, 2004 Auth Appr/Negs Date January 28, 2004 Bank Approval Date September 9, Country and Sector Background Country Background Ministry of Health Address: Navoi Street 12, Tashkent, , Uzbekistan Contact Person: Dr. Abdukhakim Muminovich Khadjibaev, Ist Deputy Minister Tel: Fax: The work of the most recent CAS indicates that Uzbekistan s transition experience is somewhat unique among former Soviet countries in that it experienced a milder and less protracted recession relative to many of its neighbors. Output declined in the early 1990s, but was still 81 percent of its 1991 level by 1995, relative to 32 percent in Kazakhstan. Since 1995, the economy has been growing at about 4 percent annually, according to official statistics. Yet, living standards appear to have stagnated. In 2001, Uzbekistan s GDP per capita at the official exchange rate was $552, the fourth lowest in the CIS. In real terms, per capita GDP in US dollars was 84 percent of per capita GDP in Most of the population (63 percent) live in rural areas, and most of the poor are found in rural regions. Approximately 28 percent of the population lives below the poverty line, and a third of them could be considered extremely poor. Some regions are particularly worse off. Access to basic public services and utilities, such as water and sewerage, remains low, particularly in the rural areas and for the poorer strata of the population. Despite a historical legacy of relatively favorable human capital outcomes, these non-income dimensions of poverty are under stress and there is evidence of serious disparities between regions, and income groups. Large segments of the population remain vulnerable to risks from loss of income, natural disasters, and ill health and employ counterproductive coping strategies. Many, but especially the poor, are negatively affected by corruption and informal payments, including payments for social services.

2 2 The Government of Uzbekistan (GoU) has pursued a gradual and managed approach to reform, retaining control over the production and sale of strategic crops such as cotton and wheat crucial to revenues and program of import substitution. With regard to the labor market, Uzbekistan faces challenges in utilizing its abundant labor resources to full potential. Labor force participation rates are low, particularly for women. Less than a third of the working age female population participates in the labor market. There have been reversals in education investments at all levels of the system during transition. Absolute enrollments in preschool and higher education have fallen, while coverage rates have fallen at basic and secondary education levels. Health Sector Health Status. Uzbekistan suffers from a double burden of disease, with both communicable diseases re-emerging, particularly with the post-soviet transition, and non-communicable diseases typical of developed countries. Overall, premature adult mortality is not high in Uzbekistan; however, Millennium Development Goals (MDGs) indicators such as infant mortality, under 5 years mortality, and maternal mortality continue to be a concern (see table below). Infant mortality is among the highest of the former Soviet republics. Although below the Central Asia Republic (CAR) average, the country had 22 infant deaths per 1,000 live births in 1998 and 19 in 2000 according to official data. However, the Demographic and Health Survey placed infant mortality much higher -- at 44 infant deaths per 1,000 live births in The under 5 mortality was 55 per 1,000 live births in 1996 (the 2002 DHS is still embargoed as of this writing.) The overall trends for maternal mortality rate are similar. In 1991, there were 33 deaths recorded per 100,000 live births a level nearly six times higher than western European countries, and twice that in Central and Eastern Europe. During the post-independence period the rate had decreased to 19 per 100,000 live births in 1995, but has increased again in recent years. Maternal mortality rates differ widely between different geographical regions and between rural and urban areas, and a rate of over 90 was reported for Navoiy in Excessive rates of maternal mortality are generally associated with lower income areas of the country; in Karakalpakstan and Khorezm, for example. In 1999, the maternal mortality rate in Karakalpakstan was 48 per 100,000 live births. Communicable diseases remain a major problem in Uzbekistan, despite improving vaccination coverage against tuberculosis, pertussis, measles, diphtheria, tetanus and poliomyelitis. Acute respiratory infections among children remain the primary cause of death and morbidity. Over the last few years Uzbekistan has experienced several outbreaks of infectious diseases, including tuberculosis, diphtheria, viral hepatitis, and recently typhoid. There is much variation by region. Incidence of hepatitis A and acute intestinal infections each vary by three fold across regions; hepatitis B by fourfold; and parasitic diseases by eightfold. The tuberculosis incidence rate increased by over 40 percent from 1993 to 1998, reaching 58 per 100,000 population. The situation is particularly serious in Karakalpakstan; tuberculosis rates were over 109 per 100,000 population in 1998, and multi-resistance tuberculosis is increasingly a challenge. The HIV/AIDS epidemic is still in the early stages in Uzbekistan, but there are signs that the infection is spreading quickly among young people. While only 51 cases had been identified in the first ten years of the epidemic ( ), almost 3,365 cases had been registered by October The number of cases has doubled in less than one year (more than 50 percent increase in 5 months). However, prevalence of HIV infection may be 5-10 times higher than registered. More than 85 percent of the cases are among men, and about 55 percent of cases of HIV/AIDS are reported among people under age 30 years.

3 3 Meeting MDGs Targets in Uzbekistan: Selected Health Status Indicators and Trends Uzbekistan Under 5 Mortality Rate (per 1,000 live births) TMD WHO DHS WB 2000 a Infant Mortality Rate (per 1,000 live births) TMD* EUPHIN WHO DHS WB 2000 a Maternal mortality (live births, adjusted) TMD EUPHIN (all causes /100,000 live bths) DHS Prevalence of HIV, female (age 15-24) ECEM AIDS (New diagnosed cases/yr) EUPHIN (incid of clin diagn'd /100,000) UNAIDS/WHO (All AIDS cases by year) GDF & WDI (Adult HIV-1 seroprevalence TMD* (newly registered cases of HIV) Incidence of TB (per 100,000 people) TMD EUPHIN Male Adult mortality rate (per 1,000 adults) TMD (per 100,000 rel popn) TMD (per 100,000 rel popn) Non-communicable diseases can be related to poor diet and behaviors such as smoking and excessive alcohol intake and sedentary lifestyles. While the EU death rate for ischemic heart disease has been declining, Uzbekistan s rate has increased by 33 percent since Similar trends are observed with related diseases of the digestive system and chronic liver disorders. The age-standardized death rate due to chronic liver disease and cirrhosis was 49 per 100,000 population in 1995, which exceeded the European Union rate (15 per 100,000), the NIS rate (31 per 100,000) and the CAR rate (40 per 100,000). The high prevalence of viral hepatitis infections might be a causal factor, though there has been a downward trend since Data on alcohol consumption is spotty, but it is likely to be a major risk factor. The number of cigarettes consumed in Uzbekistan per person per year had reached 864 in 1997, compared to 493 in 1992, and is likely associated with a substantial increase in ischemic heart disease. Health Reform and Government Strategy Efficiency and Restructuring. During the transition period the health care system in Uzbekistan has been moving from central planning and government finance to a mixed public and out-of-pocket payments

4 4 system. There is a growing public-private mix as well. The old Soviet system was characterized by too many facilities, too many staff, and an imbalance between hospital-based specialized care versus more cost-effective primary care. Following independence in 1991, the GoU experimented with some ad-hoc reforms, and introduced various measures targeted to improving different aspects of the health system. A 1996 Presidential decree on the improvement of rural infrastructure, aimed at the rural and poor populations, established the basis for a progression away from the central hospital-based system towards primary health care (PHC). The reforms aimed at reducing the several tiers of health facilities into a flatter two level structure. In 1998 the Government went beyond the rural health infrastructure and introduced new emergency hospitals to every region, and outlined a series of reforms related to public-private mix in secondary services. Overall, between 1990 and 2000, using MOH figures, some impressive gains were made, including a reduction in the number of hospital beds per 10,000 population from to 53.3; a decrease in inpatient admission per 100 population from 24.4 to 13.2, and the average length of stay for inpatient admissions fell from 14.8 to These efficiency gains are among the most significant in all CIS countries (European Observatory, 2001). However, there remain issues such as the maldistribution of physicians, with over an 8-fold difference between urban and rural areas. The move to privatization has been in part to relieve government budgetary burdens, to codify current out-of-pocket payments, and to encourage more revenues flowing into the health sector. It has mostly focused on secondary and tertiary care (hospital services). However, the process has been less than transparent, and often confusing to providers and consumers alike. Primary Care Services. Primary care services have been retained by the public sector and remain free of charge except for pharmaceuticals for the non-poor. The reforms called for new/rehabilitated primary care centers (SVPs, the Russian acronym), and rationalization of the older Soviet feldsher stations (FAPs), small rural ambulatories (SVAs) and small rural hospitals (SUBs). The reforms plan to ultimately condense this referral chain to 3 levels: rural medical centers (SVPs), central district hospitals and regional hospitals. Some feldsher-midwifery posts will remain in remote areas. Second, there is upgrading of the medical profession (in particular training of GPs and universal nurses) and equipping of facilities. There are also key management and financing reforms being piloted and now replicated, including legal independence, greater financial and organizational autonomy at all levels, incentive-based financing, and closure of redundant facilities. Efficiency Gains The set of reforms, supported by the first Health project, has encouraged efficiency as patients shift to lower cost services on an outpatient basis, as well as helped orient facilities towards local needs and improve accountability. In the pilots, relative funding for recurrent expenditures such as pharmaceuticals and supplies has increased, while referrals and staff inputs per capita have decreased by 5-15 percent depending upon the region. Hundreds of facilities were closed as well. Nevertheless, staffing is maldistributed, and budgetary inputs are still skewed in some regions towards hospital based and outpatient specialization. There remain major challenges due to limited medical skills and diagnostic back-up in the remaining nine regions, particularly in rural areas, shortages of drugs, and the need to more fully introduce evidence-based approaches to diagnosis and treatment. With the experience from the pilot areas, the Ministry of Health is committed to extending these reforms to the rest of the country, another nine oblasts. The MOH further

5 5 wants urban primary care models to be developed in the next step of reforms to ensure universal access to health care through the services of a general practitioner. Training of Doctors and Nurses. The concept of GPs is now becoming widely accepted; a 10-month retraining program for SVP doctors in pilot areas has been a widely acknowledged success and apparently upgraded skills have led to a reduced rate of referrals and better patient satisfaction. The training was financed through close collaboration between the Bank and the UK Department for International Development (DfID) grant funding for TA and training. National replication will require expanding the number of clinical training centers to meet the demand for practical training, as well as expanding the number of trained trainers, and supportive agreements between the training institutes and authorities. The pre-diploma training towards producing general practitioners has made significant progress through curriculum reform, pedagogical methodology improvements and encouraging more practical training. However, much of the training takes place in the 6th and 7th years and greater restructuring has to take place sooner in the system. A significant shift during the period of Health I has been the acceptance that there will be a general education throughout the pre-diploma training and only on completion of this training will specialization occur, including Family Medicine. Furthermore, the extension of general medical education to seven years is being re-visited but this would also require a revision of content and methods of training before this step is taken. The involvement of the Ministry of Higher Education as well as the Cabinet of Ministers in all significant changes in educational structure and content has to be recognized as an impediment to further reform, requiring education, patience and political influence. Primary health care services envisages a significant role for nurses but their quality is low. The Ministry of Health wants a competent professional workforce. These dual needs are incompatible, and no progress has been made in addressing the problem except for a proposal to extend the period of training from three years to four years. Currently, there are 54 medical schools and colleges teaching nurses who enter these facilities after nine years of basic education for three years training, much of which is consumed with continuation of basic education. The Government intends to increase the number of schools to 86 over the next ten years increasing the number of so-called nurses exponentially in face of the present surplus of inadequately trained nurses. In addition, there are recently established baccalaureate courses for specialized nurses at the medical institutes, but the numbers involved are very low. Quality of Care. Quality of care has been addressed through the continuous medical education (CME) program for doctors. To date, it has been donor driven and steps have to be taken to ensure that the programs become sustainable by becoming a responsibility of the Ministry of Health at Republican and oblast levels. Ensuring quality services is also linked to the licensing and accreditation process. While a licensing commission has been established between assistance from Health I and the UK DfID, unfortunately it was set up as an independent legal entity, which has significantly hampered its development. Major infectious diseases of childhood such as ARI and diarrhea are addressed through integrated management of childhood illness (IMCI), standard prevention and treatment protocol incorporated into GPs training and SVP in-service training. Efforts are also underway to strengthen the community component of IMCI, but still at an early stage. Reproductive and child health has been identified as a priority by several donors, including the Asian Development Bank (ADB). To more effectively reduce maternal mortality and early neonatal deaths, efforts are needed improve services not only at the SVP level but also at first referral level, with investments in essential emergency and neonatal services. It will be important in the second phase of the primary care reform efforts to include identification and referral of pregnant women and severely ill children at SVPs, and quality obstetric and neonatal care at secondary facilities, as well as

6 6 post-partum follow up. Equity. The Bank's Living Standard Assessment (LSA) found that new inequities have emerged, in part attributable to the drop in GDP since independence and the declining share of government-based health expenditure, falling from around 6 percent of GDP in the mid-1980s to 3 percent in As a result, out-of-pocket expenditures for health services and drugs have risen substantially, with the poor paying more as a percentage of income, and with a growing incidence of non-poor falling into poverty due to catastrophic or chronic illnesses. Equity also is an issue along geographic lines, with the LSA finding rather significant variations in expenditures per capita by region, up to 40 percent between highest and lowest. It shows a bias towards Tashkent city, Tashkent oblast, and richer regions such as Syr Darya and Ferghana. Poorer regions such as Khorezm, Kashkardarya, and Djizzak regions are either average or below average in per capita spending. These are exactly the regions with highest rates of morbidity and mortality as well. Namangan and Khorezm, for example, have the highest rates of morbidity overall, but receive only average allocations. The variations in expenditures probably reflect, in part, the continued use of Soviet-era input-based normatives that allocate on the basis of beds and staff rather than population or other demand/need measure. The proposed Health II project would focus on relatively poor regions. Public Health. The sanitary and epidemiological service system is organized vertically, with provision of services at the national, regional, and district level. There has been no cadre of public health specialists in the country until the recent introduction of a course at Tashkent Medical Institute #2 (TASH-MI II). The Institute of Health (IOH) was created in 2001, and is responsible for health promotion, but functionally appears to be little different from the old Centers of Health whose name has been retained at the local (rayon) level. A joint plan of action on health promotion was developed recently by the IOH and the Bank. Activities comprise development and dissemination of print materials and a health bulletin/newsletter in pilot oblast; multimedia campaigns, interpersonal communication training, KAP surveys and newsletter for SVP staff to disseminate information and reinforce learning. The plan also includes support to health in schools, and institutional development of the IOH. However, the joint plan of action faces major constraints. Little attention is currently given to broad-based and comprehensive nutrition programs although malnutrition is a significant contributor to poor health among both children and women. Anemia in women and children, and micronutrient deficiencies are among the priorities. Further work is needed to identify what can be done through the primary care services and what needs to be done or reinforced at community level to make a significant difference to the nutritional status, especially among the rural poor where the prevalence of stunting is the highest. Although a range of public health initiatives are underway, a coherent strategy and program needs to be developed to address priority public health issues on a national scale. HIV/AIDS and TB. The Government has recently approved the HIV/AIDS strategy that was prepared with assistance from UNAIDS, and may be awarded a $5 million grant by the Global Fund to Fight AIDS, TB and Malaria (GFATM) for the period The political leadership has demonstrated commitment to HIV/AIDS prevention, and the Uzbek Parliament passed a law in 2000 on the prevention of HIV/AIDS, which led to the opening of more than 200 HIV counseling units -- "Trust Points" -- throughout the country. This was the first initiative in Central Asia by national authorities for nation-wide implementation. However, allocation of funds for training of health workers and supplies required for the effective operation of the Trust Points is insufficient. Furthermore, public awareness campaigns have to be initiated to increase knowledge about the infection and HIV prevention among young people. With regard to tuberculosis, the Government is expanding the implementation of the DOTS strategy with laboratory,

7 7 drug donations and training programs supported from different sources, but additional funding is necessary. The proposed Health II project can play an important complementary role by extending the implementation of DOTS to two additional oblasts (Djizzak and Navoiy Oblasts), including the prison system, and promote the integration of DOTS at the primary care level, in the standard treatment practices of SVPs, as has started in the pilot regions under Health I. Support activities to reach vulnerable groups, such as prisoners, and HIV/AIDS patients with TB, will be necessary. Non-Communicable Diseases. Prevention of non-communicable diseases is spread among various parts of the health care system. The newly created Institute of Health is badly staffed, lacks technical means and budget, and its staff has limited basic training on health promotion methods. Presently, the Institute of Health is not able to act as a resource center, and initiator and coordinator of health promotion activities. A joint plan of action on health promotion was developed, but it faces major constraints. Further attention also needs to be given to broad-based and comprehensive nutrition programs as malnutrition is a significant contributor to poor health among both children and women. Pharmaceuticals. Pharmaceuticals represent a significant, and rising, portion of public and private health expenditures. Over the years, the government has embarked on several policy interventions aimed at improving the pharmaceutical sector. A comprehensive framework for coordinated development of the pharmaceutical sector has been adopted since Drug regulation mechanisms and an essential drugs list are in place. A national essential formulary with updated, objective drug information is available to all prescribers, and plans are underway to develop standard treatment guidelines. The Ministry of Health is exercising price regulation for 20 basic products, which applies to all pharmacies regardless of ownership. Pharmacies were among the first health sector institutions to be privatized. The state shareholder, Dori Darmon, though, continues to retain significant control. Payment of drugs is now well-established, although several studies suggest that the cost of the drugs may limit access to those who need them most. Hospitalized patients are supposed to get free treatment, but due to drug shortages, an increasing proportion of patients are asked to provide their own medicines and consumables. A substantial amount of drugs and supplies are still procured through Republican or Oblast funding or funded through humanitarian aid. The delivery systems of getting these commodities to the health facilities are managed sub-optimally starting from procurement to distribution. Quick efficiency gains, at least in the short-term, can be achieved if more attention were given to the logistics of delivering and managing commodities. However, for the longer term, additional strategies such as standardizing drugs and supplies, segmenting markets, increasing resources, and instituting drug price monitoring will also need to be considered in order to improve the availability of essential drugs and supplies at the SVP. Assessing Overall Performance. The monitoring and evaluation framework developed by the Ministry of Health and supported by the Health I project aims at providing timely supervision, to trace the project s implementation progress and evaluate its impact. The monitoring scheme includes indicators to monitor the utilization of resources allocated for project implementation, and to monitor project outputs (i.e., number of re/constructed SVPs, number of staff trained, etc.). Another set of indicators aims at evaluating the effectiveness and quality of the services. The monitoring scheme draws on available data generated by facilities through the routine reporting system. There is no specific policy and planning unit at the Ministry and there is a weak health information system with monitoring and evaluating sectoral performance not a systematic undertaking. Nevertheless, this is now changing as Health I draws to a close, with improved M&E as outlined in the box below, which will be useful for Health II design and implementation.

8 8 Moving from Project Outputs to Project Outcomes Although the analysis of Health I that has been done of the data ( ) indicate that overall project specific objectives are met, the available data do not provide information about the actual quality of the services, the performance of the providers or whether the populations served by the SVPs are satisfied with the services, can afford them and find them easily accessible. Recently, a health facility survey and a linked household survey were initiated. Results will provide detailed information about both providers and households in the three pilot regions under Health I loan project, and compare results with control regions not part of the first loan project. 2. Objectives The project development objective is to improve the quality and overall cost-effectiveness of health care services in Uzbekistan. This will be achieved through (a) completion of the primary care program in 8 regions (Samarkand, Sukhandarya, Namangan, Andijon, Djizzak, Ferghana, Navoiy, Syr Darya), and other regions as agreed, and institutionalization of general practitioners nationally; (b) extending financing and management reforms related to efficiency and effectiveness of service delivery; (c) improving public health services, including surveillance, training in public health and control of communicable disease; and (d) building capacity in the Ministry of Health to better monitor and evaluate the reforms, and better manage the restructuring process. The proposed Health II project follows and builds upon Health I. The current Health I Project supports the restructuring of primary care and outpatient services in rural areas. The Government, for its part, has begun building new primary care centers, and rehabilitating some selected facilities already in operation. The Bank support has provided funding for: (i) equipment, supplies, and small amounts of emergency pharmaceuticals; (ii) development of a new cadre of medical personnel through short-term training programs for general practitioners and universal nurses, and longer-run by redefining medical education curricula; and (iii) management and financing reforms that promote decentralization, incentive-based payment systems, and management innovations. The reforms have been enacted mainly in three pilot oblasts, Ferghana, Navoiy and Syr Darya. In addition, elements of the program have been initiated elsewhere, most recently in Khorezm and the semi-autonomous region of Karakalpakstan. This first health operation in Uzbekistan commenced in 1998, and will end 31 December The proposed Health II Project will scale up Health I, with a limited number of important extensions and refinements. Five new regions will have primary care facilities equipped. The rural primary care models of Health I will be extended to new urban area pilots. New GP training centers will allow full national replication of GP training. A greater emphasis will be placed on access to pharmaceuticals, continuous medical education and quality improvement. The financing and management pilots will be replicated nationally. Some extensions such as physician bonus schemes will be developed to address the maldistribution issues. New provider payment pilots for hospital services will be initiated. A new rationalization strategy will focus on consolidation of hospital services and facilities.

9 9 The legal agreement is flexible, and allows for extending the program to more than 8 regions as funds become available through government funding, donor support, or re-allocation from savings. A new component, Improving Public Health Services, will contribute to the control of emergent communicable diseases and the long-standing issue of non-communicable diseases, and will improve public health services, including surveillance and health promotion.

10 10 3. Rationale for Bank's Involvement Bank involvement in the health sector over the last decade has helped to carry out comprehensive health sector reforms in Uzbekistan. A continuous policy dialogue has helped the government to embrace market-oriented reforms and further develop conceptual frameworks to support infrastructure development, training and conceptualization of the new health system. It has also helped to direct the broad policy agenda in the health sector away from input-oriented infrastructure and hardware towards investment in human capital and systems design. Involvement of the Bank has leveraged interest and support from other donors, and created multi-party support for the health reforms. The UK DfID and USAID-funded programs have been closely tailored to align with Health I activities, and, indeed, each donor has been highly successful in providing high-quality technical assistance and training which has contributed to policy development and reform in the health sector. This will largely continue under Health II. With Health II, foremost of partners in this cooperation will be the Asian Development Bank, which will work with the Government and the Bank on scaling up and completing primary care reforms and then extending the new model to the Central Rayon Hospital level. Continued Bank presence in the country -- especially in the context of the limited Bank portfolio and the relatively closed economy -- may also influence general policy, and contribute to accelerating the shift towards a market-oriented economy. 4. Description Component 1. Primary Health Care Development The project would extend further support for development of Primary Health Care (PHC) services. In concert with the Asian Development Bank, all SVPs in the Government s program not covered to date, as well as some remaining SVPs not covered under Health I, would be supplied with a package of equipment. More remote SVPs would be supplied with telecommunication equipment and transport to improve patient services, referrals, and overall management of these facilities. Primary health care models will be replicated to urban areas, through pilots. The project will equip ten pilot sites at urban polyclinics in selected cities and, at least at one location (Gulistan city), an open enrollment campaign will be undertaken. The project would scale up training programs initiated under Health I to provide staff for the PHC facilities who are trained in the new concept of family medicine. The previously adopted strategy of retraining existing doctors and training General Practitioners at an undergraduate level will be intensified. This will entail doubling the number of trainers undergoing courses at the Tashkent Institute of Advanced Medical Education (T-IAME) and opening three more Clinical Training Centers (CTCs) for re-training of SVP and polyclinic staff. The undergraduate curriculum for GP training will be modified to ensure that clinically competent GPs emerge at graduation from the medical institutes. In addition, a revised training program for laboratory technicians will be established, using T-IAME to train oblast level trainers, who in turn will training technicians at the SVP level. A series of related activities would provide a broader framework to ensure the sustainability of the overall reform of making PHC the cornerstone of service delivery. The work of the licensing center, initiated under Health I, will continue. Linked to this work, a Continuous Medical Education (CME) center will be

11 11 established and supported to enable the GPs to sustain skills and be exposed to advances in knowledge. A Center for Evidence-Based Medicine (EBM) will be established at T-IAME to improve the quality of services provided through the PHC network of facilities. Building on the initial work conducted under Health I, a more comprehensive study of health manpower will be undertaken to assist the re-structuring of the medical workforce in keeping with the Government s reform of the system for health service delivery. Component 2. Financing and Management Reforms The project would support broad activities to continue to improve the health care financing and management system, to improve efficiency in the delivery of services and to help increase sustainability of primary health care reforms. Activities to improve the health care financing and management system would comprise the scaling up of financing and management pilots initiated under the first Health project, and extending and geographically expanding the rural PHC financing model of the first project nation-wide following some adaptations. This would include the pooling of funds at the oblast level, and extension of pilots for development and implementation of financial reform models and the capitated payment system for the urban PHC facilities, as well as extending new payment systems for the secondary (hospitals) health facilities. A physician bonus system will be developed for addressing the maldistribution problem of physicians in rural areas, especially very remote areas, based on PER analysis. Furthermore, the management information system (MIS) developed under the first health project would be replicated, and MIS capacity will be developed in the central rayon hospitals. To support the development of an integrated health care system, restructuring and rationalization of secondary level health care services and referral facilities will be necessary. Health management capacity building and the development of a comprehensive health financing and management strategy will be supported. Building on the PER findings, national financial planning and management capacities would be increased through the development of National Health Accounts, improvements in the allocation formulas across regions and the establishment of comprehensive health management training at the undergraduate and postgraduate levels. The financing of this component would be shared with the Asian Development Bank; each Bank would finance regions consistent with the split under component 1. The Bank will take the lead on management capacity building; the ADB will take the lead on national level MIS and financing studies and technical assistance. Component 3. Improving Public Health Services This component aims at contributing to the control of communicable and non-communicable diseases, and to improve public health services, including surveillance and health promotion. The component would support three main areas: capacity building, through development of a national public health strategy, development of a School of Public Health, scaling-up health promotion and health education programs under Health I, and local community-driven and nutrition programs; upgrading and strengthening of essential public health infrastructure and manpower; and, contributing to scaling-up activities to prevent HIV/AIDS and STIs, and control TB. The Bank would fund the majority of activities in coordination with other donors. Capacity building in Public Health would support various capacity building initiatives that have been under preparation. The Government has been taking initial steps to fully develop a School of Public Health in

12 12 Tashkent. Such a school would provide training in epidemiology, and public health functions such as surveillance, health policy, and health promotion. The school would also provide training in health management. The school would integrate the training in public health that has been carried out separately by the Tashkent Medical Institutes I and II, and the Institute of Postgraduate Medical Training; and it would be supported by the Institute of Health. The Institute of Health, which is responsible for health promotion, would benefit from building capacity that would enable it to adequately carry out its functions; and from being moved to more appropriate location and facilities. Under the project, the Institute of Health would be supported to develop health promotion policy; carry out advocacy and education activities through the mass media; and supervise health promotion activities at the regional and local level, including nutrition (provision of micronutrients) and community development activities. Support would be provided to modernize surveillance of communicable diseases in Uzbekistan, to develop a specific program for upgrading the Sanitary Epidemiological Services, including public health laboratories, and would start implementation of this program. The program would be developed in cooperation with the US Centers for Disease Control (CDC). There would be an integrated electronic database for surveillance of communicable diseases, training of laboratory staff (doctors and laboratory assistants) in modern methods of surveillance of communicable diseases, and refurbishment of selected laboratories throughout the country. CDC has started providing technical and financial assistance to upgrading the surveillance system and public health labs. The project would complement those efforts in close cooperation with CDC. The component would contribute to the implementation of the recently approved HIV/AIDS Strategy and of the TB National Program that aims at extending the DOTS approach throughout the country. The subcomponent would provide support for TB and HIV/AIDS activities up to an estimated amount of US$2.5 million, of which part would be grant funding for AIDS. The preparation and implementation of this subcomponent would be closely coordinated with the activities to be carried out under GFATM grant of $5 million for AIDS; KfW activities to control TB, and USAID/CDC activities to control HIV/AIDS and TB. Specifically, the subcomponent would finance the following: (i) policy development on HIV/AIDS and TB, including integration of HIV/AIDS strategy into national policy for development; anti-discrimination legislation; decriminalization of drug use, CSW and homosexuality; policy on use of ARVs; policy on treatment of LWHA and TB; etc; (ii) further development of sentinel surveillance of HIV/AIDS in cooperation with SES and CDC, including upgrading HIV/AIDS labs; (iii) further development of Trust Points and support to NGOs working on HIV/AIDS control; (iv) extension of DOTS under the project to two additional regions (Djizzak and Navoiy Oblasts), including the prison system; and (v) a revised TB grant proposal to submit to the Global Fund to Fight AIDS, TB and Malaria, to allow for scaling-up of DOTS throughout the country, including the prison system. Component 4. Project Management, Monitoring and Evaluation The project will be implemented through the Ministry of Health, its Central Project Implementation Bureau (CPIB) and Oblast Project Implementation Bureaus (PIBs). This would be a model utilized in Health I. The CPIB was established under the Health I Project, and will continue to be the management agency of the Ministry of Health for implementation of Health II. Operation of existing Oblast Project Implementation Bureaus in the Health I pilot oblasts will continue, and additional Oblast PIBs will be established in each of the new project oblasts.

13 13 It is planned that the CPIB also acts as the implementing agency for the ADB Women and Child Health program, to ensure efficient implementation of the joint program activities of the World Bank and ADB, and to maximize economies of scale and scope. The component would finance CPIB staff salaries, technical assistance, travel costs, annual project audits and limited upgrade of office equipment for the CPIB and office equipment and vehicles for the oblast PIBs out of the credit. It is expected that the borrower would fund all office running costs and staff salaries in the oblast PIBs. Under the PHRD grant, a strategic Monitoring & Evaluation plan including baseline indicators has been developed, which will be implemented in the Health II project, and linked to the PRSP process and longer-term focus of attainment of the MDGs. The objectives of the monitoring and evaluation system will be to support decision makers in the assessment of the project s impact. Regular facility surveys will be conducted as a core part of the data collection process during the implementation of Health II.

14 14 5. Financing Source (Total ( US$m)) BORROWER/RECIPIENT ($78.09) IDA ($39.48) IDA GRANT FOR HIV/AIDS ($0.52) Total Project Cost: $ Implementation National level: Overall co-ordination and management of project implementation would be the responsibility of the Central Project Implementation Bureau (CPIB), which reports to the Ministry of Health. The CPIB is already operational and co-ordinates implementation of the currently ongoing Health I project, and would continue its work under the planned second project in co-operation with the involved national and regional agencies. The CPIB would, however, require strengthening of in-house capacity to cope with the geographical and technical extension planned under Health II. It would need to expand its technical staff for the Public Health component. The project would use the current Health I project to begin long-term training of procurement staff to better address difficulties in procurement lags under the first health project. There would also be a streamlining of registration and certification of drugs/medical instruments/equipment. The Main Department for Quality Control of Drugs and Medical Equipment (Main Department) of MOH is the key agency involved in such registration and certification. Under Health II, the Main Department assume the responsibility for undertaking the processing of all applications for registration as well as for certification. The necessary coordination between various Government agencies involved would also be the responsibility of the Main Department. For these services, the Main Department would charge a reasonable fee. Applications would be prepared on the basis of known requirements to present necessary supporting documentation and samples as needed. The fee structure of the Main Department would be presented in the bidding documents and a supplier, having been awarded a contract including items which require registration and certification, would apply to the Main Department for registration and certification. Having submitted a complete and correct application and paid the application fee, the supplier would then receive within the stipulated period of time either (i) a certificate confirming registration or certification or (ii) the reasons why approval of the application could not be granted. It is envisaged to have a consolidated project implementation bureau for both financing projects. That is, the CPIB also would act as the implementing agency for the ADB Women and Child Health project, to ensure efficient implementation of the joint program activities of the World Bank and ADB, and to maximize economies of scale and scope. The proposed organizational set-up of the joint CPIB would provide independence for technical work, with a joint functioning administrative services unit. An additional project co-ordinator will be recruited to the staff of the CPIB to manage and supervise the new Public Health Component. Otherwise, present staffing is sufficient in all main functions to carry out implementation and supervision of the Health II Project. The CPIB staff capacities will be supplemented by consultants for procurement and Monitoring & Evaluation as needed for critical tasks. Oblast level: In each project oblast, a Project Implementation Bureau would be set up, or if already existing, continue its operation. The local PIBs are attached to the health department in the local Khokimyats, and assist the CPIB in implementing the project in the oblasts. HIV/AIDS: The HIV/AIDS sub-component would be implemented under the leadership of the

15 15 InterMinisterial Coordination Committee for HIV/AIDS and STIs. Uzbekistan HIV/AIDS Coordination Mechanism Steering Committee National Interministerial Council on HIV/AIDS, STIs UN-TG on AIDS NGO Representatives Coordination level AIDS Center, Dermato-Venerealogical Center UN-TG on AIDS Project Management Implementation level Partnerships Prisons and and NGOs Implementation level Partnerships Public AIDS & STIs services and NGOs Community Development Grants: Funds for small grants will be financed from other than Bank sources in amount USD 100,000 and will complement the community involvement activities. The CPIB will manage, and monitor annually, the small grants program under the Public Health component. The small grants program will be assessed and adjusted as needed after two years of project implementation. Following needs assessments, action plans and the development of proposals, local community social organizations ("Mahallas") will submit proposals to Central Project Implementation Bureau. If a proposal is judged successful, the Mahalla will sign a contract with the CPIB for the use of funds which will then be transferred to a created account of the Mahalla in a commercial bank. The funds will be given in two tranches of 60 percent and 40 percent. The Mahallas would be required to undertake procurement using Bank procedures. If there is a noted improvement in health indicators in the mahallas receiving grants, they will be eligible for a second grant of up to USD 3,000. Mahallas will be expected to contribute 15 percent of the cost of the activity through local budgets or fund raising. 7. Sustainability The proposed project will increase recurrent costs for primary health care services. Sustainability will be achieved through cost savings related to: Rationalization, particularly at the secondary services level. Streamlining the public sector service network and institutions would help to reduce infrastructure maintenance and operations costs to more sustainable levels. This is consistent with the Government's efforts to privatize many secondary level services. Health I used rationalization of outpatient facilities and initiated rationalization at the hospital level. Health II will need to sustain this process and accelerate it through new "provider participation plans" and new hospital payment incentives; Increased efficiencies through lowered admissions and lowered referrals to outpatient specialists; Re-allocation of funding to outpatient and primary care relative to inpatient care. Health I included a conditionality of moving to a 55:45 inpatient/outpatient allocation split for the 3 pilot regions. This was achieved in the first 3 years for the project. A similar approach will be utilized in Health II. Improvements in the quality of service provision and equipment of facilities could support efforts to mobilize additional resources e.g., from formal co-payments, though the project design does not envisage this.

16 16 8. Lessons learned from past operations in the country/sector The latest CAS points out a number of general lessons that guide the selection of forthcoming projects in Uzbekistan. A crucial success factor for future operations is genuine, broad based support, and the political will and ownership to implement the proposed reforms. Secondly, it is acknowledged that the scope of achievable policy reform for individual projects may be limited, and that it may take a relatively longer time frame to build a common understanding of the reform agenda and decision making processes for the implementation of reform. A number of issues have been identified from Health I, and are reflected in the proposed project design. In Health I, much of the effort was placed in the procurement of medical equipment, supplies and pharmaceuticals. However, these supplies are replenishable items and logistics systems need to be developed to ensure uninterrupted distribution. The first health project found that equipment when combined with training programs can improve quality of services and can generate increased utilization of needed care. Improved use of resource allocation methods has resulted in improved mix of services provided, improved access to needed supplies and pharmaceuticals and an improved labor input mix. Primary Care and SVPs. Conditions at the SVPs were sometimes sub-optimal regarding provision of water, electricity and waste water disposal. New equipment will be based on meeting basic standards in regard to the foregoing conditions at SVPs. Telephone communications are present in many, but in more remote places the ability to communicate was hampered by their absence While this was overcome under Health I by establishing radio communications, the rapid advances in wireless technology may result in less costly solutions to this issue in the future. Early delays in equipment delivery meant that many of the re-trained SVP doctors went back to their work places without the benefit of the equipment that was meant to be in place. For Health II, the lesson is to commence procurement of SVP equipment as soon as possible. It is better to re-equip the SVPs before the SVP doctors go for training, than have them wait sometimes for years until it arrives. While the SVP equipment list was generally satisfactory, there were some items such as furniture which were over specified. The equipment list has been reviewed; the number and costs of items will be reduced, although some costs will have risen in the meantime. Overall it is expected that the costs per SVP will be significantly lower under Health II. Drugs and Supplies. Under Health I, a program of supplying emergency drugs to SVPs was initiated. Later a supply of drugs was provided for the two drought areas. Difficulties over procurement and distribution of emergency drugs became a major difficulty in Health I. Both the Government agreed that no drugs would be procured using credit proceeds in Health II. But this doesn t lessen the problem since the utilization and effectiveness of the PHC services depends, in part, on a supply of pharmaceuticals. Recent visits to SVPs reveal a barren landscape in the matter of drug availability. Training SVPs. The success of this program which designated certain SVPs as "training facilities" was modest; the concept needs to be modified. In two of three oblasts, the site-ing of these facilities proved to be inappropriate and were subsequently relocated along with the equipment. Generally the facilities were underutilized but this was mainly due to the failure to establish a systematic program of continuous medical education (CME), an initial intention of the project.