World Bank Document€¦ · B.1 No withdrawal shall be made: (a) for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed twelve

Document of

The World Bank

FOR OFFICIAL USE ONLY

Report No: PAD2518

INTERNATIONAL DEVELOPMENT ASSOCIATION

PROJECT APPRAISAL DOCUMENT

ON A

PROPOSED CREDIT

IN THE AMOUNT OF US$60 MILLION

TO THE

REPUBLIC OF NICARAGUA

FOR A

INTEGRATED PUBLIC PROVISION OF HEALTH CARE SERVICES PROJECT

February 22, 2018

Health, Nutrition, and Population Global Practice

Latin America and the Caribbean Region

This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

Pub

lic D

iscl

osur

e A

utho

rized

CURRENCY EQUIVALENTS

Exchange Rate Effective February 8, 2018

Currency Unit = Nicaraguan Córdobas Oro

US$1 = NIO 31.10

FISCAL YEAR

January 1 - December 31

Regional Vice President: Jorge Familiar

Country Director: Y. Seynabou Sakho

Senior Global Practice Director: Timothy Grant Evans

Practice Manager: Daniel Dulitzky

Task Team Leader(s): Amparo Elena Gordillo-Tobar

ABBREVIATIONS AND ACRONYMS

CEMED Medical Equipment Maintenance Center (Centro de Mantenimiento de Equipos

Médicos) CNDR Center for Diagnosis and Reference (Centro Nacional de Diagnóstico y Referencia) CPF Country Partnership Framework DAs Designated Accounts

DFIL Disbursement and Financial Information Letter

DGAF General Financial and Administrative Division (Dirección General Administrativa y Financiera)

DGPD General Division of Planning and Development (Division General de Planificación y Desarrollo)

DGSS General Directorate of Health Services (Dirección General de Servicios de Salud) DGVSP General Directorate of Epidemiological Surveillance (Dirección General de Vigilancia

de la Salud Pública) ENSDIA Adolescent Sexual and Reproductive Health Strategy (Estrategia Nacional de Salud y

Desarrollo Integral para Adolescentes) ESMF Environmental and Social Management Framework GBV Gender-based Violence GDP Gross Domestic Product GHG Green House Gas HWM Hospital Waste Management IDA International Development Association IFRs Interim Financial Reports IPP Indigenous Peoples Plan IPPF Indigenous Peoples Planning Framework IRR Internal Rate of Return LAC Latin American and the Caribbean MDGs Millennium Development Goals MIFAN Ministry of Family (Ministerio de la Familia) MINJUVE Ministry of Youth (Ministerio de la Juventud) MINED Ministry of Education (Ministerio de Educación) MOH Ministry of Health (Ministerio de Salud) MOSAFC Family and Community Health Model (Modelo de Salud Familiar y Comunitario) M&E Monitoring and evaluation NCDs Non-Communicable Diseases NPV Net Present Value OOPS Out-of-pocket Spending PAHO Pan-American Health Organization PDO Project Development Objective PIU Project Implementation Unit

PPSD Project Procurement Strategy for Development PTC Project Technical Committee PVC Project Verification Commission SCD Systematic Country Diagnostic SDGs Sustainable Development Goals SIGAF Integrated Financial Management System (Sistema Integrado de Manejo Financiero) SILAIS Local Systems of Integral Health Care (Sistema Local de Atención Integral de Salud) SOE Statement of Expenditure SORT Systematic Operations Risk Tool WHO World Health Organization

The World Bank NI - Integrated Public Provision of Health Care Services (P164452)

Page 1 of 66

BASIC INFORMATION

Is this a regionally tagged project? Country(ies) Financing Instrument

No Investment Project Financing

[ ] Situations of Urgent Need of Assistance or Capacity Constraints

[ ] Financial Intermediaries

[ ] Series of Projects

OPS_BASICINFO_TABLE_3 Approval Date Closing Date Environmental Assessment Category

15-Mar-2018 30-Aug-2023 B - Partial Assessment

Bank/IFC Collaboration

No

Proposed Development Objective(s) The objective of the Project is to extend the coverage and improve the quality of care for the most prevalent health conditions with an emphasis on vulnerable groups.

Components

Component Name Cost (US$, millions)

Results based financing for quality improvement in prevention and provision of health care services to the poorest 66 municipalities

14.00

Support to the implementation of National Health Strategies for the provision of quality health services under the MOSAFC

44.50

Provision of contingency financing in the case of a Public Health Alert, or a Public Health Emergency

0.00

Project management 1.50

Organizations

Borrower :

Republic of Nicaragua


Page 2 of 66

Implementing Agency : Ministry of Health - Nicaragua

PROJECT FINANCING DATA (US$, Millions)

FIN_TABLE_DATA

[ ] Counterpart Funding

[ ] IBRD [ ✔ ] IDA Credit

[ ] IDA Grant

[ ] Trust Funds

[ ] Parallel Financing

FIN_COST_OLD

Total Project Cost: Total Financing: Financing Gap:

60.00 60.00 0.00

Of Which Bank Financing (IBRD/IDA):

60.00

Financing (in US$, millions)

FIN_SUMM_OLD

Financing Source Amount

IDA-61990 60.00

Total 60.00

Expected Disbursements (in US$, millions)

Fiscal Year 2018 2019 2020 2021 2022 2023 2024

Annual 0.55 4.46 7.35 13.21 15.53 15.79 3.10

Cumulative 0.55 5.01 12.36 25.57 41.10 56.90 60.00

INSTITUTIONAL DATA

Practice Area (Lead)

Health, Nutrition & Population


Page 3 of 66

Contributing Practice Areas

Gender

Climate Change and Disaster Screening

This operation has been screened for short and long-term climate change and disaster risks

Gender Tag Does the project plan to undertake any of the following? a. Analysis to identify Project-relevant gaps between males and females, especially in light of country gaps identified through SCD and CPF Yes b. Specific action(s) to address the gender gaps identified in (a) and/or to improve women or men's empowerment Yes c. Include Indicators in results framework to monitor outcomes from actions identified in (b) Yes

SYSTEMATIC OPERATIONS RISK-RATING TOOL (SORT)

Risk Category Rating

1. Political and Governance Moderate

2. Macroeconomic Moderate

3. Sector Strategies and Policies Low

4. Technical Design of Project or Program Low

5. Institutional Capacity for Implementation and Sustainability Low

6. Fiduciary Moderate

7. Environment and Social Moderate

8. Stakeholders Moderate

9. Other

10. Overall Moderate


Page 4 of 66

COMPLIANCE

Policy

Does the project depart from the CPF in content or in other significant respects?

[ ] Yes [✔] No

Does the project require any waivers of Bank policies?

[ ] Yes [✔] No

Safeguard Policies Triggered by the Project Yes No

Environmental Assessment OP/BP 4.01 ✔

Natural Habitats OP/BP 4.04 ✔

Forests OP/BP 4.36 ✔

Pest Management OP 4.09 ✔

Physical Cultural Resources OP/BP 4.11 ✔

Indigenous Peoples OP/BP 4.10 ✔

Involuntary Resettlement OP/BP 4.12 ✔

Safety of Dams OP/BP 4.37 ✔

Projects on International Waterways OP/BP 7.50 ✔

Projects in Disputed Areas OP/BP 7.60 ✔

Legal Covenants

Sections and Description Schedule 2. Section I. Implementation Arrangements A. Institutional Arrangements

3. By no later than six (6) months after the Effective Date, the Recipient shall amend the PAHO MoU, and

thereafter carry out Part 2(b)(ii) of the Project in accordance with the PAHO MoU.

Sections and Description Schedule 2. Section I. Implementation Arrangements A. Institutional Arrangements

4. By no later than six (6) months after the Effective Date, the Recipient shall, through MOH appoint, and

thereafter maintain, throughout Project implementation, a Project Verification Commission, with composition,

qualifications, experience, and terms of reference satisfactory to the Association, for purposes of the verification

and third-party, independent certification of the activities being carried out under Parts 1 of the Project, as further

detailed in the Operational Manual. The Project Verification Commission shall include representatives of the


Page 5 of 66

Technical Council, the Citizen Council and an External Independent Certification Institution.

Sections and Description Schedule 2. Section I. Implementation Arrangements D. CEMED Agreement

1. For purposes of implementing Part 2(f)(ii) of the Project, the Recipient, through MOH, shall, not later than six

(6) months after the Effective Date, amend the CEMED Agreement and thereafter make part of the proceeds of

the Financing available to the CEMED under such agreement, under terms and conditions satisfactory to the

Association.

Sections and Description Schedule 2. Section III. Withdrawal of the Proceeds of the Financing

B.1 No withdrawal shall be made: (a) for payments made prior to the Signature Date, except that withdrawals up

to an aggregate amount not to exceed twelve million Dollars US$12,000,000 may be made for payments made

prior to this date but on or after December 7, 2017 but in no case earlier than twelve (12) months from the date of

this Agreement for Eligible Expenditures under Category (3).

Conditions

Type Description Effectiveness Article IV - Effectiveness; Termination

4.01. The Additional Condition of Effectiveness consists of namely that the Operational Manual has been adopted by the Recipient, through MOH, in a manner satisfactory to the Association, in accordance with Section I.E of Schedule 2 to the Financing Agreement.

Type Description Disbursement Withdrawal Conditions. Section B.1.(b)

under Category (4) unless the Recipient has provided a letter to the Association including: (i) evidence, satisfactory to the Association, that a Public Health Alert, or a Public Health Emergency has occurred; (ii) legal evidence, satisfactory to the Association, of the declaration of a Public Health Alert, or a Public Health Emergency; (iii) designation of, terms of reference for, and resources to be allocated to, the entity to be responsible for coordinating and implementing Part 3 of the Project (“Coordinating Authority”); (iv) a list of the goods, works, consulting services and Operating Costs proposed to be financed under Category (4) of the Project to address the needs of the Public Health Alert, or a Public Health Emergency (including a procurement plan) acceptable to the Association; (v) the estimated flow of funds needs; and (vi) the assessments and plans that the Association may require under Section I.G.3 of Schedule 2 to this Agreement.


Page 6 of 66

PROJECT TEAM

Bank Staff

Name Role Specialization Unit

Amparo Elena Gordillo-Tobar

Team Leader(ADM Responsible)

Task Team Leader GHN04

Carlos Lago Bouza Procurement Specialist(ADM Responsible)

Procurement Specialist GGOPL

Enrique Antonio Roman Financial Management Specialist

Financial Management Specialist

GGOLF

Andre C. Medici Peer Reviewer Senior Economist GHN19

Diana Jimena Arango Team Member Senior Gender Specialist GTGDR

Enrique O. Alasino Massetti

Team Member Senior Education Specialist GED04

Escarlata Baza Nunez Counsel Legal Counsel LEGLE

Fernando Lavadenz Peer Reviewer Senior Health Specialist GHN13

John R. Butler Social Safeguards Specialist Lead Social Development Specialist

GSU04

Marco Antonio Zambrano Chavez

Environmental Safeguards Specialist

Senior Environmental Specialist

OPSES

Maria E. Colchao Team Member Operations Analyst GHN04

Maria Virginia Hormazabal Team Member Finance Officer WFACS

Miriam Matilde Montenegro Lazo

Team Member Senior Social Protection Specialist

GSP04

Viviana A. Gonzalez Team Member Program Assistant GHN04

Extended Team

Name Title Organization Location

Evelyn Rodriguez Knowledge Management

Marcos Miranda Infrastructure and Medical Equipment Consultant

Santiago de Chile, CHILE,

Ximena Traa-Valarezo Social Development Specialist Washington DC,


Page 7 of 66

REPUBLIC OF NICARAGUA

NI - INTEGRATED PUBLIC PROVISION OF HEALTH CARE SERVICES

TABLE OF CONTENTS

I. STRATEGIC CONTEXT ...................................................................................................... 9

A. Country Context ............................................................................................................... 9

B. Sectoral and Institutional Context ................................................................................... 9

C. Higher-level Objectives to which the Project Contributes ............................................. 12

II. PROJECT DEVELOPMENT OBJECTIVES ............................................................................ 13

A. Project Development Objective (PDO)........................................................................... 13

B. Project Beneficiaries ....................................................................................................... 13

C. PDO-Level Results Indicators ......................................................................................... 13

III. PROJECT DESCRIPTION .................................................................................................. 14

A. Project Components ....................................................................................................... 14

B. Project Cost and Financing ............................................................................................. 19

C. Lessons Learned and Reflected in the Project Design ................................................... 19

IV. IMPLEMENTATION ........................................................................................................ 20

A. Institutional and Implementation Arrangements .......................................................... 20

B. Results Monitoring and Evaluation ................................................................................ 22

C. Sustainability .................................................................................................................. 22

D. Role of Partners .............................................................................................................. 23

V. KEY RISKS ..................................................................................................................... 23

A. Overall Risk Rating and Explanation of Key Risks ........................................................... 23

VI. APPRAISAL SUMMARY .................................................................................................. 24

A. Economic and Financial Analysis .................................................................................... 24

B. Technical ......................................................................................................................... 24

C. Financial Management ................................................................................................... 24

D. Procurement .................................................................................................................. 25

E. Social (including Safeguards) .......................................................................................... 25

F. Environment (including Safeguards) .............................................................................. 26

G. World Bank Grievance Redress ...................................................................................... 26


Page 8 of 66

ANNEX 1: DETAILED PROJECT DESCRIPTION ....................................................................................... 36

ANNEX 2: IMPLEMENTATION ARRANGEMENTS ................................................................................. 48

ANNEX 3: IMPLEMENTATION SUPPORT PLAN .................................................................................... 60

ANNEX 4: ECONOMIC AND FINANCIAL ANALYSIS ............................................................................... 63


Page 9 of 66

I. STRATEGIC CONTEXT .

A. Country Context

1. Nicaragua remains one of the poorest countries in Latin America and the Caribbean (LAC), despite the notable poverty and inequality reduction of the past decade. Nicaragua’s real gross domestic product (GDP) grew between 1994 and 2016 by an average of 4 percent, with an average of 5.3 percent being recorded from 2010 to 2015 (compared with an average of 2.9 percent in the LAC region as a whole). Extreme poverty decreased from about 17 percent in 2005 to about 8 percent in 2014. Similarly, the overall official poverty rate decreased from about 48 percent in 2005 to about 30 percent in 2014.1 Two-thirds of this poverty reduction was due to increased labor income. Despite the robust growth that the country has achieved, it will take it 79 years to catch up with the average per capita income in LAC if current average growth rates continue. While high by international standards, inequality in Nicaragua is lower than in other LAC countries. The Gini coefficient decreased from 0.49 to 0.44 between 2005 and 2009, before increasing slightly to 0.47 in 2014. Official data suggest that inequality has declined again since 2014. This data makes Nicaragua’s economy the second most egalitarian in the region, after Uruguay.

2. The country’s economic growth has sustained increased public spending on the social sectors in general and - in particular - the health sector, which accounts for a little more than half of all public social spending.2 Public social spending in Nicaragua increased from an annual rate of 10 percent of GDP in 2007 to 13.5 percent in 2014, approaching the average Central American level of 13.9 percent; in per capita terms it is still among the lowest in the LAC region (US$145 dollars). From 2007 to 2014, total public health expenditure in Nicaragua increased from 3.8 to 5.1 percent of GDP (a 34 percent increase), placing the country just behind Costa Rica in Central America. Public health expenditure accounted for 52 percent of all public social expenditure in 2013 (up from 38 percent in 2007), making Nicaragua the country that allocates the highest share of its total social expenditure to the health sector in Central America. However, it lags its neighbors in terms of the quality of its essential services, especially water, electricity, and sanitation. Poor access to these services results in greater health problems, especially among children under the age of five. Fiscal policy in general, and social assistance programs, have played a modest role in reducing income inequality. In addition, the country’s vulnerability to climate shocks and natural disasters puts at risk the gains that have been made in terms of poverty reduction and more widely shared prosperity.

B. Sectoral and Institutional Context

3. Nicaragua has reduced maternal mortality but, despite these efforts, it is still high in some areas of the country.3 The maternal mortality rate declined from 63 to 38 deaths per 100,000 live births

1 Source: World Bank estimates based on 2005 and 2014 Living Standards Measurement Studies Surveys (Encuesta Nacional de Hogares sobre Medición de Nivel de Vida). 2 World Bank Central America Social Expenditure and Institutional Review, August 30, 2016. 3 Data used in this paragraph comes from the Statistics Unit at the Ministry of Health. This national data allows to see disaggregated data and therefore the inequalities among municipalities. These data differ from the International data (maternal


Page 10 of 66

between 2009 and 2014. Government efforts made in pursuit of the Millennium Development Goals (MDGs) and subsequently the Sustainable Development Goals (SDGs) included increasing the number of deliveries in medical facilities, providing women and their babies with immediate post-delivery checkups, and implementing a multi-sectoral strategy to provide maternal houses in rural areas as places for women to go to have safe and assisted deliveries and to receive postnatal care. Despite this progress, Nicaragua has the fourth highest maternal mortality in LAC and the highest in Central America.4 Challenges persist across different Local Systems of Integral Health Care (Sistema Local de Atención Integral de Salud, SILAIS), particularly related to quality of care and inequity. For instance, Boaco, Jinotega, and the Caribbean Coast have significantly higher maternal mortality rates than the national average (78.5, 55.9, and 160 maternal deaths per 100,000 live births respectively). 4. There are striking differences in the reduction of under-5 mortality rates across Nicaragua. The national average under-5 mortality rate declined from 42 to 17 per 1,000 live births between 1998 and 2011-2012 due to improvements in living conditions, the quality of water, access to health care, and the provision of preventive measures such as vaccinations. However, rates in rural areas remain more than 10 percentage points higher than those in urban areas and are highest in the neonatal period. These disparities, as well as the high rate of neonatal mortality, are due in part to the persistent high share of babies born to adolescent mothers in Nicaragua, which ranged from 19 to 37 percent across municipalities between 2005 and 2016.5 Many young girls either drop out of school and become pregnant, or drop out of school because they have become pregnant, both of which affect their education attainment and reduces their earning potential. In addition, their daughters are more likely to become teenage mothers themselves, thus perpetuating the vicious cycle of poverty.6 5. Nicaragua now faces a triple burden of disease that includes non-communicable diseases (72.3 percent), maternal conditions and communicable diseases (14.7 percent), and injuries (13 percent). Communicable diseases include climate-sensitive diseases such as malaria that are transmitted by mosquitoes (the disease vector), which thrive in warm temperatures. Declines in deaths from infectious diseases and maternal conditions have led to an increase in life expectancy (from 70.8 years in 2000-2005 to 74.5 years in 2010-2015), but morbidity and mortality due to chronic conditions and external causes are on the rise (see Figure 1 below). Modern lifestyles,7 disorganized urbanization, and pollution contribute to the increased number of deaths from chronic conditions (such as vascular diseases, and cancer), and external causes (such as self-inflicted injuries, violence or accidents). In addition, the incidence of climate-sensitive diseases, such as malaria, dengue, and yellow fever that have always been present in Nicaragua, have increased in recent years due in part to globalization. Viruses once circumscribed to distant countries have been spread globally and these trends will only continue. The Chikungunya and Zika viruses have become endemic in the country, presenting the health system with additional challenges due to the complexity of the secondary effects of these diseases.

mortality declined from 170 to 100 per 100,000 live births, and the under-5 mortality rate declined from 67 to 24 per 1,000 live births between 1990 and 2015.WHO: http://www.who.int/countries/nic/en/) 4 World Health Organization (2016). http://www.who.int/countries/nic/en/ 5 http://vision2017.csis.org/addressing-adolescent-pregnancy-and-maternal-mortality-in-nicaragua/ 6 The national issue of adolescent pregnancy prompted the MOH to support the preparation and implementation of the National

Strategy for the Integral Health and Development of Adolescents 2012-2015. 7 Modern lifestyles include smoking, lack of exercise, consumption of highly processed foods rich in fats and sugar, etc.


Page 11 of 66

Figure 1: Burden of Disease in Nicaragua, 2014

Source: Burden of Disease. Institute for Health Metrics and Evaluation 2016, http://www.healthdata.org/nicaragua

6. The Government’s flagship health program is the Family and Community Health Model (Modelo de Salud Familiar y Comunitario, MOSAFC), which was established in 2006. The program provides free access to health care services and primarily serves the poorest and most vulnerable segments of the population, protecting them from falling further into poverty due to catastrophic health expenditures. The MOSAFC has been a pillar of the Government’s reform program aimed at widening access to care to rural and remote areas. The model is based on the participation of the community as an agent of change, and on respecting natural medicine as well as western knowledge and advanced medicine. The model has contributed to an 11 percent decrease in out-of-pocket spending (OOPS) as a share of total health expenditure from 42.01 percent in 2007 to 37.5 percent in 2014.8 Nevertheless, OOPS remain high, and the growing incidence of chronic diseases will increase the demand for pharmaceuticals, which already account for the majority of OOPS, and this is likely to put in peril recent progress in alleviating the financial burden of health expenditures on households. In addition, challenges remain in both the coverage and quality of care. There is a need to ensure that services reach the Caribbean Coast and rural populations that are still underserved. On the question of quality, there is a need to improve the safety, effectiveness, timeliness, efficiency, and equity of health care provision and to ensure that services take a patient-centered approach. MOSAFC will need to be further strengthened if Nicaragua is to achieve the health-related SDGs. Also, its focus will need to extend beyond maternal and child health care to include chronic conditions and communicable diseases to ensure that Nicaragua has a healthy working population and to protect the human capital of the generations to come. 7. The World Bank has supported the Government in its efforts to implement MOSAFC since 2007. World Bank-financed projects have supported the expansion of coverage, the modernization of health care provision, and, lately, the systematic introduction of results-based financing in the municipal health networks. Specifically, within the ongoing Strengthening the Health Care System Project (P152136), the World Bank has supported: (a) institutional strengthening to transition from historical to results-based budgeting and from external technical audits to national certification procedures; (b) the development and introduction of health care plans in 66 municipalities that later were adopted nationwide; (c)

8 PAHO/WHO Core Indicators. http://www.paho.org/data/index.php/en/indicators/visualization.html

13.0%

14.7%

72.3%72.3%

Injuries

Communicable, maternal, neonatal, andnutritional diseases

Non-communicable diseases

http://www.healthdata.org/nicaragua


Page 12 of 66

investments in hospital waste management (HWM) that also fostered a dialogue about non-hazardous waste management and the disposal of hazardous waste; (d) more equitable health access among different ethnic groups; (e) the implementation of the Adolescent Sexual and Reproductive Health Strategy (Estrategia Nacional de Salud y Desarrollo Integral para Adolescentes, ENSDIA) 2012-2017; and (f) efforts to increase Nicaragua’s epidemiological preparedness and ability to respond to health emergencies. 8. The Ministry of Health (Ministerio de Salud, MOH) has produced positive results in terms of increased coverage of care, wider provision of services, and improvements in some health outcomes, but some challenges remain. The proposed Integrated Public Provision of Health Care Services Project will support the MOH in implementing MOSAFC in the following ways: (a) achieving wider coverage of and inclusion in the provision of health care; (b) establishing a sustainable mechanism for monitoring the quality of care; and (c) conducting a long-term transformation of how services are provided to increase the efficient delivery of care. These efforts have been developed under the quality of care framework, which includes structural and process elements of quality, and cultural sensitivity.9 The Project will support a critical government investment in the country’s human capital by: (a) preserving and restoring the health of the working age population; and (b) protecting the health of generations to come, emphasizing the first 1,000 days of life and the preservation and restoration of health during childhood to ensure that the young can develop to their full potential. The Project will invest in: (a) a national system for monitoring quality of the implementation of municipal health care plans, which will cover (i) the delivery of prenatal care, delivery, postnatal care and well-visits for children during the first year of life,10 (ii) the promotion of healthy lifestyles, (iii) the identification of risk factors and early onset of diseases, and (iv) the treatment of illnesses; (b) the quality of water accessible to communities; (c) the extension of coverage to the Siuna municipality in the Atlantic Coast, to rural populations, and to vulnerable ethnic groups; (d) health-related aspects of multisector interventions to prevent adolescent pregnancy; and (e) the identification of risk factors for non-communicable diseases (NCDs) to inform public policies for the prevention of these diseases.

C. Higher-level Objectives to which the Project Contributes 9. Considering that Nicaragua is one of the poorest countries in the LAC Region, the World Bank’s support to the country is relevant and fully aligned with the Bank’s Twin Goals of ending extreme poverty and boosting shared prosperity. It is also aligned with the efforts to achieve SDGs 3.1, 3.2, 3.3, and 3.4 (on maternal mortality, child mortality, communicable diseases, and NCDs) and SDG 5 on gender equality. The Project is also aligned with the goals of the Bank’s Health, Nutrition, and Population Global Practice of achieving universal health service coverage and protecting households from catastrophic health care costs, focusing particularly on women, children, indigenous peoples, the elderly, and vulnerable families. MOSAFC has shown promising results in terms of improving health indicators and reducing the financial burden of health care, but more support is needed to integrate services to address communicable diseases and NCDs, and hence increase their efficiency and improve their quality. Finally, the Project is aligned with the proposed Nicaragua Country Partnership Framework (CPF) for the Period FY18-22 to be

9 Institute of Medicine of the National Academy of Sciences (2001). Crossing the Quality Chasm: A New Health System for the 21st Century. 10 The Project supports the National Immunization Program. Although current immunization rates in Nicaragua are higher than 90 percent, moving from there to full coverage (achieving the “last mile”) is a challenge.


Page 13 of 66

presented to the World Bank’s Board of Executive Directors on March 15, 2018 together with this Project. In particular, the Project is designed in accordance with Pillar 1: Investing in Human Capital Particularly for Disadvantaged Groups (which will take a lifecycle approach to human capital investment starting with health and education in early childhood) and Pillar 3: Improving Institutions for Resilience and Sustainability. The Project will support the achievement of Pillar 1’s Objective 1 (Improved learning conditions and employability) and Objective 2 (Improved health and early childhood development) by improving the quality of preventive and curative health care services with a particular focus on women, children, and indigenous population.

II. PROJECT DEVELOPMENT OBJECTIVES

A. Project Development Objective (PDO)

10. The objective of the Project is to extend the coverage and improve the quality of care for the most prevalent health conditions with an emphasis on vulnerable groups.

B. Project Beneficiaries 11. Component 1 will be implemented in the poorest 66 municipalities (1.3 million people), and Component 2 will be implemented nationwide, covering all 19 SILAIS, including the Alto Wangki Bocay.11 For the purpose of the Project, vulnerable groups are defined as indigenous peoples, children, adolescents who are pregnant or at risk of becoming pregnant, and those at risk of acquiring NCDs in the poorest municipalities. 12. The Project will improve the quality of health care services nationwide with emphasis on the following population throughout their lifecycles: (a) women at reproductive age; (b) children under five years of age; (c) adults over 50 years of age with identified risk factors; (d) adolescents (both girls and boys); and (e) indigenous population.

C. PDO-Level Results Indicators Percentage of health centers certified for hypertension screening (as an indicator of quality).

Percentage of adolescents (under 20 years of age) with institutional birth delivery (as an indicator of coverage).

13. Both PDO indicators will be measured in three groups of the 66 poorest municipalities defined by their performance level. Those in Group 1 (G1) need to increase coverage and improve the quality of their care, those in Group 2 (G2) need to improve the quality of their care, and those in Group 3 (G3) need to demonstrate the sustainability of the improvements that they have already made (see Table A1.1 in Annex 1).

11 Alto Wangki Bocay is considered a territory and not SILAIS.


Page 14 of 66

Box 1. Quality of Care: Definition and Frame of Reference for the Project As defined by the U.S. Institute of Medicine study committee, quality of care is the degree to which health services for individuals and populations increase the likelihood of achieving desired health outcomes and are consistent with current professional knowledge. The challenge is to achieve the proper balance in six key dimensions. Health care systems should be: • Safe—avoiding injuries to patients from the care that is intended to help them; • Effective—providing services based on scientific knowledge to all who could benefit from them and refraining from providing services to those who are unlikely to benefit (avoiding underuse and overuse respectively); • Patient-centered—providing care that is respectful of and responsive to individual patients’ preferences, needs, and values and ensuring that patient values guide all clinical decisions; • Timely—reducing waits and sometimes harmful delays for both those who receive and those who give care; • Efficient—avoiding waste, including waste of equipment and supplies; and • Equitable—providing care that does not vary in quality because of the personal characteristics of the patient, such as gender, ethnicity, geographic location, and socioeconomic status. A health care system that meets all of these goals is well prepared to meet patients’ needs. Patients experience care that is safer, more reliable, more responsive, more integrated, and more available. Patients count on receiving the full array of preventive, acute, and chronic services from which they are likely to benefit. The application of these dimensions in the Project components is presented in Annex 1. Table A.1.4 -------------------------------------- Sources: Institute of Medicine (US) Committee to Design a Strategy for Quality Review and Assurance in Medicare (1990). K.N. Lohr editor. Medicare: A Strategy for Quality Assurance: VOLUME II Sources and Methods. National Academies Press: Washington D.C. Institute of Medicine (2001). Crossing the Quality Chasm: A New Health System for the 21st Century, National Academies Press: Washington D.C. Note: The results framework below presents the dimensions to be measured by each indicator.

III. PROJECT DESCRIPTION

A. Project Components

14. Component 1: Results-based financing for quality improvement in prevention and provision of health care services to the poorest 66 municipalities (US$14 million). The purpose of this Component is to ensure quality in the prevention of disease and the provision of care for communicable diseases and NCDs at the primary health care level in the public sector for the 66 most vulnerable municipalities of the country, including Alto Wangki Bocay and the municipalities of the Caribbean Coast. Targeted interventions will include: (a) the early identification of health risk factors; and (b) monitoring of the provision and quality of health care services. 15. This Component will finance results-based capitation payments to support the improvement of maternal and child health care services and to promote the prevention of NCDs. Capitation payments

http://www.nationalacademies.org/hmd/Reports/2001/Crossing-the-Quality-Chasm-A-New-Health-System-for-the-21st-Century.aspxhttp://www.nationalacademies.org/hmd/Reports/2001/Crossing-the-Quality-Chasm-A-New-Health-System-for-the-21st-Century.aspx


Page 15 of 66

are the marginal financial resources transferred by the MOH to selected municipalities to ensure that the population has access to quality health care services. Capitation payments will fund the widespread coverage of health promotion efforts; prevention of diseases at the primary and secondary levels (Box 2); and the prevention of risk factors. The results-based capitation mechanism increases the efficiency of public spending by making recipients accountable for their use of the funds and by delaying or preventing the onset of chronic diseases and their complications. The annual amount to be transferred to each municipality will be based on the per capita incremental recurrent expenditure on health care services (the current estimate is US$5.05) and on the size of the rural population in each municipality. Recurrent expenditures consist of the cost of the medical supplies (gauze, alcohol, etc.) needed to provide services in primary health care facilities. The fixed costs of the provision of care are covered by the Government, and this transfer is not meant to replace the normal budget provision to the municipalities. The MOH will transfer these annual payments to the municipalities using a 60/40 percent formula. The 60 percent will be calculated based on the size of the rural population in each municipality and the 40 percent will be paid on condition that the municipality meets its targets for tracer indicators that will be defined in the Quality Health Care Plan agreed upon with the SILAIS each year. As noted above, the 66 municipalities will be divided into three groups based on the respective levels of coverage, quality, and sustainability of services. The latest data held by the MOH statistics office as of December 2016 will provide the baseline for monitoring the performance of the municipalities.

Box 2. Levels of Prevention and Definitions

Prevention plays a dominant role in public health. Its definition covers a wide array of activities that prevent, delay the onset of, or reduce the seriousness of diseases and their complications. Prevention can be either primary or secondary. Primary prevention activities promote health and protect people against exposure to the risk factors that lead to health problems. Primary prevention focuses on reducing or removing risk factors by changing the environment and the community, as well as family and individual lifestyles and types of behavior. Examples include nutrition education and guidance on how to develop and maintain healthy eating and exercise habits. Secondary prevention focuses on stopping or slowing the progression of diseases. It includes screening and detection for early diagnosis, treatment, and follow-up. Secondary prevention activities target people who are more susceptible to health problems because of family history, age, lifestyle, health conditions, or environmental factors. Examples include the early detection and treatment of cervical cancer, blood lipid screening, and referrals. Source: Anita Yanochik Owen, Patricia L. Splett, George M. Owen - 1999 Nutrition in the Community: The Art and Science of Delivering Services.

16. The SILAIS will draw up and maintain annual performance agreements with the municipal health networks (Acuerdos sociales por la salud y el bienestar con el nivel municipal) to govern their provision of services. The agreements will specify a Quality Health Care Plan and performance indicators to be used to measure the progress made by each network. There will be three mandatory indicators, and each SILAIS will have the discretion to select additional indicators based on the geographic, demographic, and epidemiological profiles of each network (as defined in the Project’s Operational Manual). These


Page 16 of 66

indicators, along with the Quality of Care Plan, will be used to monitor improvements in health services and to mitigate risk factors in each SILAIS. The MOH will continue to use its own system of incentives and support based on the network’s performance. Municipalities will report every six months to the relevant SILAIS on its progress towards achieving the Project indicators and towards the implementation of the Quality Health Care Plan. The SILAIS will be responsible for collecting, revising, and consolidating all municipal reports and sending them to the MOH. The Technical Council and Citizen Councils will continue to be responsible for reviewing the quality of care that will ultimately be certified by an external organization such as Pan-American Health Organization (PAHO). They will review the bi-annual reports from the SILAIS and discuss their results.

17. Component 2: Support to the implementation of national health strategies for the provision of quality health services under the MOSAFC (US$44.5 million). This Component will support the implementation of several national strategies aimed at improving the quality of health care provision nationwide, the expansion of coverage in the Caribbean Coast, and the provision of public goods targeted to vulnerable population groups. These national health strategies are a key instrument for implementing the MOSAFC health care model. This Component will finance goods, consulting, and non-consulting services, minor works, training and operation costs to implement the strategies. Specifically, it will support:

a. Implementation of the National Chronic Disease Strategy to promote good health care practices and prevent and control major chronic diseases, as well as risk factors. The Project will work closely with the National Directorate of Health Services that prepared the first National Strategy for NCDs. The new strategy encompasses previous efforts to prevent and provide early treatment for chronic diseases such as cervical cancer and hypertension. Specifically, this subcomponent will support the MOH in: (i) disseminating information about the strategy and updating all relevant norms, guidelines, and technical documents; (ii) implementing the strategy, including carrying out the first survey of risk factors to establish a baseline for monitoring future progress; (iii) acquisition of medical supplies and medical and non-medical equipment, including information technology equipment to fill existing gaps in the primary and secondary levels of care; and (iv) designing and implementing the technology needed to monitor and follow up on the implementation of the Municipal Quality Health Care Plans.

b. Strengthening the capability of the MOH to prepare for and respond to epidemics and epidemiological alerts in the country. This subcomponent will support: (i) the National Entomological Surveillance Program for the prevention of climate-sensitive diseases; (ii) the National Immunization Program; and (iii) the implementation of the National Medical Waste and Water Quality Management Programs.


Page 17 of 66

c. Implementation of the National Program for the Inclusion of Holistic Medicine and Traditional Therapeutic Medicines. This subcomponent will continue the Bank’s support for the National Program of Natural Medicine12 by integrating Western and traditional medicines in line with the Project’s Indigenous Peoples Plan (IPP). Activities will include: (i) supporting the holistic management of pain through the use of natural medicine and complementary therapy clinics at the primary care level; (ii) continuing to support training for health personnel; (iii) strengthening the municipal offices of natural medicine and complementary therapies; (iv) acquisition of general equipment and furniture for the natural medicine clinics; and (v) strengthening the research strategy in this area.

d. Implementation of the National Intersectoral Adolescent Health Strategy for the Prevention or

Delay of Adolescent Parenthood13 with emphasis on the concepts of agency and prevention of gender-based violence (GBV). This effort will be built on the ENSDIA 2012-2017, for which the Bank supported the MOH in creating a national vision with an emphasis on cross-cultural populations. It will involve multisector coordination between the Ministry of Education (Ministerio de Educación, MINED), the Ministry of Family (Ministerio de la Familia, MIFAN), the Ministry of Youth (Ministerio de la Juventud, MINJUVE), and the Offices of Children and the Family aimed at preventing adolescent pregnancies nationwide. In addition, it will use existing methodologies, such as the Strong Family Program used by MIFAN, adolescent-oriented events, national life skills campaigns as well as public awareness campaigns, teacher training workshops, and community spaces for adolescents.

e. Expanding health care coverage in Nicaragua’s Caribbean Coast region. In an effort to reduce

inequities in the quality of care between regions, and to increase the capacity of the delivery network to provide care to distant areas of the country, this investment will fund the structural design and procurement of equipment for the planned hospital in Siuna in the Las Minas SILAIS. This municipality is one of the five municipalities of the Caribbean region and is isolated from the rest of the country due to a lack of proper roads. The catchment area of this hospital will cover the municipalities of Siuna, Rosita, Boanaza, Mulukuku, and the municipality of Paiwas (on the Atlantic South), with a combined population of approximately 251,000 inhabitants (3.9 percent of the country’s total population), of whom 74 percent live in rural areas and around 12 percent belong to the Miskitur and Mayanga ethnic communities. The proposed hospital is intended to be a general hospital, providing tertiary-level care for urgent cases and maternal emergencies. At the moment, the Caribbean Coast has just one primary care hospital with 48 beds and the capacity to deliver only basic care. The most complicated cases are referred to Bilwy (located 265 kilometers away) or Managua (339 kilometers away), which, in addition to being costly, means that patients cannot be provided with care in a timely manner. In 2016 alone, the Las Minas SILAIS referred 1,068 cases to higher-level hospitals.

f. Cross-strategy investments for the implementation of the national strategies. Activities under this subcomponent will include: (i) training programs for health workers at the central and local levels; (ii) support for the implementation of the national plan for the maintenance and repair of medical and non-medical equipment throughout the country by strengthening the Medical

12 Ley de Medicina Tradicional Ancestral No. 759, approved in July 2011. 13 Preventing first pregnancies and delaying second pregnancies among adolescents.


Page 18 of 66

Equipment Maintenance Center (Centro de Mantenimiento de Equipos Médicos, CEMED); and (iii) ensuring that the MOH’s information systems at all levels of care are connected and compatible.

18. Component 3: Provision of contingency financing in case of a public health alert or public health emergency (US$0.00 million). The objective of this Component is to enable critical resources to be used in the event that a public health alert or public health emergency is officially declared by a Health Ministerial Resolution or a Presidential Decree. The Project allocates no funds to this Component. The World Bank will reallocate funds from elsewhere in the Project budget and disburse them only after an alert or emergency has been declared and the Government has provided the World Bank with documentation that includes: (i) legal evidence, satisfactory to the World Bank, for the declaration of the public health alert, or public health emergency; (ii) a list of the required goods, minor rehabilitation works, consultancies, or other services needed and operating costs (including a procurement plan) acceptable to the World Bank; (iii) a clear indication of the activities that will be affected by the reallocation of funds; and (iv) any assessments and plans that the World Bank might require.

19. Component 4: Project management (US$1.5 million). This Component will finance efforts to strengthen the capacity of the MOH to administer, implement, supervise, and evaluate Project activities, including support for carrying out external financial audits. 20. Gender. The Project will address gender-related aspects of health care with the aim of benefitting children, adolescents (both girls and boys), adults, and the elderly with a special emphasis on indigenous peoples. The Project aims to: (i) provide quality care to mothers, adolescents, children, and populations with risk factors for NCDs; (ii) prevent adolescent parenthood, with an emphasis on the concept of agency and the prevention of GBV; and (iii) provide a gender-sensitive agenda to medical staff working with culturally diverse ethnic groups.

21. Citizen Engagement. The Project engages the population by involving citizens of the municipality as active participants in the implementation and evaluation of most Project activities. The Citizen Councils, existing MOH administrative bodies in every SILAIS, are directly involved in overseeing the health services delivered at the municipality level. Through the Project, the Citizen Councils will be part of the Project Verification Commission and will review the performance of the 66 municipalities participating in the capitation mechanism. In addition, as part of the Project Verification Commission (PVC), the Citizen Councils will participate in the review of the output-based disbursement mechanism. Also, this Project will strengthen the implementation of the social agreements and certification processes that enable community members from the municipalities to be involved in deciding which health care services should be available in their communities each year. Finally, the Project is designed to encourage communities to participate in project activities, such as vaccination campaigns and public communication campaigns aimed at changing risky types of behavior. 22. Climate Co-benefits. The Project is expected to have moderate climate co-benefits largely related to reductions in greenhouse gas (GHG) emissions, emissions of dioxin14 and the Project’s investments in response to climate-sensitive diseases. Dioxin, a GHG, is one of the most toxic and persistent pollutants

14 EPA-1994. The Environmental Protection Agency of the USA, announced that the hospital incinerators were responsible for 40 percent of the atmospheric pollution in the country. In this regard, the World Health Organization recommends not to incinerate hospitals waste containing polyvinyl chloride and copolymer.


Page 19 of 66

in Nicaragua, and will be reduced as a result of using the autoclave instead of incinerators to dispose hospital waste.15 Dioxins refers to a group of toxic chemical compounds that share certain chemical structures and biological characteristics. Several hundred of these chemicals exist and are members of three closely related families: chlorinated dibenzo-p-dioxins, chlorinated dibenzofurans and certain polychlorinated biphenyls. Chlorinated dibenzo-p-dioxins and chlorinated dibenzofurans are not created intentionally, but are produced as a result of human activities like the backyard burning of trash. The Stockholm Convention on Persistent Organic Pollutants signed by more than 150 countries, including Nicaragua, promotes the use of better environmental practices to reduce the volume of dioxin generated from waste incineration. Additionally, the implementation of the Waste Management Plans in health centers, including good environmental practices for reducing and disposing of medical waste, will reduce the volume of medical waste to be managed and treated, hence reducing greenhouse gas emissions and contamination. In addition, a substantial part of Nicaragua’s burden of disease is related to climate-sensitive conditions such as malaria, Zika, dengue, and chikungunya. In recent years, some of those diseases have either been introduced (Zika) or have spread in part because of recent climate variability, such as longer dry seasons, general droughts and floods cause by increased rain intensity, and higher average temperatures. Considering that climate change is expected to increase rainfall, floods and droughts, it is also expected that these climate sensitive diseases will increase. The Project will support the implementation of the National Entomological Surveillance Program for the prevention of these climate-sensitive arbovirus-related diseases. The Project will have a direct positive impact on the environment by supporting efforts to educate the population on ways to stop mosquitos from breeding, thus reducing the need for spraying.

B. Project Cost and Financing

Components Amounts US$ million

Component 1: Results-based financing for quality improvement in prevention and provision of health care services to the poorest 66 municipalities 14.0

Component 2: Support for the implementation of national health strategies for the provision of quality health services under the MOSAFC 44.5

Component 3. Provision of contingency financing in the case of an eligible public health alert or a public health emergency 0.0

Component 4. Project management 1.5

Total cost 60.0

C. Lessons Learned and Reflected in the Project Design

23. The Project design incorporates lessons learned from previous and ongoing World Bank and donor-funded projects in Nicaragua and world-wide. These include:

a. Health care models such as MOSAFC work well in their own context. Experience from previous

15 WHO- Health – Care Waste http://www.who.int/mediacentre/factsheets/fs253/en/ https://www.healthcare-waste.org/


Page 20 of 66

projects demonstrates that the MOSAFC model works in Nicaragua. The World Bank will continue to support this approach in the Project, seeking to innovate within the existing MOSAFC model, while continuing to focus on the long-term goal of reducing the country’s burden of disease. The Bank’s contribution to implementing and strengthening the MOSAFC ensures its sustainability.

b. The benefit of implementing a project without a project implementation unit. This Project, as well as the one currently being implemented, Strengthening the Health Care System Project (P152136), have been designed to be implemented directly by the MOH. Implementing without a PIU has made it possible to build institutional capacity within the MOH by means of the close coordination between its technical units and divisions and the World Bank.

c. Results-based capitation payments and annual performance agreements, along with effective monitoring, have introduced a new concept of accountability in the public health sector. The Nicaragua Community and Family Health Care Project (P106870) and the Strengthening the Health Care System Project (P152136) have both fostered a sense of accountability at the SILAIS level. It is evident that marginal funding of the cost of service along with consistent monitoring and evaluation (M&E) of outcomes are effective in holding service providers accountable for their performance.

d. Performance agreements are a useful tool for establishing a results-oriented culture. These agreements have proven to be a powerful tool for managing decentralized health programs at the municipal level. The Project will strengthen the MOH’s M&E system so that the Project Technical Committee (PTC) within the MOH can complete the technical reports in a timely manner and can make any necessary changes to the Project promptly.

e. In countries vulnerable to natural disasters or other emergencies, projects should be designed

to allow for a flexible response to a public health alert or health emergency. This Project will use the same activation and disbursement procedures as defined in the emergency contingency subcomponents of the Nicaragua Community and Family Health Care Project (P106870) and the ongoing Strengthening the Public Health Care System Project (P152136), which have been successfully used in the past.

f. Using national-level technical and administrative directorates and councils to supervise and monitor project activities has been demonstrated to foster ownership of the project activities, build local technical capacity, and ensure the sustainability of the outcomes.

IV. IMPLEMENTATION

A. Institutional and Implementation Arrangements

24. The MOH will be responsible for the implementation of the Project through its various national directorates and technical units. The Project will follow similar implementation arrangements to those in the ongoing Strengthening the Health Care System Project (P152136), which have proven to be successful.


Page 21 of 66

Implementation will be overseen by the PTC,16 which already exists. The PTC will be responsible for: (a) coordinating project activities, including those carried out by the SILAIS and the municipal health networks; (b) monitoring project results indicators at the macro level; (c) coordinating with the General Directorate of Epidemiological Surveillance (Dirección General de Vigilancia de la Salud Pública, DGVSP), the Procurement Division and the General Division of Financial Management within the MOH, and with PAHO on procurement of vaccines; (d) overseeing the implementation of the Indigenous Peoples Planning Framework (IPPF) and the Environmental Management Framework; (e) preparing technical and financial progress reports; and (f) ensuring that technical reports are presented to the Technical Council and Citizen Councils for certification. The PTC is led by the MOH’s Division of External Cooperation and consists of technical staff from each participating technical and administrative directorate and division within the MOH.

25. The Technical Council will be responsible for the technical oversight of activities implemented by the municipalities. The Technical Council is an established MOH structure that oversees the performance of MOH’s technical units and is responsible for reviewing health reports and for making executive decisions on the technical aspects of health implementation plans. Its role in the Project will be to review the performance of the 66 municipalities every six months, to monitor their progress towards achieving the indicators and their implementation of quality of care plans and output-based disbursement arrangements and to issue a statement on its findings. The Technical Council consists of the directors of all the General Directorates of the MOH at the central level, a representative of the Health Workers Federation, and the Minister of Health.

26. In every SILAIS, the existing Citizen Councils will be responsible for monitoring the provision of care, the achievement of health indicator targets, the judicious use of funds, and other related issues at the SILAIS level. The Citizen Councils are also an established structure of the MOH at the SILAIS level, with the membership consisting of the SILAIS director, representatives of the local hospitals, the SILAIS epidemiologist, a representative of the local branch of the Health Workers Federation, a representative of the Community Cabinet (Gabinete de la Familia Comunidad y Vida), and community leaders. A representative of the Citizen Councils will participate in the Technical Committee’s review of the SILAIS’s bi-annual progress reports, as well as its review of the municipality’s Quality of Care Plan.

27. Finally, the existing PVC will continue working on the verification and certification of capitated payments and output-based disbursements. The PVC consists of representatives of the Technical Committee and the Citizen Councils, together with a representative of an external independent institution, which, in the current Bank-financed Project is PAHO. These PVC members will visit a randomly selected number of municipalities to verify the implementation of their Quality Health Care Plans and, for those municipalities receiving capitation payments, their progress towards achieving their indicator targets. The PTC will coordinate and organize these verification visits by the PVC. The PVC will be responsible for reviewing municipalities’ indicators, results, and implementation of activities according to the Project implementation Plan. Every year the PVC will present a technical report to the World Bank with the certified documentation. The certified documentation will consist of the signed document from the independent entity or agency who has done the verification supported by the Technical Council report on the municipalities’ achievement of the indicators and compliance with the Quality of Care Plans. Once the World Bank has reviewed and accepted this report and its documentation, it will make the annual

16 The Project Technical Council Committee includes all the Directors (technical staff) of the MOH’s Directorates.


Page 22 of 66

disbursement. The detailed process will be explained in the Operational Manual and is outlined in Annex 2.

28. Under Component 1, the MOH will continue its annual performance agreements (Acuerdos sociales por la salud y el bienestar) with participating SILAIS for the implementation of MOSAFC. Under these renewable annual arrangements, the SILAIS will be responsible for: (a) guaranteeing the delivery of the health services by the municipal health networks; (b) supervising and monitoring the performance of the health services that are delivered; (c) transferring the funds received from the MOH as capitation payments to the selected municipalities; (d) entering into individual municipal agreements with each selected municipality; (e) supervising and keeping records of the health services provided by the municipal health networks and compiling the municipalities’ progress reports on the performance indicators targets set out in each municipal agreement; and (f) complying with the provisions of the Operational Manual (including the IPPF and the Environmental Management Framework), as well as the Anti-Corruption Guidelines. 29. The SILAIS in turn will enter into municipal agreements with the municipal health networks (Acuerdos Sociales por la salud y el bienestar con el nivel municipal). These renewable annual agreements between the director of the municipal health network and the director of the SILAIS will stipulate the terms under which the standard set of basic health care services will be delivered by providers in the network. These agreements will, among other things, require the MOH (through the SILAIS) to transfer the pertinent capitation payments to the selected municipalities on a per capita basis to finance the delivery of health services. They will also require each municipality to: (a) prepare and implement a Quality Health Care Plan and to meet the agreed mandatory indicator targets; (b) keep records of which health services are being provided and create progress reports on the performance indicators; (c) comply with the provisions of the Operational Manual and the Anti-Corruption Guidelines; and (d) list its performance indicators and their corresponding targets, and the mechanism for periodically adjusting these indicators and targets.

B. Results Monitoring and Evaluation

30. The M&E system of the MOH will be used to monitor progress on the indicators specified in the results framework. The system will contain data from multiple sources including: (a) the monthly reports submitted to the SILAIS by the municipal health networks; (b) biannual reports presented by SILAIS to the central MOH; (c) project management reports prepared by the PTC twice a year; (d) annual certified municipal performance technical reports; and (e) annual social consultations, an existing mechanism to monitor the implementation of MOSAFC, in which the SILAIS requests comments, addresses complaints and seeks suggestions for improvements from the local community and beneficiaries in each municipal health network. The Project will support technical assistance, supervision, and the monitoring of activities under Components 1 and 2, and 4, all of which will build managerial capacity at both the local and national levels.

C. Sustainability

31. The Project builds on the experience and satisfactory results of past World Bank-financed health projects implemented in Nicaragua. Most importantly, a strong focus on sustainability is embedded in


Page 23 of 66

the Project’s demand-driven design, which involves: (a) supporting MOSAFC, the Government’s own health services provision model; (b) using the technical units of the MOH to implement the Project with no external PIU; (c) relying on the fiduciary and procurement divisions of the MOH for the Project’s implementation; (d) using the national M&E system to monitor the Project’s implementation instead of external technical audits; (e) enabling community-based participation and empowerment; (f) contributing to public policy discussions based on the identified progress and gaps; and (g) fostering coordination among sectors in the implementation of the Project.

D. Role of Partners

32. Coordination with other agencies. The World Bank has a longstanding commitment to coordinating with other international agencies working in Nicaragua. As part of this Project, the Bank will cooperate with the MOH, PAHO, and Nicaraguan universities to contribute or execute in at least three activities: (a) procuring vaccines; (b) improving quality of medical care; and (c) providing high-level training and internships. During the Project’s implementation period, PAHO will be a key partner for the Bank in the procurement of vaccines using a competitive mechanism that it has already established in the LAC region. The Project also builds on the ongoing Strengthening the Health Care System Project (P152136) in terms of continuing to use PAHO and the national universities to certify the quality of health services and of training and continuous education programs in the field of health. However, one new element in this Project is that it enlists international universities to certify teachers, graduates, courses and specialized internships.

V. KEY RISKS

A. Overall Risk Rating and Explanation of Key Risks

33. The overall risk has been assessed as Moderate. Key risks are related to: (i) the country’s limited capacity to administer the system of capitation payments and output-based disbursements; (ii) the sustainability of improvements made to the quality of services provided in public health care network; and (iii) the potential environmental and/or social risks associated with the construction of the hospital in the Siuna municipality. While the proposed Project would finance the design and equipment for the hospital, it would not finance the construction phase. Proposed measures to help manage these risks include: (i) strengthening the technical units of the Ministry of Health through capacity building and technical assistance; (ii) promoting ownership of the quality of care improvement process at the local level by ensuring the participation of community representatives in the Project Verification Commission; and (iii) close supervision to oversee the compliance with the Bank’s safeguards policies, including during the construction phase of the hospital in Siuna.


Page 24 of 66

VI. APPRAISAL SUMMARY

A. Economic and Financial Analysis

34. The Project investments of US$60 million over a five-year period are expected to benefit an estimated 1.3 million people in 66 selected municipalities. The Project will use the MOSAFC model to ensure the early identification of risk factors for communicable diseases and NCDs while investing in the prevention of pregnancy-related adolescent mortality. The MOH has estimated that the cost per person of the needed interventions within the health system is US$20, and the Project will fund US$5.05 annually per beneficiary during the five-year period. In addition, the Project will invest in intersectoral activities aimed at preventing adolescent pregnancies and at ensuring the early identification of risk factors for communicable diseases and NCDs at the primary care level with strong grassroots community involvement. For the purposes of the Project’s economic evaluation, a net investment of US$52.2 million is assumed and a 10 percent discount rate is applied. Recurrent costs are estimated to reach 20 percent of the total investment. Taking 2018 as year one, the Project has an estimated net present value (NPV) of US$4,320,320 and an expected internal rate of return (IRR) of 13.6 percent. A detailed cost-benefit analysis is presented in Annex 4.

B. Technical

35. The improvements achieved in Nicaragua in the provision of health care and attainment of health outcomes in the last decade are remarkable. These advances have been possible due to the Government’s commitment to health. Nonetheless, challenges still remain and Nicaragua now faces a triple burden of disease. The MOSAFC program responds to this diagnosis and prepares the health system to expand service delivery and improve quality. As the steward of the public health provision in the sector, the MOH is uniquely positioned to design and implement the changes needed to expand services, improve quality and efficiency and, therefore, improve the financial sustainability of the health sector. The proposed Project has critical building blocks required for delivering results. These include: (a) strong political commitment, which is bolstered by the result based financing mechanism included in project design; (b) harmonization between the Project and the larger policy framework under the MOSAFC model, since the Project contributes to solving the main challenges identified in the National Pluri-Annual Health Plan 2015-2021; and (c) a technically sound MOH program oriented to addressing the strategic priorities facing Nicaragua’s health sector by introducing, through the primary health care network, comprehensive provision of health care, including early identification and prevention of diseases.

C. Financial Management 36. Overall, the Project will benefit substantially from the MOH´s existing financial management arrangements, which were put in place for the implementation of the ongoing Strengthening the Health Care System Project (P152136). The performance of these financial management arrangements in terms of a financial recording system, financial reporting, cash flow, audit arrangements, an internal control system, and asset management are Moderately Satisfactory. Taking into account the additional activities envisioned under the proposed Project, and following the financial management assessment conducted in October 2017, financial management issues were discussed and proposed to be strengthened under


Page 25 of 66

the proposed Project. The assessment identified the need: (a) for additional staff to strengthen the MOH’s General Financial and Administrative Division (Dirección General Administrativa y Financiera, DGAF); (b) to review of specific procedures to govern the funds flow arrangements for the capitation payments and output-based financing activities; and (c) to revise the implementation of a new financial management information tool that facilitates the recording, control and reporting of project transactions for the provision of required financial reports, which are currently prepared in Excel, after one year of project execution. The Operational Manual was updated to reflect these recommendations.

37. Retroactive financing. The Project will allow retroactive financing for up to 20 percent of the total amount of the credit (up to US$12 million) for eligible expenditures under Component 2, except for subcomponent 2(f)(i) on or after December 7, 2017, but in no case earlier than 12 months from the date of the Financing Agreement.

D. Procurement

38. Procurement for the Project will be carried out by the MOH. The Procurement Division has more than five years of experience with externally financed operations, and a procurement capacity assessment carried out in September 2017 confirmed that MOH has the necessary capacity, adequate structure, and the requisite procedures in place to carry out the procurement for the Project. The MOH will be responsible for all procurement and contracting-related queries and processing, including the management of and compliance with fiduciary requirements. A Procurement Plan for the first 18 months of the Project was developed and agreed upon. The Project will be executed in accordance with the World Bank’s Procurement Regulations for Borrowers under Investment Project Financing of July 2016 and the provisions stipulated in the Procurement Plan and the Operational Manual. 39. A Project Procurement Strategy for Development (PPSD) was prepared and a series of mitigation measures will be carried out to ensure the satisfactory performance of procurement functions within the MOH. Based on the PPSD, which has identified the appropriate selection methods, market approach, and type of review to be conducted by the World Bank, most project activities will be carried out by contractors selected through national or international competition. The complete PPSD will be part of the Operational Manual.

E. Social (including Safeguards)

40. The Project triggers OP/BP 4.10 on Indigenous Peoples given the presence of indigenous peoples in the Project area. The ongoing Nicaragua Strengthening the Public Health Care System Project (P152136) includes an IPP that was developed after the IPPF prepared for the Nicaragua Community and Family Health Care Project (P106870). The IPP was prepared, disseminated for consultation, and disclosed in March 2015 and is currently being successfully implemented by the Directorate of Health and supervised by the National Coordination of Indigenous Peoples and Traditional Medicine. The activities under Component 1 of this Project are a continuation of the ongoing Strengthening the Health Care System Project’s activities (P152136). Under Component 2 (c), the National Program for the Inclusion of Holistic Medicine and Traditional Therapeutic Medicines will be implemented to support Nicaragua in moving towards the integration of traditional ancestral medicine into Western health systems. Consultations and assessments were undertaken during Project preparation to ensure that the Project’s


Page 26 of 66

maternal, adolescent, child, and reproductive care activities take into account the cultural practices of indigenous groups. Any intercultural health practices that end up being supported by the Project could be shared as models with other countries. The IPP was updated and disclosed on MOH’s website and was published on the World Bank’s website on December 7, 2017.

F. Environment (including Safeguards)

41. The Project triggers OP/BP 4.01 on Environmental Assessment because it will finance minor rehabilitation works, including minor pre-installment works for the medical and non-medical equipment to be purchased by the Project for health facilities and technical studies for the construction of a hospital in Siuna. Any possible negative impacts are likely to be localized, minor, and reversible. In this regard, the Project has been classified as Category B according to the OP/BP 4.01. An Environmental and Social Management Framework (ESMF) was prepared for the previous World Bank-financed projects (P106870 and P152136); the ESMF and associated Action Plan has been updated for this Project. These updated versions of the ESMF and Action Plan have been consulted on according with the World Bank guidelines and have been disclosed on MOH’s website and on the World Bank’s website on December 7, 2017. With regards to the HWM plan, nine plans are currently being implemented under the ongoing Strengthening the Public Health Care System Project (P152136), and a few additional plans will be implemented under the proposed Project. These plans include the World Bank’s Environmental Health Safety Guidelines for Medical Facilities and procedures to manage radioactive waste associated with the medical equipment acquired under the projects. The technical specifications of the structural design of the Siuna Hospital will take into account the Environmental and Social Impact Assessment and its Environmental and Social Management Plan. The Environmental and Social Impact Assessment will be consulted again and disclosed once the final design for construction is confirmed. In addition, even though the Bank’s funds will not finance the construction of the Siuna hospital, the Bank will oversee compliance with safeguards policies during the construction phase, as part of Project supervision, considering that the Bank’s funds will finance the structural design and the Environmental and Social Impact Assessment of the Hospital.

G. World Bank Grievance Redress

42. Communities and individuals who believe that they are adversely affected by a World Bank supported Project may submit complaints to existing Project-level grievance redress mechanisms or the World Bank’s Grievance Redress Service. The Grievance Redress Service ensures that complaints received are promptly reviewed in order to address Project-related concerns. Project affected communities and individuals may submit their complaint to the World Bank’s independent Inspection Panel which determines whether harm occurred, or could occur, as a result of World Bank non-compliance with its policies and procedures. Complaints may be submitted at any time after concerns have been brought directly to the World Bank's attention, and World Bank Management has been given an opportunity to respond. For information on how to submit complaints to the World Bank’s corporate Grievance Redress Service, please visit http://www.worldbank.org/GRS. For information on how to submit complaints to the World Bank Inspection Panel, please visit www.inspectionpanel.org.

http://www.worldbank.org/GRShttp://www.inspectionpanel.org/


Page 27 of 66

Results Framework

COUNTRY : Nicaragua NI - INTEGRATED PUBLIC PROVISION OF HEALTH CARE SERVICES

Project Development Objectives

The objective of the Project is to extend the coverage and improve the quality of care for the most prevalent health conditions with an emphasis on vulnerable groups.

Project Development Objective Indicators

Indicator Name Core Unit of Measure

Baseline End Target Frequency Data Source/Methodology Responsibility for Data Collection

Name: Percentage of adolescents (


Page 28 of 66



Name: Percentage of health centers certified on screening of hypertension – G1 (Quality)

Percentage 34.00 53.00 Annual

Project Report

DGSS (MOH)

Percentage of health centers certified on screening of hypertension – G2 (Quality)


Project Report

DGSS (MOH)

Percentage of health centers certified on screening of hypertension – G3 (Quality)


Project Report

DGSS (MOH)

Description: Certification includes: equipment, trained health personnel and implementation of health prevention activities.

Intermediate Results Indicators



Name: National Laboratory for the assessment of residual waters refurbished (Quality: safety, efficiency,

Number 0.00 1.00 Bi-annual

Project Report

CNDR (MOH)/ CEMED


Page 29 of 66



effectiveness)

Description: It will be marked as accomplished once the National Laboratory is operating

Name: Entomology areas fully equipped and providing services (Quality: timeliness)


Project Report

CNDR (MOH)/ CEMED

Description:

Name: Number of health facilities with updated and implemented waste management plans (Quality: safety, efficiency)


Project Report

DGVSP (MOH)

Description:

Name: Number of health personnel receiving training (Quality: effectiveness )


Project Report

DGPD (MOH)

Description: Training programs for health workers at the central and local levels

Name: Percentage of women receiving prenatal

Percentage 54.00 58.00 Annual Statistics Report DGPD/DGSS (MOH)


Page 30 of 66



care coverage G1 (at least four visits) (Coverage)

Percentage of women receiving prenatal care coverage G2 (at least four visits) (Coverage)


Statistics Report

DGPD/DGSS (MOH)

Percentage of women receiving prenatal care coverage G3 (at least four visits) (Coverage)


Statistics Report

DGPD/DGSS (MOH)

Description:

Name: Percentage increase of women between 30-49 years of age with screening for cervical cancer G1 (Quality: timeliness)


Statistics Report

DGPD/DGSS (MOH)

Percentage increase of women between 30-49 years of age with screening for cervical cancer G2 (Quality: timeliness)


Statistics Report

DGPD/DGSS (MOH)

Percentage increase of women between 30-49

Percentage 0.00 3.00 Annual Statistics Report DGPD/DGSS (MOH)


Page 31 of 66



years of age with screening for cervical cancer G3 (Quality: timeliness)

Description: Incremental in relation to the baseline collected at the end of 2017. Baseline will consider the estimates at the end of 2017.

Name: Number of municipal health units implementing traditional medicine (Quality: patient-centered, equity)


Project Report

Institute of Traditional Medicine

Description:

Name: Citizen Council participation in the Project Verification Co

Documents

World Bank Document€¦ · B.1 No withdrawal shall be made: (a) for payments made prior to the Signature Date, except that withdrawals up to an aggregate amount not to exceed twelve